NONEMPLOYEE DIRECTOR STOCK INCENTIVE PLAN

Exhibit 10.1

NISOURCE INC.

NONEMPLOYEE DIRECTOR
STOCK INCENTIVE PLAN

NISOURCE INC.
NONEMPLOYEE DIRECTOR
STOCK INCENTIVE PLAN
(As Amended and Restated Effective April 1, 2007)

TABLE OF CONTENTS

		Page
ARTICLE I ESTABLISHMENT, PURPOSE, AND DURATION			2
1.1 Establishment of the Plan			2
1.2 Purpose of the Plan			2
1.3 Duration of the Plan			2
ARTICLE II DEFINITIONS			3
2.1 Award			3
2.2 Award Agreement			3
2.3 Board or Board of Directors			3
2.4 Change in Control			3
2.5 Code			5
2.6 Company			5
2.7 Committee			5
2.8 Director			5
2.9 Disability			5
2.10 Employee			6
2.11 Fair Market Value			6
2.12 Nonemployee Director			6
2.13 Nonqualified Stock Option or NQSO			6
2.14 Option			6
2.15 Participant			6
2.16 Period of Restriction			6
2.17 Restricted Stock			6
2.18 Restricted Stock Unit			6
2.19 Shares			6
ARTICLE III ADMINISTRATION			7
3.1 Committee			7
3.2 Administration by the Committee			7
3.3 Decisions Binding			7
ARTICLE IV SHARES AND RESTRICTED STOCK UNITS SUBJECT TO THE PLAN			7
4.1 Number of Shares and Restricted Stock Units			7
4.2 Lapsed Awards			8
4.3 Adjustments in Authorized Shares and Restricted Stock Units			8
ARTICLE V ELIGIBILITY AND PARTICIPATION			9
5.1 Eligibility			9
5.2 Actual Participation			9

 i 

TABLE OF CONTENTS
(continued)

		Page
ARTICLE VI GRANTS OF RESTRICTED STOCK AND RESTRICTED STOCK UNITS			9
6.1 Initial Grant			9
6.2 Special Grant of Restricted Stock Units			9
6.3 Grants Prior to January 1, 2004			10
6.4 Future Grants On and After January 1, 2004			10
6.5 Award Agreements			11
6.6 Other Restrictions			11
6.7 Certificate Legend			12
6.8 Restricted Stock Unit Account			12
6.9 Vesting and Transferability			12
6.10 Voting and Stock Ownership Rights			13
6.11 Dividends and Other Distributions			14
6.12 Payment of Restricted Stock Units			14
ARTICLE VII NONQUALIFIED STOCK OPTIONS			15
7.1 Potential Grants of Options			15
7.2 Option Award Agreement			15
7.3 Option Price			15
7.4 Duration of Options			16
7.5 Vesting of Shares Subject to Option			16
7.6 Payment			16
7.7 Restrictions on Share Transferability			17
ARTICLE VIII CHANGE IN CONTROL			17
ARTICLE IX AMENDMENT, MODIFICATION AND TERMINATION			18
9.1 Amendment, Modification and Termination			18
9.2 Awards Previously Granted			18
ARTICLE X GENERAL PROVISIONS			18
10.1 Additional Awards			18
10.2 Gender and Number			19
10.3 Severability			19
10.4 Indemnification			19
10.5 Beneficiary Designation			20
10.6 Termination of Directorship			20
10.7 Nontransferability of Options			21
10.8 No Right of Nomination			23
10.9 Shares Available			23
10.10 Additional Compensation			23
10.11 Successors			23
10.12 Requirements of Law			23
10.13 Governing Law			23

 ii 

NISOURCE INC.
NONEMPLOYEE DIRECTOR
STOCK INCENTIVE PLAN

      WHEREAS, NiSource Inc. (the “Company”) adopted the NiSource Inc. Nonemployee Director Stock Incentive Plan (formerly the NIPSCO Industries, Inc. Nonemployee Director Stock Incentive Plan), effective February 1, 1992, as last amended effective December 16, 1997 and February 1, 1998 (“Plan”); and

      WHEREAS, the Company adopted the NiSource Inc. Nonemployee Director Restricted Stock Unit Plan (formerly the NIPSCO Industries, Inc. Nonemployee Director Restricted Stock Unit Plan) effective January 1, 1999 (“Stock Unit Plan”); and

