Iwc Resources Corp – ‘PREM14A’ on 1/22/97

As of:  Wednesday, 1/22/97   ·   Accession #:  950131-97-309   ·   File #:  0-15420

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Preliminary Proxy Solicitation Material — Merger or Acquisition   —   Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: PREM14A     Proxy Statement                                       87    539K 

Document Table of Contents

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SCHEDULE 14A INFORMATION  

Proxy Statement Pursuant to Section 14(a) of the Securities 
Exchange Act of 1934 (Amendment No.  )  

Filed by the Registrant [X]                                                     

Filed by a Party other than the Registrant [_]                                  

Check the appropriate box:                                                      

[X]  Preliminary Proxy Statement         [X]  CONFIDENTIAL, FOR USE OF THE      
                                            COMMISSION ONLY (AS PERMITTED BY
                             RULE 14A-6(E)(2))

[_]  Definitive Proxy Statement                                                 

[_]  Definitive Additional Materials                                            

[_]  Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12

IWC RESOURCES CORPORATION 
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)  

IWC RESOURCES CORPORATION 
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)  

Payment of Filing Fee (Check the appropriate box):                              

[_]  No fee required                                                            

[X]  Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.   

(1) Title of each class of securities to which transaction applies:   

Common Stock, without par value                     
   -------------------------------------------------------------------------

(2) Aggregate number of securities to which transaction applies:      

9,078,249 shares                                    
   -------------------------------------------------------------------------

(3) Per unit price or other underlying value of transaction computed  
   pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):

$32.00                                              
   -------------------------------------------------------------------------

(4) Proposed maximum aggregate value of transaction:                  

$290,503,968                                        
   -------------------------------------------------------------------------

(5) Total fee paid:                                                   

$58,101                                             
   -------------------------------------------------------------------------

[_]  Fee paid previously with preliminary materials.                            

[_]  Check box if any part of the fee is offset as provided by Exchange         
  Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
     was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.           

(1) Amount Previously Paid:                                           

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

(2) Form, Schedule or Registration Statement No.:                     

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

(3) Filing Party:                                                     

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

(4) Date Filed:                                                       

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

Notes:                                                                          

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CONFIDENTIAL-PRELIMINARY PROXY MATERIALS DATED JANUARY 22, 1997 FOR THE USE OF  
THE COMMISSION ONLY 

[LETTERHEAD OF IWC RESOURCES CORPORATION] 

                                                             February   , 1997

Dear Fellow Shareholder:                                                        

You are cordially invited to attend the special meeting of shareholders (the
"Special Meeting") of IWC Resources Corporation ("IWC"), which will be held on  
March   , 1997 at 11:00 a.m., Eastern Standard Time, at the corporate           
headquarters of IWC, 1220 Waterway Boulevard, Indianapolis, Indiana.            

At the Special Meeting, holders of common shares, without par value, of IWC 
("IWC Common Shares") will be asked to consider and vote upon a proposal to     
approve an Agreement and Plan of Merger (the "Merger Agreement"), dated as of   
December 19, 1996, by and among NIPSCO Industries, Inc. ("Industries"),         
Speedway Acquisition Corp., a wholly-owned subsidiary of Industries             
("Acquisition"), and IWC, and to approve the merger of IWC with and into        
Acquisition pursuant to the Merger Agreement (the "Merger"). A copy of the      
Merger Agreement appears as Annex A to the accompanying Proxy                   
Statement/Prospectus.                                                           

In the Merger, IWC will become a wholly-owned subsidiary of Industries, and 
each outstanding IWC Common Share will be converted into (i) a fraction of a    
common share, without par value, of Industries ("Industries Common Shares")     
having a value of $32.00 (based upon the Industries Share Price determined as   
described in the accompanying Proxy Statement/Prospectus) or (ii) at the        
election of the holder, the right to receive $32.00 in cash, without interest,  
subject to certain limitations outlined in the accompanying Proxy               
Statement/Prospectus. IWC shareholders will receive cash in lieu of any         
fractional shares of Industries Common Shares to which they otherwise would     
have been entitled.                                                             

The Merger Agreement contains a number of conditions and other terms, which 
are summarized, along with certain financial and other information, in the      
accompanying Proxy Statement/Prospectus. You should read carefully the          
accompanying Notice of Special Meeting of Shareholders and the Proxy            
Statement/Prospectus for details of the Merger and additional related           
information.                                                                    

THE BOARD OF DIRECTORS OF IWC HAS DETERMINED THAT THE MERGER IS FAIR TO AND 
IN THE BEST INTERESTS OF IWC AND ITS SHAREHOLDERS. ACCORDINGLY, THE IWC BOARD   
OF DIRECTORS HAS APPROVED THE TERMS OF THE MERGER AGREEMENT AND UNANIMOUSLY     
RECOMMENDS THAT THE IWC SHAREHOLDERS VOTE FOR THE APPROVAL OF THE MERGER        
AGREEMENT AND THE MERGER.                                                       

The affirmative vote of holders of a majority of the outstanding IWC Common 
Shares is necessary to approve the Merger Agreement and the Merger.             

Whether or not you plan to attend the Special Meeting, please complete, sign
and date the enclosed proxy card and return it promptly in the enclosed         
postage-paid WHITE envelope. If you attend the Special Meeting, you may vote    
in person if you wish, even though you previously have returned your proxy      
card. Your prompt cooperation will be greatly appreciated.                      

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In addition, if you wish to receive cash for all or any portion of your IWC 
Common Shares, please complete the enclosed Form of Election and return it,     
together with your stock certificates, in the enclosed BLUE envelope.           

Please do not send your stock certificates with the proxy card. If the      
Merger Agreement and the Merger are approved by the IWC Shareholders and the    
Merger is consummated, IWC Shareholders who have not submitted their stock      
certificates with a Form of Election will receive a transmittal form and        
instructions for the surrender and exchange of their shares.                    

Thank you for your cooperation.                                             

              Sincerely,

                   James T. Morris
            Chairman

PLEASE COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD PROMPTLY.  

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IWC RESOURCES CORPORATION 
1220 WATERWAY BOULEVARD 
INDIANAPOLIS, INDIANA 46206 

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS 

TO BE HELD ON MARCH  , 1997 

                                                             February   , 1997

TO THE SHAREHOLDERS OF IWC RESOURCES CORPORATION:                               

A special meeting of the shareholders (the "Special Meeting") of IWC        
Resources Corporation, an Indiana corporation ("IWC"), will be held at the      
corporate headquarters of IWC, 1220 Waterway Boulevard, Indianapolis, Indiana   
46206, on March   , 1997 at 11:00 a.m., Eastern Standard Time, for the          
following purposes:                                                             

(1) To consider and vote upon a proposal to approve the Agreement and   
Plan of Merger (the "Merger Agreement"), dated as of December 19, 1996, by  
and among NIPSCO Industries, Inc., an Indiana corporation ("Industries"),   
Speedway Acquisition Corp., an Indiana corporation and a wholly-owned       
subsidiary of Industries ("Acquisition"), and IWC, and to approve the       
merger of IWC with and into Acquisition as contemplated by the Merger       
Agreement (the "Merger"). In the Merger, IWC will become a wholly-owned     
subsidiary of Industries, and each outstanding common share, without par    
value, of IWC ("IWC Common Shares") will be converted into (i) a fraction   
of a common share, without par value, of Industries ("Industries Common     
Shares") having a value of $32.00 (based upon the Industries Share Price    
determined as described in the accompanying Proxy Statement/Prospectus), or 
(ii) at the election of the holder, the right to receive $32.00 in cash,    
without interest, subject to certain limitations outlined in the            
accompanying Proxy Statement/Prospectus. IWC Shareholders will receive cash 
in lieu of any fractional shares of Industries Common Shares to which they  
otherwise would have been entitled. THE MERGER IS MORE COMPLETELY DESCRIBED 
IN THE MERGER AGREEMENT INCLUDED AS ANNEX A TO THE ACCOMPANYING PROXY       
STATEMENT/PROSPECTUS.                                                       

(2) To transact such other business as may properly come before the     
Special Meeting or any adjournments or postponements thereof.               

Only holders of record of IWC Common Shares at the close of business on     
February 13, 1997, the record date for the Special Meeting, are entitled to     
notice of, and to vote at, the Special Meeting and any adjournments or          
postponements thereof.                                                          

The affirmative vote of the holders of a majority of the outstanding IWC    
Common Shares is necessary to approve the Merger Agreement and the Merger.      

Holders of IWC Common Shares who wish to receive cash in the Merger should  
complete the enclosed Form of Election and return it, together with their       
stock certificates, in the enclosed BLUE envelope.                              

IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE SPECIAL MEETING SO   
THAT A QUORUM WILL BE ASSURED. WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL    
MEETING, PLEASE COMPLETE, SIGN AND DATE THE ENCLOSED PROXY CARD AND RETURN IT   
PROMPTLY IN THE ENCLOSED POSTAGE-PAID WHITE ENVELOPE. PLEASE DO NOT SEND ANY    
STOCK CERTIFICATES OR THE FORM OF ELECTION WITH YOUR PROXY. YOUR PROXY MAY BE   
REVOKED AT ANY TIME BEFORE IT IS VOTED BY SIGNING                               

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AND RETURNING A LATER DATED PROXY WITH RESPECT TO THE SAME SHARES, BY FILING    
WITH THE SECRETARY OF IWC A WRITTEN REVOCATION BEARING A LATER DATE OR BY       
ATTENDING AND VOTING AT THE SPECIAL MEETING.                                    

                                       By Order of the Board of Directors,

                            John M. Davis, Secretary

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IWC RESOURCES CORPORATION 

PROXY STATEMENT 

SPECIAL MEETING OF SHAREHOLDERS 
TO BE HELD MARCH   , 1997 

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

NIPSCO INDUSTRIES, INC. 

PROSPECTUS  

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

This Joint Proxy Statement/Prospectus ("Proxy Statement/Prospectus") is     
being furnished to the holders of common shares, without par value ("IWC        
Common Shares"), of IWC Resources Corporation, an Indiana corporation ("IWC"),  
in connection with the solicitation of proxies by the Board of Directors of     
IWC for use at a special meeting of shareholders of IWC to be held at the       
corporate headquarters of IWC, 1220 Waterway Boulevard, Indianapolis, Indiana   
46206, on March   , 1997, at 11:00 a.m., Eastern Standard Time, and at any and  
all adjournments or postponements thereof (the "Special Meeting").              

This Proxy Statement/Prospectus relates to the proposed merger (the         
"Merger") of IWC with and into Speedway Acquisition Corp., an Indiana           
corporation ("Acquisition") and a wholly-owned subsidiary of NIPSCO             
Industries, Inc., an Indiana corporation ("Industries"), pursuant to an         
Agreement and Plan of Merger, dated as of December 19, 1996, by and among       
Industries, Acquisition and IWC. In the Merger, each outstanding IWC Common     
Share will be converted into (i) a fraction of a common share, without par      
value, of Industries (including the associated preferred share purchase         
rights, "Industries Common Shares") having a value of $32.00 (based on the      
average of the closing prices of the Industries Common Shares on the NYSE       
Composite Transactions Reporting System, as reported in The Wall Street         
Journal, for the 20 trading days immediately preceding the second trading day   
prior to the time that the Merger becomes effective (the "Industries Share      
Price")) or (ii) at the election of the holder, the right to receive $32.00 in  
cash, without interest, subject to certain limitations as described in this     
Proxy Statement/Prospectus. Consummation of the Merger is subject to various    
conditions, including the approval of a majority of the outstanding IWC Common  
Shares at the Special Meeting.                                                  

This Proxy Statement/Prospectus also constitutes the Prospectus of          
Industries with respect to the Industries Common Shares to be issued in         
connection with the Merger. Industries Common Shares are traded on the New      
York Stock Exchange, Inc. (the "NYSE") under the symbol "NI." On February    ,  
1997, the closing sales price for Industries Common Shares as reported on the   
NYSE Composite Tape was $     per share.                                        

All information contained in this Proxy Statement/Prospectus with respect to
IWC has been provided by IWC. All information contained in this Proxy           
Statement/Prospectus with respect to Industries and Acquisition has been        
provided by Industries.                                                         

This Proxy Statement/Prospectus and the accompanying form of proxy are first
being mailed to shareholders of IWC on or about February    , 1997. A           
shareholder who has given a proxy may revoke it at any time prior to its        
exercise. See "THE SPECIAL MEETING."                                            

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

THE SECURITIES TO WHICH THIS  PROXY STATEMENT/PROSPECTUS RELATES HAVE NOT BEEN  
APPROVED OR  DISAPPROVED BY  THE SECURITIES AND  EXCHANGE COMMISSION  OR ANY  
STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE  COMMISSION 
OR ANY  STATE SECURITIES COMMISSION  PASSED UPON THE ACCURACY  OR ADEQUACY  
OF THIS PROXY  STATEMENT/PROSPECTUS. ANY REPRESENTATION  TO THE CONTRARY  
IS A CRIMINAL OFFENSE.                                                  

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

The date of this Proxy Statement/Prospectus is February   , 1997. 

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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY        
REPRESENTATION NOT CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROXY         
STATEMENT/PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION  
SHOULD NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROXY                 
STATEMENT/PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION    
OF AN OFFER TO PURCHASE, THE SECURITIES OFFERED BY THIS PROXY                   
STATEMENT/PROSPECTUS, OR THE SOLICITATION OF A PROXY, IN ANY JURISDICTION TO    
OR FROM ANY PERSON TO OR FROM WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR         
SOLICITATION OF AN OFFER, OR PROXY SOLICITATION, IN SUCH JURISDICTION. NEITHER  
THE DELIVERY OF THIS PROXY STATEMENT/PROSPECTUS NOR THE ISSUANCE OR             
DISTRIBUTION OF ANY SECURITIES HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE   
ANY IMPLICATION THERE HAS BEEN NO CHANGE IN THE INFORMATION SET FORTH HEREIN    
OR IN THE AFFAIRS OF INDUSTRIES OR IWC SINCE THE DATE HEREOF OR THAT THE        
INFORMATION CONTAINED OR INCORPORATED BY REFERENCE HEREIN IS CORRECT AS OF ANY  
TIME SUBSEQUENT TO ITS DATE.                                                    

AVAILABLE INFORMATION 

Industries and IWC are subject to the informational requirements of the     
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in        
accordance therewith file reports, proxy statements and other information with  
the Securities and Exchange Commission (the "SEC"). Copies of such reports,     
proxy statements and other information can be obtained at prescribed rates      
from the Public Reference Section of the SEC, 450 Fifth Street, N.W.,           
Washington, D.C. 20549. In addition, such reports, proxy statements and other   
information can be inspected and copied at the public reference facilities      
maintained by the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549 and at  
the SEC's Regional Offices located at 7 World Trade Center, New York, New York  
10048 and at the Citicorp Center, 500 West Madison Street, Chicago, Illinois    
60661. The SEC maintains a web site on the World Wide Web that contains         
reports, proxy statements and other information regarding issuers that file     
electronically with the SEC. The address of such site is "http://www.sec.gov."  
In addition, such reports, proxy statements and other information concerning    
Industries can be inspected and copied at the offices of the NYSE, 20 Broad     
Street, New York, New York 10005.                                               

Industries has filed a Registration Statement on Form S-4 (together with all
amendments and exhibits, the "Registration Statement") with the SEC pursuant    
to the Securities Act of 1933, as amended (the "Securities Act"), covering up   
to            Industries Common Shares to be issued in connection with the      
Merger Agreement. This Proxy Statement/Prospectus does not contain all of the   
information set forth in the Registration Statement, certain parts of which     
are omitted in accordance with the rules and regulations of the SEC. For        
further information, reference is hereby made to the Registration Statement,    
copies of which are available from the Public Reference Section of the SEC at   
prescribed rates as described above. Statements contained herein concerning     
the provisions of documents filed with, or incorporated by reference in, the    
Registration Statement as exhibits are necessarily summaries of such            
provisions and documents, and each such statement is qualified in its entirety  
by reference to the copy of the applicable document filed with the SEC.         

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INCORPORATION OF CERTAIN INFORMATION BY REFERENCE 

THIS PROXY STATEMENT/PROSPECTUS INCORPORATES BY REFERENCE DOCUMENTS THAT ARE
NOT PRESENTED HEREIN OR DELIVERED HEREWITH. COPIES OF THESE DOCUMENTS           
(EXCLUDING EXHIBITS THERETO UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED  
BY REFERENCE INTO SUCH DOCUMENTS) ARE AVAILABLE WITHOUT CHARGE UPON ORAL OR     
WRITTEN REQUEST OF ANY PERSON, INCLUDING A BENEFICIAL OWNER, TO WHOM A COPY OF  
THIS PROXY STATEMENT/PROSPECTUS HAS BEEN DELIVERED. REQUESTS FOR DOCUMENTS      
RELATING TO INDUSTRIES SHOULD BE DIRECTED TO NINA M. RAUSCH, SECRETARY, NIPSCO  
INDUSTRIES, INC., 5265 HOHMAN AVENUE, HAMMOND, INDIANA 46320, TELEPHONE NUMBER  
(219) 853-5199. REQUESTS FOR DOCUMENTS RELATING TO IWC SHOULD BE DIRECTED TO    
THE SHAREHOLDER RELATIONS DEPARTMENT, IWC RESOURCES CORPORATION, 1220 WATERWAY  
BOULEVARD, P.O. BOX 1220, INDIANAPOLIS, INDIANA 46206, TELEPHONE NUMBER (317)   
639-1501. IN ORDER TO ENSURE TIMELY DELIVERY OF THESE DOCUMENTS, ANY SUCH       
REQUEST SHOULD BE MADE BY               , 1997 [DATE THAT IS FIVE BUSINESS      
DAYS PRIOR TO ELECTION DEADLINE].                                               

The following documents previously filed with the SEC by Industries (File   
No. 001-9779) and IWC (File No. 000-15420) are incorporated herein by           
reference:                                                                      

(a) Industries' Annual Report on Form 10-K for the year ended December  
31, 1995;                                                                   

(b) Industries' Quarterly Reports on Form 10-Q for the quarters ended   
March 31, 1996, June 30, 1996, and September 30, 1996;                      

(c) The description of Industries' common shares, without par value, and
associated preferred share purchase rights, contained in Industries'        
registration statement on Form 8-B filed pursuant to Section 12 of the      
Exchange Act and any amendments and reports filed for the purpose of        
updating that description;                                                  

(d) IWC's Annual Report on Form 10-K for the year ended December 31,    
1995; and                                                                   

 (e) IWC's Quarterly Reports on Form 10-Q for the quarters ended March 31,
1996, June 30, 1996, and September 30, 1996.                                

All documents subsequently filed by Industries or IWC pursuant to Sections  
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Proxy      
Statement/Prospectus and prior to the termination of the offering of the        
Industries Common Shares shall be deemed to be incorporated by reference in     
this Proxy Statement/Prospectus and to be a part hereof from the date of        
filing of such documents. Any statement contained in a document incorporated    
or deemed to be incorporated by reference in this Proxy Statement/Prospectus    
shall be deemed to be modified or superseded for purposes of this Proxy         
Statement/Prospectus to the extent that a statement contained herein or in any  
other subsequently filed document that also is or is deemed to be incorporated  
by reference herein modifies or supersedes such statement. Any such statement   
so modified or superseded shall not be deemed, except as so modified or         
superseded, to constitute a part of this Proxy Statement/Prospectus.            

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TABLE OF CONTENTS 

                                                                [Download Table]
                                                                               
AVAILABLE INFORMATION......................................................   2
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE..........................   3
SUMMARY....................................................................   5
THE SPECIAL MEETING........................................................  14
  General..................................................................  14
  Purpose of the Special Meeting...........................................  14
  Record Date; Quorum......................................................  14
  Vote Required; Shares Entitled to Vote...................................  14
  Voting of Proxies........................................................  15
  Revocation of Proxies....................................................  15
  Solicitation of Proxies..................................................  15
THE MERGER.................................................................  15
  Overview of the Merger...................................................  16
  Background of the Merger.................................................  16
  IWC's Reasons for the Merger; Recommendation of the IWC Board of             
   Directors...............................................................  18
  Opinion of Goldman Sachs.................................................  18
  Industries' Reasons for the Merger.......................................  22
  Opinion of Barr Devlin...................................................  23
  Cash Elections; Allocation and Proration.................................  26
  Cash Election Procedure..................................................  27
  No Dissenters' Rights....................................................  28
  Exchange of Stock Certificates...........................................  28
  No Fractional Shares.....................................................  28
  IWC Dividends Prior to the Effective Time of the Merger..................  28
  Impact of Stock Splits, Etc..............................................  28
  Operation of IWC after the Merger........................................  29
  Regulatory Matters.......................................................  29
  Stock Exchange Listings..................................................  29
  Conditions to the Merger.................................................  29
  Other Acquisition Proposals..............................................  30
  Termination; Termination Fees............................................  30
  Expenses.................................................................  31
  Amendment, Extension and Waiver..........................................  31
  Interests of Certain Persons.............................................  32
  Effective Time of the Merger.............................................  34
  Certain Federal Income Tax Consequences..................................  34
  Accounting Treatment.....................................................  35
  Resales of Industries Common Shares Issued in the Merger; Affiliates.....  36
SHAREHOLDERS OF IWC........................................................  37
COMPARATIVE SHAREHOLDER RIGHTS.............................................  38
  Common and Preferred Shares..............................................  38
  General Voting Rights....................................................  38
  Voting on Transactions with Interested Shareholders......................  38
  Board of Directors.......................................................  39
  Special Meetings of Shareholders.........................................  39
  Amendment of Articles....................................................  40
  Amendment of By-Laws.....................................................  40
  Share Purchase Rights Plans..............................................  40
LEGAL OPINION..............................................................  41
EXPERTS....................................................................  41
ANNEXES                                                                        
  ANNEX A: Agreement and Plan of Merger                                        
  ANNEX B: Opinion of Goldman, Sachs & Co.                                     
  ANNEX C: Opinion of Barr Devlin & Co. Incorporated                           

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SUMMARY 

 The following is a summary of certain information contained elsewhere in this
Proxy Statement/Prospectus. This summary does not contain a complete statement  
of such information or all of the material features of the Merger and is        
qualified in its entirety by reference to, and should be read in conjunction    
with, the detailed information contained or incorporated by reference in this   
Proxy Statement/Prospectus, including the Annexes hereto. Certain capitalized   
terms used in this summary are defined elsewhere in this Proxy                  
Statement/Prospectus.                                                           

PARTIES TO THE MERGER                                                           

IWC Resources Corporation. IWC, an Indiana corporation, is a holding company
which owns and operates seven subsidiaries, including two regulated water       
utility companies, Indianapolis Water Company and Harbor Water Corporation      
(together, the "Water Companies"), which supply water for residential,          
commercial and industrial uses, and fire protection service, in Indianapolis,   
Indiana, and surrounding areas. The territory served by the Water Companies     
covers an area of approximately 309 square miles which includes areas in        
Marion, Hancock, Hamilton, Hendricks, Boone and Morgan counties in central      
Indiana. At December 31, 1996, the Water Companies were providing service to    
approximately    ,000 customers.                                                

In addition to the Water Companies, IWC has five other wholly-owned         
subsidiaries: SM&P Utility Resources, Inc. ("SM&P"), Miller Pipeline            
Corporation ("MPC"), Waterway Holdings, Inc. ("WHI"), Utility Data Corporation  
("UDC") and IWC Services, Inc. SM&P performs underground utility locating and   
marking services in Indiana and other states. MPC's primary function is the     
installation of underground pipelines for natural gas utilities. In addition,   
MPC sells products and services related to infrastructure preservation and      
replacement. IWC, principally through WHI, owns real estate that it expects to  
sell or develop in the future. UDC provides customer relations, customer        
billing and other data processing services for the Water Companies and other    
water and sewer utilities. IWC Services provides laboratory water testing       
services, principally for water utilities. IWC, through IWC Services, is the    
majority (52%) partner in the White River Environmental Partnership ("WREP"),   
which entered into a five-year contract, effective January 1994, to operate and 
maintain two advanced wastewater treatment facilities for the City of           
Indianapolis. WREP is actively seeking new markets and opportunities for        
contract management services pursuant to expanded governmental privatization    
efforts.                                                                        

The principal executive offices of IWC are located at 1220 Waterway         
Boulevard, P.O. Box 1220, Indianapolis, Indiana 46206, and its telephone number 
is (317) 639-1501.                                                              

 NIPSCO Industries, Inc. Industries is an Indiana corporation, incorporated on
September 22, 1987, which serves as the holding company for a number of         
subsidiaries, including four regulated companies: Northern Indiana Public       
Service Company ("Northern Indiana"), Kokomo Gas and Fuel Company ("Kokomo      
Gas"), Northern Indiana Fuel and Light Company, Inc. ("NIFL") and Crossroads    
Pipeline Company ("Crossroads"). Industries' major non-utility subsidiaries     
include NIPSCO Development Company, Inc. ("Development"), NIPSCO Energy         
Services, Inc. ("Services"), Primary Energy, Inc. ("Primary") and NIPSCO        
Capital Markets, Inc. ("Capital Markets").                                      

Northern Indiana, Industries' largest and dominant subsidiary, is a public  
utility operating company engaged in supplying natural gas and electric energy  
to the public. It operates in 30 counties in the northern part of Indiana,      
serving an area of about 12,000 square miles with a population of approximately 
2,188,000. Northern Indiana serves approximately 653,200 customers with gas and 
approximately 411,500 with electricity. Kokomo Gas is a public utility          
operating company engaged in supplying natural gas to the public. It operates   
in the City of Kokomo, Indiana, and the surrounding area in six counties having 
a population of approximately 100,000 and serves approximately 32,900           
customers. The Kokomo Gas service territory is contiguous to Northern Indiana's 
gas service territory. NIFL is a public utility operating company engaged in    
supplying natural gas to                                                        

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the public. Headquartered in Auburn, Indiana, it operates in five counties in   
the northeast corner of the state having a population of approximately 66,700   
and serves approximately 31,100 customers. The NIFL service territory is        
contiguous to Northern Indiana's gas service territory. Crossroads is a natural 
gas pipeline that was certificated by the Federal Energy Regulatory Commission  
as an interstate pipeline in May 1995. Development makes various investments,   
including real estate and venture capital investments. Services coordinates the 
energy-related diversification ventures of Industries. Primary arranges energy- 
related projects with large industrial customers. Capital Markets handles       
financing for ventures of Industries and its subsidiaries other than Northern   
Indiana.                                                                        

The principal executive offices of Industries are located at 5265 Hohman    
Avenue, Hammond, Indiana 46320, and its telephone number is (219) 853-5200.     

Acquisition. Acquisition is an Indiana corporation recently organized by    
Industries solely for the purpose of effecting the Merger. It has no material   
assets and has not engaged in any activities except in connection with the      
Merger. Upon consummation of the Merger, Acquisition, as the surviving          
corporation, will change its name to "IWC Resources Corporation."               

THE SPECIAL MEETING                                                             

 The Special Meeting has been called to consider and vote upon the approval of
the Merger Agreement and the Merger and will be held on March   , 1997 at 11:00 
a.m., Eastern Standard Time, at the corporate headquarters of IWC, 1220         
Waterway Boulevard, Indianapolis, Indiana. Holders of record of IWC Common      
Shares at the close of business on February 13, 1997 (the "Record Date") will   
be entitled to notice of and to vote at the Special Meeting. The presence, in   
person or by proxy, at the Special Meeting of the holders of a majority of the  
IWC Common Shares outstanding and entitled to vote at the Special Meeting is    
necessary to constitute a quorum. See "THE SPECIAL MEETING--Record Date;        
Quorum."                                                                        

VOTING RIGHTS AND VOTES REQUIRED FOR APPROVAL                                   

 Approval of the Merger Agreement and the Merger requires the affirmative vote
of the holders of a majority of the outstanding IWC Common Shares. On the       
Record Date, there were outstanding 9,078,249 IWC Common Shares. Each IWC       
Common Share outstanding on the Record Date will be entitled to cast one vote   
with respect to the Merger at the Special Meeting. See "THE SPECIAL MEETING--   
Record Date; Quorum"; "--Vote Required; Shares Entitled to Vote."               

RECOMMENDATION OF THE IWC BOARD OF DIRECTORS                                    

 The Board of Directors of IWC believes that the terms of the Merger Agreement
and the Merger are fair to and in the best interests of the IWC shareholders.   
ACCORDINGLY, THE BOARD OF DIRECTORS OF IWC HAS UNANIMOUSLY ADOPTED THE MERGER   
AGREEMENT AND UNANIMOUSLY RECOMMENDS THAT THE IWC SHAREHOLDERS VOTE FOR         
APPROVAL OF THE MERGER AGREEMENT AND THE MERGER. The circumstances surrounding  
and the reasons for the Board of Directors' recommendation, as well as the      
factors considered by the Board of Directors in making such recommendation, are 
discussed further under "THE MERGER--IWC's Reasons for the Merger;              
Recommendation of the IWC Board of Directors." Three members of the Board of    
Directors of IWC will receive certain payments in connection with the change in 
control of IWC and will enter into employment agreements with the Surviving     
Corporation. See "THE MERGER--Interests of Certain Persons."                    

OPINION OF GOLDMAN SACHS                                                        

On December 19, 1996, Goldman, Sachs & Co. ("Goldman Sachs") delivered its  
oral and written opinions to the Board of Directors of IWC to the effect that,  
as of such date and based upon and subject to the factors and assumptions set   
forth therein, the Stock Consideration and the Cash Consideration (each as      
defined in Goldman Sachs' opinion attached hereto as Annex B) to be received by 
the holders of IWC Common Shares pursuant to the Merger Agreement were each     
fair to the holders of IWC Common Shares receiving either such                  

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Consideration. Goldman Sachs subsequently confirmed its December 19, 1996       
opinion by delivery of its written opinion, dated the date hereof. See "THE     
MERGER--Opinion of Goldman Sachs."                                              

 The full text of the written opinion of Goldman Sachs, dated the date hereof,
which sets forth assumptions made, matters considered and limitations on the    
review undertaken in connection with the opinion, is attached as Annex B to     
this Proxy Statement/Prospectus and is incorporated herein by reference.        
SHAREHOLDERS OF IWC ARE URGED TO, AND SHOULD, READ SUCH OPINION IN ITS          
ENTIRETY.                                                                       

THE MERGER                                                                      

General. The Merger Agreement provides that, subject to the approval of the 
holders of IWC Common Shares and satisfaction or waiver of certain other        
conditions, IWC will be merged with and into Acquisition, which will be the     
surviving corporation (the "Surviving Corporation"), and the Surviving          
Corporation will be a wholly-owned subsidiary of Industries. At the effective   
time of the Merger (the "Effective Time"), each outstanding IWC Common Share    
will be converted into (i) the fraction (rounded to the nearest ten-thousandth  
of a share) of an Industries Common Share determined by dividing $32.00 by the  
Industries Share Price (the "Exchange Ratio") or, (ii) at the election of the   
holder, the right to receive $32.00 in cash, without interest, subject to       
certain limitations described below. The "Industries Share Price" means the     
average of the closing prices of the Industries Common Shares on the NYSE       
Composite Transactions Reporting System, as reported in The Wall Street         
Journal, for the 20 trading days immediately preceding the second trading day   
prior to the Effective Time. See "THE MERGER--Overview of the Merger."          

Cash Elections; Allocation and Proration. Each record holder of IWC Common  
Shares may elect to receive cash for all or any portion of such holder's IWC    
Common Shares (a "Cash Election"); however, the aggregate number of IWC Common  
Shares that will be converted into the right to receive cash in the Merger (the 
"Cash Election Maximum") may not exceed        shares [the number of IWC Common 
Shares determined by dividing (a)(i) $159,000,000 less (ii) the amount paid by  
IWC in consideration of the cancellation of IWC Common Shares issued under      
IWC's Restricted Stock Plan by (b) $32.00]. If the aggregate number of IWC      
Common Shares covered by valid Cash Elections (the "Cash Election Shares")      
exceeds the Cash Election Maximum, each Cash Election Share will be converted   
into (i) the right to receive cash, without interest, in an amount equal to the 
product of (a) $32.00 multiplied by (b) a fraction, the numerator of which will 
be the Cash Election Maximum and the denominator of which will be the total     
number of Cash Election Shares (the "Cash Fraction") and (ii) a fraction of an  
Industries Common Share equal to the product of (a) the Exchange Ratio          
multiplied by (b) a fraction equal to one minus the Cash Fraction. The Cash     
Election Maximum is subject to further adjustment as discussed under "THE       
MERGER--Cash Elections; Allocation and Proration."                              

Promptly after the Effective Time, the Exchange Agent will calculate the    
aggregate number of Cash Election Shares. If the aggregate number of Cash       
Election Shares does not exceed the Cash Election Maximum, all Cash Election    
Shares will be converted into the right to receive cash. However, if the        
aggregate number of Cash Election Shares exceeds the Cash Election Maximum,     
then the Cash Election Shares will be converted on a pro rata basis into a      
combination of cash and Industries Common Shares as described above. AS A       
RESULT OF ANY SUCH PRORATION, A HOLDER OF IWC COMMON SHARES MAKING A CASH       
ELECTION MAY NOT RECEIVE CASH IN THE AMOUNT THAT SUCH HOLDER ELECTED. A HOLDER  
OF IWC COMMON SHARES MAKING A CASH ELECTION WILL NOT BE ABLE TO ALTER ANY SUCH  
PRORATION. See "THE MERGER--Cash Elections; Allocation and Proration."          

Cash Election Procedure. A holder of IWC Common Shares who wishes to receive
cash instead of Industries Common Shares for all or any portion of such         
holder's IWC Common Shares may make a Cash Election by completing the enclosed  
Form of Election and returning it in the enclosed BLUE envelope to Harris Trust 
and Savings Bank (the "Exchange Agent") so that it is received no later than    
5:00 p.m., New York City time (4:00 p.m., Chicago time), on the last NYSE       
trading day prior to the date of the Special Meeting (the "Election Deadline"). 
The failure of a holder of IWC Common Shares to complete properly and return a  
Form of Election prior to the Election Deadline, and to comply with the         
election procedures disclosed in this Proxy                                     

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Statement/Prospectus and the Form of Election (including the instructions       
thereto), will result in all of such holder's IWC Common Shares being           
automatically converted into Industries Common Shares pursuant to the Merger    
Agreement. See "THE MERGER--Cash Election Procedure."                           

No Fractional Shares. No fractional Industries Common Shares will be issued 
pursuant to the Merger. IWC Shareholders will receive cash in lieu of any       
fractional shares resulting from the conversion of IWC Common Shares into       
Industries Common Shares based on the Industries Share Price. See "THE MERGER-- 
No Fractional Shares."                                                          

NO DISSENTERS' RIGHTS                                                           

Under the Indiana Business Corporation Law, holders of IWC Common Shares do 
not have dissenters' rights in connection with the Merger. See "THE MERGER--No  
Dissenters' Rights."                                                            

IWC DIVIDENDS PRIOR TO THE EFFECTIVE TIME OF THE MERGER                         

IWC will be entitled to declare and pay quarterly dividends at the rate of  
$.36 per share in accordance with its past practice until the Effective Time.   
On January 16, 1997, the Board of Directors of IWC declared a cash dividend of  
$.36 per share on the IWC Common Shares. The dividend will be paid on March 1,  
1997, to shareholders of record on February 10, 1997. See "THE MERGER--IWC      
Dividends Prior to the Effective Time of the Merger."                           

REGULATORY MATTERS                                                              

Consummation of the Merger is subject to the notification and reporting     
provisions of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the     
"HSR Act"). Under Indiana law, no approval is needed from the Indiana Utility   
Regulatory Commission. See "THE MERGER--Regulatory Matters."                    

CONDITIONS TO THE MERGER                                                        

 The obligations of Industries and IWC to consummate the Merger are subject to
the satisfaction or waiver of a number of conditions specified in the Merger    
Agreement, including, among other things: (i) the approval of the Merger        
Agreement by IWC shareholders; (ii) receipt of all required governmental and    
regulatory consents and approvals; (iii) the absence of any order or injunction 
that would restrain, enjoin or prohibit the consummation of the Merger; (iv)    
receipt by each of Industries and IWC of tax opinions from their respective tax 
counsel; (v) the cancellation of existing executive employment agreements       
between IWC and certain IWC executives; (vi) execution of employment agreements 
between the Surviving Corporation and certain IWC executives; and (vii) the     
redemption of IWC's preferred share purchase rights. See "THE MERGER--          
Conditions to the Merger."                                                      

OTHER ACQUISITION PROPOSALS                                                     

 In the Merger Agreement, IWC has agreed not to solicit, initiate or encourage
the submission of, or participate in any discussions or negotiations regarding, 
or furnish to any person any information with respect to, or take any other     
action to facilitate any inquiries or the making of any proposal that           
constitutes, or may be reasonably expected to lead to, any bona fide proposal   
with respect to a merger, consolidation, share exchange or similar transaction  
involving IWC or any of its subsidiaries, any purchase of all or any            
significant portion of the assets or shares of IWC or any of its subsidiaries   
or any other business combination involving IWC or any of its subsidiaries (an  
"Acquisition Proposal"). However, the Merger Agreement does not prohibit IWC    
from furnishing information to, or entering into discussions or negotiations    
with, any person or entity that makes an unsolicited Acquisition Proposal, to   
the extent that (i) the Board of Directors of IWC makes a good faith            
determination based upon the advice of outside counsel that such action is      
necessary for the Board of Directors of IWC to comply with its fiduciary duties 
to shareholders under applicable law, (ii) IWC provides reasonable notice to    
Industries that it is taking such action and (iii) such person or entity enters 
into a confidentiality agreement with IWC as provided in the Merger Agreement.  
See "THE MERGER--Other Acquisition Proposals."                                  

