UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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:

NiSource Inc.

801 E. 86th Avenue — Merrillville, IN 46410 — (877) 647-5990

NOTICE OF ANNUAL MEETING

April 12, 20134, 2014

To the Holders of Common Stock of NiSource Inc.:

The annual meeting of the stockholders (the “Annual Meeting”) of NiSource Inc. (the “Company”) will be held at the InterContinentalCrowne Plaza Chicago O’Hare, 5300 N.5440 North River Road, Rosemont, IL 60018 on Tuesday, May 14, 2013,13, 2014, at 10:00 a.m., local time, for the following purposes:

All persons who were stockholders of record at the close of business on March 19, 201318, 2014 will be entitled to vote at the Annual Meeting.

Please act promptly to vote your shares with respect to the proposals described above. You may vote your shares by marking, signing, dating and mailing the enclosed proxy card. You may also vote by telephone or through the Internet by following the instructions set forth on the proxy card. If you attend the Annual Meeting, you may be able to vote your shares in person, even if you have previously submitted a proxy. See the section “Voting in Person” for specific instructions on voting your shares.

If you plan to attend the Annual Meeting, please so indicate in the space provided on the proxy card or respond when prompted on the telephone or through the Internet.

PLEASE VOTE YOUR SHARES BY TELEPHONE, THROUGH THE INTERNET OR BY PROMPTLY

MARKING, DATING, SIGNING AND RETURNING THE ENCLOSED PROXY CARD.

Robert E. Smith

Corporate Secretary

Important Notice Regarding the Availability of Proxy Materials

For the Annual Meeting of Stockholders to be Held on May 14, 201313, 2014

The Proxy Statement and 20122013 Annual Report to Stockholders

are Available athttp://ir.nisource.com/annuals.cfm

TABLE OF CONTENTS

PROXY STATEMENT

The accompanying proxy is solicited on behalf of the Board of Directors of NiSource Inc. (the “Board”). for the 2014 annual meeting of the stockholders (the “Annual Meeting”) to be held at the Crowne Plaza Chicago O’Hare, 5440 North River Road, Rosemont, IL 60018 on Tuesday, May 13, 2014 at 10:00 a.m., local time. The common stock, $.01 par value per share, of the Company represented by the proxy will be voted as directed. If you return a signed proxy card without indicating how you want to vote your shares, the shares represented by the accompanying proxy will be voted as recommended by the Board “FOR” all of the nominees for director; “FOR” advisory approval of the compensation of the Company’s Named Executive Officers; “FOR” the ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accountants for 2013; “FOR” advisory approval of the compensation of the Company’s Named Executive Officers;2014; and “AGAINST” the stockholder proposal regarding action by written consent and “AGAINST” the stockholder proposal to establish a policy to end benchmarking CEO compensation.reports on political contributions.

This Proxy Statement and the accompanying proxy card are first being sent to stockholders on April 12, 2013.4, 2014. The Company will bear the expense of this mail solicitation which may be supplemented by telephone, facsimile, e-mail and personal solicitation by officers, employees, and our agents. To aid in the solicitation of proxies, we have retained Phoenix Advisory Partners for a fee of approximately $9,500, plus reimbursement of expenses. We will also request brokerage houses and other nominees and fiduciaries to forward proxy materials, at our expense, to the beneficial owners of stock held on the record date.

We use the terms “NiSource,” the “Company,” “we,” “our” and “us” in this proxy statement to refer to NiSource Inc.

Who May Vote

Holders of shares of common stock as of the close of business on March 19, 201318, 2014 are entitled to notice of and to vote at the Annual Meeting. As of March 19, 2013, 311,794,90118, 2014, 314,758,575 shares of common stock were issued and outstanding. Each share of common stock outstanding on that date is entitled to one vote on each matter presented at the Annual Meeting.

Voting Your Proxy

If you are a “stockholder of record” (that is, if your shares of common stock are registered directly in your name on the Company’s records), you may vote your shares by proxy using any of the following methods:

All votes must be received by the proxy tabulator by 11:59 p.m. Eastern Time on May 13, 2013.12, 2014.

If your shares are held in a brokerage account or by a bank or other stockholder of record (herein referred to as a “Broker”), you are considered a “beneficial owner” of shares held in “street name.” As a beneficial owner, you will receive proxy materials and voting instructions from the stockholder of record that holds your shares. You must follow the voting instructions in order to have your shares of common stock voted.

Discretionary Voting by Brokers, Banks and Other Stockholders of Record

If your shares are held in street name and you do not provide the Broker with instructions as to how to vote such shares, your Broker will only be able to vote your shares at theirits discretion on certain “routine” matters as permitted by New York Stock Exchange (“NYSE”) rules. At this meeting, Brokers will have discretionary authority to vote your shares only with regard to the ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accountants for 2013.2014. We do not believe that Brokers will have discretionary authority to vote your shares with respect to the election of directors, the advisory approval of executive compensation or the stockholder proposals on action by written consent or a policy to end benchmarking CEO compensation.proposal. Therefore, it is important that you instruct your Broker or other nominee how to vote your shares.

If you hold your shares in the Company’s 401(k) Plan (“401(k) Plan”) administered by Fidelity Management Trust Company (“Fidelity”), you should instruct Fidelity how to vote your shares by one of the methods discussed in this Proxy Statement. If you do not instruct the 401(k) Plan how to vote your shares by completing

and returning the proxy card or by using the telephone or Internet, or if you sign the proxy card with no further instructions as to how to vote your shares, the 401(k) Plan provides for Fidelity to vote your shares in the same proportion as the shares for which it receives instructions from all other participants, to the extent permitted under applicable law.

Voting in Person

You also may come to the Annual Meeting and vote your shares in person by obtaining and submitting a ballot that will be provided at the meeting. However, if your shares are held in street name by a Broker, then, in order to be able to vote at the meeting, you must obtain an executed proxy from the Broker, indicating that you were the beneficial owner of the shares on March 19, 2013,18, 2014, the record date for voting, and that the Broker is giving you the proxy to vote the shares.

If your shares are held in the 401(k) Plan, you will not be able to vote your shares at the meeting. In order to vote your shares you must provide instructions to Fidelity either by returning your proxy card or by voting via the telephone or internet no later than 11:59 p.m. Eastern Time on May 13, 2013.12, 2014.

Votes cast in person or represented by proxy at the meeting will be tabulated by the inspectors of election.

If you plan to attend the Annual Meeting, please so indicate when you vote, so that we may send you an admission ticket and make the necessary arrangements. Stockholders who plan to attend the meeting must present picture identification along with an admission ticket or evidence of beneficial ownership.

Revoking Your Proxy

You may revoke your proxy at any time before a vote is taken or the authority granted is otherwise exercised. To revoke a proxy, you may send to the Company’s Corporate Secretary a letter indicating that you want to revoke your proxy or you can supersede your initial proxy by submitting a duly executed proxy bearing a later date, voting by telephone or through the Internet on a later date, or attending the meeting and voting in person. Attending the Annual Meeting will not in and of itself revoke a proxy.

Quorum for the Meeting

A quorum of stockholders is necessary to take action at the Annual Meeting. A majority of the outstanding shares of common stock, present in person or represented by proxy, will constitute a quorum at the Annual Meeting. The inspectors of election appointed for the Annual Meeting will determine whether or not a quorum is present. The inspectors of election will treat abstentions and broker non-votes as present and entitled to vote for purposes of determining the presence of a quorum. A broker non-vote occurs when a Broker holding shares for a beneficial owner does not have discretionary authority to vote the shares and has not received instructions from the beneficial owner as to how the beneficial owner would like the shares to be voted.

PROPOSAL I1 — ELECTION OF DIRECTORS

At the recommendation of the Corporate Governance Committee, the Board has nominated the persons listed below to serve as directors, each for a one-year term, beginning at the Annual Meeting on May 14, 201313, 2014 and running until the 20142015 Annual Meeting. The nominees include ten independent directors, as defined in the applicable rules of the NYSE, and the President and Chief Executive Officer of the Company. The nominees do not include Ian M. Rolland, who is currently serving as Chairman and will retire from the Board at the Annual Meeting when his current term ends. The Board has determined that it will not fill the vacancy of Mr. Rolland; therefore, upon Mr. Rolland’s retirement, the Board will be reduced by one to eleven directors. The Board does not anticipate that any of the nominees will be unable to serve, but if any nominee is unable to serve, the proxies will be voted in accordance with the judgment of the person or persons voting the proxies.

All of the nominees currently serve on the Board.

The following chart gives information about all nominees (each of whom has consented to being named in the proxy statement and to serving if elected). The dates shown for service as a director include service as a director of the Company and its corporate predecessor.

Vote Required

In order to be elected, each nominee must receive more votes cast in favor of his or her election than against election. Abstentions and broker non-votes will not be voted with respect to the election of directors and therefore will have no effect on the vote.

THE BOARD RECOMMENDS THAT YOU VOTE “FOR” THE ELECTION OF EACH OF THE NOMINEES LISTED BELOW.

