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. 86^th Avenue • Merrillville, Indiana 46410 • (877) 647-5990

NOTICE OF ANNUAL MEETING

April 7, 20165, 2017

To the Holders of Common Stock of NiSource Inc.:

The 2017 annual meeting of the stockholders (the “Annual Meeting”) of NiSource Inc., a Delaware corporation (the “Company”), will be held at the Hyatt Rosemont, 6350 N. River Road, Rosemont, Illinois 60018 on Wednesday,Tuesday, May 11, 2016,9, 2017, at 10:00 a.m., local time, for the following purposes:

All persons who were stockholders of record atas of the close of business on March 15, 2016, will be entitled14, 2017, are eligible to vote at the Annual Meeting and any adjournment or postponement thereof.

Your vote is very important. Whether or not you plan to attend the meeting,Annual Meeting, please vote at your earliest convenience. 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.

Samuel K. Lee

Corporate Secretary

Important Notice Regarding the Availability of Proxy Materials

For the Annual Meeting of Stockholders to be Held on May 11, 20169, 2017

The Proxy Statement, Notice of Annual Meeting and 20152016 Annual Report to Stockholders

are available athttp:https://ir.nisource.com/annuals.cfmwww.nisource.com/filings

TABLE OF CONTENTS

PROXY STATEMENT

The accompanying proxy is solicited on behalf of the Board of Directors of NiSource Inc. (the “Board”) for the 20162017 annual meeting of the stockholders (the “Annual Meeting”) to be held at the Hyatt Rosemont, 6350 North River Road, Rosemont, Illinois 60018 on Wednesday,Tuesday, May 11, 2016,9, 2017, 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 (“Deloitte”) as the Company’s independent registered public accountantsauditor for 2016; “AGAINST”2017; “FOR” advisory approval of the stockholder proposal regarding reportscompensation of the Company’s named executive officers (the “Named Executive Officers”); and “ONE YEAR” with respect to the frequency of future advisory votes on political contributions; “AGAINST” the stockholder proposal regarding a senior executive equity retention policy; and “AGAINST” the stockholder proposal regarding accelerated vesting of equity awards of senior executives upon a change in control.Named Executive Officer compensation.

This Proxy Statementproxy statement (the “Proxy Statement”) and the accompanying proxy card are first being sent to stockholders on April 7, 2016.5, 2017. We will bear the expense of this mail solicitation, which may be supplemented by telephone, facsimile, e-mail and personal solicitation by our officers, employees and agents. To aid in the solicitation of proxies, we have retained D.F. King for a fee of $9,500, plus reimbursement of expenses. We may incur additional fees if we request additional services. 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 March 15, 2016,14, 2017, the record date for voting.

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

Who May Vote

Holders of shares of common stock as of the close of business on March 15, 2016,14, 2017, are entitled to notice of and to vote at the Annual Meeting and any adjournment thereof. As of March 15, 2016, 320,722,00514, 2017, 323,703,918 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 10, 2016.8, 2017.

If your shares are held in a brokerage account or by a bank, broker, trust or other stockholder of recordnominee (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“Broker Non-Votes”

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 its discretion on certain “routine” matters as permitted by New York Stock Exchange (“NYSE”) rules. The proposal to ratify the appointment of our independent registered public accountantsauditor is the only proposal considered a routine matter and, accordingly, at the Annual Meeting, Brokers will only have discretionary authority to vote your shares with regard to Proposal No. 2, the ratification of the appointment of Deloitte as our independent registered public accountantsauditor for 2016.2017. 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. Brokers will not have discretionary authority to vote your shares with respect to the election of directors, the advisory approval of executiveNamed Executive Officer compensation or approval of the stockholder proposals.frequency of future advisory votes on Named Executive Officer compensation. Therefore, it is important that you instruct your Broker or other

nominee how to vote your shares. If Brokers exercise this discretionary voting authority on Proposal No. 2, such shares will be considered present at the Annual Meeting for quorum purposes and broker non-votes will occur as to each of the other proposals presented at the Annual Meeting, which are considered “non-routine.”

Voting Shares Held in athe Company’s 401(k) Plan (“401(k) Plan”)

Our 401(k) Plan andIf you hold your shares of common stock in the 401(k) Plan, of Columbia Pipeline Group, Inc. (“CPG”) each holdthose shares of our common stock. All of these shares (collectively, “Plan Shares”) are held in the name of Fidelity Management Trust Company (“Fidelity”), which administers eachthe administrator of these plans.the 401(k) Plan. You will receive a proxy card that includes the number of shares of our common stock held in yourthe 401(k). Plan. You should instruct Fidelity how to vote your shares by completing and returning the proxy card or by voting your shares by Internet or by telephone, as detailed above under “Voting Your Proxy.” If you do not instruct Fidelity how to vote your shares, or if you sign the proxy card with no further instructions as to how to vote your shares, Fidelity will vote your Plan Sharesshares in the same proportion as the shares for which it receives instructions from all other participants, to the extent permitted under applicable law. To allow enough time for Fidelity to vote your Plan Sharesshares in accordance with your direction, your voting instructions must be received by Fidelity no later than 11:59 p.m. Eastern Time on May 8, 2016.4, 2017.

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 available at the meeting.Annual Meeting. However, if your shares are held in street name by a Broker, then, in order to be able to vote at the meeting,Annual Meeting, you must obtain an executed proxy from the Broker indicating that you were the beneficial owner of the shares on March 15, 2016,14, 2017, the record date for voting, and that the Broker is giving you its proxy to vote the shares.

If your shares are held in our 401(k) Plan or CPG’sthe 401(k) Plan, you will not be able to vote your shares at the meeting.Annual Meeting.

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

If you plan to attend the Annual Meeting, please so indicate when you vote,return your proxy card, so that we may send you an admission ticket and make the necessary arrangements. Stockholders who plan to attend the meetingAnnual Meeting must present picturevalid, government-issued photo 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 a letter to the Company’s Corporate Secretary (which must be received before a vote is taken) 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 meetingAnnual 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 voteAbstentions are counted for purposes of determining whether a quorum is present. As explained above under “Discretionary Voting by Brokers and ‘Broker Non-Votes’,” if Brokers exercise their discretionary voting authority on Proposal No. 2, such shares will be considered present at the presence of a quorum. Ameeting for quorum purposes and 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 ownernon-votes will occur as to howeach of the beneficial owner would likeother proposals presented at the shares to be voted.Annual Meeting.

PROPOSAL 1 — ELECTION OF DIRECTORS

At the recommendation of the Nominating and 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 11, 2016,9, 2017, and expiring at the 20172018 annual meeting of the Company’s stockholders (the “2017“2018 Annual Meeting”) and until their successors are duly elected or appointed and qualified. The nominees include eightnine independent directors, as defined in the applicable rules of the NYSE, and our President and Chief Executive Officer (“CEO”). 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 statementProxy Statement and to serving, if elected).

Vote Required

In order to be elected, a nominee must receive more votes cast in favor of his or her election than against election. Abstentions by those present or represented by proxy and broker non-votes will not be votedcounted as a vote cast either “for” or “against” with respect to the election of directors and, therefore, will have no effect on the outcome. Brokers will not have discretionary authority to vote on the election of directors. Accordingly, there could be broker non-votes which will have no effect on the vote.

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

Name, Age and Principal Occupations for Past Five Years and Directorships Held		Has Been a Director Since
Peter A. Altabef, 57			2017
Mr. Altabef currently serves as president and CEO of Unisys Corporation, a global information technology company, and is a member of its board of directors, a position he has held since January 2015. Prior to his current role, he served as president and CEO of MICROS Systems, Inc., a provider of integrated software and hardware solutions to the hospitality and retail industries, from 2013 to 2014, when it was acquired by Oracle Corporation. Before that, he served as president and CEO of Perot Systems Corporation from 2004 to 2009, when it was acquired by Dell, Inc. Following that transaction, Mr. Altabef served as president of Dell Services, the information technology services and business process solutions unit of Dell, Inc. until his departure in 2011. He is also a member of the President’s National Security Telecommunications Advisory Committee, a board member of EastWest Institute, and a member of the advisory boards of Merit Energy Company, LLC and Petrus Trust Company, LTA. He has previously served as a senior advisor to 2M Companies, Inc., in 2012, and as a director of MICROS Systems, Perot Systems Corporation and Belo Corporation.
Mr. Altabef has experience leading large organizations as CEO and a strong background in strategic planning, financial reporting, risk management, business operations and corporate governance. He also has more than 20 years of senior leadership experience at some of the world’s leading information technology companies. As a result, he has a deep understanding of the cybersecurity issues facing businesses today. His overall leadership experience and his cybersecurity background provides the Board with valuable perspective and insight into significant issues faced by the Company.
Aristides S. Candris, 6465			2012
Dr. Candris was President and CEO of Westinghouse Electric Company (“Westinghouse”), Pittsburgh, Pennsylvania, a nuclear engineering company, which is a unit of Tokyo-based Toshiba Corp., from July 2008 until his retirement on March 31, 2012. During his 36 years of service at Westinghouse, Dr. Candris served in various positions, including as Senior Vice President, Nuclear Fuel, from September 2006 to July 2008. Dr. Candris was also2008, and continued to serve on the board of Westinghouse until October 1, 2012 and2012. He is a directormember of Kurion, Inc.the advisory boards of the Carnegie Institute of Technology and the Wilton E. Scott Institute for Energy Innovation at Carnegie Mellon University. Dr. Candris also serves on the boards of trustees of Transylvania University and the Hellenic-American University and the board of directors of The Hellenic Initiative.
Dr. Candris is a nuclear scientist and engineer, and he has significant experience gained through leading a global nuclear power company. His knowledge of the electric industry gives him significant insight onto the issues impacting the electric utility industry. His experience managing highly technical engineering operations is valuable as we build and maintain facilities to address increasing environmental regulations and make long-term strategic decisions on electric power generation. His technical and management skills are helpful as we build and modernize both our transmission and distribution systems. Dr. Candris’Candris has great insight from his experience developing customer focused programs and attaining excellence in business processes and behaviors, is insightful as wewhich will assist us to better meet the increasing expectations of customers and regulators. He serves