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TERMINATION; TERMINATION FEES                                                   

The Merger Agreement may be terminated at any time prior to the Effective   
Time by the mutual consent of IWC and Industries or by either party if (i) the  
shareholders of IWC fail to approve the Merger Agreement, (ii) the Merger is    
not completed by May 31, 1997, (iii) the Merger is enjoined by court order,     
(iv) the Board of Directors of IWC concludes that, in order to comply with its  
fiduciary duties to shareholders, it is necessary to pursue an Acquisition      
Proposal, or (v) the other party breaches in any material respect any of its    
covenants or representations and warranties under the Merger Agreement and      
fails to cure such breach.                                                      

The Merger Agreement provides that, if the Merger Agreement is terminated by
Industries or IWC because the Board of Directors of IWC concludes that, in      
order to comply with its fiduciary duties to shareholders under applicable law, 
it is necessary to modify or withdraw its approval or recommendation of the     
Merger Agreement, approve or recommend an unsolicited Acquisition Proposal or   
enter into an agreement with respect to such Acquisition Proposal, IWC will pay 
Industries $1,000,000 as liquidated damages within 30 days of the date of such  
termination and will pay Industries an additional $9,000,000 as liquidated      
damages upon the earlier of consummation of the transactions contemplated by    
the Acquisition Proposal or five months from the date of such termination;      
provided that IWC will not be obligated to pay the additional $9,000,000 if,    
within such five-month period, the transactions contemplated by the Acquisition 
Proposal are abandoned or otherwise terminated and either (i) the Merger        
Agreement is reinstated by mutual agreement of Industries and IWC or (ii)       
Industries rejects a firm written offer from IWC to reinstate the Merger        
Agreement and consummate the transactions contemplated thereby. The Merger      
Agreement further provides that, if the Merger Agreement is terminated by       
either Industries or IWC as a result of a material breach by the other of any   
representation, warranty or obligation thereunder, the breaching party will pay 
$10,000,000 to the nonbreaching party as liquidated damages. See "THE MERGER--  
Termination; Termination Fees."                                                 

INTERESTS OF CERTAIN PERSONS IN THE MERGER                                      

Certain directors and executive officers of IWC have interests in the       
transactions contemplated by the Merger Agreement that are in addition to the   
interests of shareholders of IWC generally, including the following:            

Change in Control Obligations and New Employment Agreements. In connection  
with the Merger, five senior executives of IWC, three of whom are also          
directors of IWC, will agree to the cancellation of their existing executive    
employment agreements with IWC and their restricted shares granted pursuant to  
IWC's Restricted Stock Plan in consideration for new employment agreements with 
the Surviving Corporation. Under the new employment agreements, each executive  
will be entitled to receive: (i) a base salary at the executive's 1997 base     
salary; (ii) a completion bonus following completion of the Merger; (iii)       
annual deferred compensation in an amount equal to the annual contribution      
Industries would have made to its defined benefit pension plan for that year if 
the executive had been a participant in the plan; (iv) an annual performance    
incentive bonus; (v) in the case of three of the executives, an acquisition     
incentive bonus; (vi) payments relating to an agreement not to compete with     
Industries or its subsidiaries after termination of employment; and (vii)       
participation in employee welfare benefit plans made available generally to     
senior executives of Industries. In addition, to the extent that any payments   
under the new employment agreements are subject to an excise tax under Section  
4999 of the Internal Revenue Code of 1986, as amended (the "Code"), the         
Surviving Corporation will reimburse the executives for the amount of such      
excise tax up to an aggregate of $6,000,000.                                    

Election to Industries' Board. The Merger Agreement provides that Industries
will use its best efforts to cause its Articles of Incorporation to be amended  
at its 1997 annual meeting of shareholders to increase the authorized number of 
directors so as to permit the appointment of one director of IWC to be mutually 
determined by Industries and IWC to serve as a director of Industries.          
Industries and IWC have selected James T. Morris to serve as this director.     

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IWC Directors. After the Merger, it is expected that the current members of 
IWC's Board of Directors will serve as directors of the Surviving Corporation,  
other than current directors of IWC who are also directors of another electric  
or gas utility company. It is further expected that the compensation of those   
continuing directors will remain substantially unchanged. Directors of IWC      
(other than directors who are employees of IWC) receive a quarterly retainer of 
$2,500 and an additional $1,000 for each Board of Directors meeting attended.   
Directors also receive additional amounts for serving as members of the         
Executive Committee, the Audit Committee and the Compensation Committee. IWC    
maintains a retirement program for its non-employee directors, under which the  
quarterly director's retainer of $2,500 is paid to a director who retires after 
reaching age 65 and who has at least ten years of service as a director. The    
retirement benefit is reduced proportionately in the case of retiring directors 
who have fewer than ten years of service as a director.                         

Indemnification. Industries has agreed to indemnify and hold harmless each  
Eligible Person (as defined in IWC's Articles of Incorporation), including the  
directors of IWC, determined as of the Effective Time, against any costs,       
expenses and other liabilities to the fullest extent that IWC or any of its     
subsidiaries would have been permitted to indemnify such person under           
applicable law and the Articles of Incorporation of IWC or such subsidiary in   
effect on the date of the Merger Agreement.                                     

See "THE MERGER--Interests of Certain Persons."                             

EFFECTIVE TIME OF THE MERGER                                                    

The Effective Time will occur at the time Articles of Merger are filed with 
the Secretary of State of Indiana. Such filing will be made as soon as          
practicable following the Special Meeting and the satisfaction or waiver of the 
other conditions in the Merger Agreement. See "THE MERGER--Effective Time of    
the Merger."                                                                    

CERTAIN FEDERAL INCOME TAX CONSEQUENCES                                         

The Merger is expected to qualify as a tax-free reorganization for federal  
income tax purposes within the meaning of Section 368(a) of the Code. Assuming  
the Merger so qualifies, no gain or loss will be recognized by Industries or    
IWC, and no gain or loss will be recognized by any shareholder of IWC, except   
in respect of cash received in a Cash Election or for fractional shares.        
Consummation of the Merger is conditioned upon receipt of opinions of counsel   
to Industries and counsel to IWC to the effect that the Merger will constitute  
a tax-free reorganization. See "THE MERGER--Certain Federal Income Tax          
Consequences."                                                                  

ACCOUNTING TREATMENT                                                            

 The Merger will be accounted for by Industries under the "purchase" method of
accounting in conformity with generally accepted accounting principles. See     
"THE MERGER--Accounting Treatment."                                             

COMPARATIVE RIGHTS OF SHAREHOLDERS OF INDUSTRIES AND IWC                        

Industries and IWC are both incorporated under the laws of Indiana. IWC     
shareholders will, upon consummation of the Merger and subject to Cash          
Elections, become shareholders of Industries, and their rights as such will be  
governed by Indiana law and Industries' Articles of Incorporation and By-laws.  
See "COMPARATIVE SHAREHOLDER RIGHTS."                                           

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MARKET PRICES AND DIVIDENDS                                                     

Industries. Industries Common Shares are listed and traded on the NYSE, the 
Pacific Stock Exchange and the Chicago Stock Exchange. The table below          
indicates the high and low sales prices of Industries Common Shares reported on 
the NYSE Composite Tape, and the dividends declared per share, during the       
periods indicated.                                                              

                                                                [Download Table]

                                                                  DIVIDEND
                                                   HIGH     LOW   DECLARED
                                                  ------- ------- --------
                                                                          
1995                                                                      
  First Quarter.................................. $32 1/4 $29 1/4  $0.39  
  Second Quarter................................. $35 1/4 $30 3/4  $0.39  
  Third Quarter.................................. $34 7/8 $32 1/8  $0.39  
  Fourth Quarter................................. $38 1/2 $34 1/2  $0.42  
1996                                                                      
  First Quarter.................................. $39 1/8 $36      $0.42  
  Second Quarter................................. $40 1/4 $35 1/4  $0.42  
  Third Quarter.................................. $40 1/8 $36 1/8  $0.42  
  Fourth Quarter................................. $39 7/8 $35 7/8  $0.45  
1997                                                                      
  First Quarter (through February   , 1997)......                         

On December 18, 1996, the last full trading day prior to the public         
announcement of execution of the Merger Agreement, the closing sale price       
reported on the NYSE Composite Tape for the Industries Common Shares was $38    
5/8. On February   , 1997, the last full trading day for which information was  
available prior to the printing of this Proxy Statement/Prospectus, the closing 
sale price reported on the NYSE Composite Tape for the Industries Common Shares 
was $      .                                                                    

On December 17, 1996, the Board of Directors of Industries declared a cash  
dividend of $0.45 per share on the Industries Common Shares. The dividend was   
paid on February 20, 1997, to holders of record of Industries Common Shares on  
January 31, 1997. Holders of record of IWC Common Shares were not entitled to   
receive this dividend on the Industries Common Shares.                          

IWC. IWC Common Shares are listed on the Nasdaq National Market. The table  
below indicates the high and low sales prices of IWC Common Shares on the       
Nasdaq National Market, and the dividends declared per share, during the        
periods indicated.                                                              

                                                                [Download Table]

                                                                  DIVIDEND
                                                   HIGH     LOW   DECLARED
                                                  ------- ------- --------
                                                                          
1995                                                                      
  First Quarter.................................. $20 3/4 $18 1/4  $0.35  
  Second Quarter................................. $20 1/4 $18      $0.35  
  Third Quarter.................................. $19 3/4 $18 3/4  $0.35  
  Fourth Quarter................................. $20 1/2 $18 3/4  $0.35  
1996                                                                      
  First Quarter.................................. $23     $20      $0.36  
  Second Quarter................................. $21 1/4 $17 1/4  $0.36  
  Third Quarter.................................. $20 1/4 $17 3/4  $0.36  
  Fourth Quarter................................. $31 3/4 $19 3/4  $0.36  
1997                                                                      
  First Quarter (through February   , 1997)......                         

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On December 18, 1996, the last full trading day prior to the public         
announcement of execution of the Merger Agreement, the closing price reported   
for the IWC Common Shares was $24.25. On February   , 1997, the last full       
trading day for which information was available prior to the printing of this   
Proxy Statement/Prospectus, the closing price reported for the IWC Common       
Shares was $     .                                                              

On January 16, 1997, the Board of Directors of IWC declared a cash dividend 
of $0.36 per share on the IWC Common Shares. The dividend will be paid on March 
1, 1997, to holders of record of IWC Common Shares on February 10, 1997.        

SELECTED FINANCIAL DATA                                                         

 The following tables present certain selected consolidated financial data for
Industries and IWC on an historical basis. This summary has been derived from,  
and should be read in conjunction with, the consolidated financial statements   
of Industries and IWC incorporated by reference in this Proxy                   
Statement/Prospectus. The selected consolidated financial data for IWC for the  
twelve-month period ended September 30, 1996 are unaudited and, in the opinion  
of management, include all adjustments, consisting of only normal recurring     
accruals, necessary for a fair presentation of such data. The selected          
consolidated financial data for the twelve-month period ended September 30,     
1996 are not necessarily indicative of the results of operations for the fiscal 
year ended December 31, 1996.                                                   

Industries                                                                    

                                                        [Enlarge/Download Table]

                           TWELVE MONTHS                   YEAR ENDED DECEMBER 31,                
                               ENDED        ------------------------------------------------------
                         SEPTEMBER 30, 1996    1995       1994       1993       1992       1991   
                         ------------------ ---------- ---------- ---------- ---------- ----------
                                         (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)                 
                                                                                                  
Operating revenues......     $1,766,258     $1,722,325 $1,676,401 $1,677,872 $1,582,356 $1,535,161
Net income..............        177,153        175,465    163,987    156,140    136,648    133,388
Earnings per average                                                                              
 common share...........           2.85           2.72       2.48       2.31       2.00       1.94
Total assets (a)........      4,111,931      3,999,520  3,947,138  3,912,324  3,807,941  3,647,557
Long-term obligations                                                                             
 and redeemable                                                                                   
 preferred and                                                                                    
 preference stock (a)...      1,252,485      1,274,379  1,281,395  1,295,962  1,160,122  1,157,686
Cash dividends declared                                                                           
 per common share.......           1.68           1.59       1.47       1.35       1.26       1.18
Book value per share                                                                              
 (a)....................          18.30          17.99      17.34      16.63      15.73      15.17

 IWC                                                                                              


                           TWELVE MONTHS                                                          
                               ENDED                       YEAR ENDED DECEMBER 31,                
                         SEPTEMBER 30, 1996 ------------------------------------------------------
                            (UNAUDITED)        1995       1994       1993       1992       1991   
                         ------------------ ---------- ---------- ---------- ---------- ----------
                                         (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)                 
                                                                                                  
Operating revenues......     $  184,228     $  147,065 $  111,379 $   84,242 $   63,452 $   59,930
Net income..............         11,211         12,192     10,142      9,376      8,113      7,737
Earnings per average                                                                              
 common share...........           1.35           1.64       1.47       1.41       1.27       1.45
Total assets (a)........        420,853        408,879    335,382    312,443    275,112    279,608
Long-term obligations                                                                             
 and redeemable                                                                                   
 preferred and                                                                                    
 preference stock (a)...        117,897        119,080    103,930     91,080     90,780     77,180
Cash dividends declared                                                                           
 per common share.......           1.43           1.40       1.40       1.40      1.395       1.38
Book value per share                                                                              
 (a)....................          13.27          12.81      11.38      11.20      10.49      10.54

--------                                                                        
(a) At end of period.                                                           

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HISTORICAL AND PRO FORMA COMPARATIVE PER SHARE DATA                             

The following summary presents selected comparative per share data for      
Industries Common Shares and IWC Common Shares on an historical basis and       
unaudited per share data for Industries on a pro forma basis and for IWC on a   
pro forma equivalent basis assuming the Merger had been effective as of January 
1, 1995. The data presented should be read in conjunction with the historical   
consolidated financial statements of Industries and IWC, and the related notes  
thereto, incorporated by reference in this Proxy Statement/Prospectus. The      
following data is not necessarily indicative of the results that actually would 
have occurred if the Merger had been in effect during the periods presented or  
which may be attained in the future.                                            

                                                                [Download Table]

                                  HISTORICAL                PRO FORMA(1)(2)    
                          -------------------------- --------------------------
                          TWELVE MONTHS              TWELVE MONTHS             
                              ENDED      YEAR ENDED      ENDED      YEAR ENDED 
                          SEPTEMBER 30, DECEMBER 31, SEPTEMBER 30, DECEMBER 31,
                              1996          1995         1996          1995    
                          ------------- ------------ ------------- ------------
                                                                               
Industries                                                                     
  Book value per share...    $18.30        $17.99       $18.39        $19.07   
  Cash dividends declared                                                      
   per common share......      1.68          1.59         1.68          1.59   
  Earnings per average                                                         
   common share..........      2.85          2.72         2.69          2.53   

                                                             PRO FORMA         
                                  HISTORICAL               EQUIVALENT(3)       
                          -------------------------- --------------------------
                          TWELVE MONTHS              TWELVE MONTHS             
                              ENDED      YEAR ENDED      ENDED      YEAR ENDED 
                          SEPTEMBER 30, DECEMBER 31, SEPTEMBER 30, DECEMBER 31,
                              1996          1995         1996          1995    
                          ------------- ------------ ------------- ------------
                                                                               
IWC                                                                            
  Book value per share...    $13.27        $12.81       $14.90        $15.45   
  Cash dividends declared                                                      
   per common share......      1.43          1.40         1.36          1.29   
  Earnings per average                                                         
   common share..........      1.35          1.64         2.18          2.05   

--------                                                                        
(1) The pro forma per share information for Industries was prepared based on    
the assumptions that the purchase price is $289.7 million, that the     
Industries Share Price is $39.50, and that the consideration paid by    
  Industries in the Merger will be comprised 45% of Industries Common Shares
   and 55% of cash. Such assumptions result in a ratio of .36 of an Industries
   Common Share to be issued in connection with the Merger for each IWC Common
 Share outstanding. For purposes of computing unaudited per share data for
  Industries on a pro forma basis, it has been assumed that the assets to be
 acquired and the liabilities to be assumed are stated at fair value, with
the excess purchase price over those assets and liabilities allocated to
goodwill. This allocation is preliminary due to certain events and      
activities that must occur for the allocation to be final.              
(2) The pro forma per share data for Industries were determined assuming that   
the purchase price will be comprised 45% of Industries Common Shares and
   55% of cash, which is the maximum amount of cash allowable under the Merger
  Agreement. Changing this assumption to contemplate that the purchase price
will be comprised 50% of Industries Common Shares and 50% of cash would 
increase Industries' pro forma book value per share amounts by $.11 and 
  $.12 and have no impact on pro forma earnings per average common share for
 the twelve months ended September 30, 1996 or the year ended December 31,
1995, respectively.                                                     
(3) The pro forma equivalent per share data for IWC assume a ratio of .81 of an 
   Industries Common Share for each IWC Common Share converted into Industries
 Common Shares, based upon an assumed Industries Share Price of $39.50. No
  pro forma equivalent per share data is provided with respect to IWC Common
Shares converted into the right to receive cash.                        

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THE SPECIAL MEETING 

GENERAL                                                                         

This Proxy Statement/Prospectus is being furnished to shareholders of IWC in
connection with the solicitation of proxies by the Board of Directors of IWC    
for use at the Special Meeting. The Special Meeting will be held at 11:00       
a.m., Eastern Standard Time, on March   , 1997, at the corporate headquarters   
of IWC, 1220 Waterway Boulevard, Indianapolis, Indiana. This Proxy              
Statement/Prospectus is first being mailed to shareholders of IWC on or about   
February   , 1997.                                                              

PURPOSE OF THE SPECIAL MEETING                                                  

At the Special Meeting, IWC shareholders will be asked to consider and vote 
upon a proposal to approve the Merger Agreement and the Merger. A copy of the   
Merger Agreement is attached as Annex A. See "THE MERGER."                      

In the Merger, IWC will become a wholly-owned subsidiary of Industries, and 
each outstanding IWC Common Share will be converted into (i) a fraction of an   
Industries Common Share having a value of $32.00 (based upon the Industries     
Share Price, determined as provided in the Merger Agreement), or (ii) at the    
election of the holder, the right to receive $32.00 in cash, without interest,  
subject to certain limitations outlined in the Merger Agreement. See "THE       
MERGER--Overview of the Merger"; "--Cash Elections; Allocation and Proration."  

The Board of Directors of IWC has determined that the Merger is fair to and 
in the best interests of IWC and its shareholders. ACCORDINGLY, IWC'S BOARD OF  
DIRECTORS HAS UNANIMOUSLY APPROVED THE TERMS OF THE MERGER AGREEMENT AND        
RECOMMENDS THAT THE SHAREHOLDERS OF IWC VOTE FOR THE APPROVAL OF THE MERGER     
AGREEMENT AND THE MERGER. See "THE MERGER--IWC's Reasons for the Merger;        
Recommendation of the IWC Board of Directors."                                  

The Board of Directors of IWC knows of no other business that will be       
presented for consideration at the Special Meeting.                             

RECORD DATE; QUORUM                                                             

The Board of Directors of IWC has fixed the close of business on February   
13, 1997, as the Record Date for determining holders of IWC Common Shares       
entitled to notice of, and to vote at, the Special Meeting. Only holders of     
record of IWC Common Shares at the close of business on that date will be       
entitled to vote at the Special Meeting. Each IWC Common Share outstanding on   
the Record Date will be entitled to one vote. At the close of business on the   
Record Date, 9,078,249 IWC Common Shares were outstanding and entitled to       
vote.                                                                           

A quorum of shareholders is necessary to take action at the Special Meeting.
A majority of the outstanding IWC Common Shares, represented in person or by    
proxy, will constitute a quorum of shareholders at the Special Meeting. The     
Secretary of IWC will determine whether a quorum of IWC Common Shares entitled  
to vote at the Special Meeting are present in person or by proxy and, pursuant  
to Indiana law and the Bylaws of IWC, will treat abstentions as shares that     
are present and entitled to vote for purposes of determining the presence of a  
quorum. If a broker indicates on a proxy that it does not have the              
discretionary authority as to certain shares to vote on a particular matter,    
those shares will not be considered as present and entitled to vote with        
respect to that matter.                                                         

VOTE REQUIRED; SHARES ENTITLED TO VOTE                                          

The affirmative vote of the holders of a majority of the IWC Common Shares  
outstanding as of the Record Date is required to approve the Merger Agreement   
and the Merger. Votes cast by proxy or in person at the                         

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Special Meeting will be tabulated by the Secretary of IWC. As of the Record     
Date, directors and executive officers of IWC and their affiliates were the     
beneficial owners of            IWC Common Shares (approximately    % of the    
outstanding IWC Common Shares).                                                 

VOTING OF PROXIES                                                               

IWC Common Shares which are represented by properly executed proxies, unless
such proxies shall have previously been properly revoked, will be voted in      
accordance with the instructions indicated in such proxies. If no contrary      
instructions are indicated, such shares will be voted FOR approval of the       
Merger Agreement and the Merger, and in the discretion of the persons named in  
the proxy as proxy appointees as to any other matter which may properly come    
before the Special Meeting and of which IWC is not presently aware. Pursuant    
to Indiana law and the Bylaws of IWC, shares held by persons who abstain from   
voting on a proposal will not be counted as voting either for or against such   
proposal. If a broker indicates on a proxy that it does not have discretionary  
authority as to certain shares on a particular proposal, those shares will not  
be counted as voting with respect to that proposal. Because the approval of     
Merger Agreement and the Merger by shareholders of IWC requires the             
affirmative vote of a majority of the IWC Common Shares outstanding as of the   
Record Date, failure to submit a proxy, abstentions and broker non-votes will   
have the same effect as a vote against approval of the Merger Agreement and     
the Merger.                                                                     

It is not expected that any matters other than those referred to in this    
Proxy Statement will be brought before the Special Meeting. If, however, other  
matters are properly presented, the persons named as proxy appointees will      
vote in accordance with their best judgment on such matters. The grant of a     
proxy will also confer discretionary authority on the persons named in the      
proxy to vote in accordance with their best judgment on matters incident to     
the conduct of the Special Meeting. The Special Meeting may be adjourned to     
another date and/or place for any proper purpose, including, without            
limitation, for the purposes of soliciting additional proxies.                  

REVOCATION OF PROXIES                                                           

Any shareholder may revoke a proxy at any time before it is voted by filing 
with the Corporate Secretary of IWC an instrument revoking the proxy or by      
returning a duly executed proxy bearing a later date, or by attending the       
Special Meeting and voting in person. Any such filing should be made to the     
attention of John M. Davis, Secretary, IWC Resources Corporation, 1220          
Waterway Boulevard, P.O. Box 1220, Indianapolis, Indiana 46206. Attendance at   
the Special Meeting will not by itself constitute revocation of a proxy.        

SOLICITATION OF PROXIES                                                         

In addition to the solicitation of proxies by use of the mails, proxies may 
also be solicited by IWC and its directors, officers and employees (who will    
receive no additional compensation therefor) by telephone, telegram, facsimile  
transmission and other electronic communication methods or in person. IWC will  
reimburse banks, brokers, custodians and other fiduciaries who hold IWC Common  
Shares in their name or in custody, or in the names of nominees for others,     
for their out-of-pocket expenses incurred in forwarding copies of the proxy     
materials to those persons for whom they hold such shares. IWC will bear the    
costs of the Special Meeting and of soliciting proxies therefor. Costs          
incurred in connection with printing, mailing and distributing this Proxy       
Statement/Prospectus and related materials will be shared equally by IWC and    
Industries.                                                                     

THE MERGER  

The following section of this Proxy Statement/Prospectus describes certain  
aspects of the proposed Merger. This description does not purport to be         
complete and is qualified in its entirety by reference to the Merger            
Agreement, which is attached as Annex A and is incorporated by reference        
herein.                                                                         

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OVERVIEW OF THE MERGER                                                          

The Merger Agreement provides that, subject to the approval of the Merger   
Agreement by the shareholders of IWC and the satisfaction or waiver of certain  
other conditions, IWC will be merged with and into Acquisition, which will be   
the Surviving Corporation. No vote of Industries' shareholders is required in   
connection with the Merger Agreement. The time at which the Merger becomes      
effective is referred to as the "Effective Time."                               

At the Effective Time, each outstanding IWC Common Share will be converted  
into (i) a fraction (rounded to the nearest ten-thousandth of a share) of an    
Industries Common Share pursuant to the Exchange Ratio or (ii) at the election  
of the holder, the right to receive $32.00 in cash, without interest, subject   
to certain limitations described below. See "THE MERGER--Cash Elections;        
Allocation and Proration." The Exchange Ratio will be determined by dividing    
(i) $32.00 by (ii) the Industries Share Price, which is the average of the      
closing prices of the Industries Common Shares on the NYSE Composite            
Transactions Reporting System, as reported in The Wall Street Journal, for the  
20 trading days immediately preceding the second trading day prior to the       
Effective Time.                                                                 

BACKGROUND OF THE MERGER                                                        

IWC was formed as the holding company of Indianapolis Water Company in June,
1986, for the purpose of expanding and diversifying the scope of that           
company's business beyond its regulated water utility business. IWC acquired    
UDC, a billing and data processing company in December, 1986. UDC renders       
billing and data processing for a number of municipalities and utilities,       
including, among others, the Cities of Elkhart and Indianapolis, the Town of    
Speedway and Indianapolis Water Company. In 1988, IWC acquired the Town of      
Zionsville's waterworks.                                                        

In the early 1990s, it became apparent to senior management of IWC, as a    
result of a series of Indianapolis Water Company rate cases, that IWC was       
going to have increasing difficulty achieving returns sufficient to maintain    
the then current level of dividend distributions without substantially greater  
income from other sources. As a result, the pace of diversification             
accelerated. In 1993, IWC acquired SM&P, an underground facilities locating     
company. In 1995, IWC acquired MPC, which is in the business of installing and  
servicing underground pipelines for gas and storm and wastewater systems. Each  
of these acquisitions was a major acquisition and required substantial amounts  
of new capital. In 1993, IWC, through its subsidiary IWC Services, Inc.,        
entered into a partnership with two other companies to form WREP, which         
contracted with the City of Indianapolis to operate and maintain its advanced   
wastewater treatment facilities. That relationship with the City of             
Indianapolis was expanded in 1996 to include the operation and maintenance of   
the City of Indianapolis' storm and wastewater collection system and Eagle      
Creek Reservoir Dam. While these operation and maintenance contracts with the   
City of Indianapolis were not capital intensive, they were an important aspect  
of IWC's diversification plans.                                                 

In 1994, the water utility properties of Avatar, Inc., a holding company    
which then owned and operated water utility and sewage disposal systems in      
four midwestern states, including 11 systems in Indiana, became available for   
purchase. IWC was unsuccessful in its attempt to acquire these systems. IWC     
was outbid by a corporation that had substantially greater capital resources    
and the resulting ability to take a longer view on its capital investments.     
This experience reinforced the belief of IWC's senior management that IWC       
needed access to greater capital resources in order to fully take advantage of  
the opportunities available to IWC's subsidiaries.                              

During 1995 and 1996, IWC's senior management internally considered its     
strategic alternatives and had informal discussions with various entities with  
regard to a possible business combination. Discussions with only two of these   
various entities involved transactions which were, in the view of IWC's senior  
management, sufficiently attractive to pursue. During this time, IWC sought     
the advice of Goldman Sachs, a long-time financial advisor to IWC, and began    
to consider other possible merger partners. Senior management of IWC met with   
a representative of Goldman Sachs on July 15, 1996.                             

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On July 10, 1996, Gary L. Neale, Chairman of the Board, President and Chief 
Executive Officer of Industries, and Peter V. Fazio, Jr., Industries' general   
counsel, met with Fred E. Schlegel, a member of the Board of Directors of IWC   
and outside legal counsel to IWC. Messrs. Neale and Fazio conveyed Industries'  
desire to meet with IWC to explore the possibility of a business combination.   
At that meeting Mr. Schlegel agreed to discuss Industries' inquiry with James   
T. Morris, Chairman of the Board, Chief Executive Officer and President of      
IWC, and did so, on July 17, 1996.                                              

At Mr. Morris' request, Mr. Schlegel arranged for a dinner meeting between  
Messrs. Morris and Neale to discuss a possible business combination between     
the companies. The meeting took place on August 12, 1996.                       

Over the course of the next 30 days, several telephone conversations took   
place between Mr. Schlegel and Mr. Neale and between Mr. Schlegel and Mr.       
Morris, at which the parties' desires to explore a possible combination were    
discussed. The next face-to-face meeting between Messrs. Neale and Morris took  
place on September 12, 1996, in Indianapolis. At that meeting the mutual        
advantages of a business combination between the companies were explored, and   
both Mr. Morris and Mr. Neale agreed that the subject matter deserved further   
discussion.                                                                     

During the remainder of September and into early October, 1996, Mr. Morris  
separately discussed the general parameters of a business combination with      
Industries with each member of the Board of Directors of IWC. Also during this  
time, IWC's senior management was involved in serious negotiations with         
another potential merger partner.                                               

Exchanges of financial data and preliminary due diligence between IWC and   
Industries also took place during September and October. On September 27,       
1996, IWC and Industries executed a confidentiality agreement in which they     
agreed not to disclose to any third party the identity of the other party or    
matters related to the proposed business combination. The agreement was         
executed to eliminate the possibility of a transaction between the parties not  
mutually acceptable to each.                                                    

On October 15, 1996, Messrs. Neale and Morris met again to discuss the      
general terms of the proposed combination and the enhanced opportunities an     
alliance would provide both companies.                                          

At the regular quarterly meeting of the Board of Directors of IWC on October
25, 1996, the proposed transaction with Industries was discussed at length. At  
that meeting the Board of Directors appointed a Special Committee (the          
"Special Committee") of outside directors, Robert B. McConnell, J. George       
Mikelsons and Jerry D. Semler, to participate with senior management in         
consideration of merger proposals.                                              

On October 31, 1996, at Industries' offices in Merrillville, Indiana,       
representatives of IWC and Industries met to discuss the proposed combination.  
At that meeting general economic terms, structure and business opportunities    
were discussed, but no agreement was reached other than to continue             
discussions.                                                                    

On November 25, 1996, Messrs. Morris and Neale met to discuss further the   
general terms of the proposed transaction. Again, pricing was discussed, but    
no agreement was reached. On December 2, 1996, preliminary agreement was        
reached on the price of $32 per share to be paid for IWC Common Shares, which   
would be payable in Industries Common Shares or cash at the election of IWC's   
shareholders. During this time, IWC terminated discussions with the other       
potential merger partner whose cash only offer was at a lower per share price.  

On December 10, 1996, the Special Committee met to discuss the proposed     
transaction with Industries. At its meeting the Special Committee resolved to   
retain Goldman Sachs to advise the Special Committee and the Board of           
Directors as to the fairness of the consideration to be received by the         
holders of IWC Common Shares in the proposed transaction. The Special           
Committee met again on December 17, 1996, to consider the proposed              
transaction.                                                                    

On December 18, 1996, the Board of Directors of IWC met to discuss the      
proposed transaction with Industries. At the meeting Goldman Sachs presented    
its analysis of the transaction. On December 19, 1996, Goldman Sachs delivered  
to the Board its opinion to the effect that, as of such date, and based upon    
and subject to the factors and assumptions set forth therein, the Stock         
Consideration and the Cash Consideration to be received by the holders of IWC   
Common Shares pursuant to the Merger Agreement were each fair to the holders    
of IWC Common Shares receiving either such Consideration. See "THE MERGER--     
Opinion of Goldman Sachs." At the December 19, 1996, meeting of IWC's Board of  
Directors, the Board unanimously approved the transaction.                      

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IWC'S REASONS FOR THE MERGER; RECOMMENDATION OF THE IWC BOARD OF DIRECTORS      

The IWC Board of Directors has determined that the Merger is fair to and in 
the best interests of IWC and its shareholders. ACCORDINGLY, THE IWC BOARD OF   
DIRECTORS HAS APPROVED THE TERMS OF THE MERGER AGREEMENT AND RECOMMENDS THAT    
THE SHAREHOLDERS OF IWC VOTE FOR APPROVAL OF THE MERGER AGREEMENT AND THE       
MERGER. The Board of Directors of IWC recommends approval of this strategic     
alliance for a number of reasons. The Board of Directors of IWC believes that   
the price of $32.00 per share represents a substantial premium over the         
historical price of IWC Common Shares. The price is also in excess of the       
highest alternative price discussed with the other potential merger partner.    
The Board of Directors further believes that the price, together with the       
opportunity for IWC shareholders to participate in the combined entity as a     
result of receiving Industries Common Shares and thereby deferring taxable      
gain, make the Merger compelling to IWC shareholders from an economic           
standpoint.                                                                     

In addition, the need for IWC to have access to substantially greater       
capital resources was an important factor to the IWC Board of Directors. If     
IWC is to continue to grow and acquire other utilities and businesses, it must  
have the capital strength to do so. Industries, being a larger company with a   
greater capital base, has the capability of providing those resources. The      
availability of those resources comes at an important time for IWC, as          
consolidation among public utilities in the United States is becoming common.   
In addition, it is the stated desire of Industries' management that IWC remain  
a free-standing and independently-operating company. This concept is important  
to the Board of Directors of IWC, which considers IWC's presence in the City    
of Indianapolis important to the community and its institutions. No             
significant layoffs of IWC employees are expected to occur as a result of this  
transaction. The Board of Directors of IWC considers this point to be very      
important. As a result, IWC expects to operate and maintain a first-class       
water utility after the Merger in much the same way as it has in the past,      
giving the citizens of Indianapolis the continual assurance of a high quality   
water supply at all times.                                                      

The Merger Agreement contemplates that IWC shareholders may elect to receive
cash or Industries Common Shares, or a combination of cash and Industries       
Common Shares, for their IWC Common Shares. In recommending the Merger, the     
Board of Directors of IWC took into consideration the superior growth record    
for Industries Common Shares in recent years, compared with that of IWC. It     
concluded that this record increases the attractiveness of the Merger to the    
shareholders of IWC. Consequently, management believes that the proposed        
transaction maximizes shareholder value and enhances the capital resources      
available to IWC.                                                               

OPINION OF GOLDMAN SACHS                                                        

On December 19, 1996, Goldman Sachs delivered its oral opinion to the Board 
of Directors of IWC (which was subsequently confirmed in writing as of that     
date) to the effect that, as of such date, and based upon and subject to the    
factors and assumptions set forth therein, the Stock Consideration and the      
Cash Consideration (each as defined in Goldman Sachs' opinion attached hereto   
as Annex B) to be received by the holders of IWC Common Shares pursuant to the  
Merger Agreement were each fair to the holders of IWC Common Shares receiving   
either such Consideration. Goldman Sachs subsequently confirmed its December    
19, 1996 opinion by delivery of its written opinion, dated the date hereof.     

THE FULL TEXT OF THE WRITTEN OPINION OF GOLDMAN SACHS, DATED THE DATE       
HEREOF, WHICH SETS FORTH ASSUMPTIONS MADE, MATTERS CONSIDERED AND LIMITATIONS   
ON THE REVIEW UNDERTAKEN IN CONNECTION WITH THE OPINION, IS ATTACHED AS ANNEX   
B TO THIS PROXY STATEMENT/PROSPECTUS AND IS INCORPORATED HEREIN BY REFERENCE.   
SHAREHOLDERS OF IWC ARE URGED TO, AND SHOULD, READ SUCH OPINION IN ITS          
ENTIRETY.                                                                       

In connection with its opinion, Goldman Sachs reviewed, among other things, 
(i) the Merger Agreement; (ii) this Proxy Statement/Prospectus; (iii) the       
Annual Reports to Shareholders and Annual Reports on Form 10-K of IWC and       
Industries for the five years ended December 31, 1995; (iv) certain interim     
reports to shareholders and Quarterly Reports on Form 10-Q of IWC and           
Industries; (v) certain other communications from IWC and Industries to their   
respective shareholders; and (vi) certain internal financial analyses and       
forecasts for IWC                                                               

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prepared by its management. Goldman Sachs also held discussions with members    
of the senior managements of IWC and Industries regarding the past and current  
business operations, financial condition and future prospects of their          
respective companies. In addition, Goldman Sachs reviewed the reported price    
and trading activity for the IWC Common Shares and the Industries Common        
Shares, compared certain financial and stock market information for IWC and     
Industries with similar information for certain other companies the securities  
of which are publicly traded, reviewed the financial terms of certain recent    
business combinations in the utility industry specifically and in other         
industries generally and performed such other studies and analyses as it        
considered appropriate.                                                         

Goldman Sachs relied without independent verification upon the accuracy and 
completeness of all of the financial and other information reviewed by it for   
purposes of its opinion. In addition, Goldman Sachs has not made an             
independent evaluation or appraisal of the assets and liabilities of IWC or     
Industries or any of their subsidiaries and Goldman Sachs has not been          
furnished with any such evaluation or appraisal. Goldman Sachs was not          
provided any internal financial analyses or forecasts for Industries. Goldman   
Sachs was not requested to solicit, and did not solicit, interest from other    
parties in a potential transaction involving IWC.                               

The following is a summary of certain of the financial analyses used by     
Goldman Sachs in connection with providing its oral and written opinions to     
the IWC Board of Directors on December 19, 1996. Goldman Sachs utilized         
substantially the same type of financial analyses in connection with providing  
its written opinion dated December 19, 1996 and its written opinion attached    
hereto as Annex B.                                                              

(i) Historical Stock Trading Analysis. Goldman Sachs reviewed the       
historical trading prices and volumes for the IWC Common Shares and the     
Industries Common Shares. In addition, Goldman Sachs analyzed the           
consideration to be received by holders of the IWC Common Shares pursuant   
to the Merger in relation to the historical average exchange ratios between 
IWC Common Shares and Industries Common Shares. Such analysis indicated     
that the average exchange ratio for the one month, three month, six month   
and one year periods ending on December 13, 1996 was 0.55x, 0.55x, 0.57x    
and 0.55x, respectively. Based on a price of $38.63 per share (the per      
share price of Industries Common Shares on December 13, 1996) of Industries 
Common Shares, the Merger represents an exchange ratio of 0.83x.            

