NISOURCE INC. CORPORATE INCENTIVE PLAN

NISOURCE INC.
CORPORATE INCENTIVE PLAN

1. PURPOSE

The purpose of the NiSource Inc. Corporate Incentive Plan (“Plan”) is to motivate and reward certain employees of NiSource Inc. (the “Corporation”) and its affiliates (individually, the “Employer” and collectively, the “Employers”) by making a portion of their compensation dependent upon the achievement of certain performance criteria.

2. ADMINISTRATION

The Plan is administered by the Officer Nomination and Compensation Committee (“Committee”) of the Board of Directors of the Corporation (“Board”), which, subject to action of the Board, has complete discretion and authority with respect to the Plan and its application, except to the extent that discretion is expressly limited by the Plan.

3. ELIGIBILITY FOR PARTICIPATION

All exempt and non-exempt employees of the Corporation and its affiliates, other than employees who have received a last chance letter, final notice letter or equivalent during the Plan year, certain exempt employees who participate in other specialized functional incentive plans and bargaining unit employees of Kokomo Gas and Fuel Company are eligible to participate in the Plan; provided however, that the Committee may add additional employees and remove employees in its discretion (“Eligible Employees”). The Committee or the Corporation’s Chief Executive Officer may determine which Eligible Employees or groups of Eligible Employees shall actually participate in the Plan. The Committee and the Chief Executive Officer generally shall make this determination each calendar year (a “Performance Year”). Such officers and other Eligible Employees chosen to participate in the Plan are “Participants.” Designation by the Committee or Chief Executive Officer as a Participant in one Performance Year shall not confer on such Participant the right to be a Participant in another Performance Year.

Notwithstanding the previous paragraph, an employee described above shall be a “Limited Participant” if he or she has received one or more suspensions without pay totaling five days or more during the calendar year. Each Limited Participant will have his or her individual incentive opportunity reduced by at least 50%. Any Participant not covered under the preceding sentences is a “Full Participant.”

4. CREATION OF PERFORMANCE TARGETS

Each year, the Committee shall determine the basic terms and conditions under which incentive compensation will be paid under the Plan. The Committee or the Chief Executive Officer of the Corporation, as described below, may specify different terms and conditions for different Participants or different groups of Participants. A

Participant’s incentive compensation for a Performance Year may be based in whole or in part on the Participant’s corporate division, department, or business unit (“Group”) and in whole or in part on the performance of the Corporation as a whole.

The Committee or the Chief Executive Officer may segregate the Corporation into different Groups. Groups may include (a) Corporate Support, (b) Gas Distribution Business Unit, (c) NIE Business Unit, (d) NGT&S Business Unit, and (e) such other groups determined by the Committee or the Chief Executive Officer. The Committee or the Chief Executive Officer, in their sole discretion, shall place Participants in a Group based upon their position in the Corporation. If a Participant changes positions during the calendar year, the Participant will be assigned to a Group based on the position they hold on December 31, unless the Committee or the Chief Executive Officer, in their sole discretion, determines otherwise.

1. General Corporate Conditions

Whether an incentive payment will be made under this Plan may depend upon the Corporation achieving a financial trigger for an applicable Performance Year. The Committee may select the financial trigger for each performance Year based on any objective criteria, including criteria that relate to operating earnings per share, funds from operations, business unit operating earnings, revenue, expense control, shareholder return, valuation, productivity, or such other criteria determined by the Committee (the “Performance Criteria”). The Committee will have full discretion and authority to determine and certify whether the trigger has been achieved and whether any adjustments need to be made in calculating the trigger to reflect unusual or non-recurring events. If the financial trigger is less than a minimum performance standard determined by the Committee for the applicable Performance Year, no amount will be payable under the Plan.

2. Group Performance Conditions and Incentive Pool

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