      WHEREAS, pursuant to Section 9.1 of the Plan and Section 14 of the Stock Unit Plan, the Company amended the Plan and the Stock Unit Plan in certain respects, and merged the Stock Unit Plan into the Plan and restated the merged Plan in a single document, effective July 1, 2002; and

      WHEREAS , the Plan was amended and restated to reflect changes in the structure of nonemployee director compensation, effective January 1, 2004; and

      WHEREAS , the Plan was amended and restated to comply with Internal Revenue Code Section 409A, and guidance and regulations thereunder, with respect to Awards granted and/or vested under the Plan from and after January 1, 2005, and

      WHEREAS , pursuant to Section 9.1 of the Plan, the Company wishes to further amend and restate the Plan with respect to Awards granted pursuant to Section 6.4 of the Plan.

      NOW THEREFORE, the Plan is hereby amended and restated, effective April 1, 2007, as follows:

ARTICLE I

ESTABLISHMENT, PURPOSE, AND DURATION

     1.1 Establishment of the Plan . NiSource Inc. established an incentive compensation plan known as the “NiSource Inc. Nonemployee Director Stock Incentive Plan,” as set forth in this document. The Plan permits the grant of Restricted Stock, Nonqualified Stock Options and Restricted Stock Units to Nonemployee Directors, subject to the terms and provisions set forth herein.

     Awards granted and/or vested under the Plan from and after January 1, 2005 shall be administered in compliance with Code Section 409A, and guidance and regulations thereunder. Awards under the Plan granted, vested and freely transferable prior to January 1, 2005 shall be administered in accordance with the Plan as then in effect and without regard to Code Section 409A, and guidance and regulations thereunder.

     1.2 Purpose of the Plan . The purpose of the Plan is to promote the achievement of long-term objectives of the Company by linking the personal interests of Nonemployee Directors to those of Company shareholders, enhancing the interest of Nonemployee Directors in the growth and success of the Company, and attracting and retaining Nonemployee Directors of outstanding competence.

     1.3 Duration of the Plan . The Plan, as amended and restated herein, is effective April 1, 2007 and shall remain in effect, subject to the right of the Committee to terminate the Plan at any time pursuant to Article IX herein, until all Shares subject to it shall have been purchased or acquired according to the Plan’s provisions. However, in no event may an Award be granted under the Plan on or after June 30, 2012.

ARTICLE II

DEFINITIONS

     Whenever used in the Plan, the following terms shall have the meanings set forth below and, when the meaning is intended, the initial letter of the word is capitalized:

     2.1 Award . “Award” means, individually or collectively, a grant of Restricted Stock, Nonqualified Stock Options or Restricted Stock Units under the Plan.

     2.2 Award Agreement . “Award Agreement” means an agreement entered into by and between the Company and a Nonemployee Director, setting forth the terms and provisions applicable to an Award granted under the Plan.

     2.3 Board or Board of Directors . “Board” or “Board of Directors” means the Board of Directors of the Company, and includes any committee of the Board of Directors designated by the Board to administer part or all of the Plan.

     2.4 Change in Control . “Change in Control” means the occurrence of either a “Change in Ownership,” “Change in Effective Control” or a “Change of Ownership of a Substantial Portion of Assets,” as defined below:

     (a) Change in Ownership . A Change in Ownership of the Company occurs on the date that any one person, or more than one Person Acting as a Group (as defined below), acquires ownership of stock of the Company that, together with stock held by such person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of the Company. However, if any one person or more than one Person Acting as a Group, is considered to own more than 50% of the total fair market value or total voting power of the stock of the Company, the acquisition of additional stock by the same person or persons is not considered to cause a Change in Ownership of the Company (or to cause a Change in Effective Control of the Company). An increase in the percentage of stock owned by any one person, or Persons Acting as a Group, as a result of a transaction in which the Company acquires its stock in exchange for property will be treated as an acquisition of stock. This subsection (a) applies only when there is a transfer of stock of the Company (or issuance of stock of the Company) and stock in the Company remains outstanding after the transaction.

     (b) Change in Effective Control . A Change in Effective Control of the Company occurs on the date that either –

     (i) any one person, or more than one Person Acting as a Group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the Company possessing 35% or more of the total voting power of the stock of the Company; or

     (ii) a majority of members of the Board is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election.