(ii) Selected Companies Analysis. Goldman Sachs reviewed and compared   
certain financial information of IWC to corresponding financial             
information, ratios and public market multiples for eight publicly traded   
water utilities, American Water Works Company, Inc., California Water       
Service Company, Connecticut Water Service, Inc., Consumers Water Company,  
E'town Corporation, Southern California Water Company, Southwest Water      
Company and United Water Resources, Inc. (the "Selected Water Companies").  
Goldman Sachs calculated and compared various financial multiples and       
ratios. The multiples of IWC were calculated using a price of $22.50 per    
share, the closing price on December 13, 1996. The multiples and ratios for 
IWC were based on information provided by its management and the multiples  
and ratios for each of the Selected Water Companies were based on the most  
recent publicly available information. Goldman Sachs considered leveraged   
market capitalization (market value of common equity plus debt less cash)   
as a multiple of latest twelve months ("LTM") sales, as a multiple of LTM   
earnings before interest, taxes, depreciation and amortization ("EBITDA")   
and as a multiple of LTM earnings before interest and taxes ("EBIT").       
Goldman Sachs' analysis of the Selected Water Companies indicated leveraged 
multiples of (i) LTM sales which ranged from 1.0x to 5.2x, (ii) LTM EBITDA  
which ranged from 6.8x to 11.0x, and (iii) LTM EBIT which ranged from 8.7x  
to 14.0x compared to leveraged multiples of LTM sales, EBITDA and EBIT of   
1.8x, 7.2x and 10.6x, respectively, for IWC. Goldman Sachs also considered  
estimated calendar year 1996 and 1997 price/earnings ratios for the         
Selected Water Companies which ranged from 12.8x to 15.3x for fiscal year   
1996 and 12.2x to 15.0x for fiscal year 1997 compared to estimated calendar 
year 1996 and 1997 price/earnings ratios of 14.4x and 12.8x, respectively,  
for IWC.                                                                    

 Goldman Sachs also reviewed and compared certain financial information of
Industries to corresponding financial information, ratios and public market 
multiples for thirteen publicly traded electric utilities, American         
Electric Power Co., Inc., CILCORP Inc., CINergy Corp., CIPSCO Incorporated, 
Idaho Power Company, Illinova Corporation, IPALCO Enterprises, Inc., KU     
Energy Corporation, Ohio Edison                                             

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Company, Pacific Gas and Electric Company, Pacificorp, SIGCORP, Inc. and    
UtiliCorp United Inc. (the "Selected Electric Companies"). Goldman Sachs    
calculated and compared various financial multiples and ratios. The         
multiples of Industries were calculated using a price of $38.63 per share,  
the closing price on December 13, 1996. The multiples and ratios for        
Industries and for each of the Selected Companies were based on the most    
recent publicly available information. Goldman Sachs considered the         
projected five-year growth rates of earnings per share ("EPS"), the         
dividend yields and the market to book multiples (market value of common    
equity to book value). Goldman Sachs' analysis of the Selected Electric     
Companies indicated (i) EPS growth rates which ranged from 1.5% to 5.5%,    
(ii) dividend yields which ranged from 4.7% to 6.9%, and (iii) market to    
book multiples which ranged from 1.1x to 2.0x compared to EPS growth rates, 
dividend yields and market to book multiples of 4.0%, 4.3% and 2.1x,        
respectively, for Industries. Goldman Sachs also considered estimated       
calendar year 1996 and 1997 price/earnings ratios for the Selected Electric 
Companies which ranged from 9.5x to 14.6x for fiscal year 1996 and 9.8x to  
13.4x for fiscal year 1997 compared to estimated calendar year 1996 and     
1997 price/earnings ratios of 13.8x and 13.1x, respectively, for            
Industries.                                                                 

 (iii) Discounted Cash Flow Analysis. Goldman Sachs performed a discounted
cash flow analysis for IWC's utility businesses taken as a whole and for    
IWC's non-regulated businesses taken as a whole, in each case using IWC's   
management projections for the fiscal years 1997 to 2000. These future cash 
flows were discounted to present value using discount rates ranging from    
10% to 12% for IWC's utility businesses and discount rates ranging from 11% 
to 13% for IWC's non-regulated businesses. Goldman Sachs calculated         
terminal values of IWC's utility businesses and IWC's non-regulated         
businesses using 3% to 5% rates of growth of free cash flow in perpetuity.  
These terminal values were then discounted to present value using discount  
rates ranging from 10% to 12% for IWC's utility businesses and discount     
rates ranging from 11% to 13% for IWC's non-regulated businesses. The net   
present values were then combined to calculate the discounted cash flow     
value for IWC. The implied per share values ranged from $14.79, using a 12% 
discount rate for IWC's utility businesses, a 13% discount rate for IWC's   
non-regulated business and a 3% growth rate of free cash flow in            
perpetuity, to $37.09, using a 10% discount rate for IWC's utility          
businesses, an 11% discount rate for IWC's non-regulated businesses and a   
5% growth rate of free cash flow in perpetuity.                             

(iv) Selected Transactions Analysis. Goldman Sachs analyzed certain     
information relating to selected transactions in the water utilities        
industry since 1990 (the "Selected Transactions"). Such analysis indicated  
that for the Selected Transactions (i) leveraged aggregate consideration as 
a multiple of LTM sales ranged from 2.1x to 6.7x, as compared to 2.3x for   
the leveraged aggregate consideration as a multiple of LTM sales to be paid 
in the Merger, (ii) leveraged aggregate consideration as a multiple of LTM  
EBITDA ranged from 5.3x to 16.8x, as compared to 9.1x for the leveraged     
aggregate consideration as a multiple of LTM EBITDA to be paid in the       
Merger, and (iii) leveraged aggregate consideration as a multiple of LTM    
EBIT ranged from 6.4x to 22.2x, as compared to 13.4x for the leveraged      
aggregate consideration as a multiple of LTM EBIT to be paid in the Merger. 

(v) Pro Forma Merger Analysis. Goldman Sachs prepared pro forma analyses
of the financial impact of the Merger. Using earnings estimates for IWC     
prepared by its management for the fiscal years 1996 and 1997, and median   
earnings estimates from the Institutional Brokers Estimate System for       
Industries for fiscal year 1996 and 1997, Goldman Sachs compared the EPS of 
Industries Common Shares, on a stand-alone basis, to the EPS of the common  
stock of the combined companies on a pro forma basis before taking into     
account any of the possible benefits that may be realized after the Merger. 
Goldman Sachs performed this analysis based on a price of $38.63 per share  
(the per share price of Industries on December 13, 1996) of Industries      
Common Shares under the following two scenarios: (a) assuming IWC Common    
Shares representing the Cash Election Maximum are converted into the right  
to receive cash in the Merger and (b) assuming the holders of IWC Common    
Shares receive only Industries Common Shares in the Merger. Based on such   
analyses, the proposed transaction would be dilutive to Industries'         
shareholders on an EPS basis in each of the above scenarios in the years    
1996 and 1997.                                                              

(vi) Contribution and Give-Get Analysis. Goldman Sachs reviewed certain 
historical and estimated future operating and financial information         
(including, among other things, revenues, EBITDA, EBIT and                  

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net income) for IWC, Industries, and the pro forma combined entity          
resulting from the Merger based on, in the case of IWC, actual results for  
the twelve month period ended September 30, 1996 and management estimates   
for fiscal years 1996 and 1997 and, in the case of Industries, actual       
twelve month results for the period ended September 30, 1996 and            
information contained in the equity research report dated June 18, 1996 of  
Tucker Anthony Incorporated. This analysis indicated that, for the twelve   
months ended September 30, 1996, IWC would have contributed 9.4% to         
combined revenues, 7.2% to combined EBITDA, 7.5% to combined EBIT and 6.1%  
to combined net income; for fiscal year 1996, IWC would have contributed    
9.2% to combined revenues, 6.0% to combined EBITDA, 6.2% to combined EBIT   
and 7.4% to combined net income; and for fiscal year 1997, IWC would have   
contributed 9.7% to combined revenues, 6.7% to combined EBITDA, 7.1% to     
combined EBIT and 8.3% to combined net income. This analysis also indicated 
a range of implied IWC/Industries exchange ratios of 0.43x to 0.79x and a   
range of implied per share prices of IWC Common Shares of $16.63 to $30.66. 

 In addition, Goldman Sachs analyzed the amount of accretion (dilution) on
a per share basis from IWC's perspective of revenues, EBITDA, EBIT, net     
income and dividends on a pro forma basis before taking into account any of 
the possible benefits that may be realized following the Merger. This       
analysis showed that IWC would experience, for LTM, fiscal year 1996 and    
fiscal year 1997, respectively, an 18.2%, 26.2% and 22.6% revenue           
accretion, a 55.0%, 93.9% and 77.2% EBITDA accretion, a 48.7%, 88.8% and    
66.7% EBIT accretion and a 72.4%, 48.1% and 34.0% net income accretion.     
This analysis also showed a (3.3)% dilution in dividends.                   

Based on the Exchange Ratio, the number of outstanding IWC Common Shares
and Industries Common Shares as of December 13, 1996, and a price of $38.63 
per share (the per share price of Industries Common Shares on December 13,  
1996) of Industries Common Shares, if all holders of IWC Common Shares      
receive Stock Consideration, the shareholders of IWC would receive          
approximately 11.0% of the outstanding common equity of the combined        
companies after the Merger, and if IWC Common Shares representing the Cash  
Election Maximum are converted into the right to receive cash in the        
Merger, the stockholders of IWC would receive approximately 4.9% of the     
outstanding common stock of the combined companies after the Merger.        

The preparation of a fairness opinion is a complex process and is not       
necessarily susceptible to partial analysis or summary description. Selecting   
portions of the analyses or of the summary set forth above, without             
considering Goldman Sachs' analyses as a whole, could create an incomplete      
view of the processes underlying Goldman Sachs' opinion. In arriving at its     
fairness determination, Goldman Sachs considered the results of all such        
analyses and did not assign relative weights to any of the analyses. No         
company or transaction used in the above analyses as a comparison is identical  
to IWC or Industries or the contemplated transaction. The analyses were         
prepared solely for purposes of Goldman Sachs providing its opinion to the IWC  
Board of Directors as to the fairness of the Stock Consideration and the Cash   
Consideration to be received by the holders of IWC Common Shares and do not     
purport to be appraisals or to necessarily reflect the prices at which          
businesses or securities actually may be sold. Analyses based upon forecasts    
of future results are not necessarily indicative of actual future results,      
which may be significantly more or less favorable than suggested by such        
analyses. Because such analyses are inherently subject to uncertainty, being    
based upon numerous factors or events beyond the control of the parties or      
their respective advisors, none of IWC, Industries, Goldman Sachs or any other  
person assumes responsibility if future results are different from those        
projected. Goldman Sachs' opinion to the IWC Board of Directors necessarily     
was based on the economic, market and the other conditions as in effect on,     
and the information made available to it as of, the date of its opinion. As     
described above under the caption "THE MERGER--IWC's Reasons for the Merger;    
Recommendation of the IWC Board of Directors", Goldman Sachs' opinion to the    
IWC Board of Directors was one of many factors taken into consideration by the  
IWC Board of Directors in making its determination to approve the Merger        
Agreement. Although Goldman Sachs provided advice to IWC during the course of   
these negotiations, the decision to enter into the Merger Agreement and to      
accept the Stock Consideration and the Cash Consideration to be received by     
the holders of IWC Common Shares was solely that of the IWC Board of            
Directors. THE FOREGOING SUMMARY DOES NOT PURPORT TO BE A COMPLETE DESCRIPTION  
OF THE ANALYSES PERFORMED BY GOLDMAN SACHS AND IS QUALIFIED BY REFERENCE TO     
THE WRITTEN OPINION OF GOLDMAN SACHS SET FORTH AS ANNEX B HERETO.               

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Goldman Sachs, as part of its investment banking business, is continually   
engaged in the evaluation of businesses and their securities in connection      
with mergers and acquisitions, negotiated underwritings, competitive biddings,  
secondary distributions of listed and unlisted securities, private placements   
and valuations for estate, corporate and other purposes. IWC selected Goldman   
Sachs to render its opinion because it is a nationally recognized investment    
banking firm that has substantial experience in transactions similar to the     
Merger and of its prior investment banking relationship with IWC.               

Goldman Sachs has provided certain investment banking services to IWC and   
Industries from time to time, and may provide certain investment banking        
services to Industries in the future.                                           

Goldman Sachs provides a full range of financial, advisory and brokerage    
services and in the course of its normal trading activities may from time to    
time effect transactions and hold positions in the securities or options on     
securities of IWC and/or Industries for its own account and for the account of  
customers.                                                                      

Pursuant to a letter agreement dated December 12, 1996 (the "Engagement     
Letter"), IWC engaged Goldman Sachs to undertake a study to enable it to        
render its opinion with respect to the Stock Consideration and the Cash         
Consideration to be received by the holders of IWC Common Shares receiving      
either such Consideration. Pursuant to the terms of the Engagement Letter, IWC  
agreed to pay Goldman Sachs upon delivery of its opinion a fee of $500,000.     
IWC also agreed to reimburse Goldman Sachs periodically, upon request, and      
upon consummation of the Merger for its reasonable out-of-pocket expenses,      
including attorney's fees (not to exceed $15,000), plus any sales, use or       
similar taxes arising in connection with the Merger, and to indemnify Goldman   
Sachs against certain liabilities, including certain liabilities under the      
federal securities laws.                                                        

INDUSTRIES' REASONS FOR THE MERGER                                              

As the electric and gas industries have continued to consolidate,           
Industries' management has sought opportunities in other distribution           
businesses where Industries could utilize the systems it has developed and the  
expertise of its employees in running its distribution businesses. As part of   
these efforts, Industries' management has considered various energy-related     
businesses into which it might expand. Among these businesses were companies    
that locate underground utility facilities so that excavation and other         
construction-related activities may proceed safely. During the course of        
investigating such companies, Industries discovered that the largest company    
in this business, SM&P, is owned by IWC.                                        

While analyzing information relating to SM&P, Industries decided to expand  
the scope of its analysis to see whether an acquisition of all of IWC might     
make strategic sense for Industries. While conducting its expanded analyses,    
Industries learned that IWC also owns MPC, a company in an energy-related       
business which had been suggested to Industries several years ago as a          
possible acquisition candidate.                                                 

In analyzing IWC, Industries discovered a number of parallels between the   
state of the water utility business today and the electric utility industry of  
several decades ago. A substantial amount of the water utility business today   
is conducted by municipal and small private systems at a time when clean water  
legislation is likely to require the investment of substantial additional       
capital into water distribution systems in order to comply with more stringent  
quality standards. Similarly, in the 1940's and 1950's, the electric and gas    
utility businesses began building larger and more efficient generating          
stations and converting from manufactured gas to natural gas, activities which  
brought customer benefits in the way of lower unit costs but imposed            
additional capital expenditure burdens on the utilities themselves and          
resulted in consolidation in the industry. Industries believes that a similar   
increase in capital demands will result in similar consolidation in the water   
utility business.                                                               

As a result of this analysis, Industries concluded that acquiring IWC would 
provide Industries with an opportunity to initiate and to grow, much as it did  
with its electric and gas businesses, a new distribution segment.               

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OPINION OF BARR DEVLIN                                                          

On December 16, 1996, Industries entered into an engagement letter with Barr
Devlin & Co. Incorporated ("Barr Devlin") pursuant to which Barr Devlin was     
retained to act as Industries' financial advisor in connection with a           
strategic business combination with IWC. Barr Devlin has delivered its written  
opinion, dated December 19, 1996, to Industries' Board of Directors to the      
effect that, on and as of the date of such opinion, and based upon assumptions  
made, matters considered, and limits of the review, as set forth in the         
opinion, the consideration to be offered in connection with the Merger was      
fair, from a financial point of view, to the holders of Industries Common       
Shares. A copy of the opinion of Barr Devlin is attached to this Proxy          
Statement/Prospectus as Annex C and is incorporated herein by reference.        

In connection with rendering its opinion, Barr Devlin (i) reviewed the      
Annual Reports, Forms 10-K and the related financial information for the        
three-year period ended December 31, 1995, and the Forms 10-Q and the related   
unaudited financial information for the quarterly periods ended March 31,       
1996, June 30, 1996 and September 30, 1996, for IWC, (ii) reviewed the Annual   
Reports, Forms 10-K and the related financial information for the three-year    
period ended December 31, 1995, and the Forms 10-Q and the related financial    
information for the quarterly periods ended March 31, 1996, June 30, 1996 and   
September 30, 1996, for Industries and Northern Indiana; (iii) reviewed         
certain other filings with the SEC and other regulatory authorities made by     
IWC, Industries and Northern Indiana during the last three years; (iv)          
reviewed certain internal information, including financial forecasts, relating  
to the business, earnings, capital expenditures, cash flow, assets and          
prospects of IWC and Industries furnished to Barr Devlin by IWC and             
Industries; (v) conducted discussions with members of senior management of      
Industries and IWC concerning their respective businesses, regulatory           
environments, prospects, strategic objectives and possible operating and        
administrative synergies which might be realized for the benefit of Industries  
following the Merger; (vi) reviewed the historical market prices and trading    
activity for shares of IWC with those of certain publicly traded companies      
deemed by Barr Devlin to be relevant; (vii) compared the results of operations  
of IWC with those of certain companies deemed by Barr Devlin to be relevant;    
(viii) compared the proposed financial terms of the Merger with the financial   
terms of certain business combinations deemed by Barr Devlin to be relevant;    
(ix) analyzed the valuation of IWC Common Shares using various valuation        
methodologies deemed by Barr Devlin to be appropriate; (x) considered the pro   
forma effect of the Merger on Industries' capitalization, earnings and cash     
flow; (xi) compared the pro forma effect of the Merger on Industries' earnings  
per share with corresponding current and projected values on a stand-alone      
basis; (xii) reviewed the Merger Agreement and (xiii) reviewed such other       
studies, conducted such other analyses, considered such other financial,        
economic and market criteria, performed such other investigations and took      
into account such other matters as Barr Devlin deemed necessary or appropriate  
for purposes of its opinion.                                                    

In rendering its opinion, Barr Devlin relied, without independent           
verification, on the accuracy and completeness of all financial and other       
information publicly available or otherwise furnished or made available to it   
by Industries and IWC, and further relied upon the assurances of management of  
Industries and IWC that they were not aware of any facts that would make such   
information inaccurate or misleading. With respect to the financial             
projections of Industries and IWC (including, without limitation, possible      
operating and administrative synergies), Barr Devlin relied upon the            
assurances of management of Industries and IWC that such projections were       
reasonably prepared and reflected the best currently available estimates and    
judgments of the management of Industries and IWC as to the future financial    
performance of Industries and IWC, as the case may be, and as to the projected  
outcomes of legal, regulatory and other contingencies. Barr Devlin was not      
provided with and did not undertake an independent evaluation or appraisal of   
the assets or liabilities (contingent or otherwise) of Industries or IWC, nor   
did Barr Devlin make any physical inspection of the properties or assets of     
Industries or IWC.                                                              

In arriving at its opinion, Barr Devlin assumed that the Merger will be a   
reorganization as described in Section 368(a) of the Code and the regulations   
thereunder, and that no gain or loss will be recognized by Industries or IWC    
as a consequence of the Merger. In addition, Barr Devlin has assumed that the   
Merger will be accounted for by the purchase method of accounting. Barr         
Devlin's opinion is based upon general financial, stock                         

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market and other conditions and circumstances as they existed and could be      
evaluated, and the information made available to it, as of the date of the      
opinion. Barr Devlin's opinion is directed only to Industries' Board of         
Directors and the fairness from a financial point of view to the holders of     
Industries Common Shares of the consideration to be offered in connection with  
the Merger and does not address any other aspect of the Merger. Although Barr   
Devlin evaluated the fairness from a financial point of view to the holders of  
Industries Common Shares of the consideration to be offered in connection with  
the Merger, the specific consideration to be offered in connection with the     
Merger was determined by Industries and IWC through arm's-length negotiations.  
Industries did not place any limitations upon Barr Devlin with respect to the   
procedures followed or factors considered by Barr Devlin in rendering its       
opinion.                                                                        

Barr Devlin has advised Industries that, in its view, the preparation of a  
fairness opinion involves various determinations as to the most appropriate     
and relevant methods of financial analysis and the application of those         
methods to the particular circumstances, and, therefore, such an opinion is     
not readily susceptible to summary description. Furthermore, in arriving at     
its fairness opinion, Barr Devlin did not attribute any particular weight to    
any analysis or factor considered by it, nor did Barr Devlin ascribe a          
specific range of fair values to Industries; rather, Barr Devlin made its       
determination as to the fairness of the consideration to be offered in          
connection with the Merger on the basis of qualitative judgments as to the      
significance and relevance of each of the financial and comparative analyses    
and factors described below. Accordingly, notwithstanding the separate factors  
summarized below, Barr Devlin believes that its analyses must be considered as  
a whole and that considering any portions of these analyses and factors,        
without considering all analyses and factors, could create a misleading or      
incomplete view of the evaluation process underlying its opinion. In its        
analyses, Barr Devlin made many assumptions with respect to industry            
performance, general business and economic conditions and other matters, many   
of which are beyond Industries' and IWC's control. Any estimates in these       
analyses do not necessarily indicate actual values or predict future results    
or values, which may be significantly more or less favorable than as set forth  
therein. In addition, analyses relating to the value of businesses do not       
purport to be appraisals or to reflect the prices at which businesses actually  
may be sold.                                                                    

In connection with rendering its opinion dated December 19, 1996, and       
preparing its presentations to Industries' Board of Directors, Barr Devlin      
performed a variety of financial and comparative analyses and considered a      
variety of factors of which the material analyses and factors are summarized    
below. While this summary describes the material analyses performed and         
factors considered, it does not purport to be a complete description of the     
analyses performed or factors considered by Barr Devlin. Barr Devlin's opinion  
is based upon its consideration of the collective results of all such           
analyses, together with the other factors referred to in its opinion. In        
concluding that the consideration to be offered in connection with the Merger   
is fair, from a financial point of view, to the holders of Industries Common    
Shares and in its discussions with Industries' Board of Directors, Barr Devlin  
noted that $32.00 was within the range of implied values set forth under "--    
Discounted Cash Flow Analysis" and "--Comparable Transaction Analysis" below,   
which were derived from the analyses performed by it.                           

Stock Trading History. Barr Devlin reviewed the performance of the per share
market prices and trading volumes of Industries Common Shares and IWC Common    
Shares and compared such per share market price movements to movements in (i)   
the Standard and Poor's Utilities Index and (ii) the Standard and Poor's 500    
Composite Index to provide perspective on the current and historical stock      
price performance of Industries and IWC relative to one another and selected    
market indices. This analysis was utilized to provide historical background     
for the manner in which the public trading market had valued Industries and     
IWC in absolute terms and relative to each other.                               

Discounted Cash Flow Analysis. To determine the present value of IWC, Barr  
Devlin prepared and reviewed the results of unleveraged discounted cash flow    
("DCF") analyses for IWC, assuming that IWC performed in accordance with the    
operating and financial projections provided by its management for the period   
1996 through 2000 (the "Projection Period"), as revised by Barr Devlin to       
reflect certain adjustments it deemed appropriate. To calculate the present     
value, the projected unleveraged free cash flows for each year during the       
Projection Period, together with the estimated value of the business in the     
final year of the Projection Period, were                                       

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discounted to the present. Barr Devlin estimated terminal values for IWC by     
applying multiples to the projected earnings before interest, taxes and         
depreciation ("EBITDA") in 2000, projected earnings before interest and taxes   
("EBIT") in 2000, projected net income available for common shares ("Net        
Income") in 2000, and projected book value of common equity ("Book Value") as   
of year-end 2000. The multiples applied were based on analyses of the           
corresponding multiples of certain public companies comparable to IWC. For the  
purposes of these analyses, the terminal multiple ranges used were 8.5x-11.0x   
for IWC with respect to EBITDA, 11.5x-13.0x with respect to EBIT, 13.0x-14.0x   
with respect to Net Income, and 1.10x-1.40x with respect to Book Value. The     
cash flow streams and terminal values were then discounted to present value     
using discount rates that ranged from 7.0% to 8.0%. This analysis produced      
reference values of $21.31 to $49.63 per share.                                 

Comparable Transaction Analysis. Barr Devlin reviewed certain proposed or   
completed transactions involving the acquisition of regulated water utilities   
and regulated gas distribution utilities or holding companies for regulated     
water utilities and regulated gas distribution utilities (the "Comparable       
Transactions"). The Comparable Transactions involved companies possessing       
general business, operating and financial characteristics representative of     
companies in the industry in which IWC operates.                                

Barr Devlin calculated the implied equity consideration for each of the     
Comparable Transactions as a multiple of each company's respective latest 12-   
month Net Income, latest 12-month cash flow, and Book Value for the most        
recently available fiscal quarter preceding the transaction. In addition, Barr  
Devlin calculated the "implied total consideration" (defined as the sum of the  
implied equity consideration plus the liquidation value of preferred stock,     
the principal amount of debt, capitalized lease obligations, advances for       
construction and minority interests, minus cash and option proceeds, if any)    
for each of the Comparable Transactions as a multiple of each company's         
respective latest 12-month EBIT, EBITDA and customers. The Comparable           
Transactions included in this analysis consisted of Jamaica Water Supply        
Co./City of New York & Water Authority of Western Nassau County, Pennsylvania   
Gas & Water Company/American Water Works Co., Sangre de Cristo Water            
Company/City of Santa Fe, Pennsylvania Enterprises, Inc./United Water           
Resources Inc., Western Resources, Inc. (gas operations)/ONEOK Inc., Lykes      
Energy Inc./TECO Energy, Inc., United Cities Gas Company/Atmos Energy           
Corporation, Allegheny and Western Energy Corp./Energy Corp. Of America,        
Greeley Gas Company/Atmos Energy Corporation, Western Resources, Inc.           
(Missouri gas operations)/Southern Union Gas Co., and Wisconsin Southern Gas    
Co./Wisconsin Energy Corporation. This analysis produced reference values of    
$23.70 to $34.76 per share.                                                     

Because the reasons for and circumstances surrounding each of the Comparable
Transactions analyzed were diverse and because of the inherent differences      
between the operations of IWC and the companies in the selected transactions,   
Barr Devlin believed that a purely quantitative comparable transaction          
analysis would not be particularly meaningful in the context of the Merger.     
Barr Devlin believed that an appropriate use of a comparable transaction        
analysis in this instance would involve qualitative judgments concerning        
differences between the characteristics of these transactions and the Merger    
which would affect the value of IWC.                                            

Publicly Traded Comparable Company Analysis. Using publicly available       
information, Barr Devlin compared selected financial information and ratios     
(described below) for IWC with the corresponding financial information and      
ratios for a group of regulated water utilities (or their holding companies)    
deemed by Barr Devlin to be comparable to IWC (the "Comparable Companies").     
The Comparable Companies were selected on the basis of being companies which    
possessed general business, operating and financial characteristics             
representative of companies in the industry in which IWC operates. The          
Comparable Companies included United Water Resources, Inc., Philadelphia        
Suburban Corporation, California Water Service Company, E'Town Corporation,     
Southern California Water Company, Aquarion Company, Consumers Water Company,   
and SJW Corporation.                                                            

In evaluating the current market value of IWC Common Shares, Barr Devlin    
determined ranges of multiples for selected financial ratios for the            
Comparable Companies, including: (i) the market value of outstanding common     
stock as a multiple of (a) Net Income for the latest 12-month period ended      
September 30, 1996 (the "LTM Period"), (b) projected Net Income for the 12-     
month period ended December 31, 1996 and 1997, (c)                              

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Book Value for the most recently available fiscal quarter ended September 30,   
1996 and (d) after-tax cash flow from operations for the LTM Period, and (ii)   
the "aggregate market value" (defined as the sum of the market value of common  
stock, plus the liquidation value of preferred stock, the principal amount of   
debt, capitalized lease obligations, advances for construction and minority     
interests, minus cash and cash equivalents) as a multiple of (a) EBIT for the   
LTM Period and (b) EBITDA for the LTM Period. This analysis produced reference  
values of $20.18 to $25.22 per share.                                           

Because of the inherent differences between the operations of IWC and the   
Comparable Companies, Barr Devlin believed that a purely quantitative           
comparable company analysis would not be particularly meaningful in the         
context of the Merger. Barr Devlin believed that an appropriate use of a        
comparable company analysis in this instance would involve qualitative          
judgments concerning differences between the characteristics of the Comparable  
Companies and IWC. Moreover, Barr Devlin observed that comparable company       
analysis does not reflect the potential incremental value to Industries of a    
controlling interest in IWC or expected synergies, among other factors          
incidental to the Merger.                                                       

Pro Forma Merger Analysis. Barr Devlin analyzed certain pro forma effects to
the holders of Industries Common Shares resulting from the Merger, based on     
the consideration to be offered in connection with the Merger, for the period   
1997 through 2000. This analysis was based on the respective forecasts of the   
managements of Industries and IWC, as revised by Barr Devlin to reflect         
certain adjustments it deemed appropriate, including adjustments for retention  
of certain synergies. The analysis showed essentially no dilution to holders    
of Industries Common Shares in earnings per share.                              

Barr Devlin was selected as Industries financial advisor because Barr Devlin
and principals of Barr Devlin have a long history of association in the         
investment banking and utility industries. Barr Devlin is a privately held      
investment banking firm specializing in strategic and merger advisory services  
to the utility industries, the energy industry and selected other industries.   
In this capacity, Barr Devlin and principals of Barr Devlin have been involved  
as advisors in numerous transactions and advisory assignments in the utility    
industries and are constantly engaged in the valuation of businesses and        
securities in those industries.                                                 

Pursuant to the terms of Barr Devlin's engagement, Industries has paid Barr 
Devlin for its services in connection with the Merger a financial advisory fee  
of $750,000. Certain fees previously paid to Barr Devlin by Industries          
pursuant to an ongoing separate financial services agreement have been          
credited against such fee. In addition, Industries has agreed to reimburse      
Barr Devlin for its out-of-pocket expenses, including fees and expenses of      
legal counsel and other advisors engaged with the consent of Industries, and    
to indemnify Barr Devlin against certain liabilities, including liabilities     
under the federal securities laws, relating to or arising out of its            
engagement.                                                                     

CASH ELECTIONS; ALLOCATION AND PRORATION                                        

Each record holder of IWC Common Shares may make a Cash Election with       
respect to all or any portion of such holder's IWC Common Shares; however, the  
aggregate number of IWC Common Shares that will be converted into the right to  
receive cash in the Merger, the "Cash Election Maximum," may not exceed         
shares [the number of IWC Common Shares determined by dividing (a)(i)           
$159,000,000 less (ii) the amount paid by IWC in consideration of the           
cancellation of IWC Common Shares issued under IWC's Restricted Stock Plan by   
(b) $32.00]. If the aggregate number of Cash Election Shares exceeds the Cash   
Election Maximum, each Cash Election Share will be converted into (i) the       
right to receive cash, without interest, in an amount equal to the product of   
(a) $32.00 multiplied by (b) a fraction, the numerator of which will be the     
Cash Election Maximum and the denominator of which will be the total number of  
Cash Election Shares, the "Cash Fraction," and (ii) a fraction of an            
Industries Common Share equal to the product of (a) the Exchange Ratio          
multiplied by (b) a fraction equal to one minus the Cash Fraction.              
Furthermore, if after having made the foregoing calculations, counsel to        
Industries or counsel to IWC reasonably determines that it cannot deliver its   
opinion to the effect that the Merger will qualify as a reorganization under    
Section 368(a) of the Code, then Industries will reduce, to the minimum extent  
necessary to enable both counsel to deliver their respective opinions, the      
amount of cash to be                                                            

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delivered in respect of Cash Election Shares and will deliver in lieu thereof   
such number of Industries Common Shares as has an aggregate value, based on the 
Industries Share Price, equal to the amount of such reduction, and the Cash     
Election Maximum will be appropriately adjusted to give effect to such          
reduction.                                                                      

Promptly after the Effective Time, the Exchange Agent will calculate the    
aggregate number of Cash Election Shares. If the aggregate number of Cash       
Election Shares does not exceed the Cash Election Maximum, all Cash Election    
Shares will be converted into the right to receive cash. However, if the        
aggregate number of Cash Election Shares exceeds the Cash Election Maximum,     
then the Cash Election Shares will be converted on a pro rata basis into a      
combination of cash and Industries Common Shares as described above. AS A       
RESULT OF ANY SUCH PRORATION, A HOLDER OF IWC COMMON SHARES MAKING A CASH       
ELECTION MAY NOT RECEIVE CASH IN THE AMOUNT THAT SUCH HOLDER ELECTED. A HOLDER  
OF IWC COMMON SHARES MAKING A CASH ELECTION WILL NOT BE ABLE TO ALTER ANY SUCH  
PRORATION.                                                                      

CASH ELECTION PROCEDURE                                                         

All Cash Elections must be made on the Form of Election included with this  
Proxy Statement/Prospectus or a complete facsimile thereof. Holders of record   
of IWC Common Shares who hold such shares as nominees, trustees or in other     
representative capacities may submit multiple Forms of Election, provided that  
any such representative certifies that each Form of Election covers all the IWC 
Common Shares held by such representative for a particular beneficial owner.    

To be effective, a Form of Election must be properly completed, signed and  
submitted to Harris Trust and Savings Bank, the Exchange Agent, and accompanied 
by the certificate(s) representing the IWC Common Shares as to which the        
election is being made (or by an appropriate guarantee of delivery of such      
certificate(s) signed by a firm that is a member of a registered national       
securities exchange or the National Association of Securities Dealers, Inc., or 
a bank, broker, dealer, credit union, savings association or other entity that  
is a member in good standing of the Securities Transfer Agent's Medallion       
Program, the New York Stock Exchange Medallion Signature Guarantee Program or   
the Stock Exchange Medallion Program).                                          

Industries will have the discretion, which it may delegate in whole or in   
part to the Exchange Agent, to determine whether Forms of Election have been    
properly completed, signed and submitted or revoked and to disregard immaterial 
defects in Forms of Election. The decision of Industries (or the Exchange       
Agent) in such matters shall be conclusive and binding. Neither Industries nor  
the Exchange Agent will be under any obligation to notify any person of any     
defect in a Form of Election submitted to the Exchange Agent. The Exchange      
Agent will also make all computations and all such computations shall be        
conclusive and binding on the holders of IWC Common Shares. A holder of IWC     
Common Shares who does not submit a Form of Election that is received by the    
Exchange Agent prior to the Election Deadline will be deemed not to have        
properly made a Cash Election. If Industries or the Exchange Agent determines   
that any purported Cash Election was not properly made, such purported Cash     
Election will be deemed to be of no force and effect, and the IWC Common Shares 
covered by such ineffective Cash Election will be converted into Industries     
Common Shares.                                                                  

Industries and IWC will each use its best efforts to mail the Form of       
Election, with a copy of this Proxy Statement/Prospectus, to all persons who    
become record holders of IWC Common Shares during the period between the Record 
Date for the Special Meeting and 10:00 a.m., New York City time, on the date    
that is seven calendar days prior to the anticipated Effective Time and to make 
the Form of Election available to all persons who become record holders of IWC  
Common Shares subsequent to such day and no later than the close of business on 
the business day prior to the Election Deadline. A Form of Election must be     
received by the Exchange Agent by 5:00 p.m., New York City time (4:00 p.m.,     
Chicago time), on the last NYSE trading day prior to the date of the Special    
Meeting, the "Election Deadline," in order to be effective. All elections may   
be revoked in writing by the record holders submitting Forms of Election until  
the Election Deadline.                                                          

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NO DISSENTERS' RIGHTS                                                           

Under the Indiana Business Corporation Law, holders of IWC Common Shares do 
not have dissenters' rights with respect to the Merger.                         

EXCHANGE OF STOCK CERTIFICATES                                                  

From time to time after the Effective Time and the completion of the        
allocation and proration procedures, if any, Industries will transmit cash and  
deliver certificates representing Industries Common Shares to the Exchange      
Agent, for the benefit of the holders of IWC Common Shares, when and as         
required for exchanges of certificates representing IWC Common Shares. Promptly 
after the Effective Time, Industries will require the Exchange Agent to mail a  
form of transmittal letter to the holders of certificates representing IWC      
Common Shares that are not subject to previously-given and unrevoked Cash       
Elections. The form of transmittal letter will contain instructions with        
respect to the surrender of such certificates in exchange for certificates      
representing Industries Common Shares (and cash in lieu of any fractional       
Industries Common Shares and any unpaid dividends and distributions).           

IWC COMMON SHARE CERTIFICATES SHOULD NOT BE RETURNED WITH THE ENCLOSED PROXY
CARD. IF YOU WISH TO MAKE A CASH ELECTION, YOU MUST RETURN THE ENCLOSED FORM OF 
ELECTION, TOGETHER WITH THE CERTIFICATE(S) REPRESENTING YOUR IWC COMMON SHARES  
OR A VALID GUARANTEE OF DELIVERY THEREOF, TO THE EXCHANGE AGENT PRIOR TO THE    
ELECTION DEADLINE. A LETTER OF TRANSMITTAL FOR HOLDERS OF IWC COMMON SHARES WHO 
DO NOT MAKE CASH ELECTIONS WILL BE PROVIDED FOLLOWING THE EFFECTIVE TIME.       

If a certificate representing IWC Common Shares has been lost, stolen or    
destroyed, the Exchange Agent will issue the certificate representing the       
Industries Common Shares and/or the cash into which such IWC Common Shares are  
converted pursuant to the Merger Agreement upon receipt of appropriate evidence 
as to such loss, theft or destruction, appropriate evidence as to the ownership 
of such certificate and appropriate and customary indemnification.              

No dividends or other distributions declared with respect to Industries     
Common Shares with a record date after the Effective Time will be paid to the   
holder of any certificate representing IWC Common Shares until such certificate 
has been surrendered for exchange. Such dividends or other distributions will   
be paid, without interest, to holders of certificates representing IWC Common   
Shares after surrender of such certificates.                                    

NO FRACTIONAL SHARES                                                            

 No fractional Industries Common Shares will be issued pursuant to the Merger.
In lieu of issuing fractional shares, holders of IWC Common Shares who          
otherwise would be entitled to receive a fraction of a share will receive cash  
equal to such fractional amount multiplied by the Industries Share Price.       

IWC DIVIDENDS PRIOR TO THE EFFECTIVE TIME OF THE MERGER                         

IWC will be entitled to declare and pay quarterly dividends at the rate of  
$0.36 per IWC Common Share in accordance with its past practice until the       
Effective Time. On January 16, 1997, the Board of Directors of IWC declared a   
cash dividend of $0.36 per share on the IWC Common Shares. The dividend will be 
paid on March 1, 1997, to shareholders of record on February 10, 1997.          

IMPACT OF STOCK SPLITS, ETC.                                                    

In the event of any change in Industries Common Shares between the date of  
the Merger Agreement and the Effective Time by reason of any stock split, stock 
dividend, subdivision, reclassification, recapitalization, combination,         
exchange or the like, the Exchange Ratio and the calculation of all share       
prices provided for in the Merger Agreement will be proportionately adjusted.   

