EXHIBIT 10(e)



PEOPLES ENERGY CORPORATION
LONG-TERM INCENTIVE PLAN
FOR DIVERSIFIED BUSINESS UNITS

(Approved November 7, 2001, amended December 5, 2001 and December 4, 2002)

1. Introduction
2. Performance Awards
3. Award Opportunities. The minimum, target and maximum levels of annual award opportunities applicable to a Performance Award shall be determined by the Committee.
4. Performance Measures. The Performance Measures applicable to a Performance Award for each applicable Performance Period shall be determined by the Committee and shall be based upon Performance Measures established for the applicable Business Unit(s) and/or for the Company as a whole.
5. Performance Periods. A Performance Period shall be a period consisting of three (3) consecutive fiscal years of the Company, or such other period or periods as the Committee deems appropriate.
6. Cash Pay-Outs. Subject to Section 4.7(c) hereof, Performance Awards shall be settled in cash in such amounts as determined by the Committee and paid by the Business Unit that employs the Participant and to which the Performance Measures apply. The Committee's determination of the cash pay-out of a Performance Award shall be final, binding and conclusive with respect to all persons.
7. Awards in the Event of Certain Business Unit Dispositions
8. General
9. Change in Control of Company. Notwithstanding any provision in this Plan, in the event of a Change in Control of the Company, the Committee may, but shall not be required to, make such adjustments to outstanding Performance Awards hereunder as it deems appropriate, including, without limitation, causing the Performance Period applicable to any outstanding Performance Award to lapse and the Performance Award to be paid out either (i) based on actual satisfaction or attainment of the applicable Performance Measures at such time or (ii) as if the applicable Performance Measures were satisfied at the minimum, target or maximum level; provided, however, that, unless an accelerated pay-out of a Participant's Performance Awards has been made by the Committee in cash pursuant to this Section 4.7(a) or Section 4.7(b) or in the form of restricted stock or options to purchase common stock of Newco pursuant to Section 4.7(c), if the holder of an Award is involuntarily terminated (i) within twenty-four (24) months following a Change of Control for any reason other than Cause or (ii) within twelve (12) months following a Change in Control due to the closing of the Business Unit in which the holder is employed, the Performance Period applicable to any outstanding Performance Awards granted hereunder shall immediately lapse and the holder shall be entitled to receive as soon as administratively practicable thereafter a cash payment from the Company in an amount equal to the amount payable with respect to such Performance Award if the applicable Performance Measures were satisfied at the maximum level.

"Change in Control" shall mean any of the following events has occurred:

1. either (1) receipt by the Company of a report on Schedule 13D, or an amendment to such a report, filed with the Securities and Exchange Commission ("SEC") pursuant to Section 13(d) of the Exchange Act disclosing that any person (as such term is used in Section 13(d) of the Exchange Act) ("Person"), is the beneficial owner, directly or indirectly, of 20 percent or more of the outstanding stock of the Company, or (2) actual knowledge by the Company of facts, on the basis of which any Person is required to file such a report on Schedule 13D, or to make an amendment to such a report, with the SEC (or would be required to file such a report or amendment upon the lapse of the applicable period of time specified in Section 13 (d) of the Exchange Act) disclosing that such Person is the beneficial owner, directly or indirectly, of 20 percent or more of the outstanding stock of the Company;
2. purchase by any Person, other than the Company or a wholly-owned subsidiary of the Company, of shares pursuant to a tender or exchange offer to acquire any stock of the Company (or securities convertible into stock) for cash, securities or any other consideration provided that, after consummation of the offer, such Person is the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 20 percent or more of the outstanding stock of the Company (calculated as provided in paragraph (d) of Rule 13d-3 under the Exchange Act in the case of rights to acquire stock);
3. approval by the shareholders of the Company of (1) any consolidation or merger of the Company in which the Company is not the continuing or surviving corporation or pursuant to which shares of stock of the Company would be converted into cash, securities or other property, other than a consolidation or merger of the Company in which holders of its stock immediately prior to the consolidation or merger have substantially the same proportionate ownership of common stock of the surviving corporation immediately after the consolidation or merger as immediately before, or (2) any consolidation or merger in which the Company is the continuing or surviving corporation, but in which the common shareholders of the Company immediately prior to the consolidation or merger do not hold at least 90 percent of the outstanding common stock of the continuing or surviving corporation (except where such holders of common stock hold at least 90 percent of the common stock of the corporation which owns all of the common stock of the Company), or (3) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all the assets of the Company ("Transfer Transaction"), (except where (x) the Company owns all of the outstanding stock of the transferee entity or (y) the holders of the Company's common stock immediately prior to the Transfer Transaction own at least ninety 90 percent of the outstanding stock of the transferee entity, immediately after the Transfer Transaction), or (4) any consolidation or merger of the Company where, after the consolidation or merger, one Person owns 100 percent of the shares of stock of the Company (except where the holders of the Company's common stock immediately prior to such merger or consolidation own at least 90 percent of the outstanding stock of such Person immediately after such consolidation or merger); or
4. a change in the majority of the members of the Board within a 24-month period, unless the election or nomination for election by the Company's shareholders of each new director was approved by the vote of at least two-thirds of the directors then still in office who were in office at the beginning of the 24-month period.

