VVC Vectren Corp.

NOTICE OF A SPECIAL MEETING OF SHAREHOLDERS

Our board of directors unanimously recommends that you vote  FOR  all of these proposals. Your attention is directed to the accompanying proxy statement for a discussion of the merger and the merger agreement, as well as the matters that will be considered at the special meeting.

Your vote is very important.  The conditions to the merger include that our shareholders approve the Merger proposal.  Approval of the Merger proposal requires approval by holders of a majority of all of the outstanding shares of our common stock entitled to vote at the special meeting.  Approval of the non-binding Merger-Related Compensation proposal and any Special Meeting Adjournment proposal is not a condition to

completion of the merger. Approval of each of the non-binding Merger-Related Compensation proposal and any Special Meeting Adjournment proposal requires that votes cast by the holders of the outstanding shares of our common stock represented (in person or by proxy) at the special meeting and entitled to vote on the applicable proposal for approval must exceed votes cast against approval.

If your shares are held in “street name” by a broker, nominee, fiduciary or other custodian, follow the directions given by the broker, nominee, fiduciary or other custodian regarding how to instruct it to vote your shares.

Please submit your proxy by accessing the Internet, by telephone or by completing, signing, dating and returning your signed proxy card(s) as soon as possible, so that your shares may be represented at the special meeting. You may revoke your proxy at any time before the vote at the special meeting by following the procedures outlined in the accompanying proxy statement.

By order of the Board of Directors,

VECTREN CORPORATION

By: RONALD E. CHRISTIAN

Executive Vice President, Chief Legal and External

Affairs Officer and Corporate Secretary

Evansville, Indiana

            July 16, 2018

TABLE OF CONTENTS

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QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETING

The following questions and answers are intended to briefly address some commonly asked questions regarding the special meeting and the merger. These questions and answers may not address all the questions that may be important to you as a shareholder. You should read the more detailed information contained elsewhere in this proxy statement, the annexes to this proxy statement, and the documents referred to or incorporated by reference in this proxy statement. You may obtain information incorporated by reference in this proxy statement without charge by following the instructions under “Where You Can Find More Information” on page 82.

Q1: Why am I receiving this document?

A: This document is being delivered to you because you are a shareholder of Vectren Corporation (the “Company”) and we are holding a special shareholders meeting in connection with the proposed merger of Pacer Merger Sub, Inc. (“Merger Sub”), a wholly-owned subsidiary of CenterPoint Energy, Inc. (“CenterPoint Energy”), with and into the Company, with the Company continuing as the surviving corporation and a wholly-owned subsidiary of CenterPoint Energy (the “merger”).

Company shareholders are being asked to consider and vote on the following matters at a special shareholders meeting:

The approval of the Merger proposal is a condition to completion of the merger, but neither approval of the Merger-Related Compensation proposal nor the approval of any Special Meeting Adjournment proposal is a condition to completion of the merger.

This document is serving as a proxy statement because it is being used by the Board to solicit proxies from our shareholders.

Q2: What do I need to do now?

A: After you carefully read this proxy statement, please respond by submitting your proxy by accessing the Internet, by telephone or by completing, signing, dating and returning your signed proxy card(s) in the enclosed prepaid return envelope(s), as soon as possible, so that your shares may be represented at the special meeting. In order to assure that your vote is recorded, please vote your shares by one of these methods even if you currently plan to attend the special meeting in person.

Q3: Why is my vote important?

A: If you do not submit your proxy by accessing the Internet or telephone or return your signed proxy card(s) by mail or vote in person at the special meeting, it will be more difficult for us to obtain the necessary

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quorum to hold the special meeting and to obtain the shareholder approval necessary for the completion of the merger. The presence, in person or by proxy, of holders of a majority of the outstanding shares entitled to vote at the special meeting constitutes a quorum for the transaction of business. If a quorum is not present at the special meeting, the shareholders will not be able to take action on any of the proposals at the meeting.

For the Merger proposal, a majority of the outstanding shares entitled to vote on such matter must approve such proposal; thus a failure to vote will have the same effect as a vote AGAINST the Merger proposal.

Your vote is very important. We cannot complete the merger unless our shareholders approve the Merger proposal.

Q4: As a shareholder, what will I receive in the merger?

A: If the merger is completed, you will be entitled to receive $72.00 in cash, without interest, for each share of Company common stock that you owned immediately prior to the effective time of the merger. In addition, while it is not part of the merger consideration, you will continue to be entitled to receive any dividends declared by us prior to the completion of the merger, including a “stub period” dividend with respect to the period between the last quarterly dividend paid by us and the effective time of the merger.

Q5: When do you expect the merger to be completed?

A: We seek to complete the merger as soon as reasonably practicable, subject to receipt of necessary or advisable regulatory approvals and shareholder approval of the Merger proposal by our shareholders (the “Company shareholder approval”). We expect the transaction to be completed no later than the first quarter of 2019. However, we cannot predict when regulatory review will be completed, whether regulatory or Company shareholder approval will be received or the potential terms and conditions of any regulatory approval that is received. In addition, the satisfaction of certain other conditions to the merger, some of which are outside of our control, could require the companies to complete the merger later than expected or not to complete it at all. For a discussion of the conditions to the completion of the merger and of the risks associated with obtaining regulatory approvals in connection with the merger, see “The Merger Agreement—Conditions to the Merger” beginning on page 67 and “The Proposed Merger—Regulatory Matters Relating to the Merger” beginning on page 43.

Q6: How will my proxy be voted?

A: If you vote by accessing the Internet, by telephone or by completing, signing, dating and returning your signed proxy card(s), your proxy will be voted in accordance with your instructions. If other matters are properly brought before the special meeting, or any adjournment of the special meeting, your proxy includes discretionary authority on the part of the individuals appointed to vote your shares to act on those matters according to their best judgment.

If you are a shareholder of record and submit your proxy but do not indicate how you want to vote, your shares will be voted FOR the Merger proposal, FOR the Merger-Related Compensation proposal and FOR any Special Meeting Adjournment proposal.

Q7: May I vote in person?

A: Yes. If you are a shareholder of record of our common stock as of July 11, 2018, you may attend the special meeting and vote your shares in person. However, we highly recommend that you vote in advance by accessing the Internet, by telephone or by returning your signed proxy card(s) even if you plan to attend the special meeting.

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Q8: What are the votes required to approve the proposals?