Name, Age and Principal Occupations for Past Five Years and Directorships Held		Has Been a Director Since
on the Boards of Carnegie Mellon University, Transylvania University and the Hellenic-American University. He also serves on the Board of Directors for The Hellenic Initiative.
Wayne S. DeVeydt, 4647			2016
Since May 2007, Mr. DeVeydt hascurrently serves as a Senior Advisor to the Global Healthcare division of Bain Capital located in Boston, Massachusetts. Previously, he served as Executive Vice President and Chief Financial Officer (“CFO”) at Anthem, Inc., a health insurance company and an independent licensee of the Blue Cross and Blue Shield Association. Previously, heAssociation from May 2007 until his retirement in June 2016. He also served as Senior Vice President and Chief Accounting Officer at Anthem, Inc. beginning in 2005 and Chief of Staff from 2006 to 2007. Prior to joining Anthem, Inc., Mr. DeVeydt served in many roles at PricewaterhouseCoopers LLP from 1996 to 2005, at PricewaterhouseCoopers LLP, including as lead engagement partner for a number of large companies in the national managed care and insurance industries. In 2016, Mr. DeVeydt became a director of Myovant Sciences, a biopharmaceutical company with executive offices in London, England, and serves on its audit and compensation committees. He is also a member of the Boys & Girls Clubs of America Board of Governors.
Mr. DeVeydt’s current positionformer positions as CFO at a CFOpublic company in a regulated industry at a public company and his former position as an engagement partner at a public accounting firm provideseach provide him with strong financial acumen along with a deep understanding of operating in a regulated industry operations and extensive leadership skills, particularly in the areas of accounting and finance. His significant experience in internal controls, capital markets, corporate governance, risk management and strategic planning from both a company and public accounting perspective makesmake him an asset to our Board. In addition, Mr. DeVeydt is an active leader in his community through his service as a board member of the U.S Chamber of Commerce and the Cancer Support Community, Central Indiana, and a member of the Boys & Girls Clubs of America Board of Governors.charitable activities.
Joseph Hamrock, 5253			2015
Mr. Hamrock has been our President and Chief Executive OfficerCEO since July 1, 2015. From May 2012 to June 2015, and prior to this appointmenthe was our Executive Vice President and Group CEO for NiSource’s Gas Distribution Operations segment, which is comprised of local gas distribution companies in Kentucky, Maryland, Massachusetts, Ohio, Pennsylvania and Virginia since May 2012.Virginia. Prior thereto, he served in a variety of senior executive positions with American Electric Power (AEP)(“AEP”), Columbus, Ohio, an electrical service public utility holding company, including as President and Chief Operating Officer (“COO”) of AEP Ohio from January 2008 to May 2012, and2012. He also served in leadership roles in engineering, transmission and distribution operations, customer service, marketing and information technology. Mr. Hamrock received a bachelor’s degree in electrical engineering from Youngstown State University and a Master’smaster’s degree in business administration from the Massachusetts Institute of Technology, where he was a Sloan fellow.Fellow. He is currently a board member of the American Gas Association and OhioHealth, a not-for-profit healthcare system in central Ohio.
The Board believes it is important that the Company’s CEO serve on the Board. Mr. Hamrock has extensive knowledge of our industry gained throughfrom his 26 years’years of experience in a variety of positions at AEP, and augmentedwhich has been enhanced by his senior leadership experience with the Company. He began his career in the energy industry as an electrical engineer in transmission and distribution planning and went onprogressed to work in commercial and industrial customer services, earning a leadership role in commercial marketing, customer services and strategic development, among other executive roles. Consequently, he has a firm understanding of the needs of our customers and is uniquely qualified to lead a focused utility company to meet our customer commitments. Additionally, he has a solid understanding of our organization through his leadership of our gas distribution segment where he led financial, operational, regulatory and commercial performance for the Company’s gas distribution operations. This significant industry experience provides Mr. Hamrock with a unique perspective into the Company’s operations, our markets, our people and the strategic vision needed to meet our long-term business performance goals. In addition, he has been, and continues to be, an active supporter of educational, charitable and utility industry organizations. He is currently a board member of the American Gas Association and Mount Carmel College of Nursing, as well as several other community boards.

Name, Age and Principal Occupations for Past Five Years and Directorships Held		Has Been a Director Since
Deborah A. Henretta, 5455			2015
Ms. Henretta currently serves as Senior Advisor to SSA & Company, an executive decision strategy consulting firm, following her retirement from Procter & Gamble Co. (“P&G”) in 2015, where she served as Group President of Global e-Commerce at P&G.e-Commerce. Prior to her appointment as Group President of Global e-Commerce in January 2015, she held various senior positions throughout several P&G sectors, including as Group President of Global Beauty from 2012 to 2015 and served as Group President of P&G’s business in Asia from 2007 to 2012, as well as its Global Specialty Channel from 20112012. Prior to 2012. Before her appointment as a Group President of P&G’s business in 2007,Asia, she was DivisionPresident Asia from 2005 to 2007 and President of Global Baby/Baby, Toddler &and Adult Care and Division Vice President of Fabric Conditioners and Bleach.from 2004 to 2005. She joined P&G in 1985. She has been a director at Corning, Inc. since 2013 and currently serves on its audit and corporate relations committees. In 2016, Ms. Henretta became a director of Meritage Homes Corporation and is a member of its nominating and corporate governance committees. Also in 2016.2016, she became a director of Staples, Inc., and is a member of its compensation committee. Additionally, she serves on the Boardboard of Trusteestrustees for Xavier University and at Cincinnati Children’s Hospital Medical Center.St. Bonaventure University.
Ms. Henretta has over 30 years of business leadership experience with P&G in a multi-jurisdictional regulatory and competitive business environment. She has experience across many markets, that includes expertise in brand development,including responsibility for strategic planning, sales, marketing, government relations and government relations.customer service. Ms. Henretta led a dynamic business segment and is, therefore, keenly aware of the delicate balance of keeping pace with customer expectations in a changing environment, as well as maximizing the benefits that inclusion and managing risk. During her long career at P&G she has held various leadership positions responsible for strategic planning, sales, marketing, government relations, and customer service in a multi-jurisdictional regulatory and competitive business environment.diversity can provide. Because of this experience, Ms. Henretta brings valuable insights to our Board and strategic leadership to the Company as it operates in multiple regulatory environments and develops products and customer service programs to meet our customer commitments while providing a rewarding work environment.commitments.
Michael E. Jesanis, 5960			2008
Since 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. Since November 2007, Mr. Jesanis has also since November 2007, been a principal with Serrafix, Boston, Massachusetts, a firm providingthat provides energy efficiency consulting and implementation services, principally to municipalities. Mr. Jesanis also serveshas served as an advisor to several startups in energy-related fields. From July 2004 through December 2006, Mr. Jesanis was President and CEO 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 position, Mr. Jesanis was Chief Operating OfficerCOO and CFO of National Grid USA from January 2001 to July 2004. Mr. Jesanis also is a director2004 and CFO of Ameresco, Inc.its predecessor utility holding company from 1998 to 2000.
By virtue of his former positions as President and CEO, Chief Operating OfficerCOO and, prior thereto, CFO, of a major electric and gas utility holding company as well as his current role with an energy efficiency consulting firm, Mr. Jesanis has extensive 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 past trustee (and past chair of the audit committee) of anothera 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.
Kevin T. Kabat, 59		2015
From April 2007 to November 2015, Mr. Kabat was CEO of Fifth Third Bancorp. He continues to serve as vice chairman of its board of directors. Before becoming CEO, he served as president from June 2006 to September 2012 and was executive vice president of Fifth Third Bancorp from December 2003 to June 2006. Additionally, he was President and CEO of Fifth Third Bank