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OPERATION OF IWC AFTER THE MERGER                                               

After the Effective Time, the Surviving Corporation will change its name to 
IWC Resources Corporation and will remain a wholly-owned subsidiary of          
Industries. IWC's subsidiaries will continue to be legally separate             
corporations, and the Water Companies will continue to be fully subject to      
regulation to the extent now regulated by applicable regulatory agencies and    
will have the same rates, customers, property and operations as prior to the    
Merger. It is expected that the Surviving Corporation, Industries and one or    
more of their subsidiaries, including the Water Companies, may enter into one   
or more management service agreements, pursuant to which certain management,    
accounting, treasury, payroll and other financial functions, human resources    
administration, information and data processing services, and certain customer  
service functions may be provided through one or more of Industries' other      
subsidiaries. The terms of any management services agreement will be finalized  
after the Effective Time. It is intended that the costs incurred by the         
Surviving Corporation and its subsidiaries under such agreements will not       
exceed those that would be incurred by continuing the current operating         
procedures and staffing of IWC and its subsidiaries. The Water Companies will   
file all such agreements with applicable regulatory agencies to the extent      
required.                                                                       

REGULATORY MATTERS                                                              

Antitrust. Under the HSR Act and the rules promulgated thereunder by the    
Federal Trade Commission (the "FTC"), the Merger may not be consummated until   
notifications have been given and certain information has been furnished to the 
FTC and the Antitrust Division of the Department of Justice (the "Antitrust     
Division") and specified waiting period requirements have been satisfied.       
Industries and IWC filed notification and report forms under the HSR Act with   
the FTC and the Antitrust Division on February   , 1997, and the applicable 30- 
day waiting period is scheduled to expire on          , 1997, subject to        
extension if the FTC or the Antitrust Division requests additional information. 

Indiana Utility Regulatory Commission. Under Indiana law, no approval is    
needed from the Indiana Utility Regulatory Commission for the Merger.           

STOCK EXCHANGE LISTINGS                                                         

It is a condition to the Merger that the Industries Common Shares to be     
issued in the Merger be authorized for listing on the NYSE, subject to official 
notice of issuance. Industries has also agreed to use its best efforts to have  
such shares approved for listing on the Chicago Stock Exchange and the Pacific  
Stock Exchange prior to the Effective Time, subject to official notice of       
issuance.                                                                       

CONDITIONS TO THE MERGER                                                        

Conditions to Each Party's Obligation to Effect the Merger. The respective  
obligations of IWC and Industries and Acquisition to consummate the Merger are  
subject to the satisfaction or waiver of the following conditions: (i) the      
shareholders of IWC shall have approved the Merger Agreement and the            
transactions contemplated thereby, (ii) IWC and Industries shall have made all  
such filings, and obtained all permits, authorizations, consents or approvals,  
required by any government entity to consummate the transactions contemplated   
by the Merger Agreement, (iii) the waiting period (and any extension thereof)   
applicable to the Merger under the HSR Act shall have been terminated or shall  
have otherwise expired, (iv) no temporary restraining order, preliminary or     
permanent injunction or other order issued by any court of competent            
jurisdiction or other legal restraint or prohibition preventing the             
consummation of the Merger shall be in effect, (v) the Industries Common Shares 
issuable to shareholders of IWC pursuant to the Merger Agreement shall have     
been approved for listing on the NYSE, subject to official notice of issuance,  
(vi) the Registration Statement shall have become effective under the           
Securities Act and shall not be the subject of any stop order or proceedings    
seeking a stop order, (vii) the Surviving Corporation shall have entered into   
three-year employment agreements with each of James T. Morris, Joseph R.        
Broyles and J.A. Rosenfeld, as described under "THE MERGER--Interests of        
Certain Persons--Change in Control Obligations and New Employment Agreements,"  
(viii) the                                                                      

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preferred share purchase rights issued pursuant to the Rights Agreement dated   
as of February 9, 1988, between IWC and Fifth Third Bank, as rights agent,      
shall have been redeemed, and (ix) the executive employment agreements between  
IWC and each of James T. Morris, Joseph R. Broyles, J.A. Rosenfeld, Kenneth N.  
Griffin and John M. Davis, all IWC Common Shares subject to restrictions under  
IWC's Restricted Stock Plan and all obligations to provide benefits under IWC's 
nonqualified executive supplemental benefit plan shall have been canceled in    
consideration of certain cash payments. See "THE MERGER--Interests of Certain   
Persons--Change in Control Obligations and New Employment Agreements."          

Additional Conditions to IWC's Obligation to Effect the Merger. The         
obligation of IWC to effect the Merger is further subject to the satisfaction   
or waiver of the following additional conditions: (i) the representations and   
warranties of Industries and Acquisition contained in the Merger Agreement      
shall be true and correct in all material respects, (ii) each of Industries and 
Acquisition shall have performed in all material respects all obligations       
required to be performed by it under the Merger Agreement at or prior to the    
Merger, (iii) IWC shall have received a tax opinion of Baker & Daniels, its     
counsel, to the effect that, for federal income tax purposes, the Merger will   
constitute a reorganization within the meaning of Section 368(a) of the Code    
and that shareholders of IWC will not be subject to federal income tax on the   
receipt of Industries Common Shares in exchange for IWC Common Shares pursuant  
to the Merger, and (iv) IWC shall have received an opinion of Schiff Hardin &   
Waite, Industries' counsel, as to certain corporate matters.                    

Additional Conditions to Industries' and Acquisition's Obligations to Effect
the Merger. The obligations of Industries and Acquisition to effect the Merger  
are further subject to the satisfaction or waiver of the following additional   
conditions: (i) the representations and warranties of IWC contained in the      
Merger Agreement shall be true and correct in all material respects, (ii) IWC   
shall have performed in all material respects all obligations required to be    
performed by it under the Merger Agreement at or prior to the Merger, (iii)     
Industries shall have received a tax opinion of Schiff Hardin & Waite, to the   
effect that, for federal income tax purposes, the Merger will constitute a      
reorganization within the meaning of Section 368(a) of the Code and that no     
gain or loss will be recognized by Industries or IWC as a consequence of the    
Merger, (iv) Industries shall have received an opinion of Baker & Daniels, as   
to certain corporate matters, (v) the opinion of Barr Devlin discussed under    
"THE MERGER--Opinion of Barr Devlin" shall not have been modified or withdrawn, 
and (vi) IWC and its subsidiaries shall have received consents to the Merger    
under certain loan agreements, which consents have been obtained.               

OTHER ACQUISITION PROPOSALS                                                     

 In the Merger Agreement, IWC has agreed not to solicit, initiate or encourage
the submission of any Acquisition Proposal, participate in any discussions or   
negotiations regarding, or furnish to any person any information with respect   
to, or take any other action to facilitate any inquiries or the making of any   
proposal that constitutes, or may be reasonably expected to lead to, any        
Acquisition Proposal. However, the Merger Agreement does not prohibit IWC from  
furnishing information to, or entering into discussions or negotiations with,   
any person or entity that makes an unsolicited Acquisition Proposal, to the     
extent that (i) the Board of Directors of IWC makes a good faith determination  
based upon the advice of outside counsel that such action is necessary for the  
Board of Directors of IWC to comply with its fiduciary duties to shareholders   
under applicable law, (ii) IWC provides reasonable notice to Industries that it 
is taking such action and (iii) such person or entity enters into a             
confidentiality agreement with IWC as provided in the Merger Agreement.         

TERMINATION; TERMINATION FEES                                                   

 Termination. The Merger Agreement may be terminated and abandoned at any time
prior to the Effective Time, whether before or after its approval by the        
shareholders of IWC, (i) by mutual written consent of Industries and IWC; (ii)  
by either Industries or IWC (a) if the Merger is not approved by the            
shareholders of IWC at the Special Meeting, (b) if the Merger is not            
consummated on or before May 31, 1997 (unless the failure to consummate the     
Merger is the result of a willful and material breach of the Merger Agreement   
by the party                                                                    

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seeking to terminate the Merger Agreement), (c) if any government entity shall  
have issued an order, decree or ruling or taken any other action permanently    
enjoining, restraining or otherwise prohibiting the Merger and such order,      
decree, ruling or other action shall have become final and nonappealable, or    
(d) because IWC receives an Acquisition Proposal and the Board of Directors of  
IWC concludes that, in order to comply with its fiduciary duties to             
shareholders under applicable law, it is necessary to modify or withdraw its    
approval or recommendation of the Merger Agreement, approve or recommend such   
Acquisition Proposal or enter into an agreement with respect to such            
Acquisition Proposal; (iii) by IWC in the event of a material breach of any     
representation or warranty of Industries or Industries' failure to comply in    
any material respect with any of its covenants or agreements, or if any         
representation or warranty of Industries is or becomes untrue in any material   
respect, such that certain conditions to the Merger would be incapable of being 
satisfied by May 31, 1997, provided that a willful breach shall be deemed to    
cause such conditions to be incapable of being satisfied by such date; (iv) by  
Industries in the event of a material breach of any representation or warranty  
of IWC or IWC's failure to comply in any material respect with any of its       
covenants or agreements, or if any representation or warranty of IWC is or      
becomes untrue in any material respect, such that certain conditions to the     
Merger would be incapable of being satisfied by May 31, 1997, provided that a   
willful breach shall be deemed to cause such conditions to be incapable of      
being satisfied by such date.                                                   

In the event of termination of the Merger Agreement by either IWC or        
Industries, except as provided below, the Merger Agreement will become null and 
void and have no effect, without any liability or obligation on the part of     
Industries or IWC, other than provisions relating to confidentiality, expenses  
(as described under "THE MERGER--Expenses"), and the termination payments       
described below.                                                                

 Termination Fees. The Merger Agreement provides that, if the Merger Agreement
is terminated by Industries or IWC because IWC receives an Acquisition Proposal 
and the Board of Directors of IWC concludes that, in order to comply with its   
fiduciary duties to shareholders under applicable law, it is necessary to       
modify or withdraw its approval or recommendation of the Merger Agreement,      
approve or recommend such Acquisition Proposal or enter into an agreement with  
respect to such Acquisition Proposal, IWC will pay Industries $1,000,000 as     
liquidated damages within 30 days of the date of such termination and will pay  
Industries an additional $9,000,000 as liquidated damages upon the earlier of   
consummation of the transactions contemplated by an Acquisition Proposal or     
five months from the date of such termination; provided, that IWC will not be   
obligated to pay the additional $9,000,000 if, within such five-month period,   
the transactions contemplated by the Acquisition Proposal are abandoned or      
otherwise terminated and either (i) the Merger Agreement is reinstated by       
mutual agreement of Industries and IWC or (ii) Industries rejects a firm        
written offer from IWC to reinstate the Merger Agreement and consummate the     
transactions contemplated thereby. The Merger Agreement further provides that,  
if the Merger Agreement is terminated by either Industries or IWC as a result   
of a material breach by the other of any representation, warranty or obligation 
thereunder, the breaching party will pay $10,000,000 to the non-breaching party 
as liquidated damages.                                                          

EXPENSES                                                                        

Industries, Acquisition and IWC will each pay its own costs and expenses    
incident to preparing for, entering into and carrying out the Merger Agreement  
and the consummation of the transactions contemplated thereby, except that the  
filing fee in respect of the notification and report under the HSR Act and the  
expenses incurred in connection with the printing, mailing and distribution of  
this Proxy Statement/Prospectus and the preparation and filing of the           
Registration Statement will be borne equally by Industries and IWC.             

AMENDMENT, EXTENSION AND WAIVER                                                 

The Merger Agreement may be amended by the parties thereto by written       
agreement prior to the Effective Time, provided that after the approval of the  
Merger by the shareholders of IWC, no amendment may be made that would reduce   
the consideration to be issued upon conversion of IWC Common Shares pursuant to 
the Merger or otherwise adversely affect the rights of the shareholders of IWC  
without the approval of such shareholders.                                      

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At any time prior to the Effective Time, the parties may (i) extend the time
for the performance of any of the obligations or other acts of the other        
parties, (ii) waive any inaccuracies in the representations and warranties      
contained in the Merger Agreement or in any document delivered pursuant thereto 
and (iii) subject to certain limitations, waive compliance with any of the      
agreements or conditions contained in the Merger Agreement.                     

INTERESTS OF CERTAIN PERSONS                                                    

Change in Control Obligations and New Employment Agreements. In late 1993,  
IWC entered into executive employment agreements (the "Executive Agreements")   
with senior executives James T. Morris, J. A. Rosenfeld, Joseph R. Broyles,     
Kenneth N. Giffin and John M. Davis (the "Executives") for the purpose of       
better assuring the continued service and loyalty of the Executives. The        
Executive Agreements provide, among other things, for various benefits to be    
paid to the Executives in the event of a change in control of IWC. Although the 
Executive Agreements were not entered into in conjunction with the Merger, the  
Merger will constitute a "change in control" within the meaning of the          
Executive Agreements, entitling the Executives to certain rights and potential  
payments under the Executive Agreements. IWC and Industries have agreed that,   
as a condition to the Merger, immediately prior to the Effective Time, the      
Executives will agree to the cancellation of their Executive Agreements and     
their restricted shares granted pursuant to IWC's Restricted Stock Plan. In     
consideration for that action, the Surviving Corporation will enter into new    
employment agreements with the Executives. Industries will guarantee the        
payment of all compensation under the new employment agreements.                

The new employment agreements will provide to the Executives: (i) base      
compensation; (ii) a completion bonus; (iii) an annual performance incentive    
bonus; (iv) in the case of Messrs. Morris, Rosenfeld and Broyles, an            
acquisition bonus; and (v) payments relating to a covenant not to compete with  
Industries or its subsidiaries, including the Surviving Corporation, after the  
termination of the Executive's employment.                                      

The base compensation for each Executive will be equal to his base          
compensation from IWC as in effect on January 1, 1997. Those amounts are as     
follows: Mr. Morris--$360,535; Mr. Broyles--$231,186; Mr. Rosenfeld--$231,186;  
Mr. Giffin--$137,754; and Mr. Davis--$162,803. The base compensation through    
December 31, 1997 will be paid as part of the completion bonus. Base            
compensation for years subsequent to 1997 will be payable during those years in 
accordance with the Surviving Corporation's normal payroll practices.           

The completion bonus for each Executive will be payable in full immediately 
after the Effective Time (unless deferred by the Executive). Those amounts are  
as follows: Mr. Morris--$1,501,940; Mr. Broyles--$854,984; Mr. Rosenfeld--      
$805,706; Mr. Giffin--$466,382 and Mr. Davis--$573,902. Each Executive may      
elect to defer all or any part of his completion bonus until the termination of 
his employment, in which case the deferred portion will bear interest at a      
market rate.                                                                    

The performance incentive bonus will consist of two components. The first   
component (the "Industries Performance Bonus") will be a contingent amount to   
be paid to each Executive based on the consolidated earnings before interest,   
taxes, depreciation and amortization of Industries (the "Performance Base"),    
subject to specified maximum amounts. The second component, applicable only to  
Messrs. Morris, Broyles and Rosenfeld, will be a bonus based on the             
consolidated net earnings of the Surviving Corporation (the "IWC Performance    
Bonus").                                                                        

The Industries Performance Bonus will apply to 1997, in the case of Messrs. 
Giffin and Davis, and to 1997, 1998 and 1999, in the case of Messrs. Morris,    
Broyles and Rosenfeld, and will be payable at the end of such one-year or       
three-year period (unless deferred by the Executive). The percentages for each  
Executive (to be applied against the Performance Base) and the maximum amounts  
payable are as follows: Mr. Morris--1.0% and $1,269,680; Mr. Broyles--.75% and  
$1,003,600; Mr. Rosenfeld--.75% and $903,595; Mr. Giffin--.5% and $172,193; and 
Mr. Davis--.5% and $203,503. All or any portion of the Industries Performance   
Bonus may be deferred by the Executive, in which case it will bear interest at  
10% per annum from the end of the year in which the bonus is accrued. If an     
Executive's employment is terminated for any reason during the term of his      
employment agreement, he will be entitled to receive the maximum amount, plus   
accrued interest.                                                               

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The IWC Performance Bonus will be a contingent amount to be shared among    
Messrs. Morris, Broyles and Rosenfeld equal to 20% of the amount by which the   
consolidated net income of the Surviving Corporation exceeds the sum of its     
budgeted net income plus $2,000,000. The IWC Performance Bonus will be payable  
with respect to each of 1997, 1998 and 1999 to such Executives, if they are     
employed for the entire year.                                                   

The acquisition bonus will be a contingent amount to be shared among Messrs.
Morris, Broyles and Rosenfeld and will be based upon the acquisition price of   
certain acquisitions made by the Surviving Corporation during the period that   
those Executives are employees of the Surviving Corporation. For acquisitions   
occurring at a price between $10,000,000 and $100,000,000, the acquisition      
bonus will be 1% of the acquisition price. For acquisitions occurring at a      
higher price, the acquisition bonus will be based on a percentage that declines 
by .125% for each additional $100,000,000 (or any part thereof) of acquisition  
price.                                                                          

Each Executive will agree not to compete with Industries or any of its      
subsidiaries, including the Surviving Corporation, for five years after the     
termination of his employment with the Surviving Corporation. The amounts       
payable in consideration for such agreements, which will be paid upon           
termination of employment, are as follows: Mr. Morris--$2,975,389; Mr.          
Broyles--$1,619,484; Mr. Rosenfeld--$687,709; Mr. Giffin--$952,968 and Mr.      
Davis--$346,966. Each of those amounts will bear interest at 10% per annum from 
the Effective Time to the date paid.                                            

Under the new employment agreements, if any of the Executives is subject to 
an excise tax under Section 4999 of the Code as a result of payments made in    
connection with his employment, the Surviving Corporation will make an          
additional payment or payments to reimburse the Executive, on a grossed-up      
after-tax basis, for the excise tax. Industries, IWC and the Executives have    
agreed that such gross-up payments will in no event exceed an aggregate of      
$6,000,000.                                                                     

 In addition, in lieu of contributing to any pension plan, the Executives will
receive an annual deferred compensation payment in the amount Industries would  
have contributed to its defined benefit pension plan had the Executive          
participated in the plan. The Executives and their dependents will be entitled  
to participate in any health plan, disability plan and life insurance plan made 
available by Industries to its senior executives.                               

Election to Industries' Board. The Merger Agreement provides that Industries
will use its best efforts to cause its Articles of Incorporation to be amended  
at its 1997 annual meeting of shareholders to increase the authorized number of 
directors of Industries so as to permit the appointment of one director of IWC  
to be mutually determined by Industries and IWC to serve as a director of       
Industries. Industries and IWC have selected Mr. Morris to serve as this        
director.                                                                       

IWC Directors. After the Merger, it is expected that the current members of 
IWC's Board of Directors will serve as directors of the Surviving Corporation,  
other than any current directors of IWC who are also directors of another       
electric or gas utility company. It is further expected that the compensation   
of those continuing directors will remain substantially unchanged. Directors of 
IWC (other than directors who are employees of IWC) receive a quarterly         
retainer of $2,500 and an additional $1,000 for each Board of Directors meeting 
attended. Directors also receive additional amounts for serving as members of   
the Executive Committee, the Audit Committee and the Compensation Committee.    
IWC maintains a retirement program for its non-employee directors, under which  
the quarterly director's retainer of $2,500 is paid to a director who retires   
after reaching age 65 and who has at least ten years of service as a director.  
The retirement benefit is reduced proportionately in the case of retiring       
directors who have fewer than ten years of service as a director.               

Indemnification. Industries has agreed to indemnify and hold harmless each  
Eligible Person (as defined in IWC's Articles of Incorporation), including the  
directors of IWC, determined as of the Effective Time, against any costs,       
expenses and other liabilities to the fullest extent that IWC or any of its     
subsidiaries would have been permitted under applicable law and the Articles of 
Incorporation of IWC or such subsidiary in effect on the date of the Merger     
Agreement to indemnify such person.                                             

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EFFECTIVE TIME OF THE MERGER                                                    

If the Merger Agreement is approved by the requisite vote of the holders of 
IWC Common Shares at the Special Meeting and the other conditions to the Merger 
are satisfied or waived, the Merger will become effective upon the filing of    
Articles of Merger with the Secretary of State of Indiana. The filing of the    
Articles of Merger will be made as soon as practicable after all conditions to  
the Merger Agreement have been satisfied or waived.                             

CERTAIN FEDERAL INCOME TAX CONSEQUENCES                                         

 The following summary discusses the principal federal income tax consequences
of the Merger. The summary is based upon the Code, applicable treasury          
regulations thereunder and administrative rulings and judicial authority of the 
date hereof. All of the foregoing are subject to change, and any such change    
could affect the continuing validity of the discussion. The discussion assumes  
that holders of IWC Common Shares hold such shares as a capital asset and does  
not address the tax consequences that may be relevant to a particular           
shareholder subject to special treatment under certain federal income tax laws, 
such as dealers in securities, banks, insurance companies, tax-exempt           
organizations, corporate shareholders which are collapsible corporations, non-  
United States persons and shareholders who acquired IWC Common Shares as        
compensation or through a tax-qualified retirement plan, nor any consequences   
arising under the laws of any state, locality or foreign jurisdiction.          

Tax Opinion. The consummation of the Merger is conditioned upon the receipt 
by Industries and IWC of opinions of Baker & Daniels and Schiff Hardin & Waite  
to the effect that the Merger will constitute a reorganization within the       
meaning of Section 368(a) of the Code and as to certain other federal income    
tax consequences incident to the Merger. Baker & Daniels and Schiff Hardin &    
Waite are of the opinion, subject to the assumptions set forth below being true 
and correct as of the Effective Time, that the Merger will constitute a         
reorganization pursuant to Section 368(a) of the Code and that accordingly      
neither Industries nor IWC will recognize gain or loss as a result of the       
Merger. In addition, Baker & Daniels is of the opinion that holders of IWC      
Common Shares that exchange their shares solely for Industries Common Shares    
will not recognize gain or loss in the Merger, and holders of IWC Common Shares 
that exchange their shares for Industries Common Shares and cash, or solely for 
cash, will recognize gain, if any, in the Merger but not in excess of the       
amount of cash received.                                                        

The foregoing opinions are based upon (i) certain representations of IWC and
Industries, (ii) the assumption that the Merger will be consummated in          
accordance with its terms, and (iii) the assumption that the "continuity of     
interest" requirement for tax-free reorganization treatment will be satisfied.  
If Baker & Daniels or Schiff Hardin & Waite is unable to issue its opinion as a 
result of a failure to satisfy the continuity of interest requirement, the      
number of Industries Common Shares to be issued in the Merger will be increased 
to the minimum extent necessary to permit such opinions to be given, and the    
amount of cash to be paid will be reduced as described under "THE MERGER--Cash  
Elections; Allocation and Proration."                                           

The discussion below summarizes certain federal income tax consequences of  
the Merger to a holder of IWC Common Shares, assuming that the Merger will      
qualify as a reorganization.                                                    

 Holders of IWC Common Shares--General. As discussed below, the federal income
tax consequences of the Merger to a holder of IWC Common Shares depend on       
whether such holder receives cash or Industries Common Shares or some           
combination thereof in exchange for such holder's IWC Common Shares, as well as 
with respect to any IWC Common Shares that such holder constructively owns      
within the meaning of Section 318 of the Code (which generally deems a person   
to own stock that is owned by certain family members or related entities or     
that is the subject of options owned or deemed owned by such person), and may   
further depend on whether such holder actually or constructively owns any       
Industries Common Shares. Because the constructive ownership rules contained in 
Section 318 of the Code are highly complex, holders of IWC Common Shares who    
believe that they may constructively own other IWC Common Shares or Industries  
Common Shares are strongly advised to consult their own tax advisors.           

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Only Industries Common Shares Received. Except as discussed below with      
respect to cash received in lieu of a fractional Industries Common Share, a     
holder of IWC Common Shares that receives only Industries Common Shares in the  
exchange of such holder's IWC Common Shares will not recognize gain or loss.    
The adjusted tax basis of the Industries Common Shares received in the Merger   
will be the same as the adjusted tax basis of the shares of IWC Common Shares   
exchanged therefor in the Merger. The holding period of the Industries Common   
Shares received will include the holding period of IWC Common Shares exchanged  
therefor.                                                                       

Only Cash Received. A holder of IWC Common Shares that receives solely cash 
in the Merger in exchange for such holder's IWC Common Shares will recognize    
capital gain or loss measured by the difference between the amount of cash      
received and the adjusted tax basis of the IWC Common Shares exchanged          
therefor.                                                                       

Industries Common Shares and Cash Received. Except as discussed below with  
respect to cash received in lieu of a fractional Industries Common Share, a     
holder of IWC Common Shares that, as a result of prorations or allocations      
resulting from limitations on cash (see "THE MERGER--Cash Elections; Allocation 
and Proration") or as a result of not making a Cash Election with respect to    
all of such holder's IWC Common Shares, receives both Industries Common Shares  
and cash in the exchange for IWC Common Shares will not recognize loss in such  
exchange. However, under Section 356(a)(1) of the Code, such holder will        
recognize gain (measured by the sum of the fair market value of the Industries  
Common Shares received plus the amount of any cash received minus the adjusted  
tax basis of the IWC Common Shares exchanged), if any, but only to the extent   
of the amount of any cash received. Under existing rulings of the Internal      
Revenue Service, any gain recognized by a holder of IWC Common Shares will be   
capital gain. It is particularly important that holders of IWC Common Shares in 
this position confirm with their own tax advisors that they do not              
constructively own either IWC Common Shares or Industries Common Shares.        

The adjusted tax basis of the Industries Common Shares received will be the 
same as the adjusted tax basis of the IWC Common Shares exchanged therefor,     
decreased by the basis of any fractional share interest for which cash is       
received in the Merger, and further decreased by the amount of cash received    
(other than cash received for a fractional share interest), and increased by    
the amount of gain recognized on the exchange (including any portion that is    
treated as a dividend). The holding period of the Industries Common Shares      
received will include the holding period of the IWC Common Shares exchanged     
therefor.                                                                       

Fractional Shares. If a holder of shares of IWC Common Shares receives cash 
in lieu of a fractional Industries Common Share in the Merger, such cash amount 
will be treated as received in exchange for the fractional Industries Common    
Share. Gain or loss recognized as a result of that exchange will be equal to    
the cash amount received for the fractional Industries Common Share reduced by  
the proportion of the holder's adjusted tax basis in the IWC Common Shares      
exchanged and allocable to the fractional Industries Common Share.              

THE PRECEDING DISCUSSION IS INTENDED ONLY AS A SUMMARY OF CERTAIN FEDERAL   
INCOME TAX CONSEQUENCES OF THE MERGER AND DOES NOT PURPORT TO BE A COMPLETE     
ANALYSIS OR DISCUSSION OF ALL POTENTIAL TAX EFFECTS RELEVANT THERETO. HOLDERS   
OF IWC COMMON SHARES ARE URGED TO CONSULT THEIR OWN TAX ADVISORS AS TO THE      
SPECIFIC TAX CONSEQUENCES TO THEM OF THE MERGER, INCLUDING TAX RETURN REPORTING 
REQUIREMENTS, THE APPLICABILITY AND EFFECT OF FEDERAL, STATE, LOCAL AND OTHER   
APPLICABLE TAX LAWS AND THE EFFECT OF ANY PROPOSED CHANGES IN THE TAX LAWS.     

Forms of the tax opinions of Baker & Daniels and Schiff Hardin & Waite      
described herein have been filed as exhibits to the Registration Statement of   
which this Proxy Statement/Prospectus is a part.                                

ACCOUNTING TREATMENT                                                            

The Merger will be accounted for by Industries using the purchase method of 
accounting in accordance with Accounting Principles Board Opinion No. 16,       
"Business Combinations," as amended. Under this method of accounting, the       
purchase price will be allocated to the assets acquired and liabilities assumed 
based on their estimated fair values at the Effective Time. Any part of the     
purchase price not so allocated will be considered goodwill.                    

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RESALES OF INDUSTRIES COMMON SHARES ISSUED IN THE MERGER; AFFILIATES            

All Industries Common Shares issued in the Merger will be freely            
transferable, except that Industries Common Shares received by persons who are  
deemed to be "affiliates" (as that term is defined under the Securities Act) of 
IWC or Industries prior to the Merger may be sold by them only in transactions  
permitted under the resale provisions of Rule 145 under the Securities Act      
(with respect to affiliates of IWC) or Rule 144 under the Securities Act (with  
respect to persons who are or become affiliates of Industries), or as generally 
permitted under the Securities Act. Persons who may be deemed to be affiliates  
of IWC or Industries generally include individuals or entities that control,    
are controlled by, or are under common control with IWC or Industries,          
respectively, and may include certain officers, directors and principal         
shareholders of such corporations.                                              

Affiliates may not sell the Industries Common Shares received by them in the
Merger except pursuant to an effective registration under the Securities Act    
covering such shares or in compliance with Rule 145 (or Rule 144, in the case   
of persons who become affiliates of Industries) under the Securities Act or     
another applicable exemption from the registration requirements of the          
Securities Act. In general, under Rule 145, for two years following the         
Effective Time, an affiliate would be able to sell Industries Common Shares     
received in the Merger only through unsolicited "broker's transactions" or in   
transactions directly with a "market maker," as such terms are defined in Rule  
144. Moreover, the number of Industries Common Shares sold by an affiliate      
during any three-month period may not exceed the greater of 1% of the           
outstanding Industries Common Shares or the average weekly trading volume in    
Industries Common Shares on all exchanges during the four calendar weeks        
proceeding the sale. Sales under Rule 144 are also subject to the availability  
of current public information about Industries. The restrictions on sales will  
cease to apply under most circumstances once the former IWC affiliate has held  
the Industries Common Shares for at least two years. Industries Common Shares   
held by persons who are or become affiliates of Industries will be subject to   
additional restrictions on sale.                                                

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SHAREHOLDERS OF IWC 

The following table sets forth information as of February 13, 1997, the     
Record Date, regarding the beneficial ownership of IWC Common Shares by each 5% 
beneficial owner and by each director of IWC, the chief executive officer and   
the four other most highly compensated executive officers of IWC whose salary   
and bonus exceeded $100,000 for fiscal 1996, and the directors and executive    
officers of IWC as a group. The persons named in the table have sole voting and 
investment power with respect to all IWC Common Shares owned by them unless     
otherwise noted.                                                                

                                                                [Download Table]

                                               AMOUNT AND NATURE         
                                                 OF BENEFICIAL   PERCENT 
NAME OF BENEFICIAL OWNER                           OWNERSHIP     OF CLASS
------------------------                       ----------------- --------
                                                                         
Don W. Miller (1).............................                       -- %
Joseph R. Broyles.............................              (2)        * 
Robert B. McConnell...........................                         * 
J. George Mikelsons...........................                         * 
Jerry D. Semler...............................                         * 
Joseph D. Barnette, Jr........................                         * 
Milton O. Thompson............................                         * 
Robert A. Borns...............................                         * 
Susan O. Conner...............................                         * 
Murvin S. Enders..............................                         * 
Otto N. Frenzel, III..........................              (3)        * 
J.B. King.....................................                         * 
James T. Morris...............................              (4)        * 
Fred E. Schlegel..............................                         * 
John M. Davis.................................              (5)        * 
Kenneth N. Giffin.............................              (6)        * 
J.A. Rosenfeld................................              (7)        * 
Directors and Executive Officers as a group                              
 (   persons).................................              (8)         %

--------                                                                        
*Less than 1%                                                             
(1) Mr. Miller's address is 1220 Waterway Boulevard, Indianapolis, Indiana      
46206.                                                                  
(2) Shares shown include       shares owned by Mr. Broyles as custodian for his 
   minor daughters and      shares owned by Mr. Broyles' wife, as to which Mr.
 Broyles disclaims beneficial ownership. Shares shown include       shares
   credited to Mr. Broyles' account under IWC's Employee Stock Ownership Plan,
         restricted shares granted pursuant to IWC's Restricted Stock Plan and
shares allocated within IWC's Thrift Plan.                  
(3) Shares shown include     shares held in a family partnership, as to which   
Mr. Frenzel has voting and investment power, and        shares of stock 
held in charitable remainder trusts in which Mr. Frenzel is co-trustee. 
(4) Shares shown include     shares credited to Mr. Morris' account under IWC's 
  Employee Stock Ownership Plan,       restricted shares granted pursuant to
  IWC's Restricted Stock Plan and       shares allocated within IWC's Thrift
Plan.                                                                   
(5) Shares shown include     shares credited to Mr. Davis' account under IWC's  
  Employee Stock Ownership Plan and       restricted shares granted pursuant
to IWC's Restricted Stock Plan.                                         
(6) Shares shown include       shares credited to Mr. Giffin's account under    
IWC's Employee Stock Ownership Plan,       restricted shares granted    
 pursuant to IWC's Restricted Stock Plan and       shares allocated within
IWC's Thrift Plan.                                                      
(7) Shares shown include     shares credited to Mr. Rosenfeld's account under   
  IWC's Employee Stock Ownership Plan and       restricted shares granted to
Mr. Rosenfeld pursuant to IWC's Restricted Stock Plan.                  
(8) Includes        shares credited to officers under IWC's Employee Stock      
Ownership Plan (with respect to which the officers have voting but not  
investment power),        shares with respect to which voting and       
 investment power is shared with spouses or relatives of the directors and
officers,       shares as to which beneficial ownership is disclaimed,  
       restricted shares granted pursuant to IWC's Restricted Stock Plan
and        shares allocated within IWC's Thrift Plan with respect to    
officers.                                                               

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COMPARATIVE SHAREHOLDER RIGHTS

The rights of holders of IWC Common Shares and Industries Common Shares are 
currently governed by the Indiana Business Corporation Law (the "Indiana BCL")  
and the respective articles of incorporation and by-laws of each corporation.   
Upon consummation of the Merger, holders of IWC Common Shares will become       
holders of Industries Common Shares, and their rights will be governed by the   
Indiana BCL and the articles of incorporation and by-laws of Industries         
("Industries' Articles" and "Industries' By-Laws," respectively). A summary of  
certain material differences between the rights of holders of IWC Common Shares 
and the holders of Industries Common Shares is set forth below.                 

COMMON AND PREFERRED SHARES                                                     

Industries' Articles authorize the issuance of 200,000,000 Industries Common
Shares, of which 59,805,661 shares were issued and outstanding as of December   
31, 1996, and the issuance of 20,000,000 Preferred Shares, of which no shares   
were issued and outstanding as of December 31, 1996. Industries' Articles also  
authorize the issuance of 2,000,000 shares of Series A Junior Participating     
Preferred Stock in connection with Industries' Share Purchase Rights Plan. See  
"--Share Purchase Rights Plans" below. Industries Preferred Shares may be       
issued in series having such rights and preferences as may be designated by the 
Board of Directors of Industries. There are no restrictions on the issuance of  
additional Industries Preferred Shares.                                         

The articles of incorporation of IWC ("IWC's Articles") authorize the       
issuance of 20,000,000 IWC Common Shares, of which 9,078,249 shares were issued 
and outstanding as of December 31, 1996, and 2,000,000 Special Shares, no par   
value, of which no shares are issued and outstanding. IWC's Articles also       
authorize the issuance of 100,000 shares of Series A Junior Participating       
Preferred Stock ("Series A Preferred Stock") in connection with IWC's Preferred 
Stock Purchase Rights Plan. See "--Share Purchase Rights Plans" below. There    
are no issued and outstanding shares of Series A Preferred Stock. The IWC       
Special Shares may be issued in series having such rights and preferences as    
may be designated by the Board of Directors of IWC. There are no restrictions   
on the issuance of additional IWC Special Shares.                               

GENERAL VOTING RIGHTS                                                           

Common Shares. Holders of Industries Common Shares and holders of IWC Common
Shares are entitled to one vote for each share held of record upon any matter   
submitted to a vote of Industries shareholders and IWC shareholders,            
respectively.                                                                   

Preferred Shares. Industries' Articles and IWC's Articles both provide that 
the holders of preferred shares have no voting rights except as provided in the 
resolutions of the board of directors establishing the particular series of     
preferred shares or as provided by the Indiana BCL. The resolutions             
establishing Industries' Series A Junior Participating Preferred Stock and      
IWC's Series A Preferred Stock both provide that the holders of such shares     
shall be entitled to 100 votes per share on all matters submitted to a vote of  
the shareholders, subject to adjustments for share splits, share dividends and  
other events.                                                                   

VOTING ON TRANSACTIONS WITH INTERESTED SHAREHOLDERS                             

Industries' Articles and IWC's Articles both have provisions designed to    
assure fair treatment for all shareholders of Industries or IWC in certain      
business combinations (as described in Industries' Articles or IWC's Articles)  
proposed by a beneficial owner of 10% or more of the voting shares of           
Industries (an "Interested Shareholder") or IWC (a "Related Person"). Under     
Industries' Articles, any business combination that is proposed by an           
Interested Shareholder must be approved by 80% of the outstanding voting shares 
that are not beneficially owned by the Interested Shareholder, unless certain   
fair price and procedural requirements are met, the business combination is     
approved by the Board of Directors of Industries before the Interested          
Shareholder becomes an Interested Shareholder, or the business combination is   
approved by the affirmative vote of the holders of the majority of the          
outstanding voting shares that are not beneficially owned by the Interested     
Shareholder no earlier than five years after such person becomes an Interested  
Shareholder.                                                                    

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Under IWC's Articles any business combination that is proposed by a Related 
Person must be approved by two-thirds of the outstanding voting shares of IWC   
and by a majority of the outstanding voting shares that are not beneficially    
owned by the Related Person, unless certain fair price and procedural           
requirements are met, or the business combination is approved by not less than  
a two-thirds vote of the Board of Directors of IWC before the Related Person    
becomes a Related Person or the Board of Directors of IWC has otherwise         
approved the business combination or the business combination is solely between 
IWC and another corporation of which IWC owns, indirectly or directly, all of   
the voting shares.                                                              

These provisions in Industries' Articles and IWC's Articles, in effect,     
encourage a party seeking to control Industries or IWC, in advance of the party 
becoming an Interested Shareholder or Related Person, respectively, to          
negotiate and reach an agreement with the Boards of Directors of Industries or  
IWC as to the terms of its proposed business combination. Without such a prior  
agreement with the Board of Directors of Industries or IWC, it could take over  
five years for a party who is an Interested Shareholder or Related Person to    
obtain approval of its proposed business combination unless such proposed       
business combination is approved by the requisite 80% or two-thirds vote or     
satisfies the fair price and procedural requirements. As a result of these      
restrictions on business combinations with Interested Shareholders or Related   
Persons, takeovers that might be favored by a majority of Industries' or IWC's  
shareholders may be impeded or prevented. On the other hand, the negotiation of 
terms of a takeover transaction in advance is likely to result in more          
favorable terms for all of the shareholders of Industries or IWC than are       
likely to be offered in takeovers initiated without advance negotiations.       