A: The affirmative vote of the holders of a majority of all of the outstanding shares of our common stock entitled to vote at the special meeting is required to approve the Merger proposal.

Votes cast by the holders of the outstanding shares of our common stock represented (in person or by proxy) at the special meeting and entitled to vote on such proposal for approval must exceed votes cast against approval in order to approve the Merger-Related Compensation proposal. Because the vote on the Merger-Related Compensation proposal is advisory only, it will not be binding on us. Accordingly, if the Merger proposal is approved and the merger is completed, the compensation will be payable, subject only to the conditions applicable thereto, regardless of the outcome of the non-binding, advisory vote of our shareholders on the Merger-Related Compensation proposal.

Votes cast by the holders of the outstanding shares of our common stock represented (in person or by proxy) at the special meeting and entitled to vote on such proposal for approval must exceed votes cast against approval in order to approve any Special Meeting Adjournment proposal.

Q9: If I am a record holder of my shares, what happens if I abstain from voting or I don’t submit a proxy or attend the special meeting to vote in person?

A:

Q10: What if my shares are held in “street name”?

A: If some or all of your shares are held in “street name” by your broker, nominee, fiduciary or other custodian (for simplicity, referred to collectively as “broker”), you should receive instructions from your broker on how to vote your shares.

Under the listing requirements of the New York Stock Exchange (the “NYSE”), brokers who hold shares in street name for a beneficial owner of those shares typically have the authority to vote in their discretion on “routine” proposals when they have not received instructions from beneficial owners. However, brokers are not allowed to exercise their voting discretion with respect to the approval of matters that the NYSE determines to be “non-routine.” Accordingly, a “broker non-vote” occurs when the broker is not permitted to vote on an item without instruction from the beneficial owner of shares of common stock and the beneficial owner gives no instruction as to voting of the shares.

Under NYSE rules, your broker or bank does not have discretionary authority to vote your shares on any of the proposals described in this proxy statement. Therefore, if you do not instruct your broker on how to vote your shares:

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See “Information About the Special Meeting and Voting—Broker Non-Votes” beginning on page 12 for more detail on the impact of a broker non-vote.

As a result of the foregoing, please be sure to provide your broker with instructions on how to vote your shares as soon as possible. Please check the voting form used by your broker to see if it offers Internet or telephone submission of proxies.

Q11: Who will count the votes?

A: EQ Shareowner Services will serve as inspector of elections, count all of the proxies or ballots submitted and report the votes at the special meeting. Whether you vote your shares by accessing the Internet, telephone or mail, your vote will be received directly by EQ Shareowner Services.

Q12: What does it mean if I receive more than one set of materials?

A: This means you own shares that are registered under different names. For example, you may own some shares directly as a shareholder of record and other shares through a broker or you may own shares through more than one broker. In these situations, you may receive multiple sets of proxy materials. It is necessary for you to vote, sign and return all of the proxy cards or follow the instructions for any alternative voting procedure on each of the proxy cards you receive in order to vote all of the shares you own. Each proxy card you receive will come with its own prepaid return envelope; if you vote by mail, make sure you return each proxy card in the return envelope which accompanied that proxy card.

Q13: How do I vote if my shares are held in the Company 401(k) plan?

A: If your shares are held in the Vectren Corporation Retirement Savings Plan, the same voting instructions apply, and you will receive a set of proxy materials. Please follow the instructions on your proxy card.

Q14: Can I revoke my proxy and change my vote?

A: Yes. You have the right to revoke your proxy at any time prior to the time your shares are voted at the special meeting. If you are a shareholder of record, your proxy can be revoked in several ways:

However, if your shares are held in “street name”, you must check with your broker to determine how to revoke your proxy.

Q15: When and where is the special meeting?

A: The special meeting will take place on August 28, 2018 at 9:00 a.m. (Central Daylight Time), at Vectren Corporation, One Vectren Square, 211 N.W. Riverside Drive, Evansville, Indiana 47708.

Q16: What must I bring to attend the special meeting?

A: Shareholders whose shares are held in “street name” should bring with them a legal proxy or a recent brokerage statement or letter from the street name holder confirming their beneficial ownership of shares,

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together with a valid picture identification. If your shares are registered in your name on the books kept by our transfer agent or your shares are held as a 401(k) plan share, you should bring your proxy card, should you wish to vote in person, or a recent account statement, which can be obtained from the transfer agent, in either case, together with a valid picture identification. Attendance at the special meeting will be limited to shareholders of record as of the record date and one guest per shareholder, and to guests of the Company.

Q17: Should I send in my stock certificates now?

A: No. After the merger is completed, CenterPoint Energy will send former Company shareholders written instructions for exchanging their stock certificates for the merger consideration.

Q18: Who can answer any questions I may have about the special meeting or the merger?

A: Our shareholders may call D. F. King & Company (“D. F. King”), our proxy solicitor for the special meeting, toll-free at (877) 732-3619.

Q19: Will I have to pay taxes on the merger consideration I receive?

A: If you are a U.S. holder (as defined below in “Material U.S. Federal Income Tax Consequences of the Merger”), the receipt of cash in exchange for shares of Company common stock pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes. A U.S. holder of our common stock who receives cash in the merger generally will recognize gain or loss in an amount equal to the difference, if any, between (1) the amount of cash received and (2) such U.S. holder’s adjusted tax basis in the shares of our common stock exchanged therefor. Such gain or loss generally will constitute capital gain or loss and will constitute long-term capital gain or loss if the U.S. holder’s holding period for our common stock exchanged is more than one year as of the closing date of the merger. You should consult your own tax advisors regarding the particular tax consequences to you of the exchange of shares of our common stock for cash pursuant to the merger in light of your particular circumstances (including the application and effect of any federal, state, local, or foreign tax laws).

Q20: How does the Board recommend that I vote?

A: The Board unanimously recommends a vote FOR the Merger proposal, FOR the Merger-Related Compensation proposal and FOR any Special Meeting Adjournment proposal, if necessary or appropriate.

For a discussion of the factors that the Board considered in resolving to recommend that our shareholders vote to approve the Merger proposal and the Merger-Related Compensation proposal, please see the section of this proxy statement entitled “The Proposed Merger—Recommendation of the Company’s Board of Directors and its Reasons for the Merger” beginning on page 28.

Q21: What happens if I sell my shares of Company common stock before the special meeting?