Name, Age and Principal Occupations for Past Five Years and Directorships Held		Has Been a Director Since
Kevin T. Kabat, 60			2015
From April 2007 to November 2015, Mr. Kabat was CEO of Fifth Third Bancorp, a bank holding company. He continued to serve as Vice Chairman of the board of directors of Fifth Third Bancorp until his retirement in April 2016. Before becoming CEO, he served as Fifth Third Bancorp’s President from June 2006 to September 2012 and as Executive Vice President from December 2003 to June 2006. Additionally, he was previously President and CEO of Fifth Third Bank (Michigan). Prior to that position, he was previously vice chairmanVice Chairman and presidentPresident of Old Kent Bank, which was acquired by Fifth Third Bancorp in 2001. He has been a director atof Unum Group since 2008.2008 and is currently its lead independent director, chair of its human capital committee and a member of its governance committee. In 2016, Mr. Kabat became the lead independent director of E*Trade Financial Corporation and is a member of its bank board and its compensation and governance committees.
Mr. Kabat has significant leadership experience as a CEO in a regulated industry at a public company. As a result, he has a deep understanding of operating in a regulatory environment and balancing the interests of many stakeholders. In addition, hisHis extensive experience in strategic planning, risk management, financial reporting, internal controls and capital markets and corporate governance makes him an asset to our Board, becauseas he providesis able to provide unique strategic insight, financial expertise and risk management skills. In addition, he has broad corporate governance skills and perspective gained from his service as a director of other publicly traded companies.
Richard L. Thompson, 7677			2004
Mr. Thompson has been our independent Chairman of the Board since May 2013. Prior to his retirement in 2004, Mr. Thompson was Group President of Caterpillar Inc., Peoria, Illinois, a leading manufacturer of construction and mining equipment, diesel and natural gas engines and industrial gas turbines. In May 2015, Mr. Thompson retired as lead director of Lennox International, Inc., (“Lennox”), a position he held since May 2012 following his service as Chairman of the Board from June 2006 to May 2012, and as Vice Chairman from February 2005 to June 2006. He began his service on the board of Lennox in 1993. Additionally, he was on the board of Gardner Denver Inc. from November 1998 to July 2013.
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, 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 with a valuable understanding of the technical issues faced by the Company.
Carolyn Y. Woo, 6162			1998
Since January 2012, Dr. Woo has beenwas President and CEO of Catholic Relief Services, thean international humanitarian agency of the Catholic community in the United States.States from January 2012 until her retirement in December 2016. Prior thereto, Dr. Woo was the Martin J. Gillen Dean and Ray and Milann Siegfried Professor of Entrepreneurial Studies at the Mendoza College of Business, University of Notre Dame in Notre Dame, Indiana. Dr. Woo is alsoShe has been a director ofat AON Corporation.plc since 1998, and currently serves on its audit and organization and compensation committees.
Dr. Woo’s current positionexperience as President and CEO 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 providedprovides her with a deep understanding of business principles and extensive expertise with management and strategic

Name, Age and Principal Occupations for Past Five Years and Directorships Held		Has Been a Director Since
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 and a financial institution, 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

Separation of Columbia Pipeline Group

On July 1, 2015 (the “Separation Date”), the Company completed the previously announced separation of CPG from the Company through thepro rata distribution of one share of CPG common stock for every one share of the Company’s common stock (the “Separation”). As a result of the Separation, CPG became an independent public company trading under the symbol “CPGX” on the NYSE, and NiSource continued as a fully regulated natural gas and electric utilities company.

In connection with the Separation, the Company’s Board changed as follows:

Also in connection with the Separation, the Officer Nomination and Compensation Committee was renamed the Compensation Committee and the Corporate Governance Committee was renamed the Nominating and Governance Committee.

Director Independence

Under our Corporate Governance Guidelines, a majority of the 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)303A.02 of the NYSE Corporate Governance Standards.Listed Company Manual. The Board also has adopted an additional independence standard providing that a director who is an executive officer or director of a company that receives payments from the Company in an amount which exceeds 1% of such other company’s consolidated gross revenues is not “independent” until three years after falling below such threshold. A copy of our Corporate Governance Guidelines is posted on our website athttp:https://ir.nisource.com/governance.cfmwww.nisource.com/investors/governance.

The Board has affirmatively determined that, with the exception of Mr. Hamrock, all of the members of the Board and all nominees are “independent directors” as defined in Section 303A.02(b)303A.02 of the NYSE Corporate Governance StandardsListed Company Manual and meet the additional 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.

Under its Charter, the Nominating and Governance Committee reviews reports and disclosures of insider and affiliated partyrelated person transactions. Under the Company’s Code of Business Conduct, the following situations may present a conflict of interest and must be reviewed by the Nominating and Governance Committee to determine if they involve a direct or indirect interest of any director, executive officer or employee (including immediate family members) or otherwise present a potential conflict of interest:

Related partyperson transactions requiring review under the Code of Business Conduct are annually reviewed and, if appropriate, ratified by the Nominating and Governance Committee. Directors, individuals subject to Section 16 (“Section 16 Officer(s)”) of the Securities Exchange Act of 1934, (“Section 16 Officers”as amended (the “Exchange Act”), and senior executive officers are expected

to raise any potential transactions involving a conflict of interest that relatesrelate to them with the Nominating and Governance Committee so that they may be reviewed in a prompt manner.

The son of Jim L. Stanley, our Executive Vice President and Chief Operating Officer,COO, is employed by the Company in a non-executive officer position and received total compensation of less than $150,000 in 2015.2016. His compensation was established by the Company in accordance with its compensation practices applicable to employees with comparable qualifications and responsibilities and holdingwho hold similar positions and without the involvement of Jim L. Stanley.positions. In addition, Jim L. Stanley does not have direct responsibility for directing or reviewing his son’s work and does not have influence over his employment at the Company. The Nominating and Governance Committee reviewed and approved this employment relationship.

There were no other transactions between the Company and any officer, director or nominee for director, or any affiliate of or person related to any of them, since January 1, 2015,2016, of the type or amount required to be disclosed under the applicable Securities and Exchange Commission (“SEC”) rules.

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. The non-management members met separately from management fourthree times in 2015.2016. The independent Chairman of the Board presided at all these executive sessions. All of the non-management members are “independent directors” as defined under the applicable NYSE and SEC rules.

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, or any Board member, or non-management directors, or Chairman

of the Board

c/o Corporate Secretary

801 East 86^th Avenue

Merrillville, Indiana 46410

NiSource Inc.

Attention: Director, Corporate Ethics

801 East 86^th Avenue

Merrillville, Indiana 46410

Code of Business Conduct

The Company has adopted a Code of Business Conduct 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 our code, and;and (v) prompt internal reporting of violations of our code. Our Code of Business Conduct satisfies applicable 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 to employees of the Company and its affiliates. A copy of our Code of Business Conduct is available on our website athttp:https://ir.nisource.com/governance.cfmwww.nisource.com/investors/governanceand also is available to any stockholder upon written request to our Corporate Secretary.Secretary at the address noted above under the heading “Communications with the Board and Non-Management Directors.”

Any waiver of our Code of Business Conduct for any director, Section 16 Officer or senior executive officer 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 our website. No such waivers have been granted.

Corporate Governance Guidelines

The Nominating and 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:https://ir.nisource.com/governance.cfmwww.nisource.com/investors/governance and is also available to any stockholder upon written request to the Company’s Corporate Secretary.

Board Leadership Structure and Risk Oversight

Our 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, an independent lead director will be chosen annually by the Board, taking into account the recommendation of the Nominating and Governance Committee. The Chairman or, if the Chairman is not an independent director, the lead director will serve as chair of the Nominating and Governance Committee and as the presiding director of executive sessions of the Board 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. At this time, the Board believes that the independent Chairman arrangement serves the Company well.

The Board takes an active role in monitoring and assessing the Company’s strategic, compliance, operational and financial risks. The Board administers its oversight function through utilization of its various committees, as well as through acommittees. The Company’s Risk Management Committee, consistingwhich consists of members of our senior management, which is responsible for oversight of the Company’s risk management process. Senior management regularly provides reports on our risks to the Board, the Audit Committee and the Board committees that oversee the applicable risks. Additionally, 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 review and evaluation of the Company’s major risk exposures and the steps management has taken to monitor and control such exposures. The Audit Committee reviews and assesses the adequacy of the Company’s Risk Management Committee Charter annually, amending it as appropriate. In addition, the Finance Committee, the Compensation Committee, the Nominating and Governance Committee and the Environmental, Safety and Sustainability (“ESS”) Committee, the Finance Committee and the Nominating and Governance Committee are each charged with overseeing the risks associated with their respective areas of responsibility.

Meetings and Committees of the Board

The Board met nine times during 2015.2016. Each incumbent director attended at least 86%93% of the total number of meetings of the Board meetings (held during the period for which he or she was a director) and of the committees of the Board on which he or she served, (duringand in each case, during the periods that he or she served).served. Pursuant to our Corporate Governance Guidelines, all directors are expected to attend the Annual Meeting.annual meeting of stockholders. All then-serving directors attended the 2015 Annual Meeting2016 annual meeting of Stockholders.stockholders.