1. Certain Sales or Closing of Business Units. Notwithstanding any provision in this Plan, in the event of a sale of 50 percent or more of the voting securities or assets of the Business Unit (other than an IPO) or the closing of a Business Unit by the Company because of a decision to discontinue funding or a change in the Company's business strategy, each outstanding Performance Award granted hereunder to employees of such Business Unit or with respect to the performance of such Business Unit shall be surrendered to the Company by the holder thereof, and each such Award shall be canceled immediately by the Company, and the holder shall receive, within a specified period of time from the occurrence of the Divestiture or closing of such Business Unit, a cash payment from the Company in an amount equal to the amount payable with respect to such Performance Award if the applicable Performance Measures for all then-pending Performance Periods were satisfied at the target level. In the event that a Business Unit is closed by the Company due to poor performance, each outstanding Performance Award granted hereunder to employees of such Business Unit or with respect to the performance of such Business Unit shall be surrendered to the Company by the holder thereof, and each such Award shall immediately be canceled by the Company, and the holder shall receive, within a specified period of time from the closing of such Business Unit, a cash payment in an amount equal to the amount payable with respect to such Performance Award based on the actual satisfaction or attainment of the Performance Measures at such time, but no more than the target level.
2. IPO of Business Units. Notwithstanding any provision of this Plan, in the event of an IPO of a Business Unit, each outstanding Performance Award granted hereunder to employees of such Business Unit or with respect to the performance of such Business Unit may, in the Committee's sole discretion and subject to compliance with all applicable securities laws, be required to be surrendered to the Company by the holder thereof upon notice from the Company and in such event each such Award shall be canceled immediately by the Company, and the holder shall receive within a specified period of time after the occurrence of the IPO, shares of restricted common stock in Newco or options to purchase shares of common stock of Newco, or a combination thereof, in such number as is equal in value (as determined by the Committee in its sole discretion) to the amount payable in cash with respect to the Performance Award if the applicable Performance Measures were satisfied at the target level.

4.8     No Right of Participation or Employment. No person shall have any right to participate in this Plan. Neither this Plan nor any Award made hereunder shall confer upon any person any right to continued employment by the Company or a Business Unit or affect in any manner the right of the Company or Business Unit to terminate the employment of any person at any time without liability hereunder.

4.9     Rights as Shareholder. No person shall have any rights as a shareholder of a Business Unit with respect to any shares of Common Stock or other equity security of a Business Unit which is subject to an Award hereunder unless and until such person becomes a shareholder of record with respect to such shares of Common Stock or equity security.

4.10     Governing Law; Venue. This Plan, each Award hereunder, and all determinations made and actions taken pursuant thereto, shall be governed by the laws of the State of Illinois and construed in accordance therewith without giving effect to principles of conflicts of laws. A PARTICIPANT'S PARTICIPATION IN THE PLAN OR ACCEPTANCE OF AN AWARD SHALL CONSTITUTE THE PARTICIPANT'S IRREVOCABLE CONSENT THAT ALL DISPUTES ARISING OUT OF OR RELATED TO THE PLAN OR ANY AWARDS SHALL BE RESOLVED EXCLUSIVELY BY THE STATE OR FEDERAL COURTS LOCATED IN CHICAGO, ILLINOIS, AND THAT THE PARTICIPANT IRREVOCABLY SUBMITS TO THE ORIGINAL, EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN CHICAGO, ILLINOIS WITH REGARD TO ANY CONTROVERSY IN ANY WAY RELATING TO THE PLAN OR ANY AWARDS.

4.11     Foreign Employees. Without amending this Plan, the Committee may grant Awards to eligible persons who are foreign nationals on such terms and conditions different from those specified in this Plan as may in the judgment of the Committee be necessary or desirable to foster and promote achievement of the purposes of this Plan and, in furtherance of such purposes the Committee may make such modifications, amendments, procedures, subplans and the like as may be necessary or advisable to comply with provisions of laws in other countries or jurisdictions in which the Company or the Business Units operate or have employees.