A: The record date for the special meeting is earlier than the date of the special meeting. If you own shares of Company common stock on the record date, but transfer your shares after the record date but before the effective time of the merger, you will retain your right to vote such shares at the special meeting, but you will no longer have the right to receive the merger consideration with respect to such shares.

Q22: Am I entitled to exercise dissenters’ rights instead of receiving the merger consideration for my shares of Company common stock?

A: No. Under Indiana law, the Company’s shareholders are not entitled to dissenters’ rights in connection with the merger.

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Q23: What happens if the merger is not completed?

A: In the event that the Merger proposal does not receive the required approval from our shareholders, or if the merger is not completed for any other reason, our shareholders will not receive any payment for their shares of Company common stock in connection with the merger. Instead, we will remain an independent public company, the Company common stock will continue to be listed and traded on the NYSE, the Company common stock will continue to be registered under the Exchange Act and shareholders will continue to own their shares of Company common stock.

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement, and the documents incorporated by reference in this proxy statement, include forward-looking statements. A “safe harbor” for forward-looking statements is provided by the Private Securities Litigation Reform Act of 1995 (“Reform Act of 1995”). The Reform Act of 1995 was adopted to encourage such forward-looking statements without the threat of litigation, provided those statements are identified as forward-looking and are accompanied by meaningful cautionary statements identifying important factors that could cause the actual results to differ materially from those projected in the statement. Certain matters described in “The Proposed Merger – Forward-Looking Financial Information” are forward-looking statements as well as statements relating to the expected timetable for completing the merger, anticipated benefits of the merger, future opportunities for the surviving corporation, future financial performance and any other statements regarding our and CenterPoint Energy’s future expectations, beliefs, plans, objectives, financial conditions, assumptions or future events or performance. Such statements are based on management’s beliefs, as well as assumptions made by and information currently available to management. When used in this filing, the words “believe”, “anticipate”, “endeavor”, “estimate”, “expect”, “objective”, “projection”, “forecast”, “goal”, “likely”, and similar expressions are intended to identify forward-looking statements. In addition to any assumptions and other factors referred to specifically in connection with such forward-looking statements, factors that could cause our actual results to differ materially from those contemplated in any forward-looking statements include, among others, the following:

We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of changes in actual results, changes in assumptions, or other factors affecting such statements.

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THE COMPANIES

Vectren Corporation

The Company, an Indiana corporation, is an energy holding company headquartered in Evansville, Indiana. Our wholly owned subsidiary, VUHI, serves as the intermediate holding company for three public utilities: Indiana Gas, SIGECO, and VEDO. VUHI also has other assets that provide information technology and other services to the three utilities. VUHI’s consolidated operations are collectively referred to as the Utility Group. Both the Company and VUHI are holding companies as defined by the Energy Policy Act of 2005. The Company was incorporated under the laws of Indiana on June 10, 1999.

Indiana Gas provides energy delivery services to approximately 603,000 natural gas customers located in central and southern Indiana. SIGECO provides energy delivery services to approximately 146,000 electric customers and approximately 112,000 gas customers located near Evansville in southwestern Indiana. SIGECO also owns and operates electric generation assets to serve its electric customers and optimizes those assets in the wholesale power market. Indiana Gas and SIGECO generally do business as Vectren Energy Delivery of Indiana. VEDO provides energy delivery services to approximately 323,000 natural gas customers located near Dayton in west-central Ohio.

The Company, through Enterprises, is involved in nonutility activities in two primary business areas: Infrastructure Services and Energy Services. Infrastructure Services provides underground pipeline construction and repair services. Energy Services provides energy performance contracting and sustainable infrastructure, such as renewables, distributed generation, and combined heat and power projects. Enterprises also has other legacy businesses that have investments in energy-related opportunities and services and other investments. All of the above is collectively referred to as the Nonutility Group. Enterprises supports our regulated utilities by providing infrastructure services.

Our principal executive offices are located at One Vectren Square, 211 N.W. Riverside Drive, Evansville, Indiana 47708 and our telephone number is (812) 491-4000.

CenterPoint Energy, Inc.

CenterPoint Energy, a Texas corporation, is a public utility holding company. CenterPoint Energy’s operating subsidiaries own and operate electric transmission and distribution and natural gas distribution facilities, supply natural gas to commercial and industrial customers and electric and natural gas utilities and own interests in Enable.

CenterPoint Energy’s reportable business segments are Electric Transmission & Distribution, Natural Gas Distribution, Energy Services, Midstream Investments and Other Operations. CenterPoint Energy serves more than five million metered customers primarily in Arkansas, Louisiana, Minnesota, Mississippi, Oklahoma and Texas, with more than 8,000 employees. CenterPoint Energy and its predecessor company have been in business for more than 150 years.

The principal executive offices of CenterPoint Energy are located at 1111 Louisiana, Houston, Texas 77002, and its telephone number is (713) 207-1111.

Pacer Merger Sub, Inc.

Merger Sub is an Indiana corporation and wholly owned subsidiary of CenterPoint Energy. Pursuant to the merger agreement, subject to the satisfaction or waiver of certain conditions, Merger Sub will merge with and into the Company, with the Company continuing as the surviving corporation in the merger and a wholly owned subsidiary of CenterPoint Energy. Merger Sub has not carried on any activities to date, except for activities incidental to its incorporation and activities undertaken in connection with the merger.

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INFORMATION ABOUT THE SPECIAL MEETING AND VOTING

The information contained in this proxy statement is furnished in connection with the solicitation of the enclosed proxy by and on behalf of the Board. The proxy will be used at the special meeting of shareholders. We are first mailing this proxy statement and accompanying proxy card to our shareholders on or about July 17, 2018.

Date, Time and Place

The special meeting will be held at our corporate headquarters located at One Vectren Square, 211 N.W. Riverside Drive, Evansville, Indiana, 47708, on August 28, 2018, at 9:00 a.m. (Central Daylight Time), and at any adjournment of the special meeting for the matters to be acted upon under its authority.

Matters to be Considered

As of this date, the only known business to be presented at the special meeting of shareholders is (1) a proposal to approve the Merger proposal, (2) a proposal to approve, by non-binding advisory resolution, the Merger-Related Compensation proposal, (3) a proposal to approve a Special Meeting Adjournment proposal, if necessary, and (4) to transact any other business as may properly come before the special meeting or any adjournments of the special meeting. The Board is not aware of any other matters to be presented at the special meeting other than those mentioned above and has not received notice from any shareholders requesting that other matters be considered. The enclosed proxy authorizes the proxy holders to vote on these matters and on all other matters that may properly come before the special meeting, and it is the intention of the proxy holders to take any such action utilizing their best judgment.