Name, Age and Principal Occupations for Past Five Years and Present Directorships Held		Has Been a Director Since
Sigmund L. Cornelius, 5859		2011
Since April 1, 2014, Mr. Cornelius has been President and Chief Operating Officer of Freeport LNG, LLC. From October 2008 until his retirement into January 2011, Mr. Cornelius served as Senior Vice President, Finance and Chief Financial Officer of ConocoPhillips, Houston, Texas, an integrated energy company. During his 30-year tenure at ConocoPhillips, Mr. Cornelius served in various positions, including Senior Vice President, Planning, Strategy and Corporate Affairs from September 2007 to October 2008; Regional President, Exploration & Production-Lower 48 from 2006 to September 2007; and President, Global Gas from 2004 to 2006. Mr. Cornelius served on the board of DCP Midstream L.P. from 2007 to 2008 and is also a director of USEC, Inc., Carbo Ceramics Inc., Western Refining, Inc. and Parallel Energy Inc.
Mr. Cornelius has significant experience in the oil and natural gas industry, which enables him to provide valuable insight on issues impacting our pipeline business. He also has significant experience in exploration, production as well as the midstream business, which is valuable to us as we expand our presence in the Utica and Marcellus Shale gas plays. In addition, as the former Chief Financial Officer of a public company, he has extensive experience and skills in the areas of corporate finance, accounting, strategic planning and risk oversight.
Michael E. Jesanis, 5657		2008
Since November 2007,July 2013, Mr. Jesanis has been a co-founder and Managing Director of HotZero, LLC, a firm formed to develop hot water district energy systems in New Hampshire. Mr. Jesanis has also, since November 2007, been a principal with Serrafix, Boston, Massachusetts, a firm providing energy efficiency consulting and implementation services, principally to municipalities. Mr. Jesanis also serves as an advisor to several startups in energy related fields. From July 2004 through December 2006, Mr. Jesanis was President and Chief Executive Officer of National Grid USA, a natural gas and electric utility, and a subsidiary of National Grid plc, of which Mr. Jesanis was also an Executive Director. Prior to that, Mr. Jesanis was Chief Operating Officer of National Grid USA from January 2001 to July 2004. Mr. Jesanis also is a director of Ameresco, Inc.
By virtue of his former positions as President and Chief Executive Officer, Chief Operating Officer and, prior thereto, Chief Financial Officer of a major electric and gas utility holding company, as well as his current role with an energy efficiency consulting firm, Mr. Jesanis has extraordinarily broad and deep experience with regulated utilities. He has strong financial acumen and extensive managerial experience, having led modernization efforts in the areas of operating infrastructure improvements, customer service enhancements and management-team development. Mr. Jesanis also demonstrates a commitment to education as the former chair of the board of a college and a current trustee (and past chair of the audit committee) of a university. As a result of his former senior managerial roles and his non-profit board service, Mr. Jesanis also has particular expertise with board governance issues.

Name, Age and Principal Occupations for Past Five Years and Present Directorships Held		Has Been a Director Since
Marty R. Kittrell, 5657		2007
In February 2011, Mr. Kittrell retired as Executive Vice President & Chief Financial Officer of Dresser, Inc., (“Dresser”), Addison, Texas, after serving in that capacity since December 2007. Dresser, a worldwide leader in providing highly engineered products for the global energy industry, was acquired by General Electric in February 2011. Prior to joining Dresser, Mr. Kittrell was Executive Vice President and Chief Financial Officer of Andrew Corporation from October 2003 to December 2007. Mr. Kittrell is also a director of On Assignment, Inc.
Mr. Kittrell brings to the Board over 25 years of experience as a Chief Financial Officer. He has served in the role of Chief Financial Officer at several public companies. As a result of this experience, he has significant expertise with financial reporting issues facing the Company, including Securities and Exchange Commission reporting, and Sarbanes-Oxley internal control design and implementation. His recent position with a company that supplies infrastructure products to the energy industry gives Mr. Kittrell a particular familiarity with the issues facing the Company’s gas transmission and storage and gas distribution businesses. Mr. Kittrell also has extensive experience with mergers and acquisitions and capital markets transactions. He formerly practiced accounting with a national accounting firm and is an active member of the American Institute of CPAs, the National Association of Corporate Directors, and Financial Executives International. Mr. Kittrell also shows a commitment to education through his service on the board of trustees of a university.
W. Lee Nutter, 6970		2007
Prior to his retirement in 2007, Mr. Nutter was Chairman, President and Chief Executive Officer of Rayonier, Inc., Jacksonville, Florida, a leading supplier of high performance specialty cellulose fibers and owner of timberlands and other higher value land holdings. Mr. Nutter was a director of Rayonier, Inc. from 1996 to 2009. He is also a director of Republic Services Inc. and the non-executive Chairman of J.M. Huber Corporation. He is also a member of the Advisory Board at the University of Washington Foster School of Business.
Mr. Nutter’s former positions as Chairman and Chief Executive Officer of a forest products company, and his current positions as director of one company engaged in waste management and another involved in the forest products and energy industries, give him a particular familiarity with the issues involved in managing natural resources. These issues include compliance with environmental laws and exercising responsible environmental stewardship. Mr. Nutter also has an extensive background and familiarity in human resource and compensation issues, which complements well his service as chair of the Company’s Officer Nomination and Compensation Committee. In addition, as a former Chief Executive Officer, Mr. Nutter understands how to address the complex issues facing major corporations.

Name, Age and Principal Occupations for Past Five Years and Present Directorships Held		Has Been a Director Since
Deborah S. Parker, 6061		2007
Ms. Parker joined Alstom Power, a business segment of Alstom, in April 2011 and is currently serving as Senior Vice President, Quality and Environmental, Health and Safety. Alstom Power is a global leader in power generation located in Zurich, Switzerland. From April 2008 until April 2011, Ms. Parker was President and Chief Executive Officer of International Business Solutions, Inc. (“IBS”), Washington, D.C., a provider of strategic planning and consulting services to profit and not-for-profit organizations. Before joining IBS, Ms. Parker was Executive Vice President and Chief Operations Officer of the National Urban League from July 2007 through April 2008. Prior thereto, Ms. Parker served in numerous operating positions, including Vice President of Global Quality at Ford Motor Company. During her tenure at Ford, Ms. Parker also served as Chief Executive Officer and Group Managing Director at Ford Motor Company of Southern Africa (Pty) Ltd. from September 2001 to December 2004.
Ms. Parker brings a unique combination of community development and industrial management experience to the Board. As a Senior Vice President of quality, environmental, health and safety of a global power generation firm, she brings knowledge and understanding of operations, health and safety issues that are valuable to us as we execute on our commitment to increase our investment in environmental projects and focus on safety. As a former Chief Executive Officer of a consulting firm and Chief Operating Officer of a national civil rights organization dedicated to economic empowerment of historically underserved urban communities, Ms. Parker brings expertise and understanding with respect to the social and economic issues confronting the Company and the communities it serves. As a result of her 23-year career at a global manufacturing company, Ms. Parker has extensive experience managing industrial operations, including turning around several struggling business units, finding innovative solutions to management and union issues, implementing quality control initiatives and rationalizing manufacturing and inventory. This experience positions her well to provide valuable insights on the Company’s operations and processes, as well as on social issues confronting the Company.
Robert C. Skaggs, Jr., 5859		2005
Chief Executive Officer of the Company since July 2005. President of the Company since October 2004. Prior thereto, Mr. Skaggs served as Executive Vice President, Regulated Revenue from October 2003 to October 2004; President of Columbia Gas of Ohio, Inc. from February 1997 to October 2003; President of Columbia Gas of Kentucky, Inc. from January 1997 to October 2003; President of Bay State Gas Company and Northern Utilities from November 2000 to October 2003; and President of Columbia Gas of Virginia, Inc., Columbia Gas of Maryland, Inc. and Columbia Gas of Pennsylvania, Inc. from December 2001 to October 2003.
The Board believes it is important that the Company’s Chief Executive Officer serve on the Board. Mr. Skaggs has a unique understanding of the challenges and issues facing the Company. During his nearly 3132 years with the Company, he has served in a variety of positions across the organization, including the legal and finance departments, President of a number of our gas distribution subsidiaries, and Executive Vice President, Regulated Revenue, where he was responsible for developing regulatory strategies and leading external relations across all of our energy distribution markets, as well as our interstate pipeline system. He also led regulated commercial activities, including large customer and marketer relations, energy supply services, as well as federal governmental relations. This wide and deep experience provides an incomparable knowledge of the Company’s operations, our markets and our people. Over the course of his career, Mr. Skaggs has been involved in a wide array of community-based organizations as well as a number of industry organizations, further providing him with a valuable perspective on the communities the Company serves and the issues facing our industry. He served as Chairman of the American Gas Association in 2010.