BOARD OF DIRECTORS                                                              

The Board of Directors of Industries currently consists of nine persons and 
is divided into three classes serving staggered three-year terms. As a result,  
one-third of the Board of Directors is elected each year. In addition,          
Industries' Articles provide that a director of Industries may only be removed  
for cause by the directors or shareholders. Industries intends to expand the    
size of its Board of Directors to ten, as described under "THE MERGER--         
Interests of Certain Persons--Election to Industries' Board."                   

The by-laws of IWC (the "IWC By-Laws") provide that IWC's Board of Directors
consists of thirteen directors, who are divided into three classes serving      
staggered three-year terms. As a result, approximately one-third of IWC's Board 
of Directors is elected each year. In addition, the IWC By-Laws provide that    
IWC's shareholders have the right to remove a director for cause by a vote of   
IWC shareholders representing not less than two-thirds of the votes cast.       

 The existence of Industries' and IWC's staggered Boards of Directors requires
a substantial shareholder to negotiate with the existing Board before           
attempting a takeover of Industries or IWC because, without the cooperation of  
the existing Board, it could take such a shareholder up to two years to acquire 
control of the Board. This provision enables Industries' or IWC's Boards of     
Directors, and ultimately the shareholders of Industries or IWC, to negotiate   
with potential acquirors from a strong position and protects Industries' or     
IWC's shareholders against unfair or unequal treatment that could arise from an 
unsolicited attempt to acquire the respective companies. On the other hand, the 
additional time required to obtain control of Industries' or IWC's Board may    
discourage takeover bids which a majority of Industries' or IWC's shareholders  
might deem desirable.                                                           

SPECIAL MEETINGS OF SHAREHOLDERS                                                

Industries' By-Laws provide that Industries' Chairman, President or Board of
Directors may call a special meeting of shareholders and that Industries'       
President must call a special meeting of shareholders upon the written request  
of a majority of Industries' Board of Directors or the holders of at least 25%  
of the outstanding voting stock.                                                

The IWC By-Laws provide that IWC's President, Chief Executive Officer or    
Board of Directors may call a special meeting of shareholders at any time and   
must call a special meeting of shareholders upon the written request of the     
holders of at least 25% of the outstanding voting stock.                        

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AMENDMENT OF ARTICLES                                                           

Industries' Articles provide that the provisions relating to directors,     
business combinations, indemnification and amendment of such Articles may not   
be amended, altered, changed or repealed unless such amendment, alteration,     
change or repeal is approved by the affirmative vote of the holders of not less 
than 75% of the outstanding shares entitled to vote thereon. This requirement   
of a 75% vote is greater than the general voting requirement under the Indiana  
BCL and, in effect, could give certain minority shareholders of Industries,     
including the members of Industries Board of Directors in their capacity as     
shareholders, a veto power over subsequent changes to provisions relating to    
directors, business combinations, indemnification and amendment of the          
Industries' Articles, ultimately making it more difficult to amend such         
provisions, even if a majority of the holders of Industries Common Shares       
favors such changes.                                                            

IWC's Articles provide that the provisions of IWC's Articles relating to    
directors, business combinations and special shareholders meetings may not be   
amended or repealed unless such amendment or repeal is approved by the          
affirmative vote of the holders of not less than two-thirds of the outstanding  
shares entitled to vote thereon and by a majority of shareholders who are not   
Related Persons. These provisions may be amended or repealed by a shareholder   
vote pursuant to the Indiana BCL rather than by a two-thirds shareholder vote   
if not less than two-thirds of the Board of Directors who are not associated    
with any Related Person and who became directors before the Related Person      
became a Related Person recommend any amendments to or repeal of any of these   
provisions. IWC's Articles provide that the provisions of IWC's Articles        
relating to the Series A Preferred Stock may not be amended in any manner which 
would materially change the rights of the Series A Preferred Stock without the  
affirmative vote of the holders of not less than two-thirds of the outstanding  
shares of Series A Preferred Stock, voting together as a single series.         

AMENDMENT OF BY-LAWS                                                            

Industries' By-Laws and the IWC By-Laws provide that they may be altered,   
amended or repealed by an affirmative vote of a majority of a quorum of the     
Board of Directors at any meeting of the Board of Directors. In addition, the   
IWC By-Laws provide that IWC shareholders can alter or repeal any by-laws       
adopted by IWC's directors.                                                     

SHARE PURCHASE RIGHTS PLANS                                                     

In February 1990, Industries adopted a Share Purchase Rights Plan           
("Industries' Rights Plan") and issued, as a dividend, one Preferred Share      
Purchase Right (an "Industries Right") for each outstanding Industries Common   
Share. Each Industries Common Share issued since the date of that dividend also 
includes one Industries Right (including shares to be issued in connection with 
the Merger Agreement, except in the unlikely event that the Industries Rights   
are redeemed or separately certificated prior to the Effective Time).           

Industries' Rights Plan may impede or prevent takeovers that in some        
circumstances might be beneficial to Industries shareholders. Industries'       
Rights Plan would not impede or prevent most takeovers approved by the existing 
directors and is designed to enhance or have the effect of enhancing the        
ability of the Board of Directors, and ultimately the shareholders, to          
negotiate with potential acquirors from a strong position and to protect        
shareholders against unfair or unequal treatment in the event of an unsolicited 
attempt to acquire Industries. It may have, however, the overall effect of      
making it more difficult to acquire and exercise control over Industries and to 
remove incumbent officers and directors, without the approval of the directors, 
thus providing such officers and directors with enhanced ability to retain      
their positions. Such provisions might also limit opportunities for shareholder 
participation in certain types of transactions even though such transactions    
might be favored by the holders of a majority of the outstanding Industries     
Common Shares.                                                                  

Each Industries Right entitles the holder to buy one-hundredth of a share of
Series A Junior Participating Preferred Stock at a price of $60 per one-        
hundredth of a share, subject to adjustment. The Industries Rights will be      
exercisable only if a person or group acquires 20% or more of the voting power  
of Industries or announces a tender or exchange offer following which it would  
hold 25% or more of Industries' voting power. If, following                     

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an acquisition by a person or group of 25% or more of Industries' voting power, 
Industries were acquired in a merger or other business combination, each        
Industries Right would be exercisable for that number of the acquiring          
company's shares of common stock having a market value of two times the         
exercise price of the Industries Right. Industries may redeem the Industries    
Rights at the price of $.01 per Industries Right prior to the occurrence of an  
event that causes the Industries Rights to be exercisable for Industries Common 
Shares. The Industries Rights will expire on March 12, 2000.                    

In January 1988, IWC adopted a Preferred Stock Purchase Rights Plan and     
issued, as a dividend, one Preferred Stock Purchase Right (an "IWC Right") for  
each outstanding IWC Common Share. Each IWC Common Share issued since the date  
of that dividend also includes one IWC Right. Each IWC Right entitles the       
holder to buy one-hundredth of a share of IWC's Series A Junior Preferred Stock 
at a price of $45 per one-hundredth of a share, subject to adjustment. The IWC  
Rights will be exercisable only if a person or group (an "Acquiring Person")    
acquires 20% or more of the outstanding IWC Common Shares ("Share Acquisition   
Date") or commences a tender or exchange offer for 30% or more of the IWC       
Common Shares. Each holder of a IWC Right is entitled to exercise the IWC Right 
and receive IWC Common Shares having a value equal to two times the exercise    
price of the IWC Right if (i) IWC is the surviving corporation in a merger,     
(ii) a person becomes an Acquiring Person, (iii) IWC is merged or consolidated  
and IWC is not the surviving corporation, or (iv) 50% or more of IWC's assets   
is sold or transferred. IWC may redeem the IWC Rights at the price of $.01 per  
IWC Right at any time until ten days following the Share Acquisition Date. The  
IWC Rights will expire on February 9, 1998 unless earlier exercised or redeemed 
by IWC.                                                                         

Pursuant to the Merger Agreement, as long as the Merger Agreement is in     
effect, IWC shall take all action necessary to ensure that (i) no IWC Rights    
certificates are issued or required to be issued to holders of IWC Rights prior 
to, or as of, the Effective Time and (ii) the IWC Rights shall be redeemed and  
IWC's Preferred Stock Purchase Rights Plan shall be terminated no later than    
immediately prior to the Effective Time.                                        

* * * 

The foregoing does not purport to be a complete description of the          
differences between the rights of holders of IWC Common Shares and holders of   
Industries Common Shares. Such differences can be determined in full by         
reference to IWC's Articles and By-Laws and Industries' Articles and By-Laws.   

LEGAL OPINION 

The legality of the Industries Common Shares to be issued pursuant to the   
Merger has been passed upon for Industries by Schiff Hardin & Waite, 7200 Sears 
Tower, Chicago, Illinois 60606. Schiff Hardin & Waite has advised Industries    
that attorneys representing Industries in this transaction own     Industries   
Common Shares.                                                                  

EXPERTS 

The consolidated financial statements and schedules of Industries and its   
subsidiaries incorporated in this Proxy Statement/Prospectus by reference from  
Industries' Annual Report on Form 10-K and Quarterly Reports on Form 10-Q have  
been audited by Arthur Andersen LLP, independent public accountants, as         
indicated in their reports with respect thereto, and are incorporated by        
reference in this Proxy Statement/Prospectus in reliance upon the authority of  
said firm as experts in accounting and auditing in giving said reports.         

The consolidated financial statements and schedules of IWC and its          
subsidiaries incorporated by reference in this Proxy Statement/Prospectus from  
IWC's Annual Report on Form 10-K have been audited by KPMG Peat Marwick LLP,    
independent certified public accountants, as indicated in their report with     
respect thereto, and are incorporated by reference in this Proxy                
Statement/Prospectus in reliance upon such report and upon the authority of     
said firm as experts in accounting and auditing.                                

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                                                                         ANNEX A

AGREEMENT AND PLAN OF MERGER

DATED AS OF DECEMBER 19, 1996 

BY AND AMONG

NIPSCO INDUSTRIES, INC.,

SPEEDWAY ACQUISITION CORP.

AND 

IWC RESOURCES CORPORATION 

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TABLE OF CONTENTS 

                                                                [Download Table]
                                                                              
ARTICLE 1   The Merger..................................................   A-1
      1.1   The Merger..................................................   A-1
      1.2   Closing.....................................................   A-1
      1.3   Effective Time..............................................   A-1
      1.4   Articles of Incorporation...................................   A-2
      1.5   By-Laws.....................................................   A-2
      1.6   Directors...................................................   A-2
      1.7   Officers....................................................   A-2
      1.8   Conversion of Acquisition Shares............................   A-2
      1.9   Conversion of Company Common Shares.........................   A-2
            1.9.1  Outstanding Common Shares............................   A-2
            1.9.2  Cash Election........................................   A-2
            1.9.3  Cash Election Shares.................................   A-3
            1.9.4  Form of Election.....................................   A-3
            1.9.5  Deemed Non-Election..................................   A-3
            1.9.6  Election Deadline....................................   A-3
            1.9.7  Treasury Shares......................................   A-3
            1.9.8  Adjustment Per Tax Opinion...........................   A-3
            1.9.9  Impact of Stock Splits, etc..........................   A-4
      1.10  Exchange of Certificates and Related Matters................   A-4
            1.10.1 Paying Agent.........................................   A-4
            1.10.2 Letter of Transmittal................................   A-4
            1.10.3 Exchange Procedures..................................   A-4
            1.10.4 Distributions with Respect to Unexchanged Shares.....   A-4
            1.10.5 No Further Ownership Rights in Company Common              
             Shares.....................................................   A-5
            1.10.6 No Fractional Shares.................................   A-5
            1.10.7 Termination of Paying Agency.........................   A-5
            1.10.8 No Liability.........................................   A-5
ARTICLE 2   Representations and Warranties of the Company...............   A-5
      2.1   Organization, Standing and Corporate Power..................   A-5
      2.2   Capital Structure...........................................   A-6
      2.3   Subsidiaries................................................   A-6
      2.4   Authority; Noncontravention.................................   A-7
      2.5   SEC Documents and Financial Statements......................   A-8
      2.6   Absence of Certain Changes or Events........................   A-8
      2.7   Real and Personal Property..................................   A-9
      2.8   Employee Matters; ERISA.....................................   A-9
      2.9   Taxes.......................................................  A-11
      2.10  Compliance with Applicable Laws.............................  A-12
      2.11  Environmental Protection....................................  A-12
      2.12  Litigation..................................................  A-14
      2.13  Labor Relations.............................................  A-14
      2.14  Intellectual Property.......................................  A-15

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      2.15 No Default...................................................  A-15
      2.16 Regulation as a Utility......................................  A-16
      2.17 Insurance....................................................  A-16
      2.18 Change in Business Relationships.............................  A-16
      2.19 Voting Requirements..........................................  A-16
      2.20 Brokers......................................................  A-16
ARTICLE 3  Representations and Warranties of NIPSCO and Acquisition.....  A-16
      3.1  Organization, Standing and Corporate Power...................  A-16
      3.2  NIPSCO and Acquisition Capital Structure.....................  A-17
      3.3  Authority; Noncontravention..................................  A-17
      3.4  NIPSCO SEC Documents and Financial Statements................  A-18
      3.5  Absence of Certain Changes or Events.........................  A-18
      3.6  Employee Matters; ERISA......................................  A-19
      3.7  Compliance with Applicable Laws..............................  A-19
      3.8  Litigation...................................................  A-20
      3.9  Brokers......................................................  A-20
ARTICLE 4  Additional Agreements........................................  A-20
             Preparation of Form S-4 and the Proxy Statement/Prospectus;      
      4.1  Information Supplied.........................................  A-20
           4.1.1Form S-4; Proxy Statement/Prospectus....................  A-20
           4.1.2Company Information.....................................  A-20
           4.1.3NIPSCO Information......................................  A-21
      4.2  Meeting of the Company's Shareholders........................  A-21
      4.3  Best Efforts.................................................  A-21
      4.4  Letter of the Company's Accountants..........................  A-21
      4.5  Letter of NIPSCO's Accountants...............................  A-21
      4.6  Access to Information; Confidentiality.......................  A-21
      4.7  Public Announcements.........................................  A-22
      4.8  Acquisition Proposals........................................  A-22
      4.9  Fiduciary Duties.............................................  A-23
      4.10 Filings; Other Action........................................  A-23
      4.11 Stock Exchange Listings......................................  A-23
      4.12 Affiliates and Certain Shareholders..........................  A-23
      4.13 Indemnification..............................................  A-24
      4.14 Shareholder Rights Plan......................................  A-24
      4.15 Change in Control Provisions.................................  A-24
      4.16 Representation on NIPSCO Board...............................  A-25
      4.17 Termination of Company Dividend Reinvestment Plan............  A-25
      4.18 Federal Income Tax Treatment.................................  A-25
ARTICLE 5  Covenants Relating to Conduct of Business Prior to Merger....  A-25
      5.1  Conduct of Business by the Company...........................  A-25
      5.2  Management of the Company and its Subsidiaries...............  A-26
      5.3  Conduct of Business by NIPSCO................................  A-26
      5.4  Other Actions................................................  A-27

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ARTICLE 6  Conditions Precedent..........................................  A-27
      6.1  Conditions to Each Party's Obligation to Effect the Merger....  A-27
           6.1.1  Company Shareholder Approval...........................  A-27
           6.1.2  Governmental and Regulatory Consents...................  A-27
           6.1.3  HSR Act................................................  A-27
           6.1.4  No Injunctions or Restraints...........................  A-27
           6.1.5  NYSE Listing...........................................  A-27
           6.1.6  Form S-4...............................................  A-27
           6.1.7  Employment Agreements..................................  A-27
           6.1.8  Share Purchase Rights..................................  A-27
           6.1.9  Change in Control Obligations..........................  A-27
      6.2  Conditions to Obligations of NIPSCO and Acquisition...........  A-28
           6.2.1  Representations and Warranties.........................  A-28
           6.2.2  Performance of Obligations of the Company..............  A-28
           6.2.3  Tax Opinion............................................  A-28
           6.2.4  Opinion of Counsel.....................................  A-29
           6.2.5  Consents and Approvals.................................  A-28
      6.3  Conditions to Obligation of the Company.......................  A-28
           6.3.1  Representations and Warranties.........................  A-28
           6.3.2  Performance of Obligations of NIPSCO and Acquisition...  A-28
           6.3.3  Tax Opinion............................................  A-28
           6.3.4  Opinion of Counsel.....................................  A-28
ARTICLE 7  Termination, Amendment and Waiver.............................  A-29
      7.1  Termination...................................................  A-29
      7.2  Effect of Termination.........................................  A-29
      7.3  Amendment.....................................................  A-30
      7.4  Extension; Waiver.............................................  A-30
      7.5  Procedure for Termination, Amendment, Extension or Waiver.....  A-30
ARTICLE 8  Survival of Provisions........................................  A-30
      8.1  Survival......................................................  A-30
ARTICLE 9  Notices.......................................................  A-31
      9.1  Notices.......................................................  A-31
ARTICLE 10 Miscellaneous.................................................  A-32
     10.1  Entire Agreement..............................................  A-32
     10.2  Expenses......................................................  A-32
     10.3  Counterparts..................................................  A-32
     10.4  No Third Party Beneficiary....................................  A-32
     10.5  Governing Law.................................................  A-32
     10.6  Assignment; Binding Effect....................................  A-32
     10.7  Headings, Gender, etc.........................................  A-32
     10.8  Invalid Provisions............................................  A-32

EXHIBIT A -- Restated Articles of Incorporation of the Surviving Corporation    

EXHIBIT B -- Form of Affiliate's Letter                                         

EXHIBIT C -- Form of Opinion of Baker & Daniels                                 

EXHIBIT D -- Form of Opinion of Schiff Hardin & Waite                           

EXHIBIT E -- Form of Employment Agreement                                       

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AGREEMENT AND PLAN OF MERGER  

This Agreement and Plan of Merger (the "Agreement") is made and entered into
as of December 19, 1996 by and among NIPSCO Industries, Inc., an Indiana        
corporation ("NIPSCO"), Speedway Acquisition Corp., an Indiana corporation      
("Acquisition"), and IWC Resources Corporation, an Indiana corporation (the     
"Company").                                                                     

PREAMBLE  

Whereas, the respective Boards of Directors of NIPSCO and the Company have  
determined that the Merger (as defined in Section 1.1) is in the best           
interests of their respective shareholders and have approved the Merger, upon   
the terms and subject to the conditions set forth herein; and                   

Whereas, NIPSCO and the Company intend that, for federal income tax         
purposes, the Merger will constitute a reorganization within the meaning of     
Section 368(a)(1) of the Internal Revenue Code of 1986, as amended (the         
"Code"), and that shareholders of the Company will not be subject to federal    
income tax on the receipt of NIPSCO Common Shares (as defined in Section        
1.9.1) in exchange for Company Common Shares (as defined in Section 1.9.1)      
pursuant to the Merger; and                                                     

Whereas, NIPSCO and the Company desire to make certain representations,     
warranties, covenants and agreements in connection with the Merger;             

Now, Therefore, in consideration of the mutual covenants and agreements set 
forth in this Agreement, and for other good and valuable consideration, the     
receipt and sufficiency of which are hereby acknowledged, the parties hereto    
agree as follows:                                                               

ARTICLE 1 

THE MERGER  

1.1 The Merger. Subject to the terms and conditions of this Agreement, at   
the Effective Time (as is defined in Section 1.3 hereof), the Company shall be  
merged with and into Acquisition (the "Merger"), in accordance with the         
Indiana Business Corporation Law (the "Indiana Code") and the separate          
corporate existence of the Company shall cease and Acquisition shall continue   
as the surviving corporation under the laws of the State of Indiana (the        
"Surviving Corporation") with all the rights, privileges, immunities and        
powers, and subject to all the duties and liabilities, of a corporation         
organized under the Indiana Code. The Merger shall have the effects set forth   
in the Indiana Code.                                                            

1.2 Closing. Unless this Agreement shall have been terminated and the       
transactions herein contemplated shall have been abandoned pursuant to Section  
7.1, and subject to the satisfaction or waiver of the conditions set forth in   
Article 6, the closing of the Merger (the "Closing") will take place at 9:00    
a.m. on the first business day following the date on which the last of the      
conditions set forth in Article 6 shall be fulfilled or waived in accordance    
with this Agreement (the "Closing Date"), at the offices of Schiff Hardin &     
Waite, 7200 Sears Tower, Chicago, Illinois 60606, unless another date, time or  
place is agreed to by the parties hereto.                                       

1.3 Effective Time. The parties hereto will file with the Secretary of State
of the State of Indiana (the "Indiana Secretary of State") on the date of the   
Closing (or on such other date as NIPSCO and the Company may agree) articles    
of merger or other appropriate documents, mutually satisfactory in form and     
substance to NIPSCO and the Company and executed in accordance with the         
relevant provisions of the Indiana Code, and make all other filings or          
recordings required under the Indiana Code in connection with the Merger. The   
Merger shall become effective upon the filing of the articles of merger with    
the Indiana Secretary of State, or at such later time as is specified in the    
articles of merger (the "Effective Time").                                      

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1.4 Articles of Incorporation. The Articles of Incorporation of Acquisition 
shall be amended and restated in their entirety to read as set forth in         
Exhibit A hereto (including an amendment changing the name of Acquisition to    
the name of the Company) and, as so amended and restated, shall be the          
Articles of Incorporation of the Surviving Corporation until thereafter         
amended as provided by law.                                                     

1.5 By-Laws. The By-Laws of the Company, as in effect immediately prior to  
the Effective Time, shall be the By-Laws of the Surviving Corporation until     
thereafter amended as provided by law, the By-Laws or the Articles of           
Incorporation of the Surviving Corporation.                                     

1.6 Directors. The Board of Directors of the Surviving Corporation from and 
after the Effective Time shall be comprised of (i) the directors of the         
Company as of immediately prior to the Effective Time (other than any such      
directors who also serves as a director of IPALCO Enterprises, Inc.) and (ii)   
three directors appointed by NIPSCO, such directors to hold office from the     
Effective Time until their respective successors are duly elected or appointed  
and qualify in the manner provided in the Articles of Incorporation or By-Laws  
of the Surviving Corporation, or as otherwise provided by law.                  

1.7 Officers. The officers of the Company at the Effective Time shall be the
officers of the Surviving Corporation and will hold office from the Effective   
Time until their respective successors are duly elected or appointed and        
qualify in the manner provided in the Articles of Incorporation or By-Laws of   
the Surviving Corporation, or as otherwise provided by law.                     

1.8 Conversion of Acquisition Shares. Each share of common stock of         
Acquisition issued and outstanding immediately prior to the Effective Time      
shall remain outstanding unchanged by reason of the Merger as one common        
share, without par value, of the Surviving Corporation.                         

1.9 Conversion of Company Common Shares.                                    

1.9.1 Outstanding Common Shares. Subject to the other provisions of this    
Section 1.9, each common share, no par value, of the Company (the "Company      
Common Shares") issued and outstanding immediately prior to the Effective Time  
(other than shares held as treasury shares by the Company) shall, by virtue of  
the Merger and without any action on the part of the holder thereof, be         
converted into (i) the right to receive $32.00 in cash, without interest (the   
"Cash Price"), or (ii) the fraction (rounded to the nearest ten-thousandth of   
a share) of a validly issued, fully paid and non-assessable common share,       
without par value, of NIPSCO ("NIPSCO Common Shares") determined by dividing    
the Cash Price by the NIPSCO Share Price (as defined below) (the "Exchange      
Ratio") or (iii) the right to receive a combination of cash and NIPSCO Common   
Shares determined in accordance with Section 1.9.3 or Section 1.9.4 below. The  
"NIPSCO Share Price" shall be equal to the average of the closing prices of     
the NIPSCO Common Shares on the New York Stock Exchange ("NYSE") Composite      
Transactions Reporting System, as reported in The Wall Street Journal, for the  
20 trading days immediately preceding the second trading day prior to the       
Effective Time.                                                                 

1.9.2 Cash Election. Subject to the immediately following sentence, each    
record holder of Company Common Shares immediately prior to the Effective Time  
will be entitled to elect to receive solely cash for all or any part of such    
holder's Company Common Shares (a "Cash Election"). Notwithstanding the         
foregoing and subject to Section 1.9.8, the number of Company Common Shares     
that may be converted into the right to receive cash in the Merger (the "Cash   
Election Number") shall not exceed the number of Company Common Shares          
determined by dividing (i) (x) $159,000,000 less (y) the amount of the cash     
payments made pursuant to Section 4.15 that are attributable to the             
cancellation of Company Common Shares, by (ii) the Cash Price. Cash Elections   
shall be made on a form designed for that purpose (a "Form of Election"). A     
holder of record of Company Common Shares who holds such Company Common Shares  
as nominee, trustee or in another representative capacity (a "Representative")  
may submit multiple Forms of Election, provided that such Representative        
certifies that each such Form of Election covers all the Company Common Shares  
held by such Representative for a particular beneficial owner. To the extent    
not covered by a properly given Cash Election, all Company Common Shares        
issued and outstanding immediately prior to the Effective Time shall, except    
as provided in Section 1.9.1, be converted into solely NIPSCO Common Shares.    

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1.9.3 Cash Election Shares. If the aggregate number of Company Common Shares
covered by Cash Elections (the "Cash Election Shares") exceeds the Cash         
Election Number, each Cash Election Share shall be converted into (i) the       
right to receive an amount in cash, without interest, equal to the product of   
(x) the Cash Price and (y) a fraction (the "Cash Fraction"), the numerator of   
which shall be the Cash Election Number and the denominator of which shall be   
the total number of Cash Election Shares, and (ii) a number of NIPSCO Common    
Shares equal to the product of (x) the Exchange Ratio and (y) a fraction equal  
to one minus the Cash Fraction.                                                 

1.9.4 Form of Election. To be effective, a Form of Election must be properly
completed, signed and submitted to NIPSCO's transfer agent and registrar, as    
paying agent (the "Paying Agent"), and accompanied by the certificates          
representing the Company Common Shares as to which the election is being made   
(or by an appropriate guarantee of delivery of such certificate signed by a     
firm that is a member of any registered national securities exchange or a       
member of the National Association of Securities Dealers, Inc. or a bank,       
broker, dealer, credit union, savings association or other entity that is a     
member in good standing of the Securities Transfer Agent's Medallion Program,   
the New York Stock Exchange Medallion Signature Guarantee Program or the Stock  
Exchange Medallion Program). NIPSCO will have the discretion, which it may      
delegate in whole or in part to the Paying Agent, to determine whether Forms    
of Election have been properly completed, signed and submitted or revoked and   
to disregard immaterial defects in Forms of Election. The decision of NIPSCO    
(or the Paying Agent) in such matters shall be conclusive and binding. Neither  
NIPSCO nor the Paying Agent will be under any obligation to notify any person   
of any defect in a Form of Election submitted to the Paying Agent. The Paying   
Agent shall also make all computations contemplated by this Section 1.9, and    
all such computations shall be conclusive and binding on the holders of         
Company Common Shares.                                                          

1.9.5 Deemed Non-Election. For the purposes hereof, a holder of Company     
Common Shares who does not submit a Form of Election that is received by the    
Paying Agent prior to the Election Deadline (as defined in Section 1.9.6)       
shall be deemed not to have properly made a Cash Election. If NIPSCO or the     
Paying Agent shall determine that any purported Cash Election was not properly  
made, such purported Cash Election shall be deemed to be of no force and        
effect.                                                                         

1.9.6 Election Deadline. NIPSCO and the Company shall each use its best     
efforts to cause copies of the Form of Election and the Proxy                   
Statement/Prospectus (as defined in Section 4.1.1) to be mailed to the record   
holders of the Company Common Shares as of the record date for the Special      
Meeting (as defined in Section 4.2), and to all persons who become record       
holders of Company Common Shares during the period between the record date for  
the Special Meeting and 10:00 a.m. New York time, on the date seven calendar    
days prior to the anticipated Effective Time, and to make the Form of Election  
available to all persons who become record holders of Company Common Shares     
subsequent to such day and no later than the close of business on the business  
day prior to the Effective Time. A Form of Election must be received by the     
Paying Agent by 5:00 p.m., New York City time, on the last NYSE trading day     
prior to the date of the Special Meeting (the "Election Deadline") in order to  
be effective. All elections may be revoked in writing by the record holders     
submitting Forms of Election until the Election Deadline.                       

1.9.7 Treasury Shares. Each Company Common Share issued and outstanding     
immediately prior to the Effective Time which is then held as a treasury share  
by the Company shall, by virtue of the Merger and without any action on the     
part of the Company, be canceled and retired and cease to exist, without any    
conversion thereof.                                                             

1.9.8 Adjustment Per Tax Opinion. If, after having made the calculation     
under Section 1.9.3 hereof, the Tax Opinions referred to in Sections 6.2.3 and  
6.3.3 cannot be rendered (as reasonably determined by Schiff Hardin & Waite,    
counsel to NIPSCO, and Baker & Daniels, counsel to the Company), as a result    
of the Merger possibly failing to satisfy continuity of interest requirements   
under applicable federal income tax principles relating to reorganizations      
under Section 368(a) of the Code then NIPSCO shall reduce, to the minimum       
extent necessary to enable the Tax Opinions to be rendered, the amount of cash  
to be delivered with respect to the Cash Election Shares and in lieu thereof    
shall deliver such number of NIPSCO Common Shares that has an aggregate value,  
based on the NIPSCO Share Price, equal to the amount of such reduction, and     
the Cash Election Number shall be appropriately adjusted to give effect to      
such reduction.                                                                 

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1.9.9 Impact of Stock Splits, etc. In the event of any change in NIPSCO     
Common Shares between the date of this Agreement and the Effective Time by      
reason of any stock split, stock dividend, subdivision, reclassification,       
recapitalization, combination, exchange or the like, the Exchange Ratio, the    
Cash Price and the calculation of all share prices provided for in this         
Agreement shall be proportionately adjusted.                                    

1.10 Exchange of Certificates and Related Matters.                          

1.10.1 Paying Agent. Prior to the Closing Date, NIPSCO shall appoint the    
Paying Agent for the purpose of paying the Cash Price and issuing NIPSCO        
Common Shares in exchange for certificates representing Company Common Shares.  
From time to time after completion of the allocation and election procedures    
in Section 1.9, NIPSCO shall transmit, or shall cause the Surviving             
Corporation to transmit, cash, and shall deliver certificates representing      
NIPSCO Common Shares, to the Paying Agent, for the benefit of the holders of    
Company Common Shares, when and as required for exchanges of Company Common     
Shares pursuant to Section 1.9.                                                 

1.10.2 Letter of Transmittal. Promptly after the Effective Time (but in no  
event more than five business days thereafter), NIPSCO shall require the        
Paying Agent to mail to each record holder of Certificates that immediately     
prior to the Effective Time represented Company Common Shares which have been   
converted pursuant to Section 1.9 a letter of transmittal (which shall specify  
that delivery shall be effected, and risk of loss and title shall pass, only    
upon proper delivery of Certificates representing Company Common Shares to the  
Paying Agent and shall be in such form and have such provisions as NIPSCO       
reasonably may specify) and instructions for use in surrendering such           
Certificates and receiving the Merger Consideration to which such holder shall  
be entitled therefor pursuant to Section 1.9.                                   

1.10.3 Exchange Procedures. Upon surrender to the Paying Agent of a         
certificate representing Company Common Shares for cancellation, together with  
a letter of transmittal and such other customary documents as may be required   
by the instructions to the letter of transmittal (collectively, the             
"Certificate") and acceptance thereof by the Paying Agent, the holder of such   
Certificate shall be entitled to receive in exchange therefor (i) certificates  
evidencing that number of whole NIPSCO Common Shares into which the Company     
Common Shares previously represented by such Certificate are converted in       
accordance with Section 1.9.1, (ii) the cash to which such holder is entitled   
in accordance with Section 1.9.1, (iii) the cash in lieu of fractional NIPSCO   
Common Shares to which such holder is entitled pursuant to Section 1.10.6, and  
(iv) any dividends or other distributions to which such holder is entitled      
pursuant to Section 1.10.4 (the NIPSCO Common Shares, dividends, distributions  
and cash described in clauses (i), (ii), (iii) and (iv) are referred to         
collectively as the "Merger Consideration"). The Paying Agent shall accept      
such Certificate upon compliance with such reasonable terms and conditions as   
the Paying Agent may impose to effect an orderly exchange thereof in            
accordance with normal exchange practices. If the Merger Consideration (or any  
portion thereof) is to be delivered to any person other than the person in      
whose name the Certificate representing Company Common Shares surrendered in    
exchange therefor is registered on the record books of the Company, it shall    
be a condition to such exchange that the Certificate so surrendered shall be    
properly endorsed or otherwise be in proper form for transfer and that the      
person requesting such exchange shall pay to the Paying Agent any transfer or   
other taxes required by reason of the payment of such consideration to a        
person other than the registered holder of the Certificate surrendered, or      
shall establish to the satisfaction of the Paying Agent that such tax has been  
paid or is not applicable. After the Effective Time, there shall be no further  
transfer on the records of the Company or its transfer agent of any             
Certificate representing Company Common Shares, and, if any such Certificate    
is presented to the Company for transfer, it shall be canceled against          
delivery of the Merger Consideration as hereinabove provided. Until             
surrendered as contemplated by this Section 1.10.3, each Certificate            
representing Company Common Shares (other than a Certificate representing       
Company Common Shares to be canceled in accordance with Section 1.9.7), shall   
be deemed at any time after the Effective Time to represent only the right to   
receive upon such surrender the Merger Consideration, without any interest      
thereon.                                                                        

1.10.4 Distributions with Respect to Unexchanged Shares. No dividends or    
other distributions with respect to NIPSCO Common Shares with a record date     
after the Effective Time shall be paid to the holder of any Certificate that    
immediately prior to the Effective Time represented Company Common Shares       
which have been                                                                 

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converted pursuant to Section 1.9, and no other part of the Merger              
Consideration shall be paid to any such holder, until the surrender for         
exchange of such Certificate in accordance with this Article 1. Following       
surrender for exchange of any such Certificate, there shall be paid to the      
holder of certificates evidencing whole NIPSCO Common Shares issued in          
exchange therefor, without interest, (i) at the time of such surrender, the     
amount of dividends or other distributions with a record date after the         
Effective Time theretofore paid with respect to the number of whole NIPSCO      
Common Shares into which the Company Common Shares represented by such          
Certificate immediately prior to the Effective Time were converted pursuant to  
Section 1.9, and (ii) at the appropriate payment date, the amount of dividends  
or other distributions with a record date after the Effective Time, but prior   
to such surrender, and with a payment date subsequent to such surrender,        
payable with respect to such whole NIPSCO Common Shares.                        

1.10.5 No Further Ownership Rights in Company Common Shares. The Merger     
Consideration paid upon the surrender for exchange of Certificates              
representing Company Common Shares in accordance with the terms of this         
Article 1 shall be deemed to have been issued and paid in full satisfaction of  
all rights pertaining to the Company Common Shares theretofore represented by   
such certificates, subject, however, to the Surviving Corporation's obligation  
(if any) to pay any dividends or make any other distributions with a record     
date prior to the Effective Time which may have been declared by the Company    
on such Company Common Shares in accordance with the terms of this Agreement    
or prior to the date of this Agreement and which remain unpaid at the           
Effective Time.                                                                 

1.10.6 No Fractional Shares. No certificates or scrip representing          
fractional NIPSCO Common Shares shall be issued upon the surrender for          
exchange of Certificates that immediately prior to the Effective Time           
represented Company Common Shares which have been converted pursuant to         
Section 1.9, and such fractional share interests will not entitle the owner     
thereof to vote or to any rights of a shareholder of NIPSCO. Notwithstanding    
any other provisions of this Agreement, each holder of Company Common Shares    
who would otherwise have been entitled to receive a fraction of a NIPSCO        
Common Share (after taking into account all certificates delivered by such      
holder) shall receive, in lieu thereof, cash (without interest) in an amount    
equal to such fractional part of a NIPSCO Common Share multiplied by the        
NIPSCO Share Price.                                                             

1.10.7 Termination of Paying Agency. Any portion of the funds or NIPSCO     
Common Shares held by the Paying Agent which remains undistributed to the       
holders of the Certificates representing Company Common Shares by 120 days      
after the Effective Time shall be delivered to NIPSCO, and any holders of       
Company Common Shares who have not theretofore complied with this Article 1     
shall thereafter look only to NIPSCO and only as general creditors thereof for  
payment, without interest, of their claim for any Merger Consideration and any  
dividends or distributions with respect to NIPSCO Common Shares.                

1.10.8 No Liability. Neither NIPSCO, the Surviving Corporation nor the      
Paying Agent shall be liable to any person in respect of any Merger             
Consideration payable with respect to Company Common Shares delivered to a      
public official pursuant to any applicable abandoned property, escheat or       
similar law. If any Certificates representing Company Common Shares shall not   
have been surrendered prior to seven years after the Effective Time (or         
immediately prior to such earlier date on which any Merger Consideration in     
respect of such Certificate would otherwise escheat to or become the property   
of any Governmental Entity (as defined in Section 2.4)), any such cash,         
Company Common Shares, dividends or distributions payable in respect of such    
Certificate shall, to the extent permitted by applicable law, become the        
property of NIPSCO free and clear of all claims or interest of any person       
previously entitled thereto.                                                    

ARTICLE 2 

REPRESENTATIONS AND WARRANTIES OF THE COMPANY 

The Company hereby represents and warrants to NIPSCO and Acquisition as     
follows:                                                                        

2.1 Organization, Standing and Corporate Power. The Company is a corporation
duly organized and validly existing under the laws of the State of Indiana and  
has the requisite corporate power and authority to                              

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carry on its business as now being conducted. The nature of the Company's       
business does not require its qualification as a foreign corporation in any     
jurisdiction, except where the failure to be so qualified would not             
individually or in the aggregate have a Material Adverse Effect. As used in     
this Agreement, the term "Material Adverse Effect" means with respect to the    
Company a material adverse effect on the business, assets, liabilities,         
results of operations or financial condition of the Company and its             
subsidiaries taken as a whole (and with respect to NIPSCO a material adverse    
effect on the business, assets, liabilities, results of operations or           
financial condition of NIPSCO and its subsidiaries taken as a whole). With      
respect to the Company, to the extent an adverse effect can be attributed to    
either of the Company's business segments, it will be deemed to be material if  
it involves an amount in excess of (i) $2,000,000, insofar as it relates to     
the Company's water utilities business segment or (ii) $500,000, insofar as it  
relates to the Company's utility-related services segment. The Company has      
delivered to NIPSCO complete and correct copies of its Articles of              
Incorporation and By-Laws, as amended to the date of this Agreement.            