The Board has established five standing committees to assist the Board in carrying out its duties: the Audit Committee, the Nominating and GovernanceCompensation Committee, the ESS Committee, the Finance Committee and the CompensationNominating and Governance Committee. InBeginning in 2015, the Board also established a Search Committee, an ad hoc committee to assist the Nominating and Governance Committee and the Board in identifying qualified director candidates following the Separation.candidates. The Board evaluates the structure and membership of its committees on an annual basis, appoints the independent members of the Board to serve on the committees and elects committee chairs following the Annual Meetingannual meeting of Stockholders.stockholders. The following tables showtable shows the composition of each Board committee as of the date of this Proxy Statement. Mr. Hamrock does not serve on any committee, but is invited to attend various committee meetings. Mr. Thompson, who is Chairman of the Board, also serves as the Chair of the Nominating and Governance Committee and is invited to attend all meetings of each of the standing committees.

Board Committee Composition

The summaries below are qualified by reference to the entire charter for each of the Audit, Nominating and Governance,Compensation, ESS,     Finance     and     CompensationNominating and Governance Committees; each of which can be found on our website athttp:https://ir.nisource.com/governance.cfmwww.nisource.com/investors/governanceand is also available to any stockholder upon written request to the Company’s Corporate Secretary. Additionally, any committee may perform other duties and responsibilities, consistent with their respective charters, our Amended and Restated Bylaws (our “Bylaws”), governing law, the rules and regulations of the NYSE, the federal securities laws and such other requirements applicable to the Company, delegated to any committee by the Board, or in the case of the Compensation Committee, under any provision of any Company benefit or compensation plan.

Audit Committee

The Audit Committee met nineeight times in 2015. Among other things,2016. Our Audit Committee is responsible for the oversight of our internal audit function and financial reporting process. The Audit Committee has the sole authority to appoint, retain or replace the independent auditorsauditor and is responsible for:for, among other things:

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 Company’s additional independence standard set forth in the Corporate Governance Guidelines. The Audit Committee has reviewed and approved the independent registered public accountants,auditor, both for 20152016 and 2016,2017, and the fees relating to audit services and other services performed by them.

For more information regarding the Audit Committee, see “Audit Committee Report” and “Proposal 32 — Ratification of Independent Public Accountants”Auditor” below.

Compensation Committee

The Compensation Committee met seven times in 2016. The Compensation Committee apprises the Board with respect to the evaluation, compensation and benefits of our executives. Its responsibilities include, among others:

In making recommendations regarding the compensation of the CEO and approving the compensation of the other executive officers, the Compensation Committee takes into consideration its evaluation of the individual performance of each person. The Compensation Committee also considers recommendations from Exequity LLP, an executive compensation consulting firm that the Compensation 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 Compensation Committee has determined that Exequity LLP is independent under the NYSE rules.

When considering changes in compensation for senior executives that report to our CEO, including the Named Executive Officers, the Compensation Committee also considers input from the CEO, Executive Vice President, Regulatory Policy and Corporate Affairs and Vice President, Human Resources.

The Compensation Committee has authority to delegate its responsibilities to subcommittees as deemed appropriate, provided the subcommittees are composed entirely of independent directors who also meet the other requirements for membership of the Compensation Committee.

All of the directors serving on the Compensation 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 independence standard for members of compensation committees, (ii) “non-employee directors” as defined under Rule 16b-3 of the Exchange Act, and (iii) “outside directors” as defined by Section 162(m) of the Internal Revenue Code (hereafter “Section 162(m) of the Code” or “Code Section 162(m)”).

Compensation Committee Interlocks and Insider Participation

As of the fiscal year ended December 31, 2016, Messrs. Abdoo and Kabat, Dr. Candris and Ms. Henretta served on the Compensation Committee. During the fiscal year ended December 31, 2016, there were no compensation committee interlocks or insider participation.

Environmental, Safety and Sustainability Committee

The ESS Committee met five times during 2016. The ESS Committee assists the Board in overseeing the programs, performance and risks relative to environmental, safety and sustainability matters. Its responsibilities include, among others:

Finance Committee

The Finance Committee met seven times during 2016. Its responsibilities include the following, among others:

NominatingCompensation Committee Interlocks and Governance CommitteeInsider Participation

Pursuant to the Corporate Governance Guidelines, the Nominating and Governance Committee, with the assistance ofMs. Henretta served on the Compensation Committee and its independentCommittee. During the fiscal year ended December 31, 2016, there were no compensation consultant, Exequity LLP, reviews the amount and composition of non-employee director compensation from time to time and makes recommendations to the Board when it concludes changes are needed.

The Nominating and Governance Committee identifies and screens candidates for director and makes its recommendations for director to the Board as a whole. At times the Board may establish an ad hoc Search Committee to assist the Nominating and Governance Committee in this process. In 2015, a Search Committee was established to assist the Nominating and Governance Committee in identifying qualified director candidates upon the completion of the Separation. The Nominating and Governance Committee has the authority to retain a search firm to help it identify director candidates to the extent it deems necessarycommittee interlocks or appropriate. In connection with the appointments of Ms. Henretta and Mr. Kabat to the Board in 2015, the Nominating and Governance Committee engaged the search firm of Russell Reynolds and Associates, who recommended these candidates. In connection with the nomination of Mr. DeVeydt, the Nominating and Governance Committee engaged the search firm of Heidrick and Struggles, which firm recommended Mr. DeVeydt. In considering candidates for director, the Nominating and Governance 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 factors. In addition, the Nominating and Governance Committee takes into account the racial, ethnic and gender diversity of the Board.

The Nominating and Governance 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 Nominating and Governance Committee also takes into account the candidate’s level of financial literacy. The Nominating and Governance 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 Nominating and Governance Committee also assesses the diversity of the Board as a part of its annual self-assessment process. The Nominating and Governance 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 Nominating and Governance Committee are independent as defined under the applicable NYSE rules and meet the additional independence standard set forth in the Corporate Governance Guidelines.

For information on how to nominate a person for election as a director at the 2017 Annual Meeting, please see the discussion under the heading “Stockholder Proposals and Nominations for 2017 Annual Meeting.”insider participation.

Environmental, Safety &and Sustainability Committee

The ESS Committee met five times during 2015.2016. The ESS Committee assists the Board in overseeing the programs, performance and risks relative to environmental, safety and sustainability matters. Its responsibilities include:include, among others:

Finance Committee

The Finance Committee met eightseven times during 2015.2016. Its responsibilities include the following:following, among others:

Compensation Committee

The Compensation Committee met seven times in 2015. The Compensation Committee advises the Board with respect to the evaluation, compensation and benefits of our executives. Its responsibilities include:

In making recommendations regarding the compensation of the CEO and approving the compensation of the other executive officers, the Compensation Committee takes into consideration its evaluation of the individual performance of each. When considering changes in compensation for the Named Executive Officers, the Compensation Committee also considers input from the Executive Vice President, Corporate Affairs and Human

Resources, and Exequity LLP, an executive compensation consulting firm that the Compensation 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 Compensation Committee has determined that Exequity LLP is independent under the NYSE rules.

The Compensation Committee has authority to delegate its responsibilities to subcommittees as deemed appropriate, provided the subcommittees are composed entirely of independent directors who also meet the other requirements for membership of the Compensation Committee.

All of the directors serving on the Compensation 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 independence standard for members of compensation committees, (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 (hereafter “Section 162(m) of the Code” or “Code Section 162(m)”).

Compensation Committee Interlocks and Insider Participation

As of the fiscal year ended December 31, 2015,2016, Messrs. Abdoo and Kabat, Dr. Candris and Ms. Henretta served on the Compensation Committee. During the fiscal year ended December 31, 2016, there were no compensation committee interlocks or insider participation.

Environmental, Safety and Sustainability Committee

The ESS Committee met five times during 2016. The ESS Committee assists the Board in overseeing the programs, performance and risks relative to environmental, safety and sustainability matters. Its responsibilities include, among others:

Finance Committee

The Finance Committee met seven times during 2016. Its responsibilities include the following, among others:

Nominating and Governance Committee

The Nominating and Governance Committee met five times in 2016. Its responsibilities include, among others:

The Nominating and Governance Committee, with the assistance of Exequity LLP, reviews the amount and composition of non-employee director compensation and makes recommendations to the Board when it concludes changes are needed.

The Nominating and Governance Committee identifies and screens candidates for director and makes its recommendations for director to the Board. At times the Board may establish an ad hoc search committee to assist the Nominating and Governance Committee in this process. Additionally, the Nominating and Governance Committee has the authority to retain a search firm to help it identify director candidates to the extent it deems necessary or appropriate. In 2015, the Board established a search committee to assist the Nominating and Governance Committee and the Board in identifying qualified director candidates. In 2016, the Nominating and Governance Committee also engaged the firm of Heidrick & Struggles International, Inc., which firm recommended Mr. Altabef for director. In considering candidates for director, the Nominating and Governance Committee considers the skills, expertise, experience and qualifications that will best complement the overall mix of skills and expertise of the Board in view of the strategy of, and the risks and opportunities faced by the Company, as well as each candidate’s relevant business, academic and industry experience, professional background, age, current employment, community service, other board service and other factors. In addition, the Nominating and Governance Committee takes into account the racial, ethnic and gender diversity of the Board.