Record Date; Quorum Requirement; and Voting Rights

As of July 11, 2018, we had one class of capital stock outstanding, consisting of 83,080,695 shares of common stock without par value. The presence, either in person or represented by proxy, of the holders of a majority of the outstanding shares of our common stock entitled to vote at the special meeting will constitute a quorum at the special meeting. As a result, in order to have a quorum at the special meeting, 41,540,348 shares of our common stock must be represented by shareholders present, in person or represented by proxy, at the special meeting.

The holders of the outstanding shares of common stock are entitled to one vote for each share held of record on each matter presented to a vote at the special meeting. However, unless the holder personally appears and votes at the special meeting, shares for which no proxy is returned (whether registered in the name of the actual holder or in the name of a bank, broker or nominee) will not be voted. Only shareholders of record at the close of business on July 11, 2018 will be entitled to vote at the special meeting or at any adjournment of the special meeting.

Voting in Person

Only shares held by those present at the special meeting, or for which proxies are returned, will be considered to be represented at the special meeting. For the purpose of determining a quorum, shares represented at the special meeting are counted without regard to whether they are abstentions or broker non-votes as to any particular item.

Revoking Proxies

A shareholder executing and delivering the enclosed proxy may revoke it by written notice delivered to the secretary of the Company, or in person at the special meeting, at any time before the authority granted by it is exercised.

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Required Vote

The affirmative vote of the holders of a majority of all of the outstanding shares of our common stock entitled to vote at the special meeting is required to approve the Merger proposal.

Votes cast by the holders of the outstanding shares of our common stock represented (in person or by proxy) at the special meeting and entitled to vote on such proposal for approval must exceed votes cast against approval in order to approve the Merger-Related Compensation proposal. Because the vote on the Merger-Related Compensation proposal is advisory only, it will not be binding on us. Accordingly, if the Merger proposal is approved and the merger is completed, the compensation will be payable, subject only to the conditions applicable thereto, regardless of the outcome of the non-binding, advisory vote of our shareholders.

Votes cast by the holders of the outstanding shares of our common stock represented (in person or by proxy) at the special meeting and entitled to vote on such proposal for approval must exceed votes cast against approval in order to approve a Special Meeting Adjournment proposal.

Broker Non-Votes

Under the listing requirements of the NYSE, brokers who hold shares in “street name” for a beneficial owner of those shares typically have the authority to vote in their discretion on “routine” proposals when they have not received instructions from beneficial owners. However, brokers are not allowed to exercise their voting discretion with respect to the approval of matters that the NYSE determines to be “non-routine.” Accordingly, a broker non-vote occurs when the broker is not permitted to vote on an item without instruction from the beneficial owner of shares of common stock and the beneficial owner gives no instruction as to voting of the shares.

Under NYSE rules, your broker does not have discretionary authority to vote your shares on any of the proposals. Therefore, if you are a Company shareholder and you do not instruct your broker on how to vote your shares, your broker may not vote your shares on any of the proposals.

Abstentions; Not Voting

For the Merger proposal, an abstention or a failure to vote (including a broker non-vote) will be counted as a vote against such proposal.

For the Merger-Related Compensation proposal and any Special Meeting Adjournment proposal, an abstention or a failure to vote (including a broker non-vote) will not be counted as a vote cast, and, therefore, will not be counted as votes either for or against such proposal.

No Dissenters Rights

Under Indiana law, our shareholders are not entitled to dissenters’ rights in connection with the merger.

Shares Beneficially Owned by Directors and Officers

Our directors and executive officers beneficially owned 120,002 shares of Company common stock on July 11, 2018, the record date for the special meeting. These shares represented in total 0.14 percent of the total voting power of our voting securities outstanding and entitled to vote as of the record date. We currently expect that each of our directors and executive officers will vote their shares in favor of all the proposals to be voted on at the special meeting, although none of them has entered into any agreements obligating them to do so.

How Shares are Voted; Proxies

Shareholders of record may vote:

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If your shares are held by a bank, broker, or nominee, please review the voting options provided by them on your voter instruction form and act accordingly.

Whether or not you plan to attend the special meeting, your vote is important and you are urged to vote as soon as possible. You may revoke your proxy prior to or at the special meeting and vote in person if you wish. If your shares are held by a broker, bank, or nominee, it is important that they receive your voting instructions.

Other Business

We do not expect that any matter will be brought before the special meeting other than the Merger proposal, the Merger-Related Compensation proposal, and a Special Meeting Adjournment proposal. If, however, other matters are properly presented at the special meeting, the persons named as proxies will vote in accordance with their best judgment with respect to those matters.

Shares Held in Plans

If you are a participant in our automatic dividend reinvestment and stock purchase plan, your proxy card will represent the number of shares registered in your name and the number of shares credited to your plan account. For those shares held in this plan, your proxy card will serve as direction to the plan administrator as to how your account is to be voted.

Solicitation of Proxies

The Board solicits your proxy for use at the special meeting. Shares held in your name and represented by your proxy will be voted as you instruct if your proxy is duly executed and returned prior to the special meeting. Shares represented by proxies that are returned signed but without instructions for voting will be voted as recommended by the Board. Shares represented by proxies that are returned unsigned or improperly marked will be treated as abstentions for voting purposes. You may revoke your proxy at any time before it is exercised by written notice to the secretary of the Company received prior to the time of the special meeting or in person at the special meeting.

If you are a participant in our automatic dividend reinvestment and stock purchase plan, your proxy card will represent the number of shares registered in your name and the number of shares credited to your plan account. For those shares held in this plan, your proxy card will serve as direction to the plan administrator as to how your account is to be voted.

If your shares are held in a brokerage account, you may instruct your broker, bank, or other nominee to vote your shares by following instructions that the broker, bank, or nominee provides to you. Most brokers offer voting by mail, telephone, or via the Internet.

The cost of preparing, assembling, printing, and mailing this proxy statement, the enclosed proxy and any other material which may be furnished to shareholders in connection with the solicitation of proxies for the special meeting will be borne by us. We have retained D. F. King & Company to assist in soliciting proxies from shareholders, including brokers’ accounts, at an estimated fee of $20,000 plus reasonable out-of-pocket expenses. In addition, some of our officers and regular employees, who will receive no compensation in addition to their regular salaries for such solicitation, may solicit proxies by telephone, email, or personal visits. The cost of such

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additional solicitation, if any, will be borne by us. We expect to reimburse banks, brokerages, and other custodians of our stock for their reasonable charges and expenses in forwarding proxy materials to beneficial owners.