Name, Age and Principal Occupations for Past Five Years and Present Directorships Held		Has Been a Director Since
Teresa A. Taylor, 4950		2012
Ms. Taylor is currently Chief Executive Officer of Blue Valley Advisors, LLC. Ms. Taylor served as Chief Operating Officer of Qwest Communications, Inc., (“Qwest”), Denver, Colorado, from August 2009 to April 2011. Prior thereto, she was Executive Vice President, Business Markets Group from January 2008 to April 2009 and served as Executive Vice President and Chief Administrative Officer from December 2005 to January 2008. Ms. Taylor served in various positions with Qwest and the former US West since 1987. Ms. Taylor also is a director of T-Mobile USA, Inc. and First Interstate BancSystem, Inc.
In her position as Chief Operating Officer, Ms. Taylor was responsible for the daily operations of a publicly traded telecommunications company. In this role, she led a senior management team responsible for field support, technical development, sales, marketing, customer support and information technology systems. During her 24-year tenure with Qwest and US West, she held various leadership positions responsible for strategic planning and execution, sales, marketing, product development, human resources, corporate communications and social responsibility. Ms. Taylor is keenly aware of the technical and managerial skills necessary to operate a customer service company in a complex regulatory and competitive business environment. This experience will provide valuable insights to the Company as it operates in multiple regulatory environments and develops products and customer service programs to meet the expectations of our customers.
Richard L. Thompson, 7374		2004
Independent Chairman of the Board since May 2013. Prior to his retirement in 2004, Mr. Thompson was Group President, Caterpillar Inc., Peoria, Illinois, a leading manufacturer of construction and mining equipment, diesel and natural gas engines and industrial gas turbines. Mr. Thompson also is a director of Gardner Denver, Inc. and lead director of Lennox International, Inc.
In his prior role as Group President of a large, publicly traded manufacturing company, Mr. Thompson had responsibility for its gas turbine and reciprocating engine business, as well as research and development activities. By virtue of this and prior positions, and his current directorships at two other companies serving the energy and utility industries, Mr. Thompson possesses significant experience in energy issues generally and gas turbine electric power generation and natural gas pipeline compression in particular. He is a graduate electrical engineer with experience in electrical transmission system design and generation system planning. This experience provides Mr. Thompson a valuable understanding of technical issues faced by the Company.

Name, Age and Principal Occupations for Past Five Years and Present Directorships Held		Has Been a Director Since
Carolyn Y. Woo, 5859		1998
Since January 2012, Dr. Woo has been President and Chief Executive Officer of Catholic Relief Services, the international humanitarian agency of the Catholic community in the United States. Prior thereto, Dr. Woo was Martin J. Gillen Dean and Ray and Milann Siegfried Professor of Entrepreneurial Studies, Mendoza College of Business, University of Notre Dame, Notre Dame, Indiana. Dr. Woo is also a director of AON Corporation and was a director of Circuit City, Inc. until 2009.
Dr. Woo’s current position as President and Chief Executive Officer of an international organization provides her with knowledge and experience in managing a large organization. Her experience as the dean of a major business school and her experience as a professor of entrepreneurship provided her a deep understanding of business principles and extensive expertise with management and strategic planning issues. Through her current and previous service on the boards of directors, audit committees and compensation committees of a number of public companies, including a global reinsurance and risk management consulting company, a pharmaceutical distribution company, an international automotive manufacturer, a financial institution and a major electronics retailer, Dr. Woo has developed an excellent understanding of corporate governance, internal control, financial and strategic analysis and risk management issues. Dr. Woo is a leader in the areas of corporate social responsibility and sustainability, which adds an important perspective to the Company. She is also a current and past board member of several non-profit organizations, including an international relief organization, a global business school accreditation organization, leadership development organizations and an educational organization. This commitment to social and educational organizations provides Dr. Woo with an additional important perspective on the various community and social issues confronting the Company in the various communities that the Company serves.

CORPORATE GOVERNANCE

Director Independence

Under the NiSource Corporate Governance Guidelines, a substantial majority of our Board must be comprised of “independent directors.” In order to assist the Board in making its determination of director independence, the Board has adopted categorical standards of independence consistent with the standards contained in Section 303A.02(b) of the NYSE Corporate Governance Listing Standards. The Board also has adopted an additional independence standard providing that a director who is an executive officer of a company that has made payments to, or received payments from the Company for property or services within the last three years in excess of 1% of such other company’s consolidated gross revenues is not independent. These categorical standards of independence are listed in the Company’s Corporate Governance Guidelines, a copy of which can be found on our website athttp://ir.nisource.com/governance.cfm.

The Board has affirmatively determined that, with the exception of Mr. Skaggs, all of the members of the Board (except Mr. Skaggs) and all nominees (except Mr. Skaggs) are “independent directors” as defined in Section 303A.02(b) of the NYSE Listing Standards and meet the standardsadditional standard for independence set by the Board.

Policies and Procedures with Respect to Transactions with Related Persons

We have established policies and procedures with respect to the review, approval and ratification of any transactions with related persons as set forth in the Audit Committee Charter and the Code of Business Conduct.

Under its Charter, the Audit Committee is charged with the review of reports and disclosures of insider and affiliated party transactions. Under the Code of Business Conduct, the following situations must be reviewed if they involve a direct or indirect interest of any director, executive officer or employee (including immediate family members):

Related party transactions requiring review under the Code of Business Conduct are annually reviewed and ratified by the Audit Committee. Directors, individuals subject to Section 16 of the Securities Exchange Act of 1934 (Section 16 Officers) and senior executive officers are expected to raise any potential transactions involving a conflict of interest that relates to them with the Audit Committee so that they may be reviewed in a prompt manner.

Executive Sessions of Non-Management Directors

To promote open discussion among the non-management directors, the Board schedules regular executive sessions at meetings of the Board and each of its Committees. All non-management directors are also members of the Corporate Governance Committee. The non-management members met separately from management five times in 2012. Mr. Ian M. Rolland,2013 in sessions at which the independent Chairman of the Board served as lead, or presiding, director at the executive sessions of the non-management directors.presided. All of the non-management members are “independent directors.”

Communications with the Board and Non-Management Directors

Stockholders and other interested persons may communicate any concerns they may have regarding the Company as follows:

NiSource Inc.

Attention: [Board of Directors]/[Board Member]/[Non-management Directors]/[Lead Director]Chairman of the Board]

c/o Corporate Secretary

801 East 86th Avenue

Merrillville, Indiana 46410

NiSource Inc.

Vice President, Ethics and Compliance and Deputy General Counsel

801 East 86th Avenue

Merrillville, Indiana 46410

Code of Business Conduct

The Company has adopted a Code of Business Conduct (the “Code”) to promote (i) ethical behavior including the ethical handling of conflicts of interest, (ii) full, fair, accurate, timely and understandable financial disclosure, (iii) compliance with applicable laws, rules and regulations, (iv) accountability for adherence to the Code and (v) prompt internal reporting of violations of the Code. The Code satisfies applicable Securities and Exchange Commission (“SEC”) and NYSE requirements and applies to all directors, officers (including our principal executive officer, principal financial officer, principal accounting officer and controller) as well as employees of the Company and its affiliates. A copy of the Code is available on our website athttp://ir.nisource.com/governance.cfmand will be provided to any stockholder who requests it in writing from the Company’s Corporate Secretary.

Any waiver of the Code for any director, Section 16 Officer or senior executive may be made only by the Audit Committee of the Board and must be promptly disclosed to the extent and in the manner required by the SEC or the NYSE and posted on the Company’s website. No waivers have been granted under the Code.

Corporate Governance Guidelines

The Corporate Governance Committee is responsible for annually reviewing and reassessing the Corporate Governance Guidelines and will submit any recommended changes to the Board for its approval. A copy of the Corporate Governance Guidelines can be found on our website athttp://ir.nisource.com/governance.cfm and will be provided to any stockholder who requests it in writing from the Company’s Corporate Secretary.

Board Leadership Structure and Risk Oversight

The Company’s Corporate Governance Guidelines state that the Company should remain free to configure leadership of the Board in the way that best serves the Company’s interests at the time and, accordingly, the Board has no fixed policy with respect to combining or separating the offices of Chairman and CEO. If the Chairman is not an independent director, the Board will choose a lead director to serve as chair of the Corporate Governance Committee and as the presiding director for purposes of the NYSE rules.

Since late 2006, the offices of Chairman and CEO of the Company have been held by different individuals, with the Chairman being an independent director. In deciding to separate the offices, the Board believed that having a director with a long tenure serve as Chairman would help ensure continuity and stability. The Board believes that the independent Chairman arrangement continues to serve the Company well.

The Board takes an active role in monitoring and assessing the Company’s risks, which include risks associated with operations, credit, energy supply, financing, capital investments, and capital investments.compensation policies and practices. The Board administers its oversight function through utilization of its various committees, as well as through a Risk Management Committee, consisting of members of the Company’s senior management, which is responsible for the risk management process. Senior management provides an annual report on our risks to the Board. The Audit Committee discusses with management and the independent auditor the effect of regulatory and accounting initiatives on the Company’s financial statements and is responsible for overseeing the risk management program generally. The Audit Committee receives regular updates on the activities of the Risk Management Committee and any significant policy breach, if one were to occur. In addition, the Finance Committee, Officer Nomination and Compensation (“ONC”) Committee and the Environmental, Safety and Sustainability (“ESS”) Committee are each charged with overseeing the risks associated with their respective areas of responsibility. The Audit Committee receives regular updates on the activities of the Risk Management Committee and any significant policy breach, if one were to occur.

Meetings and Committees of the Board

The Board met five times during 2012.2013. Each director attended at least 81%80% of the total number of the Company’s Board meetings and the meetings of the committees of which he or she was a member. Pursuant to the Company’s Corporate Governance Guidelines, all directors are expected to attend the Annual Meeting. All incumbent directors attended the 20122013 Annual Meeting of Stockholders with the exception of Dr. Woo.Ms. Deborah S. Parker.