2.2 Capital Structure. The authorized capital stock of the Company consists 
of 20,000,000 Company Common Shares and 2,000,000 special shares, no par        
value, of which 60,000 shares have been designated as Series B Redeemable       
Preferred Stock ("Company Preferred Shares"). At the close of business on       
December 19, 1996, (i) 9,078,249 Company Common Shares were issued and          
outstanding (of which 31,430 shares were subject to restrictions under the      
Company's Restricted Stock Plan); (ii) no Company Common Shares were held as    
treasury stock; (iii) no Company Common Shares were held by subsidiaries of     
the Company; (iv) 119,104 Company Common Shares were reserved for issuance      
under the Restricted Stock Plan; (v) no special shares, including but not       
limited to Company Preferred Shares, were issued and outstanding; and (vi)      
100,000 shares of Series A Junior Participating Preferred Stock were reserved   
for issuance under the Rights Agreement dated as of February 9, 1988, between   
the Company and Bank One, Indianapolis, NA, as rights agent. All outstanding    
shares of capital stock of the Company are duly authorized, validly issued,     
fully paid and nonassessable and not subject to preemptive rights. No bonds,    
debentures, notes or other indebtedness of the Company having the right to      
vote (or convertible into, or exchangeable for, securities having the right to  
vote) on any matters on which the shareholders of the Company may vote are      
issued or outstanding. Section 2.2 of the Disclosure Schedule dated as of the   
date hereof and executed by the Company and NIPSCO (the "Disclosure Schedule")  
sets forth the name of each participant in the Restricted Stock Plan and the    
number of Company Common Shares awarded to such participant as of the date      
hereof. Except as set forth above or in Section 2.2 of the Disclosure           
Schedule, the Company does not have any outstanding option, warrant,            
subscription or other right, agreement or commitment which either obligates     
the Company to issue, sell or transfer, repurchase, redeem or otherwise         
acquire or vote any shares of capital stock of the Company, or which restricts  
the transfer of Company Common Shares.                                          

2.3 Subsidiaries.                                                           

2.3.1 Section 2.3.1 of the Disclosure Schedule sets forth the name of each  
corporation, limited liability company, general or limited partnership or       
other entity that is controlled, directly or indirectly, by the Company (a      
"subsidiary") and the jurisdiction of its organization. Each such subsidiary    
is a corporation or partnership duly organized and validly existing under the   
laws of the jurisdiction of its organization and has the corporate or           
partnership power and authority and all necessary government approvals to own,  
lease and operate its properties and to carry on its business as now being      
conducted, except where the failure to be so organized, existing and in good    
standing or to have such power and authority or necessary governmental          
approvals would not individually or in the aggregate have a Material Adverse    
Effect. Each subsidiary is duly qualified or licensed and in good standing to   
do business in each jurisdiction in which the property owned, leased or         
operated by it or the nature of the business conducted by it makes such         
qualification or licensing necessary, except in such jurisdictions where the    
failure to be so duly qualified or licensed and in good standing would not      
individually or in the aggregate have a Material Adverse Effect.                

2.3.2 Section 2.3.2 of the Disclosure Schedule sets forth, as to each       
subsidiary of the Company, its authorized capital structure and the number of   
its issued and outstanding shares of capital stock or other ownership units.    
Except as set forth in Section 2.3.2 of the Disclosure Schedule, the Company    
is, directly or                                                                 

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indirectly, the record and beneficial owner of all of the outstanding shares    
of capital stock or other ownership units of each of its subsidiaries, and no   
capital stock or other ownership units of any subsidiary is or may become       
required to be issued by reason of any options, warrants, rights to subscribe   
to, calls or commitments of any character whatsoever relating to, or            
securities or rights convertible into or exchangeable or exercisable for,       
shares of any capital stock or other ownership units of any subsidiary, and     
there are no contracts, commitments, understandings or arrangements by which    
the Company or any of its subsidiaries is or may be bound to issue, redeem,     
purchase or sell additional shares of capital stock or other ownership units    
of any subsidiary or securities convertible into or exchangeable or             
exercisable for any such shares or units. All of such shares and other          
ownership units are validly issued, fully paid and nonassessable and, except    
as set forth in Section 2.3.2 of the Disclosure Schedule, are owned by the      
Company or by another wholly-owned subsidiary of the Company free and clear of  
all liens, claims, encumbrances, restraints on alienation, or any other         
restrictions with respect to the transferability or assignability thereof       
(other than restrictions on transfer imposed by federal or state securities     
laws).                                                                          

2.4 Authority; Noncontravention. The Company has the requisite corporate    
power and authority to enter into this Agreement and to carry out its           
obligations hereunder. The execution and delivery of this Agreement by the      
Company and the consummation by the Company of the transactions contemplated    
hereby have been duly authorized by all necessary corporate action on the part  
of the Company, subject, in the case of the Merger, to the approval of its      
shareholders as set forth in Section 4.2. This Agreement has been duly          
executed and delivered by the Company and, assuming this Agreement has been     
duly executed and delivered by NIPSCO and Acquisition, constitutes a valid and  
binding obligation of the Company, enforceable against the Company in           
accordance with its terms, except that the enforcement thereof may be limited   
by bankruptcy, insolvency, reorganization, moratorium or similar laws now or    
hereafter in effect relating to creditor's rights generally and by general      
principles of equity (regardless of whether enforceability is considered in a   
proceeding at law or in equity). Except as disclosed in Section 2.4 of the      
Disclosure Schedule, the execution and delivery of this Agreement do not, and   
the consummation of the transactions contemplated by this Agreement and         
compliance with the provisions hereof will not, (i) conflict with any of the    
provisions of the Articles of Incorporation or By-Laws of the Company or the    
comparable documents of any of the subsidiaries, (ii) subject to the            
governmental filings and other matters referred to in the following sentence,   
conflict with, result in a breach of or default (with or without notice or      
lapse of time, or both) under, or give rise to a right of termination,          
cancellation or acceleration of any obligation or loss of a material benefit    
under, or require the consent of any person under, any indenture or other       
agreement, permit, concession, franchise, license or similar instrument or      
undertaking to which the Company or any of its subsidiaries is a party or by    
which the Company or any of its subsidiaries or any of their assets is bound    
or affected, or (iii) subject to the governmental filings and other matters     
referred to in the following sentence, contravene any law, rule or regulation   
of any state or of the United States or any political subdivision thereof or    
therein, or any order, writ, judgment, injunction, decree, determination or     
award currently in effect, subject, in the case of clauses (ii) and (iii), to   
those conflicts, breaches, defaults and similar matters, which, individually    
or in the aggregate, would not have a Material Adverse Effect nor materially    
and adversely affect the Company's ability to consummate the transactions       
contemplated hereby. No consent, approval or authorization of, or declaration   
or filing with, or notice to, any governmental agency or regulatory body,       
court, agency, commission, division, department, public body or other           
authority (a "Governmental Entity") which has not been received or made, is     
required by or with respect to the Company or any of its subsidiaries in        
connection with the execution and delivery of this Agreement by the Company or  
the consummation by the Company of the transactions contemplated hereby,        
except for (a) the filing of premerger notification and report forms under the  
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR      
Act"), with respect to the Merger, (b) the filing with the Securities and       
Exchange Commission (the "SEC") of a proxy statement relating to the approval   
by the shareholders of the Company of the Merger and such reports under the     
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as may be     
required in connection with this Agreement and the transactions contemplated    
by this Agreement, (c) the filing of articles of merger with the Indiana        
Secretary of State and appropriate documents with the relevant authorities of   
other states in which the Company is qualified to do business and (d) such      
other consents, approvals, authorizations, filings or notices as are set forth  
in Section 2.4 of the Disclosure Schedule.                                      

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2.5 SEC Documents and Financial Statements.                                 

2.5.1 Except as set forth in Section 2.5.1 of the Disclosure Schedule, the  
Company, and each of its subsidiaries that is or was required to do so, has     
timely filed all required reports, schedules, forms, statements and other       
documents with the SEC since January 1, 1992 (such reports, schedules, forms,   
statements and other documents are hereinafter referred to as the "Company SEC  
Documents"). As of their respective dates, the Company SEC Documents complied   
with the requirements of the Securities Act of 1933, as amended (the            
"Securities Act"), or the Exchange Act, as the case may be, and the rules and   
regulations of the SEC promulgated thereunder applicable to such Company SEC    
Documents, and none of the Company SEC Documents as of such dates contained     
any untrue statement of a material fact or omitted to state a material fact     
required to be stated therein or necessary in order to make the statements      
therein, in light of the circumstances under which they were made, not          
misleading.                                                                     

2.5.2 The consolidated financial statements of the Company included in the  
Company SEC Documents comply as to form in all material respects with           
applicable accounting requirements and the published rules and regulations of   
the SEC with respect thereto, have been prepared in accordance with generally   
accepted accounting principles applied on a consistent basis during the         
periods involved ("GAAP") (except as may be indicated in the notes thereto or,  
in the case of unaudited interim financial statements, as permitted by Rule     
10-01 of Regulation S-X) and fairly present, in all material respects, the      
consolidated financial position of the Company and its consolidated             
subsidiaries as of the dates thereof and the consolidated results of their      
operations, changes in shareholders' equity and consolidated cash flows for     
the periods then ended (subject, in the case of unaudited interim financial     
statements, to normal recurring adjustments, none of which is material).        

2.5.3 Except as disclosed in the Company SEC Documents filed and publicly   
available prior to December 6, 1996 (the "Filed Company SEC Documents") or in   
the Disclosure Schedule, neither the Company nor any of its subsidiaries has    
any absolute, accrued, contingent or other liabilities or obligations due or    
to become due, and there are no claims or causes of action (including but not   
limited to those relating to any Company Benefit Plan (as defined in Section    
2.8.1) formerly maintained by the Company or any of its subsidiaries or a       
Company ERISA Affiliate (as defined in Section 2.8.1) on or after January 1,    
1991) that have been or, to the knowledge of the officers of the Company and    
its subsidiaries and divisions, the members of the Company's legal department   
and the director(s), manager(s) or supervisor(s) of the Company's               
environmental compliance and affairs, may be asserted against the Company or    
any of its subsidiaries, except (i) as and to the extent reflected or reserved  
against on the balance sheet included in the Company's Annual Report on Form    
10-K for the year ended December 31, 1995 (the "Company Base Balance Sheet"),   
or included in the notes to the Company Base Balance Sheet, (ii) for normal     
and recurring liabilities incurred since December 31, 1995, in the ordinary     
course of business consistent with past practice, and (iii) for such other      
liabilities and obligations that are not in the aggregate reasonably likely to  
have a Material Adverse Effect.                                                 

2.6 Absence of Certain Changes or Events. Except as disclosed in the Filed  
Company SEC Documents or in Section 2.6 of the Disclosure Schedule, since the   
date of the Company Base Balance Sheet, the Company and its subsidiaries have   
conducted their business only in the ordinary course, and, except as otherwise  
expressly permitted by this Agreement, there has not been (i) any change which  
has had or which could have a Material Adverse Effect, (ii) any declaration,    
setting aside or payment of any dividend or other distribution (whether in      
cash, stock or property) with respect to any of the Company's outstanding       
capital stock (other than regular quarterly cash dividends of $.36 per Company  
Common Share and $.36 per Company Preferred Share, in accordance with usual     
record and payment dates and in accordance with the Company's present dividend  
policy), (iii) any split, combination or reclassification of any of its         
outstanding capital stock or any issuance or the authorization of any issuance  
of any other securities in respect of, in lieu of or in substitution for        
shares of its outstanding capital stock, (iv) any entry by the Company or any   
of its subsidiaries into any employment, severance, change of control,          
termination or similar agreement with any officer, director or other employee,  
or any increase in the compensation or severance or termination benefits        
payable to any director, officer or other employee of the Company or any of     
its subsidiaries (except in the case of employees in the ordinary course of     

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business consistent with prior practice, or as was required under employment    
agreements in effect as of the date of the Company Base Balance Sheet) or (v)   
any change in the method of accounting or policy used by the Company or any of  
its subsidiaries and disclosed in the financial statements included in the      
Filed Company SEC Documents.                                                    

2.7 Real and Personal Property.                                             

2.7.1 The Company and its subsidiaries own, or have a valid and enforceable 
right to use or a valid and enforceable leasehold interest in, all real         
property (including all buildings, fixtures and other improvements thereto)     
used by them in the conduct of their respective businesses as such businesses   
are now being conducted. Except as disclosed in the Filed Company SEC           
Documents or Section 2.7.1 of the Disclosure Schedule, neither the Company's    
nor any of its subsidiaries' ownership of or leasehold interest in any such     
property is subject to any mortgage, pledge, lien, option, conditional sale     
agreement, encumbrance, security interest, title exception or restriction or    
claim or charge of any kind ("encumbrances"), except for such encumbrances as   
are not in the aggregate reasonably likely to have a Material Adverse Effect.   
All such property is in good condition and repair and is suitable in all        
material respects for the purposes for which it is now being used in the        
conduct of the businesses of the Company and its subsidiaries, except to the    
extent that the poor condition or unsuitability of any such property is not in  
the aggregate reasonably likely to have a Material Adverse Effect.              

2.7.2 Except as otherwise disclosed in Section 2.7.2 of the Disclosure      
Schedule, all personal property that is owned by the Company or any of its      
subsidiaries or used by any of them in the conduct of their respective          
businesses is owned free and clear of any encumbrances, except for such         
encumbrances as are not in the aggregate reasonably likely to have a Material   
Adverse Effect. All such property is in good working condition, subject to      
normal wear and tear, and is suitable in all material respects for the          
purposes for which it is now being used in the conduct of the businesses of     
the Company and its subsidiaries, except to the extent that the poor condition  
or unsuitability of any such property is not in the aggregate reasonably        
likely to have a Material Adverse Effect.                                       

2.8 Employee Matters; ERISA.                                                

2.8.1 Section 2.8.1 of the Disclosure Schedule contains a true and complete 
list of: (i) each employee benefit plan, program or arrangement covering        
employees, former employees or directors of the Company (or any of its          
subsidiaries) or any of their dependents or beneficiaries, or providing         
benefits to such persons in respect of services provided to any such entity,    
including but not limited to any "employee benefit plan" within the meaning of  
Section 3(3) of the Employee Retirement Income Security Act of 1974, as         
amended ("ERISA") (whether or not terminated, if the Company or any of its      
subsidiaries could have statutory or contractual liability with respect         
thereto on or after the date hereof); (ii) each management, employment,         
deferred compensation, severance (including any payment, right or benefit       
resulting from a change in control), bonus or other contract for personal       
services with or covering any current officer, key employee or director or any  
consulting contract with any person who prior to entering into such contract    
was a director or officer of the Company or any of its subsidiaries (whether    
or not terminated, if the Company or any of its subsidiaries could have         
statutory or contractual liability with respect thereto on or after the date    
hereof); (iii) each "employee pension benefit plan" (within the meaning of      
ERISA Section 3(2)) subject to Title IV of ERISA or the minimum funding         
requirements of Code Section 412 maintained or contributed to by the Company    
or any entity required to be aggregated therewith pursuant to Code Section      
414(b) or (c) (each, a "Company ERISA Affiliate") at any time during the        
seven-year period immediately preceding the date hereof (collectively, the      
"Company Benefit Plans") and (iv) with respect to each Company Benefit Plan,    
the source or sources of benefit payments under the plan (including, where      
applicable, the identity of any trust (whether or not a grantor trust),         
insurance contract, custodial account, agency agreement, or other arrangement   
that holds the assets of, or serves as a funding vehicle or source of benefits  
for, such Company Benefit Plan).                                                

2.8.2 Except as disclosed in Section 2.8.2 of the Disclosure Schedule, all  
material contributions and other payments required to have been made by the     
Company or any of its subsidiaries pursuant to any Company Benefit Plan (or to  
any person pursuant to the terms thereof) have been timely made or the amount   
of such payment or contribution obligation has been reflected in the Company's  
financial statements reflected in the Filed Company SEC Documents.              

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2.8.3 Except as disclosed in Section 2.8.3 of the Disclosure Schedule, each 
Company Benefit Plan that is intended to be "qualified" within the meaning of   
Code Section 401(a) has been determined by the IRS to be so qualified, and, to  
the best knowledge of the Company, no event or condition exists or has          
occurred that could reasonably be expected to result in the revocation of any   
such determination. The Company and each of its subsidiaries are in compliance  
with, and each Company Benefit Plan is and has been operated in compliance      
with, all applicable laws, rules and regulations governing such plan,           
including without limitation ERISA and the Code, except for violations that     
could not reasonably be expected to have a Material Adverse Effect. To the      
best knowledge of the Company, no individual or entity has engaged in any       
transaction with respect to any Company Benefit Plan as a result of which the   
Company or any of its subsidiaries could reasonably expect to be subject to     
liability pursuant to ERISA Section 409 or 502 or subject to an excise tax      
pursuant to Code Section 4975. To the best knowledge of the Company, (i) no     
Company Benefit Plan is subject to any ongoing audit, investigation, or other   
administrative proceeding of the IRS, the Department of Labor, or any other     
federal, state or local governmental entity and (ii) no Company Benefit Plan    
is the subject of any pending application for administrative relief under any   
voluntary compliance program of any governmental entity (including without      
limitation the IRS's Voluntary Compliance Resolution Program or Walk-in         
Closing Agreement Program or the Department of Labor's Delinquent Filer         
Voluntary Compliance Program).                                                  

2.8.4 With respect to the Company Benefit Plans, individually and in the    
aggregate, no termination or partial termination of any Company Benefit Plan    
or other event has occurred, and, to the best knowledge of the Company, there   
exists no condition or set of circumstances that could subject the Company or   
any of its subsidiaries to any liability arising under the Code, ERISA or any   
other applicable law (including without limitation any liability to or under    
any such plan or to the Pension Benefit Guaranty Corporation (the "PBGC"), or   
under any indemnity agreement to which the Company, any of its subsidiaries or  
any Company ERISA Affiliate is a party, which liability, excluding liability    
for benefit claims and funding obligations payable in the ordinary course and   
liability for PBGC insurance premiums payable in the ordinary course, is        
reasonably likely to have a Material Adverse Effect.                            

2.8.5 Except as disclosed in Section 2.8.5 of the Disclosure Schedule, no   
Company Benefit Plan that is a "welfare plan" (within the meaning of ERISA      
Section 3(1)) provides benefits for any retired or former employees (other      
than as required pursuant to ERISA Section 601).                                

2.8.6 The Company has made available to NIPSCO a true and correct copy of   
each collective bargaining agreement to which the Company is a party or under   
which the Company has obligations and, with respect to each Company Benefit     
Plan, as applicable (i) the current plan document (including all amendments     
adopted since the most recent restatement) and its most recently prepared       
summary plan description and all summaries of material modifications prepared   
since the most recent summary plan description, (ii) the most recently          
prepared annual report (IRS Form 5500 Series) including financial statements,   
(iii) each related trust agreement, insurance contract, service provider or     
investment management agreement (including all amendments to each such          
document), (iv) the most recent IRS determination letter with respect to the    
qualified status under Code Section 401(a) of such plan and a copy of any       
application for an IRS determination letter filed since the most recent IRS     
determination letter was issued and (v) the most recent actuarial report or     
valuation.                                                                      

2.8.7 Except as disclosed in Section 2.8.7 of the Disclosure Schedule, the  
consummation or announcement of any transaction contemplated by this Agreement  
will not (either alone or upon the occurrence of any additional or further      
acts or events) result in any (i) payment (whether of severance pay or          
otherwise) becoming due from the Company or any of its subsidiaries under any   
applicable Company Benefit Plans to any officer, employee, former employee or   
director thereof or to the trustee under any "rabbi trust" or similar           
arrangement, or (ii) benefit under any Company Benefit Plan being established   
or becoming accelerated, vested or payable, except for a payment or benefit     
that would have been payable under the same terms and conditions without        
regard to the transactions contemplated by this Agreement.                      

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2.8.8 Except as disclosed in Section 2.8.8 of the Disclosure Schedule, each 
Company Benefit Plan that is subject to either or both of the minimum funding   
requirements of ERISA Section 302 or to Title IV of ERISA has assets that, as   
of the date hereof, have a fair market value equal to or exceeding the present  
value of the accrued benefit obligations thereunder on a termination basis, as  
of the date hereof based on the actuarial methods, tables and assumptions       
theretofore utilized by such plan's actuary in preparing such plan's most       
recently prepared actuarial valuation report, except to the extent that         
applicable law would require the use of different actuarial assumptions if      
such plan was to be terminated as of the date hereof. No Company Benefit Plan   
subject to the minimum funding requirements of ERISA Section 302 has incurred   
any "accumulated funding deficiency" (within the meaning of ERISA Section       
302).                                                                           

2.8.9 Except as disclosed in Section 2.8.9 of the Disclosure Schedule, no   
Company Benefit Plan is or was a "multiemployer plan" (within the meaning of    
ERISA Section 4001(a) (3)), a multiple employer plan described in Code Section  
413(c), or a "multiple employer welfare arrangement" (within the meaning of     
ERISA Section 3(40)); and none of the Company, any subsidiary thereof or any    
Company ERISA Affiliate has been obligated to contribute to, or otherwise has   
or has had any liability with respect to, any multiemployer plan, multiple      
employer plan, or multiple employer welfare arrangement. With respect to any    
Company Benefit Plan that is listed in Section 2.8.9 of the Disclosure          
Schedule as a multiemployer plan, the Company and its subsidiaries have not     
made or incurred a "complete withdrawal" or a "partial withdrawal," as such     
terms are defined in ERISA Sections 4203 and 4205, therefrom at any time        
during the five-calendar-year period immediately preceding the date of this     
Agreement and the transactions contemplated by the Agreement will not, in and   
of themselves, give rise to such a "complete withdrawal" or "partial            
withdrawal."                                                                    

2.8.10 Except as disclosed in Section 2.8.10 of the Disclosure Schedule: (i)
neither the Company nor any subsidiary of the Company is subject to any legal,  
contractual, equitable or other obligation to establish as of any date any      
employee benefit plan of any nature, including without limitation any pension,  
profit sharing, welfare, post-retirement welfare, stock option, stock or cash   
award, nonqualified deferred compensation or executive compensation plan,       
policy or practice, and (ii) to the best knowledge of Company, after review of  
all Company Benefit Plan documents, the Company or one or more of its           
subsidiaries may, in any manner, and without the consent of any employee,       
beneficiary or dependent, employees' organization or other person, terminate,   
modify or amend any Company Benefit Plan or any other employee benefit plan,    
policy, program or practice (or its participation in any such Company Benefit   
Plan or other employee benefit plan, policy, program or practice) at any time   
sponsored, maintained or contributed to by the Company or any of its            
subsidiaries, effective as of any date before, on or after the Effective Time   
except to the extent that any retroactive amendment would be prohibited by      
ERISA Section 204(g) or would deprive a plan participant of a benefit in which  
such participant has a vested right.                                            

2.8.11 Except as disclosed in Section 2.8.11 of the Disclosure Schedule, (i)
no event constituting a "reportable event" (within the meaning of ERISA         
Section 4043(b)) for which the 30-day notice requirement has not been waived    
by the PBGC has occurred with respect to any Company Benefit Plan and (ii) no   
liability, claim, action or litigation has been made, commenced or, to the      
best knowledge of the Company, threatened, by or against the Company or any of  
its subsidiaries with respect to any Company Benefit Plan (other than for       
benefits or PBGC premiums payable in the ordinary course) that is reasonably    
likely to have a Material Adverse Effect.                                       

2.9 Taxes. Except as disclosed in Section 2.9 of the Disclosure Schedule and
except for payments required to be made pursuant to Article 4 hereof:           

2.9.1 Each of the Company and each of its subsidiaries has duly filed all   
tax returns and reports required to be filed by it or requests for extensions   
to file such returns or reports have been timely filed, granted and have not    
expired, except to the extent that such failures to file or to have extensions  
granted that remain in effect would not individually or in the aggregate have   
a Material Adverse Effect. All tax returns filed by the Company and each of     
its subsidiaries are complete and accurate in all material respects, the        
Company and each of its subsidiaries has paid (or the Company has paid on the   
subsidiaries' behalf) all taxes shown as due on such                            

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returns, and the most recent financial statements contained in the Filed        
Company SEC Documents and all Company SEC Documents filed prior to the Closing  
Date reflect an adequate reserve for all taxes payable by the Company and its   
subsidiaries for all taxable periods and portions thereof accrued through the   
date of such financial statements.                                              

2.9.2 No deficiencies for any taxes have been proposed, asserted or assessed
against the Company or any of its subsidiaries that are not adequately          
reserved for, and no requests for waivers of the time to assess any such taxes  
have been granted or are pending. The Federal income tax returns of the         
Company and each of its subsidiaries consolidated in such returns have been     
examined by and settled with the United States Internal Revenue Service, or     
the statute of limitations on assessment or collection of any Federal income    
taxes due from the Company or the any of its subsidiaries has expired, through  
such taxable years as are set forth in Section 2.9.2 of the Disclosure          
Schedule.                                                                       

2.9.3 As used in this Agreement, "taxes" shall include all Federal, state,  
local and foreign income, property, premium, franchise, sales, excise,          
employment, payroll, withholding and other taxes, tariffs or governmental       
charges of any nature whatsoever and any interest, penalties and additions to   
taxes relating thereto.                                                         

2.9.4 Neither the Company nor any of its subsidiaries has made, nor is      
obligated to make, in connection with the transactions contemplated by this     
Agreement or otherwise, any payments that will not be deductible because of     
the application of Section 280G or Section 162(m) of the Code.                  

2.9.5 Neither the Company nor any of its subsidiaries has made any election,
filed any consent or entered into any agreement with respect to taxes that is   
not reflected on the federal income tax returns of the Company and its          
subsidiaries for the three years ended December 31, 1995 (copies of which       
returns have been made available to NIPSCO for review prior to the date of      
this Agreement).                                                                

2.10 Compliance with Applicable Laws. Except as disclosed in Section 2.10 of
the Disclosure Schedule:                                                        

2.10.1 The business of the Company and each of its subsidiaries is being    
conducted in compliance in all material respects with all applicable laws,      
ordinances, rules and regulations, decrees and orders of any Governmental       
Entity, and all material notices, reports, documents and other information      
required to be filed thereunder within the last three years were properly       
filed and were in compliance in all material respects with such laws.           

2.10.2 Each of the Company and each of its subsidiaries has all material    
licenses (including, without limitation, utility licenses), permits,            
authorizations, franchises and rights ("Licenses") which are necessary for it   
to own or lease, as the case may be, and operate its properties and assets and  
to conduct its business as now conducted. The business of the Company and each  
of its subsidiaries has been and is being conducted in compliance in all        
material respects with all such Licenses. All restrictions and limitations on   
those Licenses requested or required by any utility regulator are disclosed in  
the Filed Company SEC Documents or in Section 2.10.2 of the Disclosure          
Schedule. All such Licenses are in full force and effect, and there is no       
proceeding or investigation pending or, to the knowledge of the Company,        
threatened which would reasonably be expected to lead to the revocation,        
amendment, failure to renew, limitation, suspension or restriction of any such  
License.                                                                        

2.10.3 Each subsidiary of the Company that has been or is required to do so 
has filed all forms, reports, statements and other documents required by law    
to be filed by it with the Indiana Utility Regulatory Commission, and such      
forms, reports, statements and other documents, did not at the time they were   
filed contain any untrue statement of a material fact or omit to state a        
material fact required to be stated therein or necessary in order to make the   
statements therein, in light of the circumstances under which they were made,   
not misleading.                                                                 

2.11 Environmental Protection.                                              

2.11.1 Except as disclosed in Section 2.11.1 of the Disclosure Schedule or  
as disclosed in the Company SEC Documents, the Company and its subsidiaries     
are and have been in material compliance with all applicable Environmental      
Laws (as defined in Section 2.11.7), except where the failure to be or to have  
so been in material compliance, in the aggregate, is not reasonably likely to   
have a Material Adverse Effect. Except as disclosed in Section 2.11.1 of the    
Disclosure Schedule, neither the Company nor any of its subsidiaries has        
received any                                                                    

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written notice from any person or Governmental Entity that alleges that the     
Company or any of its subsidiaries is not or has not been in material           
compliance with applicable Environmental Laws, except where the failure to be   
or to have so been in material compliance, in the aggregate, would not have a   
Material Adverse Effect.                                                        

2.11.2 Except as disclosed in Section 2.11.2 of the Disclosure Schedule or  
as disclosed in the Company SEC Documents, the Company and each of its          
subsidiaries have obtained or have applied for all material environmental,      
health and safety permits and authorizations (collectively, "Environmental      
Permits") necessary for the construction of their facilities and the conduct    
of their operations, and all such Environmental Permits are in good standing    
or, where applicable, a renewal application has been timely filed and is        
pending agency approval, and the Company and its subsidiaries are in material   
compliance with all terms and conditions of all such Environmental Permits and  
are not required to make any material expenditures in connection with any       
renewal application pending agency approval, except where the failure to        
obtain or be in such compliance and the requirement to make such expenditures,  
in the aggregate, would not have a Material Adverse Effect.                     

2.11.3 Except as disclosed in Section 2.11.3 of the Disclosure Schedule or  
as disclosed in the Company SEC Documents, to the best knowledge of the         
Company, no Environmental Claim (as defined in Section 2.11.7) is pending or,   
to the best knowledge of the Company, threatened (i) against the Company or     
any of its subsidiaries, (ii) against any person or entity whose liability for  
any Environmental Claim the Company or any of its subsidiaries has or may have  
retained or assumed either contractually or by operation of law or (iii)        
against any real or personal property or operations that the Company or any of  
its subsidiaries owns, leases or manages, in whole or in part, that is          
reasonably likely in the aggregate to have a Material Adverse Effect.           

2.11.4 Except as disclosed in Section 2.11.4 of the Disclosure Schedule or  
as disclosed in the Company SEC Documents, to the best knowledge of the         
Company, there has been no Release (as defined in Section 2.11.7) of Hazardous  
Materials (as defined in Section 2.11.7) that would be reasonably likely to     
(i) form the basis of any Environmental Claim against the Company or any of     
its subsidiaries, or against any person or entity whose liability for any       
Environmental Claim the Company or any of its subsidiaries has or may have      
retained or assumed either contractually or by operation of law, or (ii) cause  
damage to or diminution of real property or operations that the Company or any  
of its subsidiaries owns, leases, or manages, in whole or in part, except for   
Releases of Hazardous Materials the liability for which would not in the        
aggregate have a Material Adverse Effect.                                       

2.11.5 Except as disclosed in Section 2.11.5 of the Disclosure Schedule, or 
as disclosed in the Company SEC Documents, to the best knowledge of the         
Company, with respect to any predecessor of the Company or any of its           
subsidiaries, there is no Environmental Claim pending or threatened, or         
Release of Hazardous Materials, that would be reasonably likely to form the     
basis of any Environmental Claims that are reasonably likely to have, in the    
aggregate, a Material Adverse Effect.                                           

2.11.6 To the best knowledge of the Company, the Company has disclosed to   
NIPSCO all material facts that the Company reasonably believes are likely to    
form the basis of a material Environmental Claim or to require material         
expenditures by the Company or any of its subsidiaries in order to comply with  
current or future applicable Environmental Laws arising from (i) the cost of    
pollution control equipment currently required or known to be required in the   
future, (ii) current investigatory, removal, remediation or response costs or   
investigatory, removal, remediation or response costs known to be required in   
the future, in each case, both on-site and off-site and (iii) any other         
environmental matters affecting the Company or any of its subsidiaries.         

2.11.7 As used in this Agreement:                                           

 (a) "Environmental Claim" means any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, directives, claims,       
liens, investigations, proceedings or notices by any person or entity       
(including without limitation any Governmental Entity) alleging potential   
liability (including without limitation potential liability for enforcement 
costs, investigatory costs, cleanup costs, response costs, removal costs,   
remedial costs, natural resources damages, property damages, personal       
injuries, fines or                                                          

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penalties) arising out of, based on or resulting from (i) the presence, or  
Release or threatened Release, of any Hazardous Materials at any location,  
whether or not owned, operated, leased or managed by the Company or any of  
its subsidiaries or joint ventures (ii) circumstances forming the basis of  
any violation, or alleged violation, of any Environmental Laws or (iii) any 
and all claims by any third party seeking damages, contribution,            
indemnification, cost recovery, compensation or injunctive relief resulting 
from the presence or Release of any Hazardous Materials.                    

(b) "Environmental Laws" means all Federal, state and local laws, rules 
and regulations relating to pollution or protection of human health or the  
environment (including without limitation ambient air, surface water,       
groundwater, land surface or subsurface strata), including without          
limitation laws and regulations relating to Releases or threatened Releases 
of Hazardous Materials or otherwise relating to the manufacture,            
processing, distribution, use, treatment, storage, disposal, transport or   
handling of Hazardous Materials.                                            

(c) "Hazardous Materials" means (i) any petroleum or petroleum products 
or petroleum wastes (including crude oil or any fraction thereof), nuclear  
fuel or waste or other radioactive materials, friable asbestos or friable   
asbestos-containing material, urea formaldehyde foam insulation, and        
transformers or other equipment that contain dielectric fluid containing    
polychlorinated biphenyls, (ii) any chemicals, materials or substances      
which are now defined as or included in the definition of "hazardous        
substances," "hazardous wastes," "hazardous materials," "extremely          
hazardous wastes," "restricted hazardous wastes," "toxic substances,"       
"toxic pollutants," or words of similar import, under any Environmental Law 
and (iii) any other chemical, material, substance or waste, exposure to     
which is now prohibited, limited or regulated under any Environmental Law   
in a jurisdiction in which the Company or any of its subsidiaries or joint  
ventures operates.                                                          

(d) "Release" means any release, spill, emission, leaking, injection,   
deposit, disposal, discharge, dispersal, leaching or migration into the     
atmosphere, soil, surface water, groundwater or property (indoors or        
outdoors).                                                                  

2.12 Litigation. Except as set forth in the Filed Company SEC Documents or  
Section 2.12 of the Disclosure Schedule, there is no suit, claim, action,       
proceeding or investigation pending or, to the knowledge of the Company,        
threatened against or affecting the Company or any of its subsidiaries, which,  
individually or in the aggregate, could reasonably be expected to have a        
Material Adverse Effect or to materially and adversely affect the Company's     
ability to consummate the transactions contemplated hereby. Neither the         
Company nor any its subsidiaries is subject to any outstanding order, writ,     
injunction or decree which, individually or in the aggregate, could reasonably  
be expected to have a Material Adverse Effect. Except as set forth in the       
Filed Company SEC Documents or Section 2.12 of the Disclosure Schedule, none    
of the Company's subsidiaries whose rates or services are subject to            
regulation by a Governmental Entity (i) has rates which have been or are being  
collected subject to refund, pending final resolution of any proceeding         
pending before a Governmental Entity or on appeal to the courts or (ii) is a    
party to any proceeding before the Governmental Entity or on appeal from        
orders of the Governmental Entity.                                              

2.13 Labor Relations. Except as set forth in Section 2.13 of the Disclosure 
Schedule:                                                                       

2.13.1 Neither the Company nor any of its subsidiaries is a party to any    
collective bargaining agreement or other current labor agreement with any       
labor union or organization, and there is no current union representation       
question involving employees of the Company or any of its subsidiaries, nor     
does the Company or any of its subsidiaries know of any activity or proceeding  
of any labor organization (or representative thereof) or employee group (or     
representative thereof) to organize any such employees.                         

2.13.2 There is no unfair labor practice charge or grievance arising out of 
a collective bargaining agreement or other grievance procedure against the      
Company or any of its subsidiaries pending or, to the knowledge of the Company  
or any of its subsidiaries, threatened that could reasonably be expected to     
have a Material Adverse Effect.                                                 

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2.13.3 There is no complaint, lawsuit or proceeding in any forum by or on   
behalf of any present or former employee, any applicant for employment or any   
classes of the foregoing alleging breach of any express or implied contract of  
employment, any law or regulation governing employment or the termination       
thereof or other discriminatory, wrongful or tortious conduct in connection     
with the employment relationship against the Company or any of its              
subsidiaries pending or, to the knowledge of the Company or any of its          
subsidiaries, threatened that could reasonably be expected to have a Material   
Adverse Effect.                                                                 

2.13.4 There is no strike, dispute, slowdown, work stoppage or lockout      
pending or, to the knowledge of the Company or any of its subsidiaries,         
threatened against or involving the Company or any of its subsidiaries that     
could reasonably be expected to have a Material Adverse Effect.                 

2.13.5 Each of the Company and each of its subsidiaries is in compliance    
with all applicable laws respecting employment and employment practices, terms  
and conditions of employment, wages, hours of work and occupational safety and  
health, except for non-compliance that would not, individually or in the        
aggregate, have a Material Adverse Effect.                                      

2.13.6 There is no proceeding, claim, suit, action or governmental          
investigation pending or, to the knowledge of the Company or any of its         
subsidiaries, threatened in respect to which any current or former director,    
officer, employee or agent of the Company or any of its subsidiaries is or may  
be entitled to claim indemnification from the Company or any of its             
subsidiaries pursuant to their respective articles or certificates of           
incorporation or bylaws, as provided in any indemnification agreement to which  
the Company or any of its subsidiaries is a party or pursuant to applicable     
law that could reasonably be expected to have a Material Adverse Effect.        