In the absence of an event described in paragraph (i) or (ii), a Change in Effective Control of the Company shall not have occurred.

Acquisition of additional control . If any one person, or more than one Person Acting as a Group, is considered to effectively control the Company, the acquisition of additional control of the Company by the same person or persons is not considered to cause a Change in Effective Control of the Company (or to cause a Change in Ownership of the Company).

     (c) Change of Ownership of a Substantial Portion of Assets . A Change of Ownership of a Substantial Portion of Assets occurs on the date that any one person, or more than one Person Acting as a Group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions. For this purpose, gross fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.

Transfers to a related person . There is no Change in Control when there is a transfer to an entity that is controlled by the shareholders of the Company immediately after the transfer. A transfer of assets by the Company is not treated as a Change of Ownership of a Substantial Portion of Assets if the assets are transferred to –

     (i) a shareholder of the Company (immediately before the asset transfer) in exchange for or with respect to its stock;

     (ii) an entity, 50% or more of the total value or voting power of which is owned, directly or indirectly, by the Company;

     (iii) a person, or more than one Person Acting as a Group, that owns, directly or indirectly, 50% or more of the total value or voting power of all the outstanding stock of the Company; or

     (iv) an entity, at least 50% of the total value or voting power of which is owned, directly or indirectly, by a person described in paragraph (iii) next above.

A person’s status is determined immediately after the transfer of assets. For example, a transfer to a corporation in which the Company has no ownership interest before the transaction, but which is a majority-owned subsidiary of the Company after the transaction is not treated as a Change of Ownership of a Substantial Portion of Assets of the Company.

     (d) Persons Acting as a Group . Persons shall not be considered to be acting as a group solely because they purchase or own stock of the same corporation at the same time or as a result of the same public offering. However, persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock, or similar business transaction with the Company. If a person, including an entity, owns stock in both corporations that enter into a merger, consolidation, purchase or acquisition of stock, or similar transaction, such shareholder is considered to be acting as a group with other shareholders in a corporation prior to the transaction giving rise to the change and not with respect to the ownership interest in the other corporation.

     2.5 Code . “Code” means the Internal Revenue Code of 1986, as amended from time to time.

     2.6 Company . “Company” means NiSource Inc., a Delaware corporation, or any successor thereto as provided in Section 10.11 herein.

     2.7 Committee . “Committee” means the Corporate Governance Committee of the Board.

     2.8 Director . “Director” means any individual who is a member of the Board of Directors of the Company.

     2.9 Disability . “Disability” means a condition that (a) causes a Director to be unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve months or (b) causes a Director to be eligible to receive Social Security disability payments.

     2.10 Employee . “Employee” means any full-time, nonunion, salaried employee. For purposes of the Plan, an individual whose only employment relationship with the Company is as a Director shall not be deemed to be an Employee.

     2.11 Fair Market Value . “Fair Market Value” means the closing price on the New York Stock Exchange Composite Transactions on the date of the grant, or on any other applicable date.

     2.12 Nonemployee Director . “Nonemployee Director” means a Director who is not currently an Employee of the Company or any subsidiary of the Company.

     2.13 Nonqualified Stock Option or NQSO . “Nonqualified Stock Option” or “NQSO” means an option to purchase Shares, granted under Article VII herein that does not constitute an Incentive Stock Option under Code Section 422 (or any successor Code Section).

     2.14 Option . “Option” means a Nonqualified Stock Option granted under the Plan.

     2.15 Participant . “Participant” means a Nonemployee Director of the Company who has a viable outstanding Award granted under the Plan.

     2.16 Period of Restriction . “Period of Restriction” means the period during which the transfer of Shares of Restricted Stock is limited in some way, and the Shares are subject to a substantial risk of forfeiture, as provided in Article VI herein.

     2.17 Restricted Stock . “Restricted Stock” means an Award granted to a Nonemployee Director pursuant to Article VI herein.

     2.18 Restricted Stock Unit . “Restricted Stock Unit” means an Award granted to a Nonemployee Director pursuant to Article VI herein.

     2.19 Shares . “Shares” means the common shares, $0.01 par value per share, of NiSource Inc.

ARTICLE III

ADMINISTRATION

     3.1 Committee . The Plan shall be administered by the Committee, subject to the restrictions set forth in the Plan.

     3.2 Administration by the Committee . The Committee shall have the full power, discretion and authority to interpret and administer the Plan in a manner that is consistent with the Plan’s provisions. However, except as otherwise set forth in Section 10.1, in no event shall the Committee have the power to determine Plan eligibility, or to determine the number, the value, the vesting period, or the timing of Awards to be made under the Plan (all such determinations are automatic pursuant to the provisions of the Plan). Notwithstanding the preceding sentence, the Committee shall have the authority to designate whether an upcoming grant of Awards shall consist of Restricted Stock, Nonqualified Stock Options or Restricted Stock Units.

     3.3 Decisions Binding . All determinations and decisions made by the Committee pursuant to the provisions of the Plan, and all related orders or resolutions of the Committee, shall be final, conclusive and binding on all persons, including the Company, its stockholders, employees, Participants, and their estates and beneficiaries.

ARTICLE IV

SHARES AND RESTRICTED STOCK UNITS SUBJECT TO THE PLAN

     4.1 Number of Shares and Restricted Stock Units . Subject to adjustment as provided in Section 4.3 herein, the total number of Shares available for grant as Awards under the Plan may not exceed an aggregate of 500,000.

     4.2 Lapsed Awards . If any Share of Restricted Stock, Option, or Restricted Stock Unit granted under the Plan terminates, expires or lapses for any reason, any such Share of Restricted Stock, any Share subject to purchase pursuant to such Option and any such Restricted Stock Unit again shall be available for grant under the Plan. Awards shall be subject to such terms and conditions, in addition to the terms and conditions set forth in the Plan, as the Committee shall determine.

     4.3 Adjustments in Authorized Shares and Restricted Stock Units .

     (a) Appropriate adjustments in the aggregate number of Shares and Restricted Stock Units issuable pursuant to the Plan, the number of Shares and Restricted Stock Units subject to each outstanding Award granted under the Plan and the Option price with respect to Options, shall be made to give effect to any increase or decrease in the number of issued Shares resulting from a subdivision or consolidation of shares, whether through recapitalization, stock split, reverse stock split, spin-off, spinout or other distribution of assets to stockholders, stock distributions or combinations of shares, payment of stock dividends, other increase or decrease in the number of such Shares outstanding effected without receipt of consideration by the Company, or any other occurrence for which the Committee determines an adjustment is appropriate.

     (b) In the event of any merger, consolidation or reorganization of the Company with any other corporation or corporations, or an acquisition by the Company of the stock or assets of any other corporation or corporations, there shall be substituted on an equitable basis, as determined by the Committee in its sole discretion, for each Share then subject to the Plan, and for each Share then subject to an Award granted under the Plan, the number and kind of shares of stock, other securities, cash or other property to which the holders of Shares of the Company are entitled pursuant to such transaction.

     (c) Without limiting the generality of the foregoing provisions of this section, any such adjustment shall be deemed to have prevented any dilution or enlargement of a Participant’s rights, if such Participant receives in any such adjustment rights that are substantially similar (after taking into account the fact that the Participant has not paid the applicable Option price) to the rights the Participant would have received had he or she exercised his or her outstanding Award and become a shareholder of the Company immediately prior to the event giving rise to such adjustment. Adjustments under this Section 4.3 shall be made by the Committee, whose decision as to the amount and timing of any such adjustment shall be conclusive and binding on all persons.

ARTICLE V

ELIGIBILITY AND PARTICIPATION

     5.1 Eligibility . Persons eligible to participate in the Plan are limited to Nonemployee Directors who are serving on the Board on the date of each grant under the Plan.

     5.2 Actual Participation . All eligible Nonemployee Directors shall receive grants of Restricted Stock, Options and Restricted Stock Units pursuant to the terms and provisions set forth in Articles VI and VII herein.

ARTICLE VI

GRANTS OF RESTRICTED STOCK AND RESTRICTED STOCK UNITS

     6.1 Initial Grant . Each person who was a Nonemployee Director on February 1, 1992 was then granted 250 Shares of Restricted Stock for each year of service as a Nonemployee Director of the Company or its predecessor (the number of years of service was determined as of the date of the first annual meeting of shareholders of the Company following February 1, 1992).

     &