The Board has established five standing committees to assist the Board in carrying out its duties: the Audit Committee;Committee, the Corporate Governance Committee;Committee, the ESS Committee;Committee, the Finance Committee;Committee, and the ONC Committee. The Board also appointed two special committees, the Pricing Committee and the Search Committee, in carrying out its duties in 2012. The Board evaluates the structure and membership of its committees on an annual basis and appoints the independent members of the Board to serve on the committees and elects committee chairs following the Annual Meeting of Stockholders. The following tables show the composition of each Board committee before and after the 20122013 Annual Meeting. Mr. Skaggs does not serve on any committee but is invited to attend the various committee meetings. Mr. Thompson, who was elected Chairman of the Board in May 2013, also serves as the Chair of the Corporate Governance Committee and is invited to attend all meetings of each of the standing committees.

Board Committee Composition — May 10, 201115, 2012 through May 15, 2012

Board Committee Composition — Beginning May 15, 20122013

Board Committee

The Audit Committee met ten times in 2012. Among other things, the Audit Committee is responsible for monitoring: Composition — Beginning May 15, 2013

The charter for each of the Audit, CommitteeCorporate Governance, ESS, Finance and ONC Committees can be found on our website athttp://ir.nisource.com/governance.cfmand will be provided to any stockholder who requests it in writing from the Company’s Corporate Secretary.

Audit Committee

The Audit Committee met eight times in 2013. Among other things, the Audit Committee has the sole authority to appoint, retain or replace the independent auditors and is responsible for overseeing:

The Board has determined that all of the members of the Audit Committee are independent as defined under the applicable NYSE and SEC rules, including the additional independence standard for audit committee members, and meet the additional independence standard set forth in the Corporate Governance Guidelines. The Audit Committee has reviewed and approved the independent registered public accountants, both for 20122013 and 2013,2014, and the fees relating to audit services and other services performed by them.

For more information regarding the Audit Committee, please see “Audit Committee Report” below.

Corporate Governance Committee

The Corporate Governance Committee met fivesix times in 2012.2013. The Committee is responsible for:

Pursuant to the Corporate Governance Guidelines, the Committee, with the assistance of the ONC Committee and its independent compensation consultant, reviews the amount and composition of director compensation from time to time and makes recommendations to the Board when it concludes changes are needed. The Committee is also responsible for evaluating the performance of the CEO and his executive direct reports. The Committee reviews and approves the Company’s goals and objectives relevant to the CEO and his executive direct reports and evaluates their performance in light of those goals and objectives and after receiving input from the Board. The Chair of the Committee reports the Committee’s findings to the ONC Committee, which uses these findings to set the compensation of the CEO and his executive direct reports.

The Committee identifies and screens candidates for director and makes its recommendations for director to the Board as a whole. The Committee has the authority to retain a search firm to help it identify director candidates to the extent it deems necessary or appropriate. The Committee appointed a sub-committee of directors (the “Search Committee”) to assist with the evaluation of the candidates identified by Russell Reynolds Associates Inc., a third party search firm engaged by the Committee, in conjunction with identification of candidates for election in 2012. During 2012, Messrs. Jesanis, Kittrell and Rolland and Ms. Parker served for a portion of the year on the Search Committee which met two times during 2012. The Search Committee did not meet to consider any candidates for election in 2013.

In considering candidates for director, the Committee considers the nature of the expertise and experience required for the performance of the duties of a director of a company engaged in our businesses, as well as each candidate’s relevant business, academic and industry experience, professional background, age, current employment, community service, other board service and other board service.factors. Pursuant to the Corporate Governance Guidelines, the Committee also considers the racial, ethnic and gender diversity of the Board. The Committee seeks to identify and recommend candidates with a reputation for and record of integrity and good business judgment who: have experience in positions with a high degree of responsibility and are leaders in the organizations with which they are affiliated, are effective in working in complex collegial settings, are free from conflicts of interest that could interfere with a director’s duties to the Company and its stockholders and are willing and able to make the necessary commitment of time and attention required for effective service on the Board. The Committee also takes into account the candidate’s level of financial literacy. The Committee monitors the mix of skills and experience of the directors in order to assess whether the Board has the necessary tools to perform its oversight function effectively. The Committee also assesses the diversity of the Board as part of its annual self-assessment process. The Committee will consider nominees for directors recommended by stockholders and will use the same criteria to evaluate candidates proposed by stockholders.

The Board has determined that all of the members of the Committee are independent as defined under the applicable NYSE rules and meet the additional independence standard set forth in the Corporate Governance Guidelines.

The charter for the Committee can be found on our website athttp://ir.nisource.com/governance.cfmand will be provided by the Company to any stockholder who requests it in writing from the Company’s Corporate Secretary.

For information on how to nominate a person for election as a director at the 20142015 Annual Meeting, please see the discussion under the heading “Stockholder Proposals and Nominations for 20142015 Annual Meeting.”

Environmental, Safety and& Sustainability Committee

The ESS Committee met sixfive times during 2012. This2013. The Committee reviewsassists the results ofBoard in overseeing the programs, performance and risks relative to environmental, compliance ofsafety and sustainability matters. In this regard, the Company and considers environmental public policy issues as well as health and safety issues affecting the Company. The charter for the Committee can be found on our website athttp://ir.nisource.com/governance.cfmand will be provided to any stockholder who requests it in writing fromCommittee:

Finance Committee

The Finance Committee met fivesix times during 2012.2013. This Committee is responsible for overseeing and monitoring monitoring:

Officer Nomination and Compensation Committee

The ONC Committee met sixseven times in 2012.2013. The charter for the Committee can be found on our website athttp://ir.nisource.com/governance.cfmand will be provided to any stockholder who requests it in writing from the Company’s Corporate Secretary. Pursuant to the charter, this Committee advises the Board with respect to nomination, evaluation, compensation and benefits of the Company’s executives. In that regard, the Committee:

The ONC Committee reviews the compensation of our CEO and his executive direct reports each year. In determiningapproving the compensation of the CEO and his executive direct reports, the Committee takes into consideration the Corporate Governance Committee’s evaluation of each of their individual performance. When considering changes in compensation for the Named Executive Officers, the Committee also carefully considers input from the Senior Vice President, Human Resources and Exequity LLP, an executive compensation consulting firm that the Committee engaged to advise it with respect to executive compensation design, comparative compensation practices and compensation matters relating to the Board. Exequity LLP provides no other services to the Company. The ONC Committee has determined Exequity LLP is independent under the NYSE rules.

All of the directors serving on the Committee are (i) independent as defined under the applicable NYSE and SEC rules and meet the additional independence standard set forth in the Corporate Governance Guidelines and the additional NYSE standard for compensation committees, that takes effect later this year, (ii) “non-employee directors” as defined under Rule 16b-3 of the Securities Exchange Act of 1934 (“Exchange Act”), and (iii) “outside directors” as defined by Section 162(m) of the Internal Revenue Code.

Pricing Committee

The Pricing Committee was appointed as a special committee in 2012 to review and approve the issuance of debt in 2012. Messrs. Kittrell, Rolland and Thompson served on this Committee which met one time in 2012.

Compensation Committee Interlocks and Insider Participation

During the fiscal year ended December 31, 2013, Messrs. Abdoo, Cornelius, Jesanis and Nutter, Ms. Taylor and Dr. Woo served on the ONC Committee. There arewere no compensation committee interlocks.interlocks or insider participation.

DIRECTOR COMPENSATION

Director Compensation.    We use a combination of cash and stock-based awards to attract and retain highly qualified candidates to serve on the Board. Only non-employee directors receive director compensation. Therefore, since Mr. Skaggs is an employee of the Company, he does not receive compensation for his service as a Board member.

We currently pay each director who is not an employee of the Company an annual retainer of $190,000, consisting of $82,500 in cash and an award of restricted stock units valued at $107,500 at the time of the award. The cash retainer is paid in arrears in four equal installments at the end of each calendar quarter.

The restricted stock units are awarded annually and the number of restricted stock units is determined by dividing the value of the grant by the closing price of the Company’s common stock on the date of grant. Restricted stock units are granted to directors under the NiSource Inc. 2010 Omnibus Incentive Plan (“Omnibus Plan”), which was approved by the stockholders in May 2010.

The Board also provides additional compensation to those directors who take on additional responsibilities and serve as the chair of a Board committee. The annual committee chair fees are: Audit Committee $20,000; ONC Committee $20,000; Finance Committeeare $20,000 and ESS Committee $15,000.for each of the standing committees. The Chairman of the Board who also serves as the chair of the Corporate Governance Committee, receives additional annual compensation of $135,000 per year. Fees paid to the Chairman of the Board and the committee chairs$160,000. These fees are paid in cash in arrears in four equal installments, in arrears. Feesand are prorated based on when Board and committee service begins or ends.in the case of partial year service.

All Other Compensation.    The only other compensation reportable under the column “All Other Compensation” in the Director Compensation table below is matching contributions made by the NiSource Charitable Foundation.