The Nominating and Governance 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 Nominating and Governance Committee also takes into account the candidate’s level of financial literacy. The Nominating and Governance 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 Nominating and Governance Committee also assesses the diversity of the Board as a part of its annual self-assessment process. The Nominating and Governance Committee will consider nominees for directors recommended by stockholders and will use the same criteria to evaluate candidates proposed by stockholders as it uses to evaluate the candidates identified by the Board.

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

For information on how to nominate a person for election as a director at the 2018 Annual Meeting, please see the discussion under the heading “Stockholder Proposals and Nominations for 2018 Annual Meeting.”

DIRECTOR COMPENSATION

Director Compensation.    This section describes compensation for our non-employee directors. To attract and retain highly qualified candidates to serve on the Board, we provide a combination of cash and equity awards. Our non-employee director compensation is reviewed annually by our Nominating and Governance Committee with the assistance of Exequity LLP. A full-time employee who serves as director does not receive any additional compensation for service on the Board. Consequently, because Mr. Hamrock is also our President and CEO, he does not receive additional compensation for his service as a Board member.

Each non-employee director receives an annual retainer of $210,000, consisting of $90,000 in cash and an award of restricted stock units valued at $120,000 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 our common stock on the grant date. Restricted stock units are granted to non-employee directors under the NiSource Inc. 2010 Omnibus Incentive Plan (“Omnibus Plan”), which was approved by the stockholders on May 11, 2010, and re-approved for Code Section 162(m) purposes on May 12, 2015.

Additionally, each non-employee director who serves as chair of a Board committee receives compensation for this responsibility. The annual committee chair fees are $20,000 for each of the standing committees. The

Chairman of the Board receives additional annual compensation of $160,000 for his role. These fees are paid in cash in arrears in four equal installments and are prorated in the case of partial year service.

All Other Compensation.    The other compensation included under the column “All Other Compensation” in the Director Compensation Table below consists of matching contributions made by the NiSource Charitable Foundation.

Omnibus 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. Except as provided below, terms and conditions of awards to non-employee directors are determined by the Board prior to grant. Since May 11, 2010, awards to directors have been made fromunder 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 separates from the Board. Beginning June 1, 2011, the awardsAwards of restricted stock units made after June 1, 2011, vest and are payable in shares of our common stock on the earlier ofto occur 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 effective in 2015, any director that commences services after the start of an annual term vests on the first anniversary of the initial grant; and, provided further, 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 is 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 is 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 on or after June 1, 2011, are payable as soon as practicable following vesting, unless otherwise provided pursuant to any prior election the non-employee director may have made to defer distribution. All equity awards under our Omnibus Plan, including awards to non-employee directors have a minimum vesting term of one year. 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 our common stock upon distribution.

In connection with the Separation, the Board approved equitable adjustments to all outstanding equity awards in order to preserve the intrinsic aggregate value of the awards prior to Separation. Vested but unpaid restricted stock units awards held by non-employee directors were credited with one immediately vested CPG restricted stock unit for each such NiSource restricted stock unit held. Unvested awards were not provided such credit, however, the awards of restricted stock units made to non-employee directors on May 12, 2015, were subject to a valuation adjustment based on a ratio of the price that a share of NiSource Common Stock traded for three days prior to the Separation and the NiSource share price traded on a when-issued basis for the same three-day period.

Also in connection with the Separation, the Company amended the restricted stock unit agreements for vested but unpaid restricted stock units to provide the non-employee directors with a one-time opportunity to elect to invest all or a portion of the such restricted stock units and the CPG restricted stock units in alternative investment options and to have such amounts settled in cash at the same time as the vested restricted stock units are paid under the prior award agreements, subject to the stock ownership requirements described below.

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, 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. All of the non-employee director nominees are in compliance with the stock ownership requirements that are included in the Corporate Governance Guidelines.

Each director has a significant portion of his or her compensation directly aligned with long-term stockholder value. Fifty-seven percent (57%) of a non-employee director’s 20152016 annual retainer (valued as of the time of award) consisted of restricted stock units, which are converted into common stock when vested and distributed to the director.

2016 Director Compensation

The table below sets forth all compensation earned by or paid to our non-employee directors in 2015.2016. Our CEO and former CEO did not receive any additional compensation for theirhis service on the Board. TheirHis compensation for serving as CEO is listed under Compensation of Executive Officers.

non-employee director to approved tax-exempt charitable organizations. Any amount not utilized for the match in the year it is first available is carried over to the following year.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table shows as of March 3, 2016,2017, the number of shares of our outstanding common stock beneficially owned by (i) each of our directors; (ii) each of our Named Executive Officers; (iii) our directors and executive officers as a group; and (iv) beneficial owners of more than 5% of our outstanding common stock (based solely on the Schedule 13G filings and any amendments thereto filed with the SEC on or before March 3, 2016)2017) except as noted below. None of the Named Executive Officers or directors has any outstanding stock options as of that date. The business address of each of the Company’s directors and executive officers is the Company’s address.

(1)

As reported on an amendment to statement on Schedule 13G filed with the SEC on behalf of T. Rowe Price Associates, Inc.The Vanguard Group on February 10, 2016. T. Rowe Price Associates, Inc.2017. The Vanguard Group has sole voting power with respect to 10,826,615529,933 shares, andshared voting power with respect to 79,122 shares, sole dispositive power with respect to 31,533,01134,556,283 shares and shared dispositive power with respect to 585,559 shares reported as beneficially owned.

EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS (CD&A)

Introduction

As noted earlier in this Proxy Statement, on July 1, 2015, the Company successfully completed the separation of its natural gas pipeline and related business into a stand-alone publicly traded company, CPG. We believe this Separation will enhance long-term stockholder value by creating two independent, highly focused, premier entities and sets the foundation for the Company to execute on our pure-play utility growth strategy. While we have retained the same executive compensation philosophy and principles post-Separation, our 2015 executive compensation program was modified as a result of the Separation in order to address the unique challenges of the mid-year Separation, including for example, (1) dramatically different financial plans for the first and second half of the year necessitating bifurcation of our annual cash short-term incentive program, (2) the difficulty in establishing long-term performance goals for our 2015 annual long-term equity awards necessitating the use of service-based restricted stock units in lieu of our traditional long-term incentive vehicle of performance-based share awards, and (3) the need to adjust performance periods and goals for our unvested 2013 and 2014 performance share awards in light of the different operating and financial plans of the Company post-Separation.

This CD&A describes our compensation philosophy and the material elements of our 20152016 executive compensation program applicable to our Named Executive Officers.

Our Named Executive Officers who currently serve as executive officers of the Company are:in 2016 were:

Joseph Hamrock — President and Chief Executive Officer

Donald E. Brown — Executive Vice President and Chief Financial Officer

Pablo A. Vegas — Executive Vice President and TreasurerPresident, Columbia Gas Group

Jim L. Stanley — Executive Vice President and Chief Operating Officer

Carrie J. Hightman — Executive Vice President and Chief Legal Officer

Violet Sistovaris — Executive Vice President, Northern Indiana Public Service Company (“NIPSCO”)

We also have three Named Executive Officers who are no longer executive officers ofOn March 24, 2017, the Company following the Separation. SEC executive compensation disclosure rules require us to provide information for each individual who served as chief executive officer or chief financial officer at any time during the fiscal year.

announced that Mr. Robert C. Skaggs, Jr. and Mr. Stephen P. Smith served as President and Chief Executive Officer and Executive Vice President and Chief Financial Officer, respectively, prior to the Separation on July 1, 2015 at which time both resignedStanley will retire from their positions with the Company and commenced employment with CPG. In addition, these disclosure rules require us to provide information for Mr. Glen L. Kettering who served as an executive officer of the Company during the year and would have been reported as a Named Executive Officer in this Proxy Statement had he not left the Company.effective June 1, 2017.

20152016 Accomplishments

In addition to the Company’s successful completion of the Separation, theThe Company achieved a number of significant accomplishments in 2015,2016, including:

Total Shareholder Return shown in the chart above is calculated by share price appreciation plus the annual dividend amount.

The NiSource 2015 share price appreciation and total shareholder return shown in the charts above are based on a 2014 year-end closing price calculated utilizing the Bloomberg separation formula taking into account the Separationseparation of Columbia Pipeline Group, Inc. from the Company on July 1, 2015.2015 (the “Separation”).

Our 20152016 performance was once again driven in large part by our continued disciplined execution across all facets of our established infrastructure-focused and investment-driven business strategy. Key business accomplishments during 20152016 include:

The Compensation Committee considered these achievements while performing its oversight activities of the Company’s executive compensation program throughout the course of the year.

Executive Compensation Highlights

ManyIn connection with its ongoing review of our executive compensation program, the Compensation Committee’s 2015 compensation decisions wereCommittee made in anticipation of the Separation and to reflect the Company’s emergence as a pure-play utility. The following are key compensation decisions that occurred during 2015, many of which were madewith respect to address the unique circumstances related to the mid-year Separation.