Adjournments

We are not currently aware of any other business to be acted upon at the special meeting. If, however, other matters are properly brought before the special meeting, or any adjourned meeting, your proxies include discretionary authority on the part of the individuals appointed to vote your shares to act on those matters according to their best judgment. Votes cast by the holders of the outstanding shares of our common stock represented (in person or by proxy) at the special meeting and entitled to vote on such proposal for approval must exceed votes cast against approval in order to approve a Special Meeting Adjournment proposal. If we adjourn the special meeting for 120 days or less and we do not set a new record date, we will announce prior to adjournment the date, time and location at which the special meeting will be reconvened. No other notice will be provided. If adjournment is for more than 120 days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each shareholder of record entitled to vote at the special meeting.

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THE PROPOSED MERGER

General

The Company and CenterPoint Energy agreed to the acquisition of the Company by CenterPoint Energy under the terms of the merger agreement that is described in this proxy statement. The Board is using this proxy statement to solicit proxies from the holders of Company common stock for use at the special meeting.

Merger Proposals

At the special meeting, holders of shares of Company common stock will be asked to vote on 1) a proposal to approve the merger agreement and the transactions contemplated thereby, including the merger (the “Merger proposal”), 2) a proposal to approve, by non-binding advisory resolution, the compensation of the NEOs that will or may become payable in connection with the merger (the “Merger-Related Compensation” proposal), 3) a proposal to approve any motion to adjourn the special meeting to a later date or dates, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to approve the merger agreement at the time of the special meeting (a “Special Meeting Adjournment” proposal), and 4) any other business as may properly come before the special meeting or any adjournments of the special meeting. The Board is not aware of any other matters to be presented at the special meeting other than those mentioned above and has not received notice from any shareholders requesting that other matters be considered.

The merger will not be completed unless our shareholders approve the Merger proposal.

Effects of the Merger; Merger Consideration

Under the terms of the merger agreement, Merger Sub will merge with and into the Company with the Company continuing as the surviving corporation in the merger and becoming a wholly owned subsidiary of CenterPoint Energy.

On and subject to the terms and conditions set forth in the merger agreement, at the effective time of the merger (the “effective time”), each share of Company common stock issued and outstanding immediately prior to the effective time will be canceled and converted into the right to receive the merger consideration. At the effective time, each stock unit payable in Company common stock or whose value is determined with reference to the value of Company common stock, whether vested or unvested, will be cancelled at the effective time with cash consideration paid therefor in accordance with the terms of the merger agreement.

Background of the Merger

The Board and senior management of the Company regularly review and evaluate the Company’s strategies as part of their ongoing efforts to provide long-term value to shareholders, taking into account economic, competitive, regulatory and other conditions, as well as historical and projected industry trends and developments. As part of this process, the Company regularly evaluates and revises its stand-alone strategic plan. Over the past several years, Company management has refined and focused the Company’s stand-alone strategic plan to focus on (i) continuing to execute gas infrastructure upgrade and replacement plans to further improve safety and reliability, (ii) modernizing its electric grid to improve safety and reliability and reduce the frequency and duration of outages, (iii) diversifying the Company’s generation portfolio to improve system optionality and efficiencies while reducing carbon emissions and (iv) continuing to grow the Company’s non-regulated businesses. Company management believes that the Company’s current strategic plan is capable of delivering 6% to 8% growth in the Company’s earnings per share over the next several years.    

As part of its ongoing strategic review, the Board and senior management of the Company also periodically consider and evaluate potential alternatives to the stand-alone plan that may enhance shareholder value and

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provide benefits to all Company stakeholders, including, from time to time, strategic transactions. Over the past several years, the Company considered several potential acquisitions and three potential “merger of equals” transactions. No definitive agreement was executed in connection with any of these potential transactions, either because the seller in the transaction did not find the Company’s proposed price acceptable or because discussions did not progress beyond a preliminary phase. In August of 2016 the Company entered into preliminary negotiations with another utility company (referred to as “Bidder A”) regarding a transaction in which Bidder A would have acquired the Company. Discussions regarding price were never concluded, but Bidder A initially proposed a price of $68.50 per share, comprised of a combination of cash and common stock of Bidder A. The trading price of the Company’s common stock during August of 2016 ranged from $48.80 to $51.90 per share. Negotiations with respect to this transaction ended when Bidder A determined that it was not prepared to proceed with a transaction at that time.

On August 22, 2017, an article appeared on the Bloomberg website indicating that the Company was considering strategic options including a potential sale after receiving takeover interest. Although the Company had not recently received any takeover interest and was not considering any specific takeover proposal at that time, the Company did not comment on the article consistent with its policy of not commenting on rumors regarding mergers and acquisitions. Immediately following publication of the article, the price of the Company’s common stock increased approximately 7.9%.

Company senior management also regularly reviews with the Board the potential long-term value that the Company’s shareholders might achieve as a result of the Company’s standalone strategic plan and compares those values to the values that might be achieved in a strategic transaction. the Company’s senior management was also aware that the utility industry in the United States has been in the process of consolidating. For example, at the time of the merger that created the Company in 2000, there were roughly 130 domestic energy companies. Considering announced transactions, there are now less than 50, and of those companies, based on market capitalization, 30 are larger than the Company. Of those 30 utilities that are larger than the Company, nearly 90% are more than twice the Company’s size. The Company’s senior management believed that its long-term strategic plan for continued growth allows the Company an opportunity to proactively select a partner with strong commitments to the Company’s stakeholders rather than be in a position where merger choices could be limited. The Company’s senior management also recognized that a larger, more competitive company can better take advantage of the significant opportunities in this time of rapid industry change in addition to bolstering the ability to attract and develop employees and achieve efficiencies in operations, which will ultimately benefit utility customers’ rates over time.

At the annual retreat of the Board on November 1 and 2, 2017, Company senior management advised the Board that, in light of valuations in recent transactions involving other regulated gas and electric companies, it might be a favorable time to determine whether any potential acquirer would align well with the Company’s company values and corporate citizenship and would be willing to pay a premium to the Company’s then current stock price in a strategic transaction. To make a more thorough evaluation of this possibility, management recommended that the Company seek assistance from a financial advisor, make a more detailed analysis of potential strategic options that might be available to the Company and report back to the Board.