Omnibus Plan.Plan.    The Omnibus Plan permits equity awards to be made to non-employee directors in the form of incentive and non-qualified stock options, stock appreciation rights, restricted stock and restricted stock units, performance shares, performance units, cash-based awards and other stock-based awards. Terms and conditions of awards to non-employee directors are determined by the Board prior to grant. Since May 10, 2010, awards to directors have been made from the Omnibus Plan. Awards of restricted stock units associated with periods prior to June 1, 2011, vested immediately but are not distributed in shares of common stock until after the director terminates or retires from the Board. As of June 1, 2011, the awards of restricted stock units vest and are payable in shares of common stock on the earlier of (a) the last day of the director’s annual term for which the restricted stock units are awarded or (b) the date that the director separates from service due to a “Change in Control” (as defined in the Omnibus Plan); provided, however, that in the event that the director separates from service prior to such time as a result of “Retirement” (defined as the cessation of services after providing a minimum of five continuous years of service as a member of the Board), death or “Disability” (as defined in the Omnibus Plan), the director’s restricted stock unit awards shall pro-rata vest in an amount determined by using a fraction, where the numerator shall be the number of full or partial calendar months elapsed between the grant date and the date of the director’s Retirement, death or Disability, and the denominator of which shall be the number of full or partial calendar months elapsed between the grant date and the last day of the director’s annual term for which the director is elected that corresponds to the year in which the restricted stock units are awarded. The vested restricted stock units awarded as of June 1, 2011 are payable as soon as practicable following vesting except as otherwise provided pursuant to the non-employee director’s prior election to defer distribution.

With respect to restricted stock units that have not been distributed, additional restricted stock units are credited to each non-employee director to reflect dividends paid to stockholders on common stock. The restricted stock units have no voting or other stock ownership rights and are payable in shares of the Company’s common stock upon distribution.

Director Stock Ownership.    The Board maintains stock ownership requirements for its directors that are included in the Corporate Governance Guidelines. Within five years of becoming a non-employee director or adoption of these ownership requirements in 2008, whichever is later, each non-employee director is required to hold an amount of Company stock with a value equal to five times the annual cash retainer paid to directors by the Company. Company stock that counts towards satisfaction of this requirement includes shares purchased on the open market, awards of restricted stock or restricted stock units through the prior Non-Employee Director Stock Incentive Plan or Omnibus Plan, and shares beneficially owned in a trust or by a spouse or other immediate family member residing in the same household.

Each director has a significant portion of his or her compensation directly aligned with long-term stockholder value. Fifty-sixFifty-seven percent (56%(57%) of the Board’s annual retainer is awarded in restricted stock units, which are converted into common stock when distributed to the director. The directors are also required to accumulate and hold five times their annual cash retainer in our common stock which is designed to align their compensation with long-term shareholder value.

The table below shows the number of shares of common stock beneficially owned by each non-employee director, the number of non-voting restricted stock units that have been awarded, and the combined total as of February 28, 2013.2014.

Director Compensation

The table below sets forth all compensation earned by or paid to our non-employee directors in 2012.2013. Mr. Skaggs is the Company’s only employee director and does not receive any separate compensation for his service on the Board.

SECURITY OWNERSHIP OF CERTAIN

BENEFICIAL OWNERS AND MANAGEMENT

The following table contains information about those persons or groups that are known to the Company to be the beneficial owners of more than five percent of the outstanding common stock.stock, based solely on the latest Schedules 13G and any amendments thereto filed with the SEC on or before February 28, 2014.

The following table contains information about the beneficial ownership of the Company’s common stock as of February 28, 20132014 for each of the directors, nominees and Named Executive Officers, and for all directors and executive officers as a group. Beneficial ownership reflects sole voting and sole investment power, unless otherwise noted.

EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS (CD&A)

2013 Accomplishments

The Company had another year of significant achievements in 2013 including:

Our 2013 performance was once again driven in large part by our continued disciplined execution across all facets of our established infrastructure investment-driven business strategy. Key business accomplishments during 2013 include:

In addition, we continued to strengthen our financial profile with our capital investment program reaching just over $2 billion dollars while maintaining investment grade credit, and providing a solid and growing dividend.

The ONC Committee considered these achievements while performing its oversight activities throughout the course of the year.

2013 Executive Compensation Highlights

The ONC Committee made a number of compensation decisions during 2013 including:

Overview of our 2012Our 2013 Executive Compensation Program

Compensation Practices

The primary objectives of our compensation program are to attract, retain and motivate highly qualified executives.

The principal elements of compensation we provide to our executives are: base salary, annual short-term performance-based cash incentives and long-term performance-based equity incentive awards (taken together these three elements are referred to as “total compensation”).

We generally target total compensation to be competitive with the compensation of executives at companies within our peer group of companies (the “Comparative Group”) having similar roles and responsibilities. We do not, however, attempt to maintain a certain target percentile within companies in the Comparative Group.

We use short and long-term performance-based compensation to incentmotivate our executives to meet and exceed the short and long-term business objectives of the Company.

We use 100% performance-based equity compensation for our annual long-term equity incentive awards as a means to align the interests of our executives with those of our stockholders. We also occasionally use special awards of time-vested restricted stock and restricted stock units to attract and retain executive talent, promote management continuity and reward outstanding performance.

We employ leading governance practices, such as clawback policies and stock ownership guidelines, and we conduct an annual risk assessment of the Company’s compensation practices.

In addition, our executive officers are permitted to trade shares only within limited quarterly trading windows, and they are prohibited from engaging in hedging or short sales of the Company’s equity securities.

Finally, when making decisions about our executive compensation program, we take into account the stockholders’ view of such matters. In 2012, 94%2013, 96% of our investors voted in favor of our Say on Pay Proposal at our Annual Meeting. No changes were made to our executive compensation program as a result of the stockholder vote.

Company Performance

2012 was another year of significant achievement for the Company. We experienced another industry leading year in stock price appreciation and total shareholder return. We delivered total shareholder return of approximately 8.5% in 2012, including a dividend increase of more than 4%, outperforming the major utility indices for the fourth consecutive year. Additionally, we generated earnings growth in line with our guidance range for the sixth consecutive year.

Our 2012 performance was driven in large part by our continued disciplined execution across all facets of our established infrastructure investment-driven business strategy. Key business accomplishments during 2012

include reaching a landmark agreement with customers to modernize the Columbia Pipeline Group’s (formerly NiSource Gas Transmission and Storage) Columbia Gas Transmission pipeline system and adding veteran energy industry executives, Joe Hamrock and Jim Stanley, to further strengthen our senior management team. Additionally, we continued to strengthen our financial profile with the issuance of $750 million in long-term debt at historically low rates, and we successfully executed our forward equity issuance of $340 million.

2012Our Executive Compensation HighlightsPhilosophy

The discussion of executive compensation philosophy, program and practices that follows in the balance of the report applies to our Company’s Named Executive Officers in 20122013. They were: Robert C. Skaggs, Jr., President and Chief Executive Officer (“CEO”); Stephen P. Smith, Executive Vice President and Chief Financial Officer; Jimmy D. Staton, former Executive Vice President and Group Chief Executive Officer, Columbia Pipeline Group;Group (“CPG”); Carrie J. Hightman, Executive Vice President and Chief Legal Officer; and Joseph Hamrock, who joinedGlen L. Kettering, Senior Vice President, Corporate Affairs. Mr. Staton stepped down as an executive officer of the Company effective December 31, 2013 and left the Company on March 31, 2014. In 2014 and 2015, Mr. Staton will receive payments in May 2012 as Executive Vice Presidentexchange for a general release and Group Chief Executive Officer of NiSource Gas Distribution.

The ONC Committee made a number of noteworthy compensation decisions during 2012, includingnon-competition agreement pursuant to the following:

Our Executive Compensation Philosophyseparation agreement.

The ONC Committee oversees the design, implementation and operation of the Company’s executive compensation programs.program. It is composed entirely of independent directors to ensure that it can performand performs its oversight activities effectively and in compliance with prevailing governance standards. For a description of the ONC Committee’s composition and responsibilities, see the section entitled “Corporate Governance -— Meetings and Committees of the Board” and for a description of the role of itsthe ONC Committee’s independent consultant, see the section entitled “Corporate Governance -— Officer Nomination and Compensation Committee.”

The ONC Committee and management believe that compensation is an important tool to recruit, retain and motivate employees. The key design priorities of the Company’s executive compensation program are to:

(1) Provide a total compensation package that is appropriately competitive within our industry and supports our short-term and long-term business objectives to build stockholder value and sustainable earnings growth by:

(2) Maintain a financially responsible program aligned with the Company’s strategic plan to build stockholder value and long-term, sustainable earnings growth;

(3)

(4) Establish and maintain our program in accordance

The ONC Committee believes that ourthe Company’s executive compensation program has been,is thoughtfully and will continueeffectively constructed to be, successful in providing competitive compensation opportunities appropriate to attractfulfill our objectives, incorporates the best features of modern and retain highly qualified executives, while at the same time encouraging our senior executives to strive toward the creation of additionalcontemporary pay systems, and rewards decision making that creates value for our stockholders, as well as our customers and other key stakeholders.

Principal Elements of Our Compensation Program

We have designed our program to meet our objectives using various executive compensation elements that drive both short-term and long-term performance. The principal elements of our executive compensation program are base salary, an annual performance-based cash incentive and long-term performance-based equity incentive opportunities (taken together these are referredwhich we collectively refer to as “total compensation”).

We believe that total compensation for our Named Executive Officers should be largely performance-based and the proportion of at-risk, performance-based compensation should increase as the executive’s level of responsibility within the Company increases. The ONC Committee ensuresbelieves the appropriate mix of the elements of compensation is appropriate by takingshould take into account the Company’s business objectives, the competitive environment, Company performance, individual performance and responsibilities, and evolving governance practices.

For 2012,2013, the approximate percentage of our Named Executive Officers’ 20122013 total target compensation (base salary, the annual performance-based cash incentive payable at the target level and the grant date face value of the annual long-term performance-based equity incentive award payable at the target level) that was fixed (base salary) was as follows:

The principal elements of our total compensation package, as more fully described below, help us achieve the objectives of our compensation program as follows:

Base Salary.    Base salary provides our employees with a competitive,level of fixed pay component.that is commensurate with role and responsibility. We believe that competitiveby delivering base salaries allow usthat are reflective of market norms, the Company is best positioned to attract, retain and motivate our executives.top caliber executives in an increasingly competitive labor environment. The ONC Committee annually reviews the base salaries of the Company’s senior executives, including the Named Executive Officers, to ensure they are competitive within our industry. In so doing, the ONC Committee considers the base salaries paid to similarly situated executives by the companies in the Comparative Group. See the section entitled “Our Executive Compensation Process”Process — Benchmarking” listing the companies in our Comparative Group. The ONC Committee determines any base salary changes for the Company’s senior executives based on a combination of factors that includes competitive pay standards, level of responsibility, experience, internal equity considerations, historical compensation, and individual performance and contribution to business objectives, as well as recommendations from the CEO. The CEO is evaluated separately, taking into account those factors reviewed for all other senior executives, as well as the Corporate Governance Committee’s evaluation of the CEO’s performance. See the section below entitled “2012“2013 ONC Committee Compensation Actions” for more information regarding 2012 base salary changes for two of our Named Executive Officers.information.

Annual Performance-Based Cash Incentive Plan.    This component of total compensation (the “Incentive Plan”) provides employees with the opportunity to earn a cash award tied to the annual performance of the Company and individual contribution to the organization’s success. Annual cash incentives are authorized by the Omnibus Plan which was approved by stockholders in May 2010. The target financial goals for the annual performance-based cash incentive plan (the “Incentive Plan”)Incentive Plan are based on the financial plan approved by the Board at the beginning of the year. The financial plan is designed to achieve the Company’s goal of creating sustainable stockholder value by growing earnings, effectively managing the Company’s cash and providing a strong dividend. The ONC Committee may exercise its discretion to make adjustments (upward or downward) in the case of extraordinary or non-recurring items that impact performance results under the Incentive Plan when the ONC Committee determines such adjustments to be appropriate.

We believe that annual performance-based cash incentives alignparticipation in the Incentive Plan aligns our employees, including the Named Executive Officers, with our short-term business objectives and rewardrewards them based upon achievement of those objectives. Eligibility for participation in the Incentive Plan extends to nearly all Company employees. Every eligible employee has an incentive opportunity at trigger, target and stretch levels of performance and the ONC Committee identifies expectations for all senior executives, including the Named Executive Officers. See the section below entitled “2012“2013 ONC Committee Compensation Actions” for more information regarding the 20122013 Incentive Plan, including incentive opportunities, performance measures, goals and payouts for each of the Named Executive Officers.

Long-Term Equity Incentive Plan (LTIP).    The Company’s compensation program also includes a long-term equity incentive component. The ONC Committee believes it important that each executive, in particular each of our senior executives, has personal financial exposure to the performance of the Company’s stock and, therefore, is aligned with the financial interests of stockholders. The ONC Committee also believes that long-term equity incentives promote decision making that is consistent with the Company’s long-range operating goals.

To ensure that our executives’ interests are aligned with those of our stockholders and the Company’s long-term business objectives, the ONC Committee determined that, beginning in 2011, the annual long-term equity incentive awards should be delivered solely in the form of performance shares. Performance shares provide the

opportunity to earn shares of the Company’s common stock contingent on the achievement of multi-year performance goals that we believe drive stockholder value. The number of performance shares that can be earned ranges from 50% of target when performance reaches the trigger level to 200% of target when performance reaches the maximum creditable level of results.

When establishing award opportunity levels for each Named Executive Officer, the ONC Committee considers, among other things, the incumbentincumbent’s base salaries,salary, the appropriate mix of cash and equity award opportunities, prior awards under the LTIP and the compensation practices for similarly situated executives at other companies in our Comparative Group. However, theThe actual value of each performance-based award, if any, depends on Company performance against pre-established performance measures as well as stock price at the time the award is earned.paid out.

The ONC Committee may also approve special equity awards that are not performance-based to attract and retain executive talent. See the section below entitled “2012“2013 ONC Committee Compensation Actions” for more information regarding the 20122013 LTIP awards for each of the Named Executive Officers, including performance measures and goals and vesting requirements for the 20122013 performance share awards, and the performance results and payout amounts for the 20102011 contingent stock awards and details regarding special equity awards for Messrs. Staton and Hamrock.awards.

Other Compensation and Benefits

We also provide other forms of compensation to our executives, including the Named Executive Officers, consisting of a limited number of perquisites, severance and change-in-control arrangements and a number of other employee benefits that commonly are extended to our entire employee population. These other forms of compensation are generally comparable to those that are provided to similarly situated executives at other companies of our size.

Perquisites.    Perquisites are not a principal element of the Company’s executive compensation program. The perquisites available to our executives, including our Named Executive Officers, are limited in number and modest in value when compared to the principal elements of compensation. They are intended to assist executive officers in the performance of their duties on behalf of the Company or otherwise to provide benefits that have a combined personal and business purpose. The Company does not reimburse the Named Executive Officers for the payment of personal income taxes incurred by the executives in connection with their receipt of these benefits. For more information on these perquisites, see the Summary Compensation Table and footnote 6.

Severance and Change-In-Control Benefits.    The Company maintains an executive severance policy, Change-in-Control Agreements with the Named Executive Officers and a letter agreement with Mr. Smith regarding payments to be made in the event of termination of his employment.

The Company entered into the Change-in-Control Agreements in the belief that these agreements are in the best interests of the stockholders. Change-in-Control Agreements ensure that thoroughly objective judgments are made in relation to any potential change in corporate ownership so that stockholder value is appropriately safeguarded and returns to investors are maximized.

Since January 2010, no In December 2013, the Company entered into new Change-in-Control Agreements entered into betweenwith the CEO and other senior executives, including the Named Executive Officers, other than Mr. Staton, in the belief that these agreements are in the best interests of the stockholders. Mr. Staton’s Change-in-Control Agreement terminated automatically in accordance with its terms when he left the Company and employees includein March, 2014.

The new Change-in-Control Agreements eliminated all previously grandfathered excise-tax “gross-up” payments that otherwise would reimburse such employees for individual excise or income taxes incurred with respect to benefits received on a Change-in-Control of the Company.

For further discussion of these agreements, see the “Potential Payments upon Termination of Employment or a Change-in-Control of the Company” table.

Pension Programs.    During 2012,2013, the Company maintained a tax-qualified defined benefit pension plan for essentially all salaried exempt employees hired before January 1, 2010, and all union non-exempt employees (both non-union and certain union employees) hired before January 1, 2013 as well as for other union employees, regardless of hire date and a non-qualified defined benefit pension plan (the “Pension Restoration Plan”) for all eligible employees with annual compensation or pension benefits in excess of the limits imposed by the Internal Revenue Service (“IRS”), including the Named Executive Officers. The Pension Restoration Plan provides for a pension benefit under the same formula provided under the tax-qualified plan but without regard to the IRS limits reduced by amounts paid under the tax-qualified plan. The material terms of the pension programs are described in the narrative to the Pension Benefits table.

Savings Programs.    Our Named Executive Officers are eligible to participate in the same tax-qualified 401(k) Plan as most employees and in a non-qualified defined contribution plan (the “Savings Restoration Plan”)

maintained for eligible executive employees. The 401(k) Plan includes a Company match that varies depending on the pension plan in which the employee participates and a Company profit sharing contribution for most employees of between 0.5% and 1.5% of the employee’s eligible earnings based on the overall corporate net operating earnings per share measure. In addition, for salaried employees hired after January 1, 2010, the 401(k) Plan includes a 3% Company contribution to the employee accounts in lieu of pension benefits. The Savings Restoration Plan provides for Company contributions in excess of IRS limits under the 401(k) Plan for eligible employees, including the Named Executive Officers. The material terms of the Savings Restoration Plan are described in the narrative to the Non-qualified Deferred Compensation table.

Deferred Compensation Plan.    The Company also maintains the Executive Deferred Compensation Plan (the “Deferred Compensation Plan”) through which eligible Company executives, including the Named Executive Officers, may elect to defer up tobetween 5% and 80% of their base salary and annual cash incentive payout. The Company makes the Deferred Compensation Plan available to eligible executives so they have the opportunity to defer their cash compensation without regard to the limits imposed by the IRS for amounts that may be deferred under the 401(k) Plan. The material terms of the Deferred Compensation Plan are described in the narrative to the Non-qualified Deferred Compensation table.