In early 2015, the Compensation Committee:2016:

In June 2015, the Compensation Committee:

In addition, in October 2015,Company with entities that the Compensation Committee amended the Omnibus Plan, effective October 4, 2015, to provide for (i) a minimum vesting period of one year for all awards and (ii) double-trigger vesting for equity awards that are assumed or replaced by an acquiring company upon a change-in-control; meaning that there must be both a change-in-control and a qualifying termination of employment in order for the

equity awards to vest in connection with or following such change-in-control. In the event equity awards are not assumed or replaced in a change-in-control, then the outstanding equity awards will vest upon the occurrence of a change-in-control alone. Please see the section entitled “Severance and Change-in-Control Benefits” for further information regarding benefitsconsiders to be received upon termination of employment or a change-in-control.operationally similar and with which we compete for executive talent.

Overview of Our Executive Compensation Practices

TheOn a continuing basis, the Compensation Committee reviews on an ongoing basis the Company’s executive compensation program to evaluate whetherensure it supportsremains optimally designed to reflect the Company’s executive compensation philosophy, andfulfills its defined objectives and is alignedaligns with stockholder interests. Our executive compensation practices include the following, each of which the Compensation Committee believes reinforces our executive compensation philosophy and objectives.

Overview of Our Executive Compensation Program

OurWe design our compensation program is intended to attract, retain and motivate highly qualified executives.highly-qualified executive talent. We believe highly-qualified executive talent is an essential driver of the Company’s success in achieving its business objectives.

The principal elements of compensation that we have historically providedprovide to our executives are: base salary, annual short-term performance-based cash incentives and long-term performance-based equity incentive awards. We use short and long-term performance-based compensation to motivate our executives to meet and exceed the Company’s short and long-term business objectives of the Company.objectives.

Since 2011, we have used 100%Our long-term performance-based equity compensation for our annual long-term equity incentive awards as a meansis denominated entirely in common shares to further align the interests of our executives with those of our stockholders. InOur annual grants of long-term equity incentive awards have been delivered solely in a performance-contingent format since 2011, except in 2015 however,when we granted service-based awards in anticipationconnection with the Separation. We also occasionally use special awards of the Separation and the fact that the Company and the Company’s financial plans would be very different following the mid-year Separation, we used service-based restricted stock and restricted stock units for

our annual long-term equity awards in lieu of performance-based equity. Effective January 2016, we returned to our historical practice of awarding 100% performance-based equity compensation for our annual long-term equity incentive awards.attract and retain executive talent, promote management continuity and reward outstanding performance.

We generally target total compensation (base salary, annual short-term performance-based cash incentives and long-term equity incentive awards) to be competitive with the compensation paid to similarly positioned executives at companies within our peer group of companies (the “Comparative Group”) as described in the section entitled “Our Executive Compensation Process — Competitive Market Review.” We do not, however, manage pay to a certain targetstipulated percentile of the Comparative Group practices.

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 prohibited from trading in Company securities during quarterly blackout periods, and they are also prohibited from engaging in hedging or short sales of the Company’s equity securities.

Finally, when making decisions about our executive compensation program, the Compensation Committee takes into account the stockholders’ view of such matters. In 2015, 96%2016, 94% of our investors voted in favor of our Say-on-Pay Proposal at our 2016 Annual Meeting. No changes were made to the design of our executive compensation program in response to the 20152016 stockholder vote.

Our Executive Compensation Philosophy

The key design priorities of the Company’s executive compensation program are to:

– Attract and retain executives with competitive compensation opportunities;

– Motivate and reward executives for achieving and exceeding our business objectives;

– ProvideEnsure that substantial portions of pay remain at risk for failure to achieve our business objectives;

The Compensation Committee believes that the Company’s executive compensation program is thoughtfully and effectively constructed to fulfill our compensation objectives and rewards decision making that creates value for our stockholders, customers and other key stakeholders.

Principal Elements of Our 20152016 Compensation Program

We have designed our program to meet our business objectives using various compensation elements intended to drive both short-term and long-term performance.

We believe that a largesignificant percentage of total compensation for our Named Executive Officers should be performance-based, and the proportionconsist of at-risk, performance-based compensation should increase as the executive’s level of responsibility within the Company increases.compensation. The Compensation Committee believes the appropriate mix of thecompensation elements of compensation should take into account the Company’s financial and strategic objectives, the competitive environment, Company performance, individual performance and responsibilities, and evolving governance practices. For example, in anticipation of

The following charts illustrate the Separation, the Compensation Committee determined it appropriateextent to approve 2015 annual long-term equity awards towhich 2016 target total compensation for our CEO and our other Named Executive Officers solelywas payable in fixed (base salary) and performance-contingent (annual performance-based cash incentive payable at the formtarget level and the grant date fair value of service-based restricted stock units that vest in February 2018, subject to the executive’s continued employment.

We believe that the principal elements of our total compensation package for 2015,2016, as more fully described below, help us achieve the objectives of our compensation program as follows:

Base Salary

Base salary is designed to provide our employees with a level of fixed pay that is commensurate with role and responsibility. We believe that by delivering base salaries that are reflective of market norms, the Company is well-positioned to attract, retain and motivate top caliber executives in an increasingly competitive labor environment. The Compensation Committee annually reviews the base salaries of the Company’s senior executives, including the Named Executive Officers, to evaluate whether they are competitive within our industry. In reviewing the base salaries, the Compensation 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 — Competitive Market Review” listing the companies in our Comparative Group used by the Compensation Committee for the first half of 2015 (pre-Separation) and in the second half of 2015 (post-Separation).Review.” The Compensation 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 Mr. Skaggs,Hamrock, our CEO at the time.CEO. Mr. Skaggs wasHamrock’s pay is evaluated separately by the Compensation Committee, taking into account those factors reviewed for all other senior executives. The Compensation Committee then providedprovides their recommendation regarding CEO compensation to the independent members of the Board for approval. See the section below entitled “Compensation Committee Actions Related to 20152016 Compensation” for more information.

Annual Performance-Based Cash Incentive Plan (“Cash Incentive Plan”)

This component of total compensation provides employees with the opportunity to earn a cash award tied to both the Company’s performance of the Company and individual contributions to the organization’s success. Annual cash incentives are authorized by the Omnibus Plan which was originally approved by stockholders in May 2010 and re-approved by stockholders for Code Section 162(m) purposes in May 2015. The performance goals forAwards under the Cash Incentive Plan are subject to one corporate financial performance goal with additional operational goals related to customer care and safety. The financial performance goal is based on the Company’s financial plan, which is approved by the Board at the beginning of the applicable performance period. The financial planyear, and is designed to achieve the Company’s aim of creating sustainable stockholder value by growing earnings effectively managing the Company’s cash and providing a strong dividend. In January 2015, in anticipationThe customer care and safety goals are designed to incent achievement of the Separation, the Compensation Committee approved performance measures and goals for the first half of 2015 and, in June, the Compensation Committee approved the same corporate performance measures (eliminatingour business unit measures) but different goals for the second half of 2015 as a result of the Separation.imperatives.

Eligibility for participation in the Cash 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 Compensation Committee identifies expectations for all senior executives, including the Named Executive Officers.CEO, for whom the Compensation Committee makes recommendations for consideration by the independent members of the Board. See the section below entitled “Compensation Committee Actions Related to 2015 Compensation”2016 Compensation—Annual Performance-Based Cash Incentives” for more information regarding the 20152016 Cash Incentive Plan, including incentive opportunities, performance measures, goals and payouts for each of the Named Executive Officers.

Long-Term Equity Incentive Plan (“LTIP”)

Our compensation program also includes a long-term equity incentive component. The Compensation Committee believes it is 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 Compensation Committee also believes that long-term equity incentives promote decision making that is consistent with the Company’s long-term business objectives.

Since 2011, the Compensation Committee has delivered annual long-term equity incentive awards solely in performance sharesa performance-contingent format to further align our executives’ interests with those of our stockholders and the Company’s long-term business objectives. However,The sole exception to this practice was in January 2015 when service-based awards were granted in anticipation ofconnection with the Separation, the Compensation Committee determined that the 2015 annual long-term equity awards should be in the form of service-based restricted stock units that vest in February 2018, subject to the executive’s continued employment through the vesting date.Separation. In January 2016, the Compensation Committee reverted back to its historical practice of delivering annual long-term equity incentive awards solely in the form of performance shares that vest based on the achievement of multi-year performance goals and the executive’s continued employment through the vesting date.date, subject to special vesting rules that apply in the event of death, “Retirement,” “Disability” or a “Change-in-Control” (each as defined in the Omnibus Plan). Termination for any other reason prior to the vesting date will result in forfeiture of all related performance shares. Additionally, the Omnibus Plan prescribes a minimum vesting period of one year for all equity awards.

When establishing equity grantsaward opportunity levels for each Named Executive Officer, the Compensation Committee considers, among other things, the executive’s base 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. The actual value of each annual long-term equityperformance award, will vary based onif any, depends upon Company performance against pre-established performance measures as well as the Company’s stock price at the time the award is settled.