2.14 Intellectual Property. The Company and its subsidiaries possess or have
adequate rights to use all material trademarks, trade names, patents, service   
marks, brand marks, brand names, computer programs, databases, industrial       
designs and copyrights necessary for the operation of their business            
(collectively, the "Company Intellectual Property"), except where the failure   
to possess or have adequate rights to use such properties would not have a      
Material Adverse Effect. Except as set forth in Section 2.14 of the Disclosure  
Schedule, all of the Company Intellectual Property is owned by the Company or   
one of its subsidiaries, free and clear of any and all liens, claims or         
encumbrances, except for those liens, claims and encumbrances that would not,   
individually or in the aggregate, have a Material Adverse Effect, and neither   
the Company nor any of its subsidiaries has forfeited or otherwise              
relinquished any Company Intellectual Property which forfeiture would have a    
Material Adverse Effect. To the knowledge of the Company, the use of the        
Company Intellectual Property by the Company or its subsidiaries does not, in   
any material respect, conflict with, infringe upon, violate or interfere with   
or constitute an appropriation of any right, title, interest or goodwill        
(including, without limitation, any intellectual property right, trademark,     
trade name, patent, service mark, brand mark, brand name, computer program,     
database, industrial design, copyright or any pending application therefor) of  
any other person, and neither the Company nor any of its subsidiaries has       
received notice of any claim or otherwise knows that any of the Company         
Intellectual Property is invalid, conflicts with the asserted rights of any     
other person, has not been used or enforced or has failed to be used or         
enforced in a manner that would result in the abandonment, cancellation or      
unenforceability of any of the Company Intellectual Property, except for such   
conflicts, infringements, violations, interferences, claims, invalidity,        
abandonments, cancellations or unenforceability that would not, individually    
or in the aggregate, have a Material Adverse Effect.                            

2.15 No Default. Neither the Company nor any of its subsidiaries is in      
default or violation (and no event has occurred which, with notice or the       
lapse of time or both, would constitute a default or violation) of any term,    
condition or provision of (i) its articles or certificate of incorporation or   
bylaws, (ii) any note, bond, mortgage, indenture, license, agreement or other   
instrument or obligation to which it is now a party or by which it or any of    
its properties or assets may be bound (except for the requirement under         
certain of such instruments to file supplemental indentures as a result of the  
transactions contemplated hereby) or (iii) any order, writ, injunction,         
decree, statute, rule or regulation applicable to it, except in the case of     
(ii) and (iii) for defaults or                                                  

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violations which in the aggregate would not have a Material Adverse Effect.     
The Company and each of its subsidiaries have fulfilled, and have taken all     
action reasonably necessary to date to enable them to fulfill when due, all of  
their material obligations under all contracts, commitments and arrangements    
and, to the knowledge of the Company, no breach or default by any other party   
under such contracts, commitments or arrangements has occurred or is            
threatened that will or could impair the ability of the Company or any of its   
subsidiaries to enforce any of its rights thereunder in any material respect.   

2.16 Regulation as a Utility. Certain subsidiaries of the Company are       
regulated as public utilities in the State of Indiana and in no other state.    
Except as disclosed in Section 2.16 of the Disclosure Schedule, neither the     
Company nor any "subsidiary company" or "affiliate" (as such terms are defined  
in the Public Utility Holding Company Act of 1935, as amended (the "1935        
Act")) of the Company is subject to regulation as a public utility or public    
service company (or similar designation) by any other state in the United       
States, by the United States or any agency or instrumentality of the United     
States or by any foreign country. The Company is not a holding company under    
the 1935 Act.                                                                   

2.17 Insurance. Except as disclosed in Section 2.17 of the Disclosure       
Schedule, each of the Company and each of its subsidiaries is, and has been     
continuously since January 1, 1991, insured with financially responsible        
insurers in such amounts and against such risks and losses as are customary     
for companies engaged in the respective businesses conducted by the Company     
and its subsidiaries during such time period. Except as disclosed in Section    
2.17 of the Disclosure Schedule, neither the Company nor any of its             
subsidiaries has received any notice of cancellation or termination with        
respect to any insurance policy. All insurance policies of the Company and its  
subsidiaries are valid and enforceable policies.                                

2.18 Change in Business Relationships. Neither the Company nor any of its   
subsidiaries has knowledge of any event or circumstance that indicates that,    
whether on account of the transactions contemplated by this Agreement or        
otherwise, any customer, agent, representative or supplier of the Company or    
any of its subsidiaries intends to discontinue, diminish or change its          
relationship with the Company or any of its subsidiaries in any way that would  
be reasonably likely to have a Material Adverse Effect.                         

2.19 Voting Requirements. The affirmative vote of the holders of a majority 
of the outstanding Company Common Shares entitled to vote at the Special        
Meeting with respect to the approval of the Merger is the only vote of the      
holders of any class or series of the Company's capital stock necessary to      
approve this Agreement and the transactions contemplated by this Agreement.     

2.20 Brokers. All negotiations relative to this Agreement and the           
transactions contemplated hereby have been carried out by the Company directly  
with NIPSCO, without the intervention of any person on behalf of the Company    
in such manner as to give rise to any valid claim by any person against         
NIPSCO, the Company or any of their respective subsidiaries for a finder's      
fee, brokerage commission or similar payment.                                   

ARTICLE 3 

REPRESENTATIONS AND WARRANTIES OF NIPSCO AND ACQUISITION  

NIPSCO and Acquisition hereby jointly and severally represent and warrant to
the Company as follows:                                                         

3.1 Organization, Standing and Corporate Power. Each of NIPSCO and          
Acquisition is a corporation duly organized and validly existing under the      
laws of the State of Indiana and has the requisite corporate power and          
authority to carry on its business as now being conducted. Each of NIPSCO and   
Acquisition is duly qualified or licensed to do business and is in good         
standing in each jurisdiction in which the nature of its business or the        
ownership or leasing of its properties makes such qualification or licensing    
necessary except where the failure to be so qualified would not individually    
or in the aggregate have a material adverse effect on the ability of NIPSCO or  
Acquisition to consummate the transactions contemplated hereby. NIPSCO and      
Acquisition have delivered to the Company complete and correct copies of their  
Articles of Incorporation and By-Laws, as amended to the date of this           
Agreement.                                                                      

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3.2 NIPSCO and Acquisition Capital Structure.                               

3.2.1 As of the date hereof, the authorized capital stock of NIPSCO consists
of 200,000,000 NIPSCO Common Shares and 20,000,000 shares of preferred stock,   
without par value. At the close of business on November 30, 1996, there were    
(i) 60,304,810 NIPSCO Common Shares issued and outstanding, (ii) 13,587,299     
NIPSCO Common Shares held as treasury shares, (iii) 2,203,211 NIPSCO Common     
Shares reserved for issuance under NIPSCO's Long-Term Incentive Plans, and      
(iv) 2,000,000 shares of Series A Junior Participating Preferred Stock          
reserved for issuance under NIPSCO's Share Purchase Rights Plan. Except as set  
forth above, at the close of business on October 31, 1996, no other shares of   
capital stock or other voting securities of NIPSCO were issued, reserved for    
issuance or outstanding. All such outstanding NIPSCO Common Shares are, and     
all NIPSCO Common Shares which may be issued in connection with the Merger      
will be, when issued, duly authorized, validly issued, fully paid and           
nonassessable and not subject to preemptive rights. All the outstanding shares  
of capital stock of each significant subsidiary (within the meaning of Rule 1-  
02 of Regulation S-X) of NIPSCO have been validly issued and are fully paid     
and nonassessable and are owned by NIPSCO or a wholly-owned subsidiary, free    
and clear of all liens, claims, encumbrances, restraints on alienation, or any  
other restrictions with respect to the transferability or assignability         
thereof (other than restrictions imposed by Federal or state securities laws).  
Except as set forth above, neither NIPSCO nor any of its significant            
subsidiaries has any outstanding option, warrant, subscription or other right,  
agreement or commitment which either obligates NIPSCO or any of its             
significant subsidiaries to issue, sell or transfer, repurchase, redeem or      
otherwise acquire or vote any shares of the capital stock of NIPSCO or any of   
its significant subsidiaries, or which restricts the transfer of NIPSCO Common  
Shares.                                                                         

3.2.2 As of the date hereof, the authorized capital stock of Acquisition    
consists of 1,000 common shares, without par value, all of which are issued     
and outstanding and owned by NIPSCO. All such outstanding common shares are     
duly authorized, validly issued, fully paid and nonassessable and not subject   
to preemptive rights.                                                           

3.3 Authority; Noncontravention. Each of NIPSCO and Acquisition has all     
requisite corporate power and authority to enter into this Agreement and to     
carry out its obligations hereunder. The execution and delivery of this         
Agreement by NIPSCO and Acquisition and the consummation by each of them of     
the transactions contemplated hereby have been duly authorized by all           
necessary corporate action on the part of NIPSCO and Acquisition. This          
Agreement has been duly executed and delivered by NIPSCO and Acquisition and,   
assuming this Agreement has been duly executed and delivered by the Company,    
constitutes a valid and binding obligation of each of NIPSCO and Acquisition,   
enforceable against each of them in accordance with its terms, except that the  
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,   
moratorium or similar laws now or hereafter in effect relating to creditor's    
rights generally and by general principles of equity (regardless of whether     
enforceability is considered in a proceeding at law or in equity). Except as    
set forth in Section 3.3 of the Disclosure Schedule, the execution and          
delivery of this Agreement do not, and the consummation of the transactions     
contemplated by this Agreement and compliance with the provisions of this       
Agreement will not (i) conflict with any of the provisions of the Articles of   
Incorporation or By-Laws of NIPSCO or Acquisition, (ii) subject to the          
governmental filings and other matters referred to in the following sentence,   
conflict with, result in a breach of or default (with or without notice or      
lapse of time, or both) under, or give rise to a right of termination,          
cancellation or acceleration of any obligation or loss of a material benefit    
under, or require the consent of any person under, any indenture, or other      
agreement, permit, concession, franchise, license or similar instrument or      
undertaking to which NIPSCO or any of its subsidiaries is a party or by which   
NIPSCO or any of its subsidiaries or any of their assets is bound or affected,  
or (iii) subject to the governmental filings and other matters referred to in   
the following sentence, contravene any law, rule or regulation of any state or  
of the United States or any political subdivision thereof or therein, or any    
order, writ, judgment, injunction, decree, determination or award currently in  
effect, subject, in the case of clauses (ii) and (iii), to those conflicts,     
breaches, defaults and similar matters, which, individually or in the           
aggregate, would not materially and adversely affect NIPSCO's ability to        
consummate the transactions contemplated hereby. No consent, approval or        
authorization of, or declaration or filing with, or notice to, any              
Governmental Entity which has not been received or made is                      

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required by or with respect to NIPSCO or Acquisition in connection with the     
execution and delivery of this Agreement by NIPSCO and Acquisition or the       
consummation by them of any of the transactions contemplated hereby, except     
for (a) the filing of premerger notification and report forms under the HSR     
Act with respect to the Merger, (b) the filing with the SEC of a registration   
statement on Form S-4 by NIPSCO in connection with the issuance of NIPSCO       
Common Shares in the Merger (the "Form S-4") and such reports under the         
Exchange Act as may be required in connection with this Agreement and the       
transactions contemplated by this Agreement, (c) the filing of articles of      
merger with the Indiana Secretary of State and appropriate documents with the   
relevant authorities of the other states in which the Company is qualified to   
do business and (d) such other consents, approvals, authorizations, filings or  
notices as are set forth in Section 2.4 of the Disclosure Schedule.             

3.4 NIPSCO SEC Documents and Financial Statements.                          

3.4.1 NIPSCO has timely filed all required reports, schedules, forms,       
statements and other documents with the SEC since January 1, 1992 (the "NIPSCO  
SEC Documents"). As of their respective dates (or, with respect to any          
amendment to the NIPSCO SEC Documents, as of the date of the filing of such     
amendment), the NIPSCO SEC Documents complied with the requirements of the      
Securities Act or the Exchange Act, as the case may be, and the rules and       
regulations of the SEC promulgated thereunder applicable to such NIPSCO SEC     
Documents, and none of the NIPSCO SEC Documents as of such dates contained any  
untrue statement of a material fact or omitted to state a material fact         
required to be stated therein or necessary in order to make the statements      
therein, in light of the circumstances under which they were made, not          
misleading.                                                                     

3.4.2 The consolidated financial statements of NIPSCO included in the NIPSCO
SEC Documents comply as to form in all material respects with applicable        
accounting requirements and the published rules and regulations of the SEC      
with respect thereto, have been prepared in accordance with GAAP (except as     
may be indicated in the notes thereto or, in the case of unaudited interim      
financial statements, as permitted by Rule 10-01 of Regulation S-X) and fairly  
present, in all material respects, the consolidated financial position of       
NIPSCO and its consolidated subsidiaries as of the dates thereof and the        
consolidated results of their operations, changes in shareholders' equity and   
consolidated cash flows for the periods then ended (subject, in the case of     
unaudited financial statements, to normal recurring adjustments, none of which  
is material).                                                                   

3.4.3 Except as disclosed in the NIPSCO SEC Documents filed and publicly    
available prior to December 6, 1996 (the "Filed NIPSCO SEC Documents") or in    
the Disclosure Schedule, neither NIPSCO nor any of its subsidiaries has any     
absolute, accrued, contingent or other liabilities or obligations due or to     
become due, and there are no claims or causes of action (including but not      
limited to those relating to any NIPSCO Benefit Plan (as defined in Section     
3.6.1) formerly maintained by NIPSCO or any of its subsidiaries or a NIPSCO     
ERISA Affiliate (as defined in Section 3.6.1) on or after January 1, 1991)      
that have been or, to the knowledge of the officers of NIPSCO and its           
subsidiaries and divisions, the members of the NIPSCO's legal department and    
the director(s), manager(s) or supervisor(s) of NIPSCO's environmental          
compliance and affairs, may be asserted against NIPSCO or any of its            
subsidiaries, except (i) as and to the extent reflected or reserved against on  
the balance sheet included in NIPSCO's Annual Report on Form 10-K for the year  
ended December 31, 1995 (the "NIPSCO Base Balance Sheet"), or included in the   
notes to the NIPSCO Base Balance Sheet, (ii) for normal and recurring           
liabilities incurred since December 31, 1995, in the ordinary course of         
business consistent with past practice, and (iii) for such other liabilities    
and obligations that are not in the aggregate reasonably likely to have a       
Material Adverse Effect.                                                        

3.5 Absence of Certain Changes or Events. Except as disclosed in the Filed  
NIPSCO SEC Documents or in Section 3.5 of the Disclosure Schedule, since the    
date of the NIPSCO Base Balance Sheet, NIPSCO and its subsidiaries have         
conducted their business only in the ordinary course, and there has not been    
(i) any change which has had or which would have a Material Adverse Effect,     
(ii) any declaration, setting aside or payment of any dividend or other         
distribution (whether in cash, stock or property) with respect to any of        
NIPSCO's outstanding capital stock (other than regular quarterly cash           
dividends in accordance with NIPSCO's present dividend policy) or (iii) any     
split, combination or reclassification of any of its outstanding capital stock  
or any issuance of the authorization of any issuance of any other securities    
in respect of, in lieu of or in substitution for shares of, its outstanding     
capital stock.                                                                  

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3.6 Employee Matters; ERISA.                                                

3.6.1 Except as disclosed in Section 3.6.1 of the Disclosure Schedule, each 
employee benefit plan, program or arrangement covering employees, former        
employees or directors of NIPSCO (or any of its subsidiaries) or any of their   
dependents or beneficiaries, or providing benefits to such persons in respect   
of services provided to any such entity, including but not limited to any       
"employee benefit plan" within the meaning of Section 3(3) of ERISA (whether    
or not terminated, if NIPSCO or any of its subsidiaries could have statutory    
or contractual liability with respect thereto on or after the date hereof),     
and each "employee pension benefit plan" (within the meaning of ERISA Section   
3(2)) subject to Title IV of ERISA or the minimum funding requirements of Code  
Section 412 maintained or contributed to by NIPSCO or any entity required to    
be aggregated therewith pursuant to Code Section 414(b) or (c) (each, a         
"NIPSCO ERISA Affiliate") at any time during the seven-year period immediately  
preceding the date hereof (collectively, the "NIPSCO Benefit Plans"), that is   
intended to be "qualified" within the meaning of Code Section 401(a) has been   
determined by the IRS to be so qualified, and, to the best knowledge of         
NIPSCO, no event or condition exists or has occurred that could reasonably be   
expected to result in the revocation of any such determination. NIPSCO and      
each of its subsidiaries are in compliance with, and each NIPSCO Benefit Plan   
is and has been operated in compliance with, all applicable laws, rules and     
regulations governing such plan, including without limitation ERISA and the     
Code, except for violations that could not reasonably be expected to have a     
Material Adverse Effect. To the best knowledge of NIPSCO, no individual or      
entity has engaged in any transaction with respect to any NIPSCO Benefit Plan   
as a result of which NIPSCO or any of its subsidiaries could reasonably expect  
to be subject to liability pursuant to ERISA Section 409 or 502 or subject to   
an excise tax pursuant to Code Section 4975. To the best knowledge of NIPSCO,   
(i) no NIPSCO Benefit Plan is subject to any ongoing audit, investigation, or   
other administrative proceeding of the IRS, the Department of Labor, or any     
other federal, state or local governmental entity and (ii) no NIPSCO Benefit    
Plan is the subject of any pending application for administrative relief under  
any voluntary compliance program of any governmental entity (including without  
limitation the IRS's Voluntary Compliance Resolution Program or Walk-in         
Closing Agreement Program or the Department of Labor's Delinquent Filer         
Voluntary Compliance Program).                                                  

3.6.2 Except as disclosed in Section 3.6.2 of the Disclosure Schedule, each 
NIPSCO Benefit Plan that is subject to either or both of the minimum funding    
requirements of ERISA Section 302 or to Title IV of ERISA has assets that, as   
of the date hereof, have a fair market value equal to or exceeding the present  
value of the accrued benefit obligations thereunder on a termination basis, as  
of the date hereof based on the actuarial methods, tables and assumptions       
theretofore utilized by such plan's actuary in preparing such plan's most       
recently prepared actuarial valuation report, except to the extent that         
applicable law would require the use of different actuarial assumptions if      
such plan was to be terminated as of the date hereof. No NIPSCO Benefit Plan    
subject to the minimum funding requirements of ERISA Section 302 has incurred   
any "accumulated funding deficiency" (within the meaning of ERISA Section       
302).                                                                           

3.7 Compliance with Applicable Laws                                         

3.7.1 The business of NIPSCO and each of its significant subsidiaries is    
being conducted in compliance, in all material respects, with all applicable    
laws, ordinances, rules, regulations, decrees and orders of any Governmental    
Entity, and all material notices, reports, documents and other information      
required to be filed thereunder within the last three years were properly       
filed and were in compliance in all material respects with such laws.           

3.7.2 NIPSCO and each of its significant subsidiaries has all material      
Licenses which are necessary for it to own or lease, as the case may be, and    
operate its properties and assets and to conduct its business as now            
conducted. The business of NIPSCO and each of its significant subsidiaries has  
been and is being conducted in compliance in all material respects with all     
such Licenses. All restrictions and limitations on those Licenses requested or  
required by any utility regulator are disclosed in the Filed NIPSCO SEC         
Documents or in Section 3.7.2 of the Disclosure Schedule. All such Licenses     
are in full force and effect, and there is no proceeding or investigation       
pending or, to the knowledge of NIPSCO, threatened which would reasonably be    
expected to lead to the revocation, amendment, failure to renew, limitation,    
suspension or restriction of any such License.                                  

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3.7.3 Each subsidiary of NIPSCO that has been or is required to do so has   
filed all forms, reports, statements and other documents required by law to be  
filed by it with the Indiana Utility Regulatory Commission, and such forms,     
reports, statements and other documents, did not at the time they were filed    
contain any untrue statement of a material fact or omit to state a material     
fact required to be stated therein or necessary in order to make the            
statements therein, in light of the circumstances under which they were made,   
not misleading.                                                                 

3.8 Litigation. Except as set forth in the Filed NIPSCO SEC Documents or    
Section 3.8 of the Disclosure Schedule, there is no suit, claim, action,        
proceeding or investigation pending or, to the knowledge of NIPSCO, threatened  
against NIPSCO or any of its subsidiaries which, individually or in the         
aggregate, could reasonably be expected to have a Material Adverse Effect or    
to materially and adversely affect NIPSCO's ability to consummate the           
transactions contemplated hereby. Neither NIPSCO nor any its subsidiaries is    
subject to any outstanding order, writ, injunction or decree which,             
individually or in the aggregate, could reasonably be expected to have a        
Material Adverse Effect.                                                        

3.9 Brokers. All negotiations relative to this Agreement and the            
transactions contemplated hereby have been carried out by NIPSCO directly with  
the Company, without the intervention of any person on behalf of NIPSCO in      
such manner as to give rise to any valid claim by any person against the        
Company or any of its subsidiaries for a finder's fee, brokerage commission or  
similar payment.                                                                

ARTICLE 4 

ADDITIONAL AGREEMENTS 

4.1 Preparation of Form S-4 and the Proxy Statement/Prospectus; Information 
Supplied.                                                                       

4.1.1 Form S-4; Proxy Statement/Prospectus. As soon as practicable following
the date of this Agreement, the Company and NIPSCO shall prepare and the        
Company shall file with the SEC a preliminary proxy statement relating to the   
Special Meeting, and NIPSCO shall prepare and file with the SEC the Form S-4,   
in which such preliminary proxy statement will be included as a preliminary     
prospectus (such proxy statement, together with the prospectus relating to the  
NIPSCO Common Shares, in each case as amended or supplemented from time to      
time, is referred to herein as the "Proxy Statement/Prospectus"). NIPSCO shall  
use its best efforts to have the Form S-4 declared effective under the          
Securities Act as promptly as practicable after such filing. The Company will   
use its best efforts to cause the Proxy Statement/Prospectus to be mailed to    
the Company's shareholders as promptly as practicable after the Form S-4 is     
declared effective under the Securities Act. NIPSCO shall also take any action  
(other than qualifying to do business in any jurisdiction in which it is not    
now so qualified) required to be taken under any applicable state securities    
laws in connection with the issuance of the NIPSCO Common Shares in the         
Merger, and the Company shall furnish all information concerning the Company    
and the holders of the Company Common Shares and Company Preferred Shares as    
may be reasonably requested in connection with any such action.                 

4.1.2 Company Information. The Company agrees that none of the information  
supplied or to be supplied by the Company specifically for inclusion or         
incorporation by reference in (i) the Form S-4 will, at the time the Form S-4   
is filed with the SEC, at any time it is amended or supplemented or at the      
time it becomes effective under the Securities Act, contain any untrue          
statement of a material fact or omit to state any material fact required to be  
stated therein or necessary to make the statement therein not misleading and    
(ii) the Proxy Statement/Prospectus will, at the date it is first mailed to     
the Company's shareholders or at the time of the Special Meeting, contain any   
untrue statement of a material fact or omit to state any material fact          
required to be stated therein or necessary in order to make the statements      
therein, in light of the circumstances under which they are made, not           
misleading. The Proxy Statement/Prospectus will comply as to form in all        
material respect with the requirements of the Exchange Act and the rules and    
regulations thereunder, except with respect to statements made or incorporated  
by reference therein based on information supplied by NIPSCO specifically for   
inclusion or incorporation by reference in the Proxy Statement/Prospectus.      

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4.1.3 NIPSCO Information. NIPSCO agrees that none of the information        
supplied or to be supplied by NIPSCO specifically for inclusion or              
incorporation by reference in (i) the Form S-4 will, at the time the Form S-4   
is filed with the SEC, at any time it is amended or supplemented or at the      
time it becomes effective under the Securities Act, contain any untrue          
statement of a material fact or omit to state any material fact required to be  
stated therein or necessary to make the statements therein not misleading, and  
(ii) the Proxy Statement/Prospectus will, at the date the Proxy                 
Statement/Prospectus is first mailed to the Company's shareholders or at the    
time of the Special Meeting, contain any untrue statement of a material fact    
or omit to state any material fact required to be stated therein or necessary   
in order to make the statements therein, in light of the circumstances under    
which they are made, not misleading. The Form S-4 will comply as to form in     
all material respects with the requirements of the Securities Act and the       
rules and regulations promulgated thereunder, and the Proxy                     
Statement/Prospectus will comply as to form in all material respects with the   
requirements of the Exchange Act and the rules and regulations promulgated      
thereunder, except with respect to statements made or incorporated by           
reference in either the Form S-4 or the Proxy Statement/Prospectus based on     
information supplied by the Company specifically for inclusion or               
incorporation by reference therein.                                             

4.2 Meeting of the Company's Shareholders. The Company will take all action 
necessary in accordance with applicable law and its Articles of Incorporation   
and By-laws to convene a meeting of its shareholders (the "Special Meeting")    
to consider and vote upon the approval of the Merger. Subject to Section 4.9,   
the Company will, through its Board of Directors, recommend to its              
shareholders approval of the Merger. Without limiting the generality of the     
foregoing, the Company agrees that, subject to its right to terminate this      
Agreement pursuant to Section 4.9, its obligations pursuant to the first        
sentence of Section 4.2 shall not be affected by (i) the commencement, public   
proposal, public disclosure or communication to the Company of any Acquisition  
Proposal (as defined in Section 4.8) or (ii) the withdrawal or modification by  
the Board of Directors of the Company of its approval or recommendation of      
this Agreement or the Merger. Subject to Section 4.9 hereof, the Company will   
use its best efforts to obtain the favorable vote of its shareholders as soon   
as practicable after the date hereof.                                           

4.3 Best Efforts. Upon the terms and subject to the conditions and other    
agreements set forth in this Agreement, each of the parties agrees to use its   
best efforts to take, or cause to be taken, all actions, and to do, or cause    
to be done, and to assist and cooperate with the other parties in doing, all    
things necessary, proper or advisable to consummate and make effective, in the  
most expeditious manner practicable, the Merger and the other transactions      
contemplated by this Agreement.                                                 

4.4 Letter of the Company's Accountants. The Company shall use its best     
efforts to cause to be delivered to NIPSCO a letter of KPMG Peat Marwick LLP,   
the Company's independent public accountants, dated a date within two business  
days before the date on which the Form S-4 shall become effective and a letter  
of KPMG Peat Marwick LLP dated a date within two business days before the date  
of the Special Meeting, addressed to NIPSCO, in form and substance reasonably   
satisfactory to NIPSCO and customary in scope and substance for letters         
delivered by independent public accountants in connection with registration     
statements similar to the Form S-4.                                             

4.5 Letter of NIPSCO's Accountants. NIPSCO shall use its best efforts to    
cause to be delivered to the Company a letter of Arthur Andersen LLP, NIPSCO's  
independent public accountants, dated a date within two business days before    
the date on which the Form S-4 shall become effective, and a letter of Arthur   
Andersen LLP, dated a date within two business days before the Special          
Meeting, each addressed to the Company, in form and substance reasonably        
satisfactory to the Company and customary in scope and substance for letters    
delivered by independent public accountants in connection with registration     
statements similar to the Form S-4.                                             

4.6 Access to Information; Confidentiality. Upon reasonable notice, the     
Company shall, and shall cause its subsidiaries to, afford to NIPSCO and to     
the officers, employees, accountants, counsel, financial advisors and other     
representatives of NIPSCO, reasonable access during normal business hours       
during the period prior to the Effective Time to all its properties, books,     
contracts, commitments, personnel and records. Upon reasonable notice, NIPSCO   
shall make its executive officers available to the Company and its              
representatives during the                                                      

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period prior to the Effective Time for the purpose of permitting the Company    
to continue its review of NIPSCO. During such period, each of the Company and   
NIPSCO shall furnish promptly to the other party a copy of each Company SEC     
Document or NIPSCO SEC Document, as the case may be, filed by it (including     
any separate subsidiary) during such period, and (iii) all correspondence or    
written communication with any securities rating agency or any Governmental     
Entity or utility regulatory authorities which relates to the transactions      
contemplated hereby or which is otherwise material to the financial condition   
or operations of the Company and its subsidiaries taken as a whole, or to       
NIPSCO and its subsidiaries taken as a whole, as the case may be. During such   
period, each of the Company and NIPSCO shall furnish to the other party such    
other financial, operating and other data as may be reasonably required by the  
other party in order to perform its investigation regarding the                 
representations and warranties made by the other party pursuant to this         
Agreement. Without limiting the foregoing, the Company shall furnish to NIPSCO  
(a) after the end of each month, any management financial reports (together     
with all accompanying documents) prepared with respect to such month, (b) all   
notices with respect to any alleged deficiency or violation material to the     
financial condition or operations of any subsidiary from any Governmental       
Entity, (c) all material filings with utility regulators made by any            
subsidiaries, (d) all material correspondence with, and any prepared summaries  
of meetings with, representatives of the IRS or other taxing authorities, (e)   
all material correspondence or communications with state utility regulatory     
authorities concerning any subsidiaries and (f) all correspondence or           
communications with any rating agency. Except as required by law, each of the   
Company and NIPSCO will hold, and will cause its respective directors,          
officers, partners, employees, accountants, counsel, financial advisors and     
other representatives and affiliates to hold, any nonpublic information         
obtained from the other party in confidence to the extent required by, and in   
accordance with, the provisions of the letter dated September 27, 1996, as      
amended, 1996, between NIPSCO and the Company (the "Confidentiality             
Agreement").                                                                    

4.7 Public Announcements. NIPSCO and the Company will consult with each     
other before issuing, and shall provide each other a reasonable opportunity to  
review and comment upon, any press release or public statement with respect to  
this Agreement or the transactions contemplated hereby, except to the extent    
disclosure prior to such consultation, review and comment may be required by    
applicable law, court process or obligations pursuant to any listing agreement  
with any national securities exchange.                                          

4.8 Acquisition Proposals. The Company shall not, nor shall it authorize or 
permit any officer, director or employee of, or any investment banker,          
attorney or other advisor or representative of, the Company or any of its       
subsidiaries to, directly or indirectly, (i) solicit, initiate or encourage     
the submission of any Acquisition Proposal (as defined below) or (ii)           
participate in any discussions or negotiations regarding, or furnish to any     
person any information with respect to, or take any other action to facilitate  
any inquiries or the making of any proposal that constitutes, or may            
reasonably be expected to lead to, any Acquisition Proposal; provided,          
however, that nothing contained in this Section 4.8 shall prohibit the Board    
of Directors of the Company from furnishing information to, or entering into    
discussions or negotiations with, any person or entity that makes an            
unsolicited Acquisition Proposal after the date hereof if, and only to the      
extent that, (a) the Board of Directors of the Company, after consultation      
with and based upon the advice of outside counsel, concludes in good faith      
that such action is necessary for the Board of Directors of the Company to      
comply with its fiduciary duties to shareholders under applicable law and (b)   
the Company (x) provides reasonable notice to NIPSCO to the effect that it is   
taking such action and (y) receives from such person or entity an executed      
confidentiality agreement not less favorable to the Company than the            
Confidentiality Agreement, except that such confidentiality agreement shall     
not prohibit such person or entity from making an unsolicited Acquisition       
Proposal to the Board of Directors of the Company. Notwithstanding anything in  
this Agreement to the contrary, the Company shall promptly advise NIPSCO        
orally and in writing of the receipt by it (or by any of the other entities or  
persons referred to above) after the date hereof of any Acquisition Proposal,   
or any inquiry which could lead to any Acquisition Proposal, the material       
terms and conditions of such Acquisition Proposal or inquiry, and the identity  
of the person or entity making any such Acquisition Proposal or inquiry,        
provided that the Company shall have no obligation to disclose the identity of  
such person or entity if such disclosure would violate the terms of any         
agreement outstanding on the date hereof with such person or entity, or the     
Board of Directors, after consultation with and based upon the advice of        
outside counsel, concludes in good faith that such disclosure would violate     
its fiduciary duties or would be                                                

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otherwise inconsistent with applicable law. For purposes of this Agreement,     
"Acquisition Proposal" means any bona fide proposal with respect to a merger,   
consolidation, share exchange or similar transaction involving the Company or   
any of its subsidiaries, or any purchase of all or any significant portion of   
the assets or shares of the Company or any of its subsidiaries, or any other    
business combination (including without limitation the acquisition of an        
equity interest therein) involving the Company or any of its subsidiaries,      
other than the transactions contemplated hereby.                                

4.9 Fiduciary Duties. The Board of Directors of the Company shall not (i)   
withdraw or modify the approval or recommendation by such Board of Directors    
of this Agreement or the Merger, (ii) approve or recommend an Acquisition       
Proposal or (iii) enter into any agreement with respect to any Acquisition      
Proposal, unless the Company receives an Acquisition Proposal and the Board of  
Directors of the Company concludes in good faith, after consultation with and   
based upon the advice of outside counsel, that in order to comply with its      
fiduciary duties to shareholders under applicable law it is necessary for the   
Board of Directors to withdraw or modify its approval or recommendation of      
this Agreement or the Merger, approve or recommend such Acquisition Proposal    
or enter into an agreement with respect to such Acquisition Proposal. Nothing   
contained in this Section 4.9 shall prohibit the Company from taking and        
disclosing to its shareholders a position contemplated by Rule 14e-2(a)         
promulgated under the Exchange Act or from making any disclosure to the         
Company's shareholders which, in the good faith judgment of the Board of        
Directors of the Company based on advice of outside counsel, is required under  
applicable law; provided that the Company does not withdraw or modify its       
position with respect to the Merger or approve or recommend an Acquisition      
Proposal, except under the circumstances described in the immediately           
preceding sentence. Notwithstanding anything contained in this Agreement to     
the contrary, any action by the Board of Directors permitted by this Section    
4.9 shall not constitute a breach of this Agreement by the Company.             

4.10 Filings; Other Action. As promptly as practicable, (i) the Company and 
NIPSCO shall make all filings and submissions under the HSR Act and (ii) the    
Company and NIPSCO shall cooperate in all reasonable respects with each other   
in (a) determining if other filings are required to be made prior to the        
Effective Time with, or if other material consents, approvals, permits,         
notices or authorizations are required to be obtained prior to the Effective    
Time from any Governmental Entity in connection with the execution and          
delivery of this Agreement and the consummation of the transactions             
contemplated hereby and (b) timely making all such filings and timely seeking   
all such consents, approvals, permits, notices or authorizations. In            
connection with the foregoing, the Company will provide NIPSCO, and NIPSCO      
will provide the Company, with copies of correspondence, filings or             
communications (or memoranda setting forth the substance thereof) between such  
party or any of its representatives, on the one hand, and any Governmental      
Entity or members of their respective staffs, on the other hand, with respect   
to this Agreement and the transactions contemplated hereby. Each of NIPSCO and  
the Company acknowledge that certain actions may be necessary with respect to   
the foregoing in making notifications and obtaining clearances, consents,       
approvals, waivers or similar third party actions which are material to the     
consummation of the transactions contemplated hereby, and each of NIPSCO and    
the Company agrees to take such action as is reasonably necessary to complete   
such notifications and obtain such clearances, approvals, waivers or third      
party actions.                                                                  

4.11 Stock Exchange Listings. NIPSCO shall use its best efforts to cause the
NIPSCO Common Shares to be issued in the Merger to be approved for listing on   
the NYSE, the Chicago Stock Exchange and the Pacific Stock Exchange, in each    
case subject to official notice of issuance, prior to the Closing Date.         

4.12 Affiliates and Certain Shareholders. Prior to the Closing Date, the    
Company shall deliver to NIPSCO a letter identifying all persons who it         
believes to be, at the time the Merger is submitted for approval to the         
shareholders of the Company, "affiliates" of the Company for purposes of Rule   
145 under the Securities Act. The Company shall use its best efforts to cause   
each such person to deliver to NIPSCO on or prior to the Closing Date a         
written agreement in connection with restrictions on affiliates under Rule      
145, in substantially the form attached as Exhibit B to this Agreement. NIPSCO  
shall not be required to maintain the effectiveness of the Form S-4 or any      
other registration statement under the Securities Act for the purposes of       
resale of NIPSCO Common                                                         

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Shares by such affiliates, and the certificates representing NIPSCO Common      
Shares received by such affiliates in the Merger shall bear a customary legend  
regarding applicable Securities Act restrictions and the provisions of this     
Section 4.12. The Company shall use its best efforts to obtain from each of     
the beneficial owners (within the meaning of Rule 13d-3 and Rule 13d-5 of the   
Exchange Act) of 5% or more of the Company Common Shares such representation    
letters addressed to NIPSCO, Schiff Hardin & Waite and Baker & Daniels as such  
law firms shall require in connection with the delivery of their Tax Opinions   
pursuant to Sections 6.2.3 and 6.3.3, respectively.                             

4.13 Indemnification. From and after the Effective Time, NIPSCO and the     
Company agree that the Surviving Corporation will indemnify and hold harmless   
each Eligible Person (as defined in the Company's Articles of Incorporation),   
determined as of the Effective Time, against any costs or expenses (including   
reasonable attorneys' fees), judgments, fines, losses, claims, damages or       
liabilities incurred in connection with any claim, action, suit, proceeding or  
investigation, whether civil, criminal, administrative or investigative,        
arising out of or pertaining to matters existing or occurring at or prior to    
the Effective Time, whether asserted or claimed prior to, at or after the       
Effective Time, to the fullest extent that the Company or any of its            
subsidiaries would have been permitted under applicable law and the Articles    
of Incorporation of the Company or such subsidiary in effect on the date        
hereof to indemnify such person (and the Surviving Corporation shall also       
advance expenses as incurred to the fullest extent permitted under applicable   
law provided the person to whom expenses are advanced provides an undertaking   
to repay such advances if it is ultimately determined that such person is not   
entitled to indemnification). The provisions of this Section 4.13 are intended  
to be for the benefit of, and shall be enforceable by, each such indemnified    
party, his heirs and his personal representatives and shall be binding on all   
successors and assigns of the Surviving Corporation.                            