During the fourth quarter of 2017, BofA Merrill Lynch assisted Company senior management in evaluating some of the strategic options that might be available to the Company. BofA Merrill Lynch was not formally retained at that time because the Board had not made a decision to initiate any discussions with potential counterparties regarding a potential strategic transaction.

The Board held a regularly scheduled meeting on December 20, 2017. Representatives of senior management, BofA Merrill Lynch and the Company’s regular outside transaction counsel, Baker Botts L.L.P. (“Baker Botts”), also were in attendance during parts of the meeting. At this Board meeting, Mr. Carl L. Chapman, the Company’s chief executive officer, and Ms. Susan Hardwick, the Company’s chief financial officer, made a presentation outlining certain strategic options potentially available to the Company other than

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pursuing its stand-alone strategic plan, including acquiring other companies, entering into a strategic merger and selling the Company in a change of control transaction. Mr. Chapman and Ms. Hardwick also discussed the current valuation of the Company’s common stock and the values that had been achieved in other recent strategic transactions in the utility industry.

Following Mr. Chapman and Ms. Hardwick’s presentation, representatives of BofA Merrill Lynch made a presentation to the Board that included an update regarding the utility sector generally, BofA Merrill Lynch’s view of the financial outlook for the utility sector, the range of strategic alternatives that might be available to the Company, a preliminary valuation analysis with respect to the Company, certain potential counterparties that might be interested in a strategic transaction with the Company, the ability of those counterparties to pay a premium price for the Company’s common stock and BofA Merrill Lynch’s recommended next steps if the Board were to decide to authorize management to contact other companies to determine if they might be interested in acquiring the Company at a premium to its current market price.

Following discussion among themselves and with management and BofA Merrill Lynch, the Board authorized Company management, with the assistance of BofA Merrill Lynch and other advisors to conduct a market assessment by contacting a limited number of potential counterparties to determine if they might have an interest in acquiring the Company at a premium to its then current market price. The Board also instructed Company management and BofA Merrill Lynch to communicate to any potential counterparty that the Board had a strong preference for a transaction in which a substantial portion of the consideration was cash, and that the Board would insist that any transaction also provide commitments to the Company’s customers, employees and the communities in which the Company operates.

On January 9, 2018, the Company executed an engagement letter retaining BofA Merrill Lynch as its financial advisor with respect to potential strategic alternatives. BofA Merrill Lynch was selected based on its experience in the utility industry generally, its experience in advising companies in strategic transactions and the preliminary work that BofA Merrill Lynch had performed for the Company during the fourth quarter of 2017. Prior to retaining BofA Merrill Lynch, the Company received from BofA Merrill Lynch information regarding BofA Merrill Lynch’s relationships, if any, with the companies that had been identified as potential counterparties to be contacted in connection with the market assessment.

From January 9, 2018 through January 18, 2018, pursuant to the direction of the Board, BofA Merrill Lynch contacted seven potential counterparties, including CenterPoint Energy and Bidder A, to determine if they might have an interest in considering a strategic transaction with the Company. Six of the parties contacted were other utility companies, and the seventh was a large investment fund focused on infrastructure investments. The seven companies contacted were selected by Company management in consultation with BofA Merrill Lynch from the list of potential counterparties discussed with the Board as the companies that, in the judgment of Company management, would be most interested in considering a strategic transaction with the Company, capable of paying a premium to the Company’s market price in such a transaction and capable of providing commitments to the Company’s customers, employees and the communities in which it operates. In its conversation with each of these companies, BofA Merrill Lynch indicated that the Company had not made any decision to pursue a transaction, but that it was interested in understanding whether the company would be interested in considering a transaction with the Company at a price in excess of the Company’s then current share price. BofA Merrill Lynch also indicated that, if the Company were to pursue a transaction, it would prefer a transaction in which a substantial portion of the consideration was cash and that would provide commitments for its customers, employees and the communities in which it operates in addition to Company shareholders.

Of the seven potential counterparties contacted by BofA Merrill Lynch, one indicated that it was not then in a position to pursue a strategic transaction while the other six indicated that they would be interested in considering a potential transaction. Although none of the six interested bidders indicated a price at which they would be willing to acquire the Company, all indicated that they would consider a price at a premium to the Company’s then current market price. Three of the six interested bidders, including CenterPoint Energy,

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indicated that they would be capable of paying 100% cash consideration in a transaction. The other three, including Bidder A, indicated that they would prefer to include a stock component in the consideration for a transaction.

On January 19, 2018, the Board held a special meeting to consider the results of BofA Merrill Lynch’s discussions with potential bidders. Company senior management and representatives of BofA Merrill Lynch and Baker Botts were present during parts of the meeting. The Board received a report from BofA Merrill Lynch about its conversations with potential counterparties. Company management also updated the Board about the Company’s stand-alone strategic plan and outlined management’s recommended next steps if the Board decided to proceed with discussions about a potential strategic transaction. Following extensive discussion, the Board authorized management, with assistance from BofA Merrill Lynch and its other advisors, to continue discussions with all six of the interested potential counterparties about a strategic transaction, and to request from each of them a non-binding indication of the terms and conditions on which they would consider acquiring the Company. Finally, the Board requested management, with advice from BofA Merrill Lynch, to contact one additional infrastructure investor to determine if it would have interest in considering a potential transaction.

Following this meeting, BofA Merrill Lynch contacted the six interested potential counterparties to inform them that the Board had decided to proceed with discussions about a potential transaction and that they would be provided with additional information about the Company following execution of a confidentiality and standstill agreement. All six parties were provided with a form of confidentiality and standstill agreement.

In addition, as directed by the Board, management in consultation with BofA Merrill Lynch, identified another large infrastructure investor that management believed was likely to have both the financial capability and interest in acquiring the Company and directed BofA Merrill Lynch to contact that investor. After considering the matter, this investor decided not to engage in discussions with the Company about a potential strategic transaction.

From January 26, 2018 to January 31, 2018, the Company entered into confidentiality and standstill agreements with five of the six counterparties that had indicated an interest in pursuing a transaction with the Company, including CenterPoint Energy and Bidder A. The terms of all five confidentiality and standstill agreements were substantially similar. The three counterparties other than CenterPoint Energy and Bidder A are referred to as Bidders B, C and D. The sixth counterparty informed BofA Merrill Lynch that it was not in a position to pursue a strategic transaction at that time and therefore declined to enter into a confidentiality and standstill agreement.