The Compensation Committee may also approve special equity awards that are not performance-based to attract and retain executive talent or to recognize significant contributions. See the section below entitled “Compensation Committee Actions Related to 20152016 Compensation” for more information regarding the 20152016 LTIP awards for each of the Named Executive Officers, including thea special sign-on equity grant to Mr. Brown,Vegas and the performance resultsmeasures and goals for the 2013 and 20142016 performance share awards, based on performance through the Separation, and the conversion of the 2013 and 2014 performance share awards into service-based restricted stock units at the time of the Separation.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 generally 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 our executive compensation program. They are intended to assist executive officers in the performance of their duties on the Company’s behalf of the Company or to otherwise to provide benefits that have a combined personal and business purpose. Generally, 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, except for relocation expenses, consistent with Company practice for all employees who receive Company-paid relocation expenses. For more information on theseregarding 2016 perquisites, see the 2016 Summary Compensation Table and footnote (6) to that table.

Severance and Change-In-Control Benefits

We maintain an executive severance policy and Change-in-Control Agreements with each of the Named Executive Officers that we currently employ, and we previously maintained a letter agreement with Mr. Smith, our former Chief Financial Officer, regarding payments to be made in the event of termination of his employment. No severance or Change-in-Control payments were triggered by the terminations of employment of Messrs. Skaggs, Smith or Kettering in connection with the Separation.

Officers. Change-in-Control Agreements are intended to 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. The Change-in-Control Agreements provide for cash severance benefits upon a double-trigger (meaning there must be both a qualifying change-in-control and termination of employment) and do not provide for any “gross-up” payments to executives for excise taxes incurred with respect to benefits

received under a Change-in-Control Agreement. Effective as of October 2015,Additionally, the Omnibus Plan was amended to provide that allprovides for double-trigger vesting for equity awards granted under the Plan that are assumed or replaced by an acquiring company will be subject to double-trigger vesting upon a change-in-control; meaning that there must be both a change-in-control and a qualifying termination of employment in order for the equity awards to vest in connection with or following such change-in-control. Awards thatIn the event equity awards are not assumed or replaced byin a change-in-control, then the acquiring companyoutstanding equity awards will vest upon such change-in-control.the occurrence of a change-in-control alone.

For further discussion of these agreements,information regarding the benefits to be received upon termination or employment or change-in-control, see the table in the section entitled “Potential Payments upon Termination of Employment or a Change-in-Control of the Company” and the accompanying narrative.

Pension Programs

During 2015,2016, we maintained a tax-qualified defined benefit pension plan for essentially all salaried exempt employees hired before January 1, 2010, all 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 theany eligible Named Executive Officers.Officer. 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 and reduced by amounts paid under the tax-qualified plan. The material terms of the pension programs are described in the narrative to the 2016 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, and non-union hourly employees hired after January 1, 2013, the 401(k) Plan includes a 3% Company contribution to the employee accounts. 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 20152016 Non-qualified Deferred Compensation Table.

Deferred Compensation Plan

We also maintain the Executive Deferred Compensation Plan (the “Deferred Compensation Plan”) through which eligible Company executives, including the Named Executive Officers, may elect to defer between 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 20152016 Non-qualified Deferred Compensation Table.

Health and Welfare Benefits

We also provide 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 Compensation Committee is responsible 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. In doing so, the Compensation Committee apprises the Board with respect to the evaluation, compensation and benefits of our executives. The Compensation Committee takes into account various factors when making compensation decisions, including:

The Compensation Committee reviews the compensation of our CEO and his executive direct reports each year. In determining the compensation of theFor our CEO, and his executive direct reports, the Compensation Committee takes into considerationevaluates CEO performance in light of the Company’s goals and objectives and considers recommendations from the Compensation Committee’s independent executive compensation consultant, Exequity LLP, that are reflective of the Compensation Committee’s assessment of our CEO’s recommendation with respect to his executive direct reportsperformance and compensation competitiveness. Following this evaluation, the Compensation Committee submits its recommendation with respect to the CEO compensationrecommendations to the independent members of the Board. Board for review and approval.

When considering changes in compensation for senior executives that report to our CEO, including the Named Executive Officers, the Compensation Committee also considers input from the CEO, the Executive Vice President, Regulatory Policy and Corporate Affairs, andVice President, Human Resources andin addition to the Compensation Committee’s independent executive compensation consultant, Exequity LLP.

Competitive Market Review

In connection with its compensation decision making, the Compensation Committee reviews the executive compensation practices in effect at other companies in the Comparative Group. Prior to Separation, theseThese companies comprised leading gas, electric, and combination utility and natural gas transmission companiesutilities that were selected by the Compensation Committee for their operational comparability to the Company and because we generally compete with these companies for the same executive talent. For 2016, the Compensation Committee, with input from Exequity LLP, removed EQT Corporation, Pepco Holdings, Inc., Spectra Energy Corp., and The Williams Companies, Inc. from the Comparative Group and added Alliant Energy Corporation, Atmos Energy Corporation, The Laclede Group, Inc., OGE Energy Corp., One Gas, Inc., Piedmont Natural Gas Company, Inc., PNM Resources, Inc., Vectren Corporation and WEC Energy Group, Inc. These changes were made to further align the Company with its peer companies with respect to revenue size, market capitalization and operational similarity. For purposes of considering 2015evaluating 2016 compensation practices, prior to the Separation, the pre-Separation Comparative Group included the following companies:

In anticipation of the Separation, in May 2015, the Compensation Committee’s independent compensation consultant presented a revised group of comparator companies to reflect the Company’s smaller size and narrower range of operations post-Separation. This revised group was used in evaluating the compensation adjustments that were approved in June 2015 in connection with the Separation. This revised group of companies was based on the Comparative Group prior to the Separation, but updated to (i) remove the following companies: EQT Corporation, Pepco Holdings, Inc., Spectra Energy Corp, and The Williams Companies, Inc. and (ii) include the following companies: Atmos Energy Corporation, The Laclede Group, Inc., OGE Energy Corp., One Gas, Inc., Piedmont Natural Gas Company, Inc., and PNM Resources, Inc.

In August 2015, the Compensation Committee, with input from its independent compensation consultant, revised the Comparative Group for purposes of evaluating compensation practices in 2016. The new post-Separation Comparative Group, set forth below, removed companies in the transportation and storage sector (EQT Corporation, Pepco Holding, Inc., Spectra Energy Corp and The Williams Companies, Inc.) and added several companies (Alliant Energy Corporation, Atmos Energy Corporation, The Laclede Group, Inc., OGE Energy Corp., One Gas, Inc., Piedmont Natural Gas Company, Inc., PNM Resources, Inc., Vectren Corporation and WEC Energy Group) in order to align with companies that are operationally similar to the Company following the Separation.

Policies and Guidelines

We maintain various guidelines and policies to help us meet our compensation objectives including:

reimbursement of amounts received in the event of certain acts of misconduct with respect to both the annual short-term cash incentive and long-term equity awards.

Tax Treatment of Executive Compensation.Compensation

Section 162(m) of the 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. The Compensation Committee reviews the deductibility of compensation under Section 162(m) of the Code and related regulations published by the IRS. The Compensation Committee retains the discretion to amend any compensation arrangement to comply with Code Section 162(m)’s requirements for deductibility in accordance with the terms of such arrangements and what it believes is in the Company’s best interest of the Company.interest.

The Compensation 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 that preserves the deductibility of compensation payments and benefits. It should be noted, however, that there are many factors which are considered by the Compensation 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 Compensation Committee has not adopted a policy that all executive compensation must be deductible under Section 162(m) of the Code.

Compensation Committee Actions Related to 20152016 Compensation

During 2015,2016, the Compensation Committee reviewed and, as appropriate, took action with respect to each element of total compensation for each Named Executive Officer following the principles, practices and processes described above. In doing so, the Compensation Committee concluded that the total compensation provided for each of the Company’s senior executives in 2015,2016, including the Named Executive Officers, was consistent with the Company’s compensation philosophy and was reasonable, competitive and appropriate.

The Compensation Committee’s compensation determinations though subjective in part, were based primarily upon recognition of the roles and responsibilities and performance of each Named Executive Officer, and a determination that the total compensation awarded to each Named Executive Officer provided well-balanced incentives to focus on serving the interests of the Company and its stockholders.

In addition, the Compensation Committee considered the stockholders’ advisory approval of the 20142015 compensation of our Named Executive Officers at the 20152016 Annual Meeting and determined that no changes were necessary or advisable in connection with the design of our senior executive compensation program as a result of the stockholders’ vote.

20152016 Base Salaries

Historically,The Compensation Committee annually reviews the base salaries of senior executives, including the Named Executive Officers, have been adjusted when deemed necessary to maintain competitivenessensure they are competitive and appropriately reflect performance. The Compensation Committee reviewedconsidered the base salaries earned by similarly situated executives of companies in the Company’s senior executives, including the Named Executive Officers,Comparative Group, responsibilities, experience, internal pay equity, historical compensation practices, individual performance and contributions to achievement of business objectives. The Compensation Committee approved salary increases effective upon the Separation, for Messrs. HamrockBrown and Stanley to maintain salary level market competitiveness for each executive that is reflective of strong performance and Ms. Sistovaris, eachtheir achievements in their roles as CFO and COO, respectively. As a result, the Compensation Committee approved an increase of whom assumed new roles with increased responsibilities following$50,000 for Mr. Brown and an increase of $25,000 for Mr. Stanley.