Health and Welfare Benefits.    The Company also provides other broad-based benefits such as medical, dental, life insurance and long-term disability coverage, on the same terms and conditions, to all employees including the Named Executive Officers. We believe that these broad-based benefits enhance the Company’s reputation as an employer of choice and thereby serve the objectives of our compensation program to attract, retain and motivate our employees.

Our Executive Compensation Process

The ONC Committee has the responsibility for determining salaries, performance-based incentives and other matters related to the compensation of our executives and for overseeing the administration of our equity plans, including equity award grants to our executive officers. The ONC Committee takes into account various factors when making compensation decisions, including:

The ONC Committee reviews the compensation of our CEO and his executive direct reports each year. In determining the compensation of the CEO and his executive direct reports, the Committee takes into consideration the Corporate Governance Committee’s evaluation of each individual’s performance and the CEO’s recommendation with respect to his executive direct reports. When considering changes in compensation for the Named Executive Officers, the ONC Committee also carefully considers input from the Senior Vice President, Human Resources and the ONC Committee’s independent executive compensation consultant, Exequity LLP.

Benchmarking.    In connection with its compensation decision-making, the ONC Committee reviews the executive compensation practices in effect at other companies in the Comparative Group. These companies comprise leading gas, electric, combination utility and natural gas transmission companies that have been selected by the ONC Committee for their operational comparability to the Company and because we generally compete with these companies for the same executive talent. During 2013, the ONC Committee removed El Paso Corporation from the Comparative Group because it was acquired by Kinder Morgan, Inc. For purposes of supporting 20122013 compensation decisions, the Comparative Group included the following companies:

Policies and Guidelines.    We have implemented various guidelines and policies to help us meet our compensation objectives including stock ownership guidelines, recoupment policies for acts of misconduct and consideration of favorable tax treatment for the Company, each as more fully described below.including:

becoming subject to the guidelines. The stock ownership guideline for the CEO is shares of the Company’s common stock having a value equal to five times his annual base salary. The other senior executives have a stock ownership guideline of three times their respective annual base salaries. Once the senior executive satisfies the guidelines, he/she must continue to own a sufficient number of shares to remain in compliance with the guidelines. Until such time as the senior executives satisfy the stock ownership guidelines, they are required to hold at least 50% of the shares of common stock received upon the lapse of the restrictions on restricted stock units and the vesting of performance shares, and no shares subject to the ownership guidelines may be pledged. At the end of 2013, the Named Executive Officers have exceeded their ownership guidelines.

Tax Treatment of Executive Compensation.    Section 162(m) of the Internal Revenue Code provides that annual compensation in excess of $1,000,000 paid to the CEO or certain of the other Named Executive Officers,

other than compensation meeting the definition of “performance-based compensation,” will not be deductible by a corporation for federal income tax purposes. In January 2012,2013, the ONC Committee established a threshold performance target based on the Company’s operating income for purposes of compliance with Section 162(m). The ONC Committee does not anticipate that the limits of Section 162(m) will materially affect the deductibility of compensation paid by the Company in 2012.2013. However, the ONC Committee will continue to review the deductibility of compensation under Section 162(m) and related regulations published by the IRS. The ONC Committee retains the discretion to amend any compensation arrangement to comply with Section 162(m)’s requirements for deductibility in accordance with the terms of such arrangements and what it believes is in the best interest of the Company.

The ONC Committee considers the anticipated tax treatment to the Company when determining executive compensation and routinely seeks to structure its executive compensation program in a way which preserves the deductibility of compensation payments and benefits. It should be noted, however, that there are many factors which are considered by the ONC Committee in determining executive compensation and, similarly, there are many factors which may affect the deductibility of executive compensation. To maintain the flexibility to compensate the Named Executive Officers in a manner designed to promote varying corporate goals, the ONC Committee has not adopted a strict policy that all executive compensation must be deductible under Section 162(m).

In addition, Sections 280G and 4999 of the Internal Revenue Code impose excise taxes on Named Executive Officers, directors who own significant stockholder interests in the Company and other service providers who receive payments in excess of a threshold level upon a Change-in-Control. Additionally, theThe Company or its successor could lose a deduction for amounts subject to the additional tax. As discussed under “Potential Payments upon Termination of Employment or a Change-in-Control of the Company” below, it is possible that payments to the Named Executive Officers could be subject to these taxes.

Finally, Section 409A of the Internal Revenue Code imposes additional taxes on Named Executive Officers, directors and other service providers who defer compensation in a manner that does not comply with Section 409A. The Company has reviewed its compensation arrangements to ensure they comply with applicable Section 409A requirements.

20122013 ONC Committee Compensation Actions

During 2012,2013, the ONC Committee reviewed and, as appropriate, took action with respect to each element of total compensation (annual base salary, annual performance-based cash incentive and long-term performance-based equity incentive) for each Named Executive Officer following the principles, practices and processes described above. In doing so, the ONC Committee concluded that the total compensation provided for each of the Company’s senior executives in 2012,2013, including the Named Executive Officers, was consistent with the Company’s compensation philosophy and was reasonable, competitive and appropriate.

The ONC Committee’s determinations, though basedsubjective in part, on subjective factors, were based primarily upon the ONC Committee’s recognition of the performance of each senior executive, including each Named Executive Officer, and the ONC Committee’s determination that the total compensation awarded to each senior executive, including each Named Executive Officer, provided well-balanced incentives to each person to continue their employment and to focus on serving the best interests of the Company and its stockholders.

In addition, the ONC Committee considered the stockholders’ advisory approval of the 20112012 compensation of our Named Executive Officers at the 20122013 Annual Meeting and determined that no changes were necessary or advisable in connection with our senior executive compensation program as a result of the stockholders’ vote.

20122013 Base Salaries.    Historically, the ONC Committee has adjusted base salaries of the Named Executive Officers when needed to maintain competitiveness and reflect performance. In 2012,2013, the ONC Committee reviewed the base salaries of all the Company’s senior executives includingand made no base salary adjustment for any of the Named Executive Officers. Historically, the ONC Committee has not adjusted base salaries of the Named Executive Officers on an annual basis. For 2012, the ONC Committee determined that base salary increases for Messrs. Staton and Smith were appropriate based on a combination of factors that included the recommendation by the CEO, increased level of responsibility, experience and contributions to business objectives. In particular, the ONC Committee considered Mr. Staton’s success at Northern Indiana Public Service Company, including settlement of a landmark electric rate case and his role and increased responsibilities as business unit leader for Columbia Pipeline Group, and determined it appropriate to approve an increase in his

base salary by approximately 9% (from $550,000 to $600,000). The ONC Committee also awarded Mr. Smith an increase in base salary of approximately 4.5% (from $550,000 to $575,000). In doing so, the ONC Committee considered Mr. Smith’s leadership in strengthening the Company’s solid financial profile as well as his increased responsibilities within the Company. Other than the adjustments for Messrs. Staton and Smith, the ONC Committee made no other base salary adjustments for the Named Executive Officers in 2012.

Annual Performance-Based Cash Incentives.In January 2012,2013, the ONC Committee established performance measures to be used by the ONC Committee to determine the 20122013 incentive payouts to the Named Executive Officers. In determining incentive compensation ranges for the Named Executive Officers, the ONC Committee considered benchmark information, input from the independent compensation consultant, historical payouts and individual performance. The ONC Committee increased eachperformance and determined that there should be no changes in the incentive compensation ranges for any of the trigger, target and stretch incentive opportunities by 5 percentage points for Messrs. Smith and Staton, primarily in recognition of each of their significant contributions to the business and increased responsibilities within the Company.Named Executive Officers. For more information on the 20122013 payout amounts for each of the Named Executive Officers, see below under the section entitled “2012“2013 Incentive Plan Payouts to the Named Executive Officers.”

The 20122013 Incentive Plan awards for senior executives, including all of the Named Executive Officers, were subject to achievement with respect to two corporate financial goals, net operating earnings per share and corporate funds from operations, as well as an additional operational measure relating to safety. The ONC Committee approved these measures because they were deemed to be important to the Company’s success in increasing stockholder value.

Earnings, cash flow and safety were measured as follows:

The incentive opportunities for the senior executives, including the Named Executive Officers, were contingent on achievement of goals relating to these measures, as applicable and subject to final discretionary adjustment by the ONC Committee’s final discretion.Committee.

The 20122013 Incentive Plan awards for the leaders of our business units also are subject to achievement with respect to business unit net operating earnings and cash flowfunds from operations goals for each of the business units. The ONC Committee believes the inclusion of business unit goals in the annual Incentive Plan improves the line of sight between employees and the incentive measures, thereby enhancing Company performance. The ONC Committee extended to Mr. Skaggs the authority to establish the annual business unit targets for the year. He assigned goals that, if accomplished, were expected to ensure the Company’s attainment of its overall corporate objectives.