On January 26, 2018, BofA Merrill Lynch received a call from a utility company (referred to as Bidder E) that had not previously been contacted by BofA Merrill Lynch on behalf of the Company. During this call, Bidder E indicated that it had heard rumors that the Company might be considering a strategic transaction and stated that if such rumors were true, it would be interested in considering such a transaction. Bidder E later confirmed that it would be prepared to enter into a transaction at a 100% cash price in excess of the Company’s then current market price, and that it would be prepared to make commitments relating to the Company’s customers, employees and the communities in which the Company operates. Following these conversations, Bidder E was provided with a form of confidentiality and standstill agreement and on February 6, 2018, Bidder E executed the agreement with the Company. The form of this agreement was substantially similar to the agreements that had been entered into with other potential bidders.

From January 30, 2018 through February 9, 2018, Company senior management made presentations about the Company’s financial condition, operations and stand-alone strategic plan to each of CenterPoint Energy, and Bidders A, B, C, D and E. Each of CenterPoint Energy and Bidders A, B, C, D and E also were provided with the Company’s internal projections and certain other non-public information about the Company.

On January 31, 2018, Mr. Chapman met with Mr. Scott Prochazka, the President and Chief Executive Officer of CenterPoint Energy. Messrs. Chapman and Prochazka discussed the Company’s motivation for

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considering a potential strategic transaction at that time and concerns of Mr. Chapman about how a transaction could affect Company employees, customers, community involvement by Company employees, funding of the Vectren Foundation and the role of the Company in the communities in which it operates. Mr. Chapman also made suggestions about leadership functions that could be based in Indiana after the completion of a strategic transaction.

On February 8, 2018, BofA Merrill Lynch received an email from an infrastructure investor indicating that it had heard rumors that the Company might be considering a strategic transaction and inquiring as to whether it could participate in any process the Company might be conducting. In a subsequent call on February 9, 2018, although BofA Merrill Lynch did not confirm that the Company might be considering a potential transaction, BofA Merrill Lynch inquired as to the nature and level of the investor’s potential interest in the Company. The investor indicated that it would respond to BofA Merrill Lynch if it had any interest in pursuing a transaction. The investor did not contact BofA Merrill Lynch again.

On February 12, 2018, BofA Merrill Lynch received an unsolicited call from the chief executive officer of an electric utility company (referred to as “Bidder F”) indicating that if the Company was considering a strategic transaction, his company would be interested in pursuing such a transaction. Following this discussion, Bidder F was provided a form of confidentiality and standstill agreement. Over the following two weeks, BofA Merrill Lynch had several discussions with Bidder F about its interest in a potential transaction with the Company, during which Bidder F indicated that it would need to enter into a partnership with another investor in order to finance any transaction with the Company and that it was in discussions with one or more potential partners to this end.

On February 21, 2018, CenterPoint Energy, and Bidders A, B and D each submitted non-binding indications of interest with respect to a strategic transaction with the Company. CenterPoint Energy proposed an all cash transaction at a price of $70.00 per share. Bidder A proposed a price of $72.50 per share with up to 83% of the consideration in cash and the remainder in common stock of Bidder A. Bidder B indicated an all cash price range of $73.00 to $75.00, and Bidder D indicated a price range of $65.00 to $70.00 with the consideration being a combination of cash and stock, but did not specify the allocation between cash and stock. Bidder F did not submit a proposal but indicated that it hoped to be able to do so in a matter of days. Bidder F did not contact BofA Merrill Lynch again.

Also on February 21, 2018, representatives of Bidder C and Bidder E each separately informed BofA Merrill Lynch that, due to factors unrelated to the Company, they would no longer consider a potential transaction with the Company. The chief executive officers of Bidder C and Bidder E also each called Mr. Chapman to inform him that their respective companies would not be submitting a proposal.

On February 22, 2018, Mr. Chapman spoke to the chief executive officer of Bidder A. Bidder A’s CEO indicated that Bidder A was very interested in a transaction and prepared to move quickly. He also indicated that Bidder A would have to raise a significant amount of both debt and equity capital to complete the transaction and that they would be meeting with rating agencies the following week. Finally, he indicated that if Mr. Chapman wished to discuss any aspect of Bidder A’s proposal, he was available to discuss it. Mr. Chapman indicated that Bidder A’s proposal would be considered by the Board along with other proposals that the Company had received.

On February 23, 2018, Mr. Chapman spoke to the chief executive officer of Bidder D, who informed Mr. Chapman that Bidder D was very interested in a transaction with the Company and wanted to confirm that Mr. Chapman understood that, although common stock of Bidder D would have to be a significant component of the consideration in a transaction with Bidder D, a transaction with Bidder D likely would result in significant dividend accretion for the Company’s shareholders.

The Board met on February 24, 2018 with members of senior management and representatives from BofA Merrill Lynch, Baker Botts and Taft Stettinius & Hollister (referred to as “Taft”) present during parts of the

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meeting. Taft is the Board’s regular outside counsel on matters relating to matters of fiduciary duty under Indiana law. Representatives from Taft and Baker Botts discussed with the Board certain legal issues relating to the Company, the Board and Indiana law in the context of a potential strategic transaction. Senior management and representatives from BofA Merrill Lynch reviewed with the Board the work that had taken place since the Board’s last meeting, the terms and conditions of the preliminary indications of interest that had been received from four parties and potential next steps. Company management and BofA Merrill Lynch also informed the Board about the interest that had been expressed by Bidder F. Following discussion among the directors, the Board authorized Company management to continue discussions with the four bidders that had submitted proposals by granting them access to additional information about the Company and soliciting definitive proposals from each of them. The Board also authorized management to continue discussions with Bidder F on the same terms as the other bidders if Bidder F could submit a preliminary indication of interest promptly. As discussed above, Bidder F did not submit a proposal.

On February 26, 2018, representatives from BofA Merrill Lynch spoke with representatives of CenterPoint Energy, Bidder A, Bidder B and Bidder D to inform them that they would be permitted to continue in the next round of discussions concerning a potential strategic transaction with the Company.

On March 2, 2018, the Company opened an electronic data room containing information about the Company to assist the potential buyers in their evaluation of a potential transaction.

On March 7, 8 and 9, 2018, representatives of BofA Merrill Lynch spoke with representatives of CenterPoint Energy, Bidder A, Bidder B and Bidder D to discuss the timetable for preparing definitive bids for the Company.