4.14 Shareholder Rights Plan. The Company shall take all action necessary to
ensure that, so long as this Agreement shall not have been terminated pursuant  
to Article 7 hereof, (i) no Right Certificates under the Rights Agreement       
dated as of February 9, 1988 between the Company and Bank One, Indianapolis,    
N.A., as Rights Agent (the "Rights Agreement"), are issued or required to be    
issued to the shareholders of the Company prior to, or as of, the Effective     
Time and (ii) the preferred share purchase rights shall be redeemed and the     
Rights Agreement shall be terminated no later than immediately prior to the     
Effective Time.                                                                 

4.15 Change in Control Provisions. Prior to the Effective Time, the Company 
shall use its best efforts (i) to cause the Executive Employment Agreements     
dated as of December 31, 1993 between the Company and each of James T. Morris,  
Joseph R. Broyles, J. A. Rosenfeld, Kenneth N. Giffin and John M. Davis (the    
"Change in Control Agreements") to be terminated by mutual consent of the       
parties, (ii) to cause all Company Common Shares subject to restrictions under  
the Company's Restricted Stock Plan to be canceled, and (iii) to cause all      
obligations to provide benefits under the Company's nonqualified executive      
supplemental benefit plan to be canceled, in consideration of an aggregate      
cash payment of not more than $12,638,194. Notwithstanding anything in the      
Change in Control Agreements to the contrary, the determination of whether and  
when a Gross-Up Payment (as such term is defined in Section 9 of the Change in  
Control Agreements) is required to be made to any of the above-named            
individuals (an "Executive") and the amount of such Gross-Up Payment and the    
assumptions to be utilized in arriving at such determination, shall be made     
jointly by KPMG Peat Marwick and Arthur Andersen LLP (the "Accounting Firms").  
Except as provided below, any determination by the Accounting Firms with        
respect to matters described in the previous sentence shall be binding on IWC,  
NIPSCO and the Executive. In the event the Accounting Firms cannot agree as to  
the amount and timing of the Gross-Up Payment to a particular Executive listed  
above, the Accounting Firms shall jointly select one of the other "Big 6"       
accounting firms (the "Substitute Accounting Firm") to determine whether and    
when a Gross-Up Payment is required to be made and the amount of such Gross-Up  
Payment and the assumptions to be utilized in arriving at such determination.   
The determination by the Substitute Accounting Firm with respect to matters     
described in the previous sentence shall be binding on IWC, NIPSCO and the      
Executive. Nothwithstanding anything in the Agreements or this Section to the   
contrary, in the event the Accounting Firm or Substitute Accounting Firm        
determines that the aggregate Gross-Up Payments payable to the Executives       
exceeds $6,000,000, the liability of IWC or NIPSCO to make Gross-Up Payments    
shall be limited to $6,000,000.                                                 

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4.16 Representation on NIPSCO Board. NIPSCO shall use its best efforts to   
cause its Articles of Incorporation to be amended at the 1997 annual meeting    
of its shareholders to increase the authorized number of directors so as to     
permit the appointment immediately thereafter of one director of the Company    
to be mutually determined by NIPSCO and the Company to serve as a director of   
NIPSCO until the 1998 annual meeting of NIPSCO's shareholders or until his      
earlier death, resignation or removal in accordance with NIPSCO's Articles of   
Incorporation.                                                                  

4.17 Termination of Company Dividend Reinvestment Plan. The Company shall   
terminate its Dividend Reinvestment Plan as soon as reasonably practicable,     
but in any event before March 1, 1997.                                          

4.18 Federal Income Tax Treatment. The Company and NIPSCO shall use their   
reasonable best efforts to ensure that the Merger constitutes a reorganization  
within the meaning of Section 368(a)(1) of the Code and that shareholders of    
the Company will not be subject to federal income tax on the receipt of NIPSCO  
Common Shares in exchange for Company Common Shares pursuant to the Merger.     

ARTICLE 5 

COVENANTS RELATING TO CONDUCT OF BUSINESS PRIOR TO MERGER 

5.1 Conduct of Business by the Company. Except as contemplated by this      
Agreement or as set forth in Section 5.1 of the Disclosure Schedule, during     
the period from the date of this Agreement to the Effective Time, the Company   
shall, and shall cause its subsidiaries to, act and carry on their respective   
businesses in the ordinary course of business and, to the extent consistent     
therewith, use best efforts to preserve intact their current business           
organizations, keep in full force and effect their Licenses, keep available     
the services of their current key officers, employees, agents and field         
representatives, and preserve the goodwill of regulators or those engaged in    
material business relationships with them. Without limiting the generality of   
the foregoing, during the period from the date of this Agreement to the         
Effective Time, the Company shall not, and shall not permit any of its          
subsidiaries to, without the prior consent of NIPSCO:                           

5.1.1 adopt or propose any change to its Articles of Incorporation or By-   
Laws;                                                                           

5.1.2. (i) declare, set aside or pay any dividends on, or make any other    
distributions with respect to, any of the Company's outstanding capital stock   
(other than the regular quarterly cash dividends for the first two quarters of  
1997 not in excess of $.36 per Company Common Share and $.36 per Company        
Preferred Share, with usual record and payment dates and in accordance with     
the Company's present dividend policy), (ii) split, combine or reclassify any   
of its outstanding capital stock or issue or authorize the issuance of any      
other securities in respect of, in lieu of or in substitution for shares of     
its outstanding capital stock or (iii) purchase, redeem or otherwise acquire    
any shares of capital stock or other securities of the Company other than the   
Company Preferred Shares to be redeemed as contemplated by Section 1.9.10       
above and the preferred share purchase rights to be redeemed as contemplated    
by Section 4.14 above;                                                          

5.1.3. issue, sell, grant, pledge or otherwise encumber any shares of its   
capital stock, any other voting securities or any securities convertible into,  
or any rights, warrants or options to acquire, any such shares, voting          
securities or convertible securities other than upon the conversion of Company  
Preferred Shares outstanding on the date of this Agreement or the issuance of   
shares under the Company's dividend reinvestment plan or Thrift Plan;           

5.1.4. acquire any business or any corporation, partnership, joint venture, 
association or other business organization or division;                         

5.1.5. take any action that, if taken prior to the date of this Agreement,  
would have been required to be disclosed in Section 2.6 of the Disclosure       
Schedule or that would otherwise cause any of the representations and           
warranties contained in Article 2 not to be true and correct in all material    
respects;                                                                       

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5.1.6 sell, mortgage or otherwise encumber or subject to any lien or        
otherwise dispose of any of its properties or assets that are material to the   
Company and its subsidiaries taken as a whole, except in the ordinary course    
of business;                                                                    

5.1.7 (i) except for borrowings in the ordinary course of business under    
existing credit facilities, incur any indebtedness for borrowed money or        
guarantee any such indebtedness of another person, other than indebtedness      
owing to or guaranties of indebtedness owing to the Company or any direct or    
indirect wholly-owned subsidiary of the Company or (ii) make any loans or       
advances to any other person, other than to the Company, or to any direct or    
indirect wholly-owned subsidiary of the Company and other than routine          
advances in the ordinary course of business to employees;                       

5.1.8 make any tax election or settle or compromise any income tax          
liability;                                                                      

5.1.9 pay, discharge, settle or satisfy any claims, liabilities or          
obligations (absolute, accrued, asserted or unasserted, contingent or           
otherwise), other than the payment, discharge or satisfaction, in the ordinary  
course of business consistent with past practice or in accordance with their    
terms, of liabilities reflected or reserved against in, or contemplated by,     
the most recent consolidated financial statements (or the notes thereto) of     
the Company included in the Filed Company SEC Documents or incurred since the   
date of such financial statements in the ordinary course of business            
consistent with past practice;                                                  

5.1.10 except in the ordinary course of business, modify, amend or          
terminate, or waive, release or assign any material rights or claims under any  
material agreement, License or similar instrument to which the Company or any   
of its subsidiaries is a party; or                                              

5.1.11 authorize any of, or commit or agree to take any of the foregoing    
actions.                                                                        

5.2 Management of the Company and its Subsidiaries. The Company shall, from 
the date of this Agreement through the Effective Time, cause its management     
and that of its subsidiaries to consult on a regular basis and in good faith    
with the employees and representatives of NIPSCO concerning the management of   
the Company's and its subsidiaries' businesses.                                 

5.3 Conduct of Business by NIPSCO. Except as contemplated by this Agreement 
or as set forth in Section 5.3 of the Disclosure Schedule, during the period    
from the date of this Agreement to the Effective Time, NIPSCO shall, and shall  
cause its subsidiaries to, act and carry on their respective businesses in the  
ordinary course of business and, to the extent consistent therewith, use best   
efforts to preserve intact their current business organizations, keep           
available the services of their current key officers and employees and          
preserve the goodwill of those engaged in material business relationships with  
them. Without limiting the generality of the foregoing, during the period from  
the date of this Agreement to the Effective Time, NIPSCO shall not and shall    
not permit any of its significant subsidiaries to, without the prior consent    
of the Company:                                                                 

5.3.1 adopt or propose any change to its Articles of Incorporation or By-   
Laws, except as otherwise contemplated by this Agreement;                       

5.3.2 issue, sell, grant, pledge or otherwise encumber any shares of its    
capital stock, any other voting securities or any securities convertible into,  
or any rights, warrants or options to acquire, any such shares, voting          
securities or convertible securities, in each case if any such action could     
reasonably be expected to (i) delay materially the date of mailing of the       
Proxy Statement/Prospectus or, (ii) if it were to occur after such date of      
mailing, require an amendment of the Proxy Statement/Prospectus;                

5.3.3 acquire any business or any corporation, partnership, joint venture,  
association or other business organization or division thereof, in each case    
if any such action could reasonably be expected to (i) delay materially the     
date of mailing of the Proxy Statement/Prospectus or, (ii) if it were to occur  
after such date of mailing, require an amendment of the Proxy                   
Statement/Prospectus; or                                                        

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5.3.4 authorize any of, or commit or agree to take any of, the foregoing    
actions.                                                                        

5.4 Other Actions. The Company and NIPSCO shall not, and shall not permit   
any of their respective subsidiaries to, take any action that would, or that    
could reasonably be expected to, result in (i) any of the representations and   
warranties of such party set forth in this Agreement becoming untrue in any     
material respect or (ii) any of the conditions of the Merger set forth in       
Article 6 not being satisfied.                                                  

ARTICLE 6 

CONDITIONS PRECEDENT  

6.1 Conditions to Each Party's Obligation to Effect the Merger. The         
respective obligation of each party to effect the Merger is subject to the      
satisfaction or waiver on or prior to the Closing Date of the following         
conditions:                                                                     

6.1.1 Company Shareholder Approval. This Agreement and the Merger shall have
been approved and adopted by an affirmative vote of the holders of the          
requisite number of shares present, in person or by proxy, and entitled to      
vote on the Merger at the Special Meeting.                                      

6.1.2 Governmental and Regulatory Consents. The Company and NIPSCO shall    
have made all such filings, and obtained such permits, authorizations,          
consents, or approvals required by any Governmental Entity to consummate the    
transactions contemplated hereby; provided, however, that such consents or      
approvals shall impose no conditions that, in the reasonable opinion of the     
Company and NIPSCO, would be expected to have a Material Adverse Effect after   
giving effect to the consummation of the Merger.                                

6.1.3 HSR Act. The waiting period (and any extension thereof) applicable to 
the Merger under the HSR Act shall have been terminated or shall have           
otherwise expired.                                                              

6.1.4 No Injunctions or Restraints. No temporary restraining order,         
preliminary or permanent injunction or other order issued by any court of       
competent jurisdiction or other legal restraint or prohibition preventing the   
consummation of the Merger shall be in effect; provided, however, that the      
party invoking this condition shall use its best efforts to have any such       
order or injunction vacated.                                                    

6.1.5 NYSE Listing. The NIPSCO Common Shares issuable to the Company's      
shareholders pursuant to this Agreement shall have been approved for listing    
on the NYSE, subject to official notice of issuance.                            

6.1.6 Form S-4. The Form S-4 shall have become effective under the          
Securities Act and shall not be the subject of any stop order or proceedings    
seeking a stop order.                                                           

6.1.7 Employment Agreements. NIPSCO shall have entered into three-year      
employment agreements with each of James T. Morris, J. A. Rosenfeld and Joseph  
R. Broyles providing for (i) base salary at an annual rate equal to such        
person's base salary from the Company as of January 1, 1997 (provided that no   
base salary shall accrue or be payable with respect to any period prior to      
January 1, 1998), (ii) deferred compensation in an amount per year equal to     
the annual contribution NIPSCO would have made to its defined benefit pension   
plan with respect to such person for that year if such person had been a        
participant in such plan, (iii) a performance incentive bonus, (iv) an          
acquisition incentive bonus, and (v) participation in employee welfare benefit  
plans made available generally to employees of NIPSCO and its subsidiaries, in  
such form as shall be determined in the sole discretion of the Chief Executive  
Officer of NIPSCO.                                                              

6.1.8 Share Purchase Rights. The preferred share purchase rights issued     
pursuant to the Rights Agreement shall have been redeemed.                      

6.1.9 Change in Control Obligations. The Change in Control Agreements, the  
Company Common Shares subject to restrictions under the Company's Restricted    
Stock Plan and the Company's obligations under the ESB shall have been          
canceled in accordance with Section 4.15.                                       

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6.2 Conditions to Obligations of NIPSCO and Acquisition. The obligations of 
NIPSCO and Acquisition to effect the Merger are further subject to the          
following conditions:                                                           

6.2.1 Representations and Warranties. The representations and warranties of 
the Company contained in this Agreement shall be true and correct in all        
material respects on the date hereof and (except to the extent specifically     
given as of an earlier date) on and as of the Closing Date as though made on    
the Closing Date, and the Company shall have delivered to NIPSCO a certificate  
dated as of the Closing Date signed by an executive officer to the effect set   
forth in this Section 6.2.1.                                                    

6.2.2 Performance of Obligations of the Company. The Company shall have     
performed in all material respects all obligations required to be performed by  
it under this Agreement at or prior to the Closing Date, and the Company shall  
have delivered to NIPSCO a certificate dated as of the Closing Date signed by   
an executive officer to the effect set forth in this Section 6.2.2.             

6.2.3 Tax Opinion. NIPSCO shall have received the opinion dated the Closing 
Date of Schiff Hardin & Waite, counsel to NIPSCO, to the effect that for        
federal income tax purposes the Merger will constitute a reorganization within  
the meaning of Section 368(a)(1) of the Code and no gain or loss will be        
recognized by NIPSCO or the Company as a consequence of the Merger. In          
rendering such opinion, Schiff Hardin & Waite shall be entitled to receive and  
may rely on representations contained in certificates of NIPSCO and the         
Company and representation letters of certain shareholders of the Company.      

6.2.4 Opinion of Counsel. NIPSCO shall have received the opinion dated the  
Closing Date of Baker & Daniels, counsel to the Company, in substantially the   
form attached as Exhibit C to this Agreement.                                   

6.2.5 Fairness Opinions. The opinion of Barr Devlin & Co. Incorporated dated
December 19, 1996, that as of that date the terms of the merger are fair to     
the current shareholders of NIPSCO from a financial point of view, shall not    
have been modified or withdrawn.                                                

6.2.6 Consents and Approvals. The Company and its subsidiaries shall have   
received the consents set forth in Section 2.4 of the Disclosure Schedule.      

6.3 Conditions to Obligation of the Company. The obligation of the Company  
to effect the Merger is further subject to the following conditions:            

6.3.1 Representations and Warranties. The representations and warranties of 
NIPSCO and Acquisition contained in this Agreement shall be true and correct    
in all material respects on the date hereof and (except to the extent           
specifically given as of an earlier date) on and as of the Closing Date as      
though made on the Closing Date, and NIPSCO and Acquisition shall have          
delivered to the Company a certificate dated as of the Closing Date, signed by  
an executive officer of each of them and to the effect set forth in this        
Section 6.3.1.                                                                  

6.3.2 Performance of Obligations of NIPSCO and Acquisition. Each of NIPSCO  
and Acquisition shall have performed in all material respects all obligations   
required to be performed by it under this Agreement at or prior to the Closing  
Date, and NIPSCO and Acquisition shall have delivered to the Company a          
certificate dated as of the Closing Date, signed by an executive officer of     
each of them and to the effect set forth in this Section 6.3.2.                 

6.3.3 Tax Opinion. The Company shall have received the opinion dated the    
Closing Date of Baker & Daniels, counsel to the Company, to the effect that     
for federal income tax purposes the Merger will constitute a reorganization     
within the meaning of Section 368(a)(1) of the Code and that shareholders of    
the Company will not be subject to Federal income tax on the receipt of NIPSCO  
Common Shares in exchange for Company Common Shares pursuant to the Merger. In  
rendering such opinion, Baker & Daniels shall be entitled to receive and may    
rely on representations in certificates of NIPSCO and the Company and           
representation letters of certain shareholders of the Company.                  

6.3.4 Opinion of Counsel. The Company shall have received the opinion dated 
the Closing Date of Schiff Hardin & Waite, counsel to NIPSCO, in substantially  
the form attached as Exhibit D to the Agreement.                                

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ARTICLE 7 

TERMINATION, AMENDMENT AND WAIVER 

7.1 Termination. This Agreement may be terminated and abandoned at any time 
prior to the Effective Time, whether before or after approval of matters        
presented in connection with the Merger by the shareholders of the Company:     

7.1.1 by mutual written consent of NIPSCO and the Company;                  

7.1.2 by either NIPSCO or the Company:                                      

(i) if, upon a vote at a duly held Special Meeting, this Agreement and  
the Merger shall fail to receive the requisite vote for approval and        
adoption by the shareholders of the Company;                                

(ii) if the Merger shall not have been consummated on or before May 31, 
1997, unless the failure to consummate the Merger is the result of a        
willful and material breach of this Agreement by the party seeking to       
terminate this Agreement;                                                   

(iii) if any Governmental Entity shall have issued an order, decree or  
ruling or taken any other action permanently enjoining, restraining or      
otherwise prohibiting the Merger and such order, decree, ruling or other    
action shall have become final and nonappealable; or                        

(iv) if the Board of Directors of the Company shall have exercised its  
rights set forth in Section 4.9 of this Agreement; or                       

7.1.3 by the Company upon a material breach of any representation or        
warranty of NIPSCO or if NIPSCO fails to comply in any material respect with    
any of its covenants or agreements, or if any representation or warranty of     
NIPSCO shall be or become untrue in any material respect, in either case such   
that the conditions set forth in Sections 6.3.1 and 6.3.2 would be incapable    
of being satisfied by May 31, 1997, provided that a willful breach shall be     
deemed to cause such conditions to be incapable of being satisfied by such      
date; or                                                                        

7.1.4 by NIPSCO upon a material breach of any representation or warranty of 
the Company or if the Company fails to comply in any material respect with any  
of its covenants or agreements, or if any representation or warranty of the     
Company shall be or become untrue in any material respect, in either case such  
that the conditions set forth in Sections 6.2.1 and 6.2.2 would be incapable    
of being satisfied by May 31, 1997, provided that a willful breach shall be     
deemed to cause such conditions to be incapable of being satisfied by such      
date.                                                                           

7.2 Effect of Termination.                                                  

7.2.1 In the event of termination of this Agreement by either the Company or
NIPSCO as provided in Section 7.1, except as provided below in Section 7.2.4,   
this Agreement shall forthwith become void and have no effect, without any      
liability or obligation on the part of NIPSCO or the Company, other than the    
last sentence of Section 4.6 and Sections 7.2 and 10.2. Nothing contained in    
this Section shall relieve any party from any liability resulting from any      
material breach of the representations, warranties, covenants or agreements     
set forth in this Agreement.                                                    

7.2.2 In the event of termination of this Agreement by NIPSCO pursuant to   
Section 7.1.4, the Company shall pay NIPSCO $10,000,000 in cash, as liquidated  
damages and not as a penalty, within 60 days of such termination, provided      
that NIPSCO shall not be in material breach of its obligations under this       
Agreement (the "Termination Payment"). The Termination Payment, if payable,     
shall be paid only once.                                                        

7.2.3 In the event of termination of this Agreement by the Company pursuant 
to Section 7.1.3, NIPSCO shall pay the Company $10,000,000 in cash, as          
liquidated damages and not as a penalty, within 60 days of such termination,    
provided that (i) the Company shall not be in material breach of its            
obligations under this Agreement and (ii) NIPSCO shall not then be entitled to  
receive the Termination Payment.                                                

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7.2.4 In the event of termination of this Agreement by either NIPSCO or the 
Company pursuant to Section 7.1.2(iv), the Company shall pay NIPSCO $1,000,000  
in cash, as liquidated damages and not as a penalty, within 30 days of such     
termination, provided that NIPSCO shall not be in material breach of its        
obligations under this Agreement, and shall pay NIPSCO an additional            
$9,000,000 in cash, as additional liquidated damages and not as a penalty,      
upon the earlier of consummation of the transactions contemplated by an         
Acquisition Proposal or five months from the date of such termination;          
provided, however, the Company shall not be obligated to pay NIPSCO such        
additional $9,000,000 in liquidated damages, if the transactions contemplated   
by such Acquisition Proposal shall be abandoned or otherwise terminated during  
such five-month period and, within such five-month period, (i) this Agreement   
shall be reinstated by mutual agreement of NIPSCO and the Company or (ii)       
NIPSCO shall reject a firm written offer from the Company to reinstate this     
Agreement and consummate the transactions contemplated hereby.                  

7.2.5 The payments provided in Sections 7.2.2, 7.2.3 and 7.2.4 shall be the 
parties' sole and exclusive remedies hereunder for the termination of this      
Agreement under the circumstances in which such payments are paid (regardless   
of any breach of this Agreement), and upon such delivery of such payment to     
NIPSCO or the Company, as the case may be, no person shall have any further     
claim or rights against the Company, NIPSCO or Acquisition under this           
Agreement.                                                                      

7.3 Amendment. Subject to the applicable provisions of the Indiana Code, at 
any time prior to the Effective Time, the parties hereto may modify or amend    
this Agreement, by written agreement executed and delivered by duly authorized  
officers of the respective parties; provided, however, that after approval of   
the Merger by the shareholders of the Company, no amendment shall be made       
which reduces the Merger Consideration payable in the Merger or adversely       
affects the rights of the Company's shareholders hereunder without the          
approval of such shareholders. This Agreement may not be amended except by an   
instrument in writing signed on behalf of each of the parties.                  

7.4 Extension; Waiver. At any time prior to the Effective Time, the parties 
may (i) extend the time for the performance of any of the obligations or other  
acts of the other parties, (ii) waive any inaccuracies in the representations   
and warranties of the other parties contained in this Agreement or in any       
document delivered pursuant to this Agreement or (iii) subject to Section 7.3,  
waive compliance with any of the agreements or conditions of the other parties  
contained in this Agreement. Any agreement on the part of a party to any such   
extension or waiver shall be valid only if set forth in an instrument in        
writing signed on behalf of such party. The failure of any party to this        
Agreement to assert any of its rights under this Agreement or otherwise shall   
not constitute a waiver of such rights.                                         

7.5 Procedure for Termination, Amendment, Extension or Waiver. A termination
of this Agreement pursuant to Section 7.1, an amendment of this Agreement       
pursuant to Section 7.3 or an extension or waiver pursuant to Section 7.4       
shall, in order to be effective, require in the case of NIPSCO or the Company,  
action by its Board of Directors or the duly authorized designee of its Board   
of Directors.                                                                   

ARTICLE 8 

SURVIVAL OF PROVISIONS  

8.1 Survival. The representations and warranties respectively required to be
made by the Company and NIPSCO and Acquisition in this Agreement, or in any     
certificate, respectively, delivered by the Company or NIPSCO and Acquisition   
pursuant to Section 6.2 or Section 6.3 hereof, will terminate upon the Closing  
and be of no further force or effect.                                           

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ARTICLE 9 

NOTICES 

9.1 Notices. Any notice or communication given pursuant to this Agreement   
must be in writing and will be deemed to have been duly given if mailed (by     
registered or certified mail, postage prepaid, return receipt requested),       
transmitted by facsimile or delivered by courier, as follows:                   

If to the Company, to:                                                      

IWC Resources Corporation                                               
1220 Waterway Boulevard                                                 
P.O. Box 1220                                                           
Indianapolis, Indiana 46206                                             
Attention: J.A. Rosenfeld                                               
Telephone: (317) 639-1501                                               
Telecopy: (317) 263-6448                                                

with a copy to:                                                             

Baker & Daniels                                                         
300 North Meridian Street                                               
Indianapolis, Indiana 46204                                             
Attention: Fred E. Schlegel                                             
Telephone: (317) 237-0300                                               
Telecopy: (317) 237-1000                                                

If to NIPSCO, to:                                                           

NIPSCO Industries, Inc.                                                 
5265 Hohman Avenue                                                      
Hammond, Indiana 46320                                                  
Attention: Stephen P. Adik                                              
Telephone: (219) 647-6012                                               
Telecopy: (219) 647-6060                                                

with copies to:                                                             

Schiff Hardin & Waite                                                   
7200 Sears Tower                                                        
Chicago, Illinois 60606-6473                                            
Attention: Peter V. Fazio, Jr.                                          
Telephone: (312) 258-5634                                               
Telecopy: (312) 258-5600                                                

All notices and other communications required or permitted under this           
agreement that are addressed as provided in this Section 9.1 will, whether      
sent by mail, facsimile or courier, be deemed given upon the first Business     
Day after actual delivery to the party to whom such notice or other             
communication is sent (as evidenced by the return receipt or shipping invoice   
signed by a representative of such party or by facsimile confirmation). Any     
party from time to time may change its address for the purpose of notices to    
that party by giving a similar notice specifying a new address, but no such     
notice will be deemed to have been given until it is actually received by the   
party sought to be charged with the contents thereof. For purposes of this      
Section 9.1, "Business Day" shall mean a day other than Saturday, Sunday or     
any day on which the principal commercial banks located in Indianapolis,        
Indiana are authorized or obligated to close under the laws of Indiana.         

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ARTICLE 10  

MISCELLANEOUS 

10.1 Entire Agreement. This Agreement constitutes the entire agreement      
between the parties hereto with respect to the subject matter hereof and        
supersedes, except as set forth in Section 4.6 with respect to the              
Confidentiality Agreement, all prior communications, agreements,                
understandings, representations and warranties, whether oral or written,        
between the parties hereto. There are no oral or written agreements,            
understandings, representations or warranties between the parties hereto with   
respect to the subject hereof other than those set forth in this Agreement.     

10.2 Expenses. The Company, NIPSCO and Acquisition each will pay its own    
costs and expenses incident to preparing for, entering into and carrying out    
this Agreement and the consummation of the transactions contemplated hereby,    
except that (i) the filing fee in respect of the notification and report under  
the HSR Act and (ii) the expenses incurred in connection with the printing,     
mailing and distribution of the Proxy Statement/Prospectus and the preparation  
and filing of the Form S-4 shall be borne equally by the Company and NIPSCO.    

10.3 Counterparts. This Agreement may be executed in one or more            
counterparts, each of which will be deemed an original, but all of which will   
constitute one and the same instrument and shall become effective when one or   
more counterparts have been signed by each of the parties and delivered to the  
other parties.                                                                  

10.4 No Third Party Beneficiary. Except as otherwise specifically provided  
in Section 4.13, this Agreement is not intended and may not be construed to     
create any rights in any parties other than the Company, NIPSCO and             
Acquisition and their respective successors or assigns, and it is not the       
intention of the parties to confer third-party beneficiary rights upon any      
other person.                                                                   

10.5 Governing Law. This Agreement shall be governed by and construed in    
accordance with the laws of the State of Indiana (without regard to the         
principles of conflicts of law) applicable to a contract executed and to be     
performed in such State.                                                        

10.6 Assignment; Binding Effect. Neither this Agreement nor any of the      
rights, interests or obligations under this Agreement shall be assigned, in     
whole or in part, by operation of law or otherwise by any of the parties        
without the prior written consent of the other parties, such consent not to be  
unreasonably withheld, and any such assignment that is not consented to shall   
be null and void. Subject to the preceding sentence, this Agreement will be     
binding upon, inure to the benefit of and be enforceable by the parties and     
their respective successors and assigns.                                        

10.7 Headings, Gender, etc. The headings used in this Agreement have been   
inserted for convenience and do not constitute matter to be construed or        
interpreted in connection with this Agreement. Unless the context of this       
Agreement otherwise requires, (i) words of any gender are deemed to include     
each other gender; (ii) words using the singular or plural number also include  
the plural or singular number, respectively; (iii) the terms "hereof,"          
"herein," "hereby," "hereto," and derivative or similar words refer to this     
entire Agreement; (iv) the terms "Article" or "Section" refer to the specified  
Article or Section of this Agreement; (v) all references to "dollars" or "$"    
refer to currency of the United States of America; (vi) the term "person"       
shall include any natural person, corporation, limited liability company,       
general partnership, limited partnership, trust or other entity, enterprise,    
authority or business organization; and (vii) the term "or" is disjunctive but  
not necessarily exclusive.                                                      

10.8 Invalid Provisions. If any provision of this Agreement is held to be   
illegal, invalid or unenforceable under any present or future law, and if the   
rights or obligations of the Company or NIPSCO and Acquisition under this       
Agreement will not be materially and adversely affected thereby, (i) such       
provision will be fully severable; (ii) this Agreement will be construed and    
enforced as if such illegal, invalid or unenforceable provision had never       
comprised a part hereof; and (iii) the remaining provisions of this Agreement   
will remain in full force and effect and will not be affected by the illegal,   
invalid or unenforceable provision or by its severance herefrom.                

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In Witness Whereof, this Agreement has been duly executed and delivered by  
the duly authorized officers of the Company, NIPSCO and Acquisition effective   
as of the date first written above.                                             

                           NIPSCO Industries, Inc.

                         /s/ Gary L. Neale
                                         By: _________________________________
                              Gary L. Neale,
                                      Chairman of the Board,
                                   President and Chief
                                 Executive Officer

                              Speedway Acquisition Corp.

                         /s/ Gary L. Neale
                                         By: _________________________________
                              Gary L. Neale,
                         President

                             IWC Resources Corporation

                           /s/ James T. Morris
                                         By: _________________________________
                                James T. Morris,
                                      Chairman of the Board,
                                       Chief Executive Officer
                             and President

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                                                                         ANNEX B

OPINION OF GOLDMAN SACHS & CO.

TO BE PROVIDED

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                                                                       ANNEX C

                                                             December 19, 1996

The Board of Directors                                                          
NIPSCO Industries, Inc.                                                         
5265 Hohman Avenue                                                              
Hammond, Indiana 46320-1775                                                     

Dear Members of the Board:                                                      

We understand that NIPSCO Industries, Inc., an Indiana corporation          
("NIPSCO") and IWC Resources Corporation, an Indiana corporation ("IWC"), have  
determined to enter into a strategic business combination. The terms and        
conditions of the business combination are set forth in the Agreement and Plan  
of Merger dated as of December 19, 1996 (the "Merger Agreement") among NIPSCO,  
IWC, and Speedway Acquisition Corp., a wholly owned subsidiary of NIPSCO and    
an Indiana corporation ("Acquisition"). Capitalized terms used herein without   
definition shall have the respective meanings assigned to such terms in the     
Merger Agreement. The Merger Agreement provides for, among other things, the    
merger of IWC with and into Acquisition (the "Merger") whereby the surviving    
corporation will be re-named IWC and will be a wholly owned subsidiary of       
NIPSCO. Pursuant to the Merger Agreement, each common share, no par value, of   
IWC (the "IWC Common Shares") issued and outstanding immediately prior to the   
Effective Time shall be converted into (i) the right to receive $32 in cash,    
without interest (the "Cash Price"), or (ii) the fraction of a validly issued,  
fully paid and non-assessable common share, without par value, of NIPSCO        
("NIPSCO Common Shares") determined by dividing the Cash Price by the NIPSCO    
Share Price (as defined below) (the "Exchange Ratio") or (iii) the right to     
receive a combination of cash and NIPSCO Common Shares determined as set forth  
in the Merger Agreement. The "NIPSCO Share Price" shall be equal to the         
average of the closing prices of NIPSCO Common Shares on the New York Stock     
Exchange Composite Transactions Reporting System for the 20 trading days        
immediately preceding the second trading day prior to the Effective Time. The   
terms and conditions of the Merger are set forth in more detail in the Merger   
Agreement.                                                                      

We have been requested by NIPSCO to render our opinion with respect to the  
fairness, from a financial point of view, to the holders of NIPSCO Common       
Shares of the Merger Consideration to be offered in connection with the         
Merger.                                                                         

In arriving at our opinion, we have, among other things:                    

(1) Reviewed the Annual Reports, Forms 10-K and the related financial   
information for the three-year period ended December 31, 1995 and the Forms 
10-Q and the related unaudited financial information for the quarterly      
periods ended March 31, 1996, June 30, 1996 and September 30, 1996 for IWC; 

(2) Reviewed the Annual Reports, Forms 10-K and the related financial   
information for the three-year period ended December 31, 1995 and the Forms 
10-Q and the related unaudited financial information for the quarterly      
periods ended March 31, 1996, June 30, 1996 and September 30, 1996 for      
NIPSCO and Northern Indiana Public Service Company;                         

(3) Reviewed certain other filings with the Securities and Exchange     
Commission and other regulatory authorities made by IWC, NIPSCO and         
Northern Indiana Public Service Company during the last three years;        

 (4) Reviewed certain internal information, including financial forecasts,
relating to the business, earnings, capital expenditures, cash flow, assets 
and prospects of IWC and NIPSCO furnished to us by IWC and NIPSCO;          

 (5) Conducted discussions with members of senior management of NIPSCO and
IWC concerning their respective businesses, regulatory environments,        
prospects, strategic objectives and possible operating and administrative   
synergies which might be realized for the benefit of NIPSCO following the   
Merger;                                                                     

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 (6) Reviewed the historical market prices and trading activity for shares
of IWC with those of certain publicly traded companies which we deemed to   
be relevant;                                                                

(7) Compared the results of operations of IWC with those of certain     
companies which we deemed to be relevant;                                   

(8) Compared the proposed financial terms of the Merger with the        
financial terms of certain business combinations which we deemed to be      
relevant;                                                                   

(9) Analyzed the valuation of shares of IWC Common Stock using various  
valuation methodologies which we deemed to be appropriate;                  

(10) Considered the pro forma effect of the Merger on NIPSCO's          
capitalization, earnings and cash flow;                                     

 (11) Compared the pro forma effect of the Merger on NIPSCO's earnings per
share with corresponding current and projected values on a stand-alone      
basis;                                                                      

(12) Reviewed the Merger Agreement; and                                 

(13) Reviewed such other studies, conducted such other analyses,        
considered such other financial, economic and market criteria, performed    
such other investigations and taken into account such other matters as we   
deemed necessary or appropriate for purposes of this opinion.               

In rendering our opinion, we have assumed and relied, without independent   
verification, upon the accuracy and completeness of all financial and other     
information publicly available or otherwise furnished or made available to us   
by NIPSCO and IWC and have further relied upon the assurances of management of  
NIPSCO and IWC that they are not aware of any facts that would make such        
information inaccurate or misleading. With respect to the financial             
projections of NIPSCO and IWC (including, without limitation, projected cost    
savings and operating synergies), we have relied upon the assurances of         
management of NIPSCO and IWC that such projections have been reasonably         
prepared and reflect the best currently available estimates and judgments of    
the management of NIPSCO and IWC as to the future financial performance of      
NIPSCO and IWC, as the case may be, and as to the outcomes projected of legal,  
regulatory and other contingencies. In arriving at our opinion, we have not     
made or been provided with an independent evaluation or appraisal of the        
assets or liabilities (contingent or otherwise) of NIPSCO or IWC, nor have we   
made any physical inspection of the properties or assets of NIPSCO or IWC. We   
have assumed that the Merger will be a reorganization as described in Section   
368(a)(1) of the Internal Revenue Code of 1986, as amended (the "Code"), and    
the regulations thereunder, and that no gain or loss will be recognized by      
NIPSCO or IWC as a consequence of the Merger. We have also assumed that for     
financial accounting purposes, NIPSCO will use purchase accounting to account   
for the Merger. Our opinion herein is necessarily based upon financial, stock   
market and other conditions and circumstances existing and disclosed to us as   
of the date hereof.                                                             

We have acted as financial advisor to NIPSCO in connection with the Merger  
and will receive certain fees for our services. In addition, we have in the     
past rendered certain investment banking and financial advisory services to     
NIPSCO for which we received customary compensation.                            

Our advisory services and the opinion expressed herein are provided solely  
for the use of NIPSCO's Board of Directors in evaluating the Merger and are     
not provided on behalf of, or intended to confer rights or remedies upon, any   
stockholder of NIPSCO or any person other than NIPSCO's Board of Directors.     
Our opinion may not be published or otherwise used or referred to without our   
prior written consent.                                                          

Based upon and subject to the foregoing, our experience as investment       
bankers and other factors we deem relevant, we are of the opinion that, as of   
the date hereof, the Merger Consideration to be offered in connection with the  
Merger is fair, from a financial point of view, to the holders of NIPSCO        
Common Shares.                                                                  

                     Very truly yours,

                                  Barr Devlin & Co. Incorporated

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IWC RESOURCES CORPORATION 

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS 

 I hereby appoint James T. Morris, J.A. Rosenfeld and John M. Davis, or any of
them, my proxies with power of substitution, to vote all common shares of the   
Company which I am entitled to vote at the special meeting of shareholders of   
the Company, to be held at the corporate headquarters of the Company, 1220      
Waterway Boulevard, Indianapolis, Indiana 46206, on March   , 1997, at 11:00    
a.m., E.S.T., and at any adjournment, as follows:                               

 1. Proposal to approve the Agreement and Plan of Merger and the Merger of the
Company with and into a wholly-owned subsidiary of NIPSCO Industries, Inc.      

[_] FOR[_] AGAINST[_] ABSTAIN 

2. In their discretion, on any other matters that may properly come before  
the meeting.                                                                    

 THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE     
VOTED FOR PROPOSAL 1.                                                           

Please sign exactly as your name appears below. When shares are held by two 
or more persons, all of them should sign. When signing as attorney, as          
executor, administrator, trustee or guardian, please give full title as such.   
If a corporation, please sign in full corporate name by President or other      
authorized officer. If a partnership, please sign in partnership name by        
authorized person.                                                              

                                           -----------------------------------
                                           SIGNATURE
                                           -----------------------------------
                                           SIGNATURE IF HELD JOINTLY

                                           DATE ________________________, 1997

                                          Please mark, sign, date and return
                                         the proxy card promptly using the
                          enclosed envelope.

Dates Referenced Herein   and   Documents Incorporated by Reference

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