Consequently, the incentive opportunities for Messrs.Mr. Staton and Hamrock were subject to achievement with respect to the corporate financial measures (net operating earnings per share and corporate funds from operations), and achievement with respect to performance measures tied to the business unit net operating earnings (net of interest expense and income taxes) and business unit funds from operations and business unit safety measures. As such, each of Mr. Staton’s and Mr. Hamrock’s measures is weighted differently than the other Named Executive Officers who are members of the corporate service group, as shown in the tables below.

These performance measures, their weightings and results are set forth in the three tables below. The amounts shown in these tables are what would have been paid under the Incentive Plan formula (the “Formulaic Amounts”). These amounts do not reflect actual Incentive Plan payouts since the ONC Committee exercised its negative discretion to pay less than the Formulaic Amounts that were otherwise payable to each of the Named Executive Officers. The actual 2012 Incentive Plan payouts which reflect the reductions for each of the Named Executive Officers as a result of two operating incidents that occurred in 2012 are shown in the section entitled “2012 Incentive Plan Payouts to the Named Executive Officers.”

The applicable performance measures and their associated weightings and results as a percentage of the target prior to reduction by the ONC Committeeincentive opportunity for Messrs. Skaggs, Smith, and SmithKettering and Ms. Hightman are:were:

The applicable performance measures and their associated weightings and results as a percentage of the target incentive opportunity for Mr. Staton were:

The applicable performance measures and their associated weightings and results as a percentage of target prior to reduction by the ONC Committee for Mr. Staton are:

(2)	This includes a downward adjustment to Funds from Operations of $244 million, taking into consideration the impact of non-recurring items related to changes in tax law and accelerated pension contributions.Named Executive Officers.”

The applicable performance measures and their associated weightings and results as a percentage of target for Mr. Hamrock are:

20122013 Incentive Plan Payouts to the Named Executive Officers.    For 2012,2013, the annual incentive opportunities and actual payout amounts for each of the Named Executive Officers as approved by the ONC Committee were:

In January 2013,2014, the ONC Committee certified the performance results set forth in the tables above. In light of serious operating incidents at Springfield, Massachusetts and Sissonville, West Virginia, the CEO recommended that the ONC Committee make discretionary negative adjustments to the annual performance-based cash incentive payouts for each of the Named Executive Officers. After careful deliberation, the ONC Committee reduced the CEO’s annual performance-based cash incentive payout by 40 percentage points and reduced the annual performance-based cash incentive for each of the other Named Executive Officers by 10 percentage points, as set forth in the table above, in order to underscore the Company’s commitment to safe operations and the accountability of management for safe operations.

The ONC Committee determined it was appropriate to approve a reducedan Incentive Plan payout of $720,000$1,224,000 to Mr. Skaggs based on the Company’s above-target performance relative to both the net operating earnings per share financial metric and stretchfunds from operations financial metric and target performance relative to the funds from operations financial metricsafety goal as well as his continued strong leadership in 2012 and also taking into consideration the two operating incidents. The reduced Incentive Plan payout reflected a reduction in the CEO’s Incentive Plan Formulaic Amount by 40 percentage points.2013. Mr. Skaggs also made recommendations to the ONC Committee with respect to the award of Incentive Plan payouts to the other senior executives, including the other Named ExecutiveExecu-

tive Officers. As noted above, the Company exceeded the target goal for net operating earnings per share, met the stretch goal for funds from operations and, with the exception of Northern Indiana Energy, failed to meet safety goals. In making his recommendations, Mr. Skaggs considered the Company’s performance and the performance of the senior executives in delivering strong stockholder returns again in 2012,2013, as well as the performances of the business unitsunit and corporate functions the executives

led. The ONC Committee considered and accepted Mr. Skaggs’ recommendations and approved Incentive Plan payouts to the Named Executive Officers that reflected a reduction in accordance with the Incentive Plan Formulaic Amount for each of the other Named Executive Officers of 10 percentage points as a result of the two operating incidentsformula, as set forth in the table above.above, including a full 2013 payout for Mr. Staton since he was employed through December 31, 2013.

20122013 Discretionary PayoutsPayout to Certaina Named Executive Officers.Officer.    TheIn March 2013, the ONC Committee approved a guaranteedspecial one-time bonus award of $292,500$500,000 for Mr. Hamrock as well as a sign-on bonus of $100,000 as partKettering in recognition of his offerstrategic leadership in obtaining the FERC modernization settlement which facilitates the long-term infrastructure investment plan to modernize the interstate pipeline system of employment in order to compensate him for lost compensation opportunities at his former employer. These amounts areColumbia Pipeline Group. This amount is set forth in the Bonus column of the Summary Compensation Table because they areit is not based on performance relative solely to the pre-established performance criteria described above.

LTIP Awards.Performance Share Awards.    In 2012,2013, the ONC Committee approved a grant of performance shares to executives of the Company, including each of the Named Executive Officers. Vesting of the 20122013 grant of performance shares is dependent upon the Company meeting certain performance measures over the three-year period from 20122013 through 20142015 and the executive’s continued employment through January 30, 2015.February 29, 2016. Special vesting rules apply in the event of death, “Retirement,” “Disability” or a “Change-in-Control” (each as defined in the Omnibus Plan). Generally, in the event of Retirement, Disability or death within twelve months or less remaining in the performance period, the performance shares pro-rata vest (based on number of full or partial months of active employment during the vesting period over the total number of full or partial months in such period), provided that the ONC Committee has certified the satisfaction of the performance goals. In the event of death with more than twelve months remaining in the performance period, the performance shares payable at the target level immediately pro-rata vest and, in the event of a Change-in-Control, the performance shares also immediately vest. Termination for any other reason will result in forfeiture of all performance shares.

The performance measures on which 2012vesting in the 2013 performance shares are basedis contingent relate to cumulative net operating earnings per share over the three-year period from January 1, 20122013 through December 31, 2014,2015, cumulative funds from operations over the same three-year period (in each case, based on the Company’s financial plan) and Relative Total Shareholder Return. We define “Relative Total Shareholder Return” (“RTSR”) as the annualized growth in the dividends and share price of a share of the Company’s common stock, calculated using a 20-day trading average of the closing price of the Company’s common stock, over a period beginning December 31, 20112012 and ending on December 31, 20142015 compared to the similarly calculated total shareholder return performance of a peer group of energy companies, pre-determined by the ONC Committee. The peer group of companies selected by the ONC Committee for the purpose of determining RTSR is broader than the Comparative Group utilized by the ONC Committee in its compensation decision-making. The 36 energy companies, including tensixteen companies from the Comparative Group, were selected by the ONC Committee because each of the companies is similarly affected by external factors that impact stock price such as interest rates and industry opportunities and challenges.

If the pre-established performance goals and service condition are met, award recipients will earn 100% of the target number of performance shares awarded. The ONC Committee also approved trigger and stretch goals for each measure. If the trigger level is not met, then the executive will not receive any value of that portion of the grant. If the target level is exceeded, the executive could receive up to a maximum of 200% of the target value of that portion of the grant unless RTSR is negative for the performance period, in which case, the maximum payout for RTSR would be at target regardless of performance relative to the peer group. When the result for a particular measure lands between two goals (for example, between the target and stretch goal), then the long-term incentive award opportunity is determined by interpolation and is expressed as a percentage of the target opportunity; except that there is no interpolation between goals below the 50^th percentile for the RTSR metric.

The measures and goals pertaining to the 20122013 performance share awards are:

three-year period and total debt as of December 31, 2012.2013. Based on the Company’s performance, 112.5% of the contingent stock awards vest subject to satisfaction of the continuing employment restrictionvested as described below.

The performance measures, their weightings and results, as approved by the ONC Committee, are:were:

The awards of contingent stock remained subject to an employment restriction until January 31, 2013, at which time,28, 2014. Thereafter, each Named Executive Officer fully vested in the contingent stock, payable one-for-one in shares of the Company’s common stock, as set forth in the table below:

OFFICER NOMINATION AND COMPENSATION COMMITTEE REPORT

The Officer Nomination and Compensation Committee of the Board of Directors (the “ONC Committee”) has furnished the following report to the stockholders of the Company in accordance with rules adopted by the Securities and Exchange Commission.

The ONC Committee states that it reviewed and discussed with management the Company’s Compensation Discussion and Analysis contained in this Proxy Statement.

Based upon the review and discussions referred to above, the ONC Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement.

This report is submitted on behalf of the members of the Officer Nomination and CompensationONC Committee:

Officer Nomination and Compensation Committee

W. Lee Nutter, ChairmanChair

Richard A. Abdoo

Sigmund L. Cornelius

Michael E. Jesanis

Teresa A. Taylor

Richard L. Thompson

Carolyn Y. Woo

March 13, 201311, 2014

ASSESSMENT OF RISK

The Company annually assesses whether its incentive compensation programs are constructed in a manner that might induce participant behaviors that could cause the Company material harm. An assessment was performed in 2012,2013, and the Company concluded that the incentive components of our program for senior executives are not reasonably likely to have a material adverse effect on the Company for reasons that include the following:

Compensation of Executive OfficersCOMPENSATION OF EXECUTIVE OFFICERS

Summary.    The following table summarizes compensation for services to NiSource and its affiliates for 2013, 2012 and 2011 awarded to, earned by or paid to each of the Named Executive Officers as of December 31, 2012.2013.

Summary Compensation Table