From March 10, 2018 through March 22, 2018, Ms. Hardwick, other members of Company management and representatives from BofA Merrill Lynch held numerous calls with bidders, including CenterPoint Energy and Bidder A, to discuss various aspects of the Company’s financial condition and operations in connection with their diligence reviews of the Company.

On March 12, 2018, Ms. Hardwick received a call from a representative of Bidder D to discuss how Bidder D could improve its proposal to acquire the Company. The discussion focused on specific commitments that Bidder D might make with respect to the Company’s customers, employees and the communities in which the Company operates.

On March 14, 2018, Ms. Hardwick received a call from Mr. William Rogers, the Chief Financial Officer of CenterPoint Energy, to discuss CenterPoint Energy’s interest in the Company and ways in which CenterPoint Energy could improve its proposal. The discussion focused on the importance of the Company in the communities in which it operates and commitments that CenterPoint Energy could make with respect to Company employee protections, the location of leadership functions in the Company service territory and maintaining current levels of community involvement where the Company operates.

On March 15, 2018, BofA Merrill Lynch delivered to CenterPoint Energy, Bidder A, Bidder B and Bidder D a letter with instructions regarding the preparation and submission of definitive bids. That same day, a form of merger agreement was provided to each of the bidders. Such form of merger agreement contemplated, among other things, an all-cash transaction and a three-year protection period following the closing during which Company non-union employees would not be terminated or have their compensation reduced. The draft merger agreement did not include any closing condition with respect to review of the transaction or approval of any items related to the transaction by the Indiana Utility Regulatory Commission (the “IURC”) and the Public Utilities Commission of Ohio (the “PUCO”) because approval of those regulators would not be required for the transaction. The draft also did not make specific proposals regarding commitments with respect to the location of the Company’s headquarters and community involvement, diversity, employee volunteerism, corporate responsibility and other similar matters. Instead, the draft requested that each bidder make proposals with respect

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to those matters. The draft also contemplated that all outstanding unvested performance-based equity awards would be cashed out at closing using values based on the greater of target and actual performance. The draft also did not make any proposal with respect to any Company director being appointed to the board of directors of the acquirer following the closing. In its draft, the Company proposed that the Board would have a so-called “fiduciary out” that would permit the Board to terminate the merger agreement if it received an alternative proposal that was superior to the transaction reflected in the merger agreement. The Company also proposed two termination fees, one payable by the Company in the event that the Board exercised its fiduciary out or in certain other circumstances, and the other payable by the acquirer in the event the agreement were to be terminated in certain circumstances. The Company proposed that its termination fee be 2% of the equity value of the transaction and that the acquirer’s fee be 6% of the equity value of the transaction.

Also on March 15, 2018, Mr. Chapman received a telephone call from the CEO of Bidder A who informed Mr. Chapman that Bidder A continued to be very interested in a transaction with the Company, that Bidder A had met with rating agencies and that the meetings had gone well, that Bidder A was in the process of arranging financing for the transaction and that Bidder A would like to include a partner in the transaction for up to 20% of the equity, but would not make its proposal contingent on having an agreement with a partner. The CEO of Bidder A also indicated to Mr. Chapman that there would be a role for some of the officers of the Company (although there was no discussion of a role for Mr. Chapman) with Bidder A following a transaction.    

On March 30, 2018, Mr. Prochazka called Mr. Chapman to update him on the status of CenterPoint Energy’s diligence review of the Company and to discuss some of the commitments that CenterPoint Energy was prepared to offer for employees and the communities in which the Company operates in connection with a transaction. In his conversation with Mr. Prochazka, Mr. Chapman emphasized that commitments to employees and local communities would be very important factors for the Board when considering proposals. Mr. Prochazka understood Mr. Chapman’s concerns and agreed with him that addressing these matters effectively would be critical to the success of a combined company.

On April 2, 2018, Bidder D’s financial advisor informed BofA Merrill Lynch that Bidder D would not be making a bid for the Company.

On April 3, 2018, Mr. Chapman received a call from the CEO of Bidder D informing him that Bidder D would not be submitting a proposal.

On April 6, 2018, CenterPoint Energy and Bidder A each submitted final offers to acquire the Company. Bidder A offered to acquire the Company for $70.50 per share with a consideration mix of 83% cash and 17% common stock of Bidder A. The common stock portion of the consideration included in Bidder A’s proposal was subject to a collar of plus or minus 5.0% based on fluctuations in the price of Bidder A’s common stock between the date a merger agreement was signed and closing. CenterPoint Energy proposed acquiring the Company for $70.00 per share, all cash. Each of CenterPoint Energy and Bidder A also submitted a revised form of merger agreement with their respective proposals. Bidder B did not submit a final offer.

In its markup of the merger agreement, CenterPoint Energy proposed a two-year protection period for Company non-union employees (excluding officers) during which the employees’ compensation and severance benefits would not be reduced, but during which layoffs would be permitted. CenterPoint Energy also proposed that any non-officer employees terminated without cause during the two-year protection period would receive severance plus their base salary and certain other benefits for the remainder of the protection period. CenterPoint Energy’s proposed form of merger agreement also proposed that unvested outstanding performance-based equity awards be cashed out at target valuation upon closing. CenterPoint Energy also proposed that its obligation to close the transaction be subject to receiving orders from the IURC and the PUCO approving the transaction, and that such orders not contain any term or condition that would result in a material adverse effect on the Company or CenterPoint Energy (referred to as a “Burdensome Condition”). CenterPoint Energy also proposed that it would establish the headquarters for the companies’ combined gas operations in Evansville for a minimum of

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three years after closing, maintain the headquarters of Indiana electric operations in Evansville, retain key operational activities in support of the utilities in Evansville and provide other assurances with respect to community involvement and employee volunteerism. CenterPoint Energy proposed a termination fee for the Company equal to 1.5% of the equity value of the transaction and a termination fee for CenterPoint Energy equal to 3% of the equity value of the transaction.

In its mark-up of the merger agreement, Bidder A proposed a two-year protection period with respect to overall salary and benefits but not against layoffs for employees, that performance-based equity awards granted after January 1, 2018 be converted into time-based restricted stock units based on the greater of target or actual performance and that all other awards be cashed out at the greater of target or actual performance. Bidder A’s proposed form of merger agreement also provided that Bidder A would have to obtain approval from its shareholders before Bidder A would be required to proceed with the merger. Bidder