With respect to Mr. Hamrock, the Compensation Committee recommended to the independent members of the Board an increase in base salary level to maintain market competitiveness that is reflective of his strong performance and achievements in his role as President and CEO of the Company since the Separation. No otherThe Compensation Committee recommended to the independent members of the Board an increase in salary adjustments were made. of $100,000 as appropriate, particularly in light of the market data for chief executive officers at companies in the Comparative Group. Such recommendation was approved.

In addition, the Compensation Committee established Mr. Brown’sVegas’ initial base salary of $450,000 at the time he joined the Company in April 2015,May 2016, considering the compensation he received from his prior employer, market data and the compensation practices within the Company.

In reviewing the base salaries of the Named Executive Officers, the Compensation Committee considered the base salaries earned by similarly situated executives of companies in the post-Separation Comparative Group, increased responsibilities, experience, internal pay equity, historical compensation practices, individual performance and contributions to achievement of business objectives. In particular, the Compensation Committee considered Mr. Hamrock’s new role and responsibilities as President and CEO of the Company and determined that an increase in salary of $300,000 was appropriate, particularly as compared to the market data for chief executive officers at companies in the post-Separation Comparative Group. The Compensation Committee also

determined that increases of $25,000 for Mr. Stanley and $80,000 for Ms. Sistovaris were appropriate based on market data and in recognition of their new roles and increased responsibilities as Chief Operating Officer and Executive Vice President, respectively.

The 20152016 base salary adjustments effective upon the Separation, for Messrs. Hamrock, Brown and Stanley were effective on June 1, 2016, and Ms. Sistovaris are shown in the table below. As noted above, Mr. Vegas’ initial base salary was established at the time he joined the Company in May 2016 and no other base salary adjustments were made in 2015 for the Named Executive Officers.Officer received a salary adjustment in 2016.

Annual Performance-Based Cash Incentives

Certain elements of our executive compensation program had to be modified in 2015 as a result of the Separation. In particular, the Incentive Plan was bifurcated into two six-month performance periods, with the same corporate performance measures for each half (but excluding business unit measures for the second half of 2015) and different performance goals for each half, reflecting the fact that the Company and its financial plans were very different pre-Separation as compared to post-Separation. Similarly, as explained below, annual performance-based cash incentive ranges and base salary amounts used to determine actual payout amounts changed post-Separation for certain Named Executive Officers.

Pre-Separation Annual Performance-Based Incentive Ranges

In January 2015, in anticipation of the Separation,2016, the Compensation Committee established performance measures and goals for the first half of the year to determine the first half2016 incentive payouts toopportunities for the Named Executive Officers employed by the Company on December 31, 2015.Officers. In determining incentive compensation ranges for the Named Executive Officers, for the first half of 2015, the Compensation Committee considered competitive information from the pre-Separation Comparative Group, input from the independent compensation consultant, historical payouts and individual performance and made no changes to the ranges for the then-serving Named Executive Officers.

The annual performance-based cash incentive ranges for each of the Named Executive Officers, except for our CFO, Mr. Brown. The Compensation Committee determined that in order for his compensation to be reflective of his strong performance and competitive with other similarly positioned executives within the Comparative Group, Mr. Brown’s incentive compensation range should also be adjusted in addition to his base salary, as of June 30, 2015, used to determine the incentive payout based on performance for the first half of the year are set forth below.

Messrs. Skaggs, Smith and Kettering subject to the terms and conditions of the CPG incentive plan, including the requirement that each be employed by CPG on December 31, 2015 in order to be eligible to receive a payment from CPG.

Post-Separation Annual Performance-Based Incentive Ranges

noted above. In June 2015, in anticipation of the Separation,addition, the Compensation Committee established performance measures and goals forMr. Vegas’ initial incentive compensation range at the second half of 2015 to determine the second half incentive payouts to the Named Executive Officers employed bytime he joined the Company on December 31, 2015. The Compensation Committee also approved additional adjustments toin May 2016, considering the cash-based incentive compensation ranges for Messrs. Hamrockhe received from his prior employer, market data and Stanley and Ms. Sistovaris based on their new roles and responsibilities following the Separation taking into account competitive information fromcompensation practices within the modified post-Separation Comparative Group, and input from the independent compensation consultant to determine their payout based on performance for the second half of the year.

The annual performance-based cash incentive ranges for each of the Named Executive Officers employed by the Company on December 31, 2015, used to determine the incentive payout based on performance for the second half of the year are set forth below.

Company. For more information on the 20152016 payout amounts for each of the Named Executive Officers, see below under the sections belowsection entitled “Pre-Separation 2015 Incentive Plan Payouts to the Named Executive Officers” and “Post-Separation 2015“2016 Cash Incentive Plan Payouts to the Named Executive Officers.”

Pre- and Post-Separation Financial Goals

The 20152016 Cash Incentive Plan awards for senior executives, including all of the eligible Named Executive Officers, were subject to achievement with respect to twoone corporate financial goals,goal, net operating earnings per share, and corporate funds from operations, as well as an additional operational measuregoals relating to customer care and safety. The Compensation Committee approved these measures for the performance periods for both the first and second half of 2015period because they were deemed to be important to the Company’s success in increasing stockholder value.

Earnings, cash flowcustomer care and safety were measured as follows:

geographic region), as reported in the 2016 JD Power Gas and Electrical Utility Residential Customer Satisfaction Studies. This measure is designed to track our progress in delivering satisfaction to our customers and is aligned with our stakeholder commitment of top-tier customer satisfaction and brand perception. The target was set using the Company’s 2015 performance, as measured based on the 2015 JD Power Gas and Electrical Utility Residential Customer Satisfaction Studies, as the baseline.

The incentive opportunities for the senior executives, including the Named Executive Officers were contingent on achievement of goals relating to these measures, subject to final discretionary adjustmentadjustments by the Compensation Committee.

For the first half performance period, the 2015 Incentive Plan awards for the leaders of our business units during the first half of the year (Mr. Hamrock, who led NiSource Gas Distribution, Mr. Stanley, who led NIPSCO, and Mr. Kettering, who led Columbia Pipeline Group) also were subject to achievement with respect to business unit net operating earnings and funds from operations goals for each of the business units. The Compensation Committee extended to Mr. Skaggs the authority to establish the annual business unit targets for the year. He assigned goals that, if accomplished, would help the Company achieve its overall corporate objectives, consistent with the Compensation Committee’s belief that 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.

Consequently, the incentive opportunities for Messrs. Hamrock, Stanley and Kettering for the first half of the 2015 performance period were subject to achievement with respect to the corporate financial measures (net operating earnings per share and corporate funds from operations), and achievement of business unit net operating earnings, business unit funds from operations and business unit safety measures for which they had responsibility. As such, each of their measures for the first half of 2015 is weighted differently than the other Named Executive Officers who were members of the corporate service group during the first half of the year, as shown in the tables below.

There are no business units remaining following the Separation since the Company is more operationally aligned following the Separation and each of the Named Executive Officers employed post-Separation was subject to the same performance goals and weighting for the second half of 2015.

Messrs. Skaggs, Smith and Kettering were not eligible to receive an incentive payout from the Company under the terms of the Incentive Plan as they were not employed on December 31, 2015 and have been excluded from the Pre-Separation Performance Results Table below. If Messrs. Skaggs and Smith had remained employed through December 31, 2015, they would have been eligible to receive annual incentive payouts based on the performance measures and weightings set forth below with respect to Ms. Hightman and Ms. Sistovaris.

Pre-Separation Performance Results

The applicable performance measures and their associated weightings and results as a percentage of the target incentive opportunity for 2016 for each of the first half of 2015 for Ms. Hightman and Ms. SistovarisNamed Executive Officers were:

(2)	These amounts reflect a percentage of each executive’s target incentive opportunity. The trigger, target and stretch incentive opportunities for Ms. Hightman and Ms. Sistovaris are provided in the section entitled “Pre-Separation 2015 Incentive Plan Payouts to the Named Executive Officers.”

The applicable performance measures and their associated weightings for the first half of 2015 for Messrs. Hamrock, Stanley and Kettering and results as a percentage of the target incentive opportunity for Messrs. Hamrock and Stanley were:

Pre-Separation 2015 Incentive Plan Payouts to the Named Executive Officers

The annual incentive opportunities and actual payout amounts for each of the eligible Named Executive Officers as approved by the Compensation Committee for the first half of 2015 performance period were:

Post-Separation Performance Results

The applicable performance measures and their associated weightings and results as a percentage of the target incentive opportunity for the second half of 2015 for each of the currently employed Named Executive Officers were:

(2)

These amounts reflect a percentage of the Named Executive Officers target incentive opportunity for the second half of 2015. The trigger, target and stretch incentive opportunities for each Named Executive Officer are provided in the section entitled “Post-Separation 2015 Incentive Plan Payouts to the Named Executive Officers.”

Post-Separation 20152016 Cash Incentive Plan Payouts to the Named Executive Officers

For 2015,2016, the annual performance-based cash incentive opportunities and actual payout amounts for each of the eligible Named Executive Officers as approved by the Compensation Committee for(and with respect to the second halfCEO, by the independent members of 2015the Board) were: