NISOURCE INC. 1994 LONG-TERM INCENTIVE PLAN CONTINGENT STOCK AGREEMENT

NISOURCE INC.

1994 LONG-TERM INCENTIVE PLAN

CONTINGENT STOCK AGREEMENT

     This Agreement is made as of the ___ day of ___, between NiSource Inc. (the “Company”) and ___ (the “Grantee”). In consideration of the agreements set forth below, the Company and the Grantee agree as follows:

     1.  Grant . A contingent stock award (“Award”) of ___ shares (“Contingent Shares”) of the Company’s common stock, par value of $.01 each (“Common Stock”), will be granted by the Company to the Grantee, subject to the following contingencies, terms and conditions. This Award is also subject to the provisions of the NiSource Inc. 1994 Long-Term Incentive Plan as amended and restated effective January 1, 2005 and as amended effective January 22, 2009 (the “Plan”), the terms of which are incorporated by reference herein, except for the dividend reinvestment provision contained in Section 14 of the Plan. The number of Contingent Shares to be granted pursuant to this Agreement shall be maintained as a bookkeeping entry on the books of the Company until the Common Stock underlying the Contingent Shares is delivered. No funds shall be set aside or earmarked for any Contingent Share. The right of the Grantee or his or her beneficiary to receive a distribution hereunder shall be an unsecured claim against the general assets of the Company, and neither the Grantee nor his or her beneficiary shall have any rights in or against any amounts credited to the books of the Company or any other specific assets of the Company.

     2.  Transfer Restrictions . Neither the rights with respect to the Award nor the Contingent Shares shall be sold, assigned, pledged or otherwise transferred, voluntarily or involuntarily, by the Grantee prior to the lapse of the “Performance Restrictions” and the “Employment Restriction” (as set forth in Section 3 of this Agreement), and until permitted pursuant to the terms of the Plan.

     3.  Lapse of Restrictions .

          (a) Upon Grantee’s continued employment through January 31, 2012 (the “Employment Restriction”) and the lapse of the Performance Restrictions, the Grantee shall receive a total of ___ shares of Common Stock. The Performance Restrictions shall lapse on the date the Officer Nomination and Compensation Committee of the Board of Directors of the Company certifies the following:

(i) With respect to one-third of the Award, the Performance Restrictions shall lapse if cumulative “net operating earnings” per share of Common Stock for the two year period beginning January 1, 2009, and ending December 31, 2010 (the “Performance Period”), equal or exceed $2.13. To the extent the cumulative “net operating earnings” per share of Common Stock for the Performance Period exceed $2.13, these shares of Common Stock shall be increased as follows:

(ii) With respect to one-third of the Award, the Performance Restrictions shall lapse if cumulative “funds from operations” for the Performance Period equal or exceed $1,950 million. To the extent cumulative “funds from operations” for the Performance Period exceed $1,950 million, these shares of Common Stock under this subsection shall be increased as follows:

(iii) With respect to one-third of the Award, the Performance Restrictions shall lapse if the Company’s total debt as of December 31, 2010 does not exceed $7.45 billion. In calculating the Company’s cumulative debt, the Company’s board of directors, in its discretion, may adjust the total debt calculation for significant movement in natural gas prices or for any board of director’s decisions to “prefund” debt or make capital investments beyond the financial plan approved at the time of this Award.

     An Award of all shares of Common Stock granted in accordance with this Section 3 will be delivered to the Grantee no later than March 15, 2012.

          (b) As soon as practicable after the end of the Performance Period, the Committee will certify in writing whether the Performance Restrictions have been met for the Performance Period and determine the number of shares of Common Stock, if any, that will be payable to Grantees that are employed with the Company through the lapsing of the Employment Restriction in accordance with Section 3(a) of this Agreement; provided, however, that if the Committee certifies that the Performance Restrictions have been met, the Committee may, in its

sole discretion, adjust the number of shares of Common Stock payable to the Grantee with respect to the Award to reflect the effect of extraordinary events upon the Performance Restrictions. The date of the Committee’s certification under this Section 3(b) shall hereinafter be referred to as the “Certification Date”. The Company will notify the Grantee (or the executors or administrators of the Grantee’s estate, if appropriate) of the Committee’s certification following the Certification Date (such notice being the “Determination Notice”). The Determination Notice shall specify (i) the Company’s cumulate net operating earnings per share, cumulative funds from operations and total debt for the Performance Period and (ii) the number of shares of Common Stock payable in accordance with the Committee’s certification.

          (c) Except as otherwise provided herein, if the Grantee’s employment terminates for any reason before January 31, 2012, the Award shall automatically terminate and the Grantee shall not be entitled to receive any shares of Common Stock under this Agreement. If, however, before the lapse of the Performance Restrictions, the Grantee terminates employment with the Company and its Affiliates (1) due to retirement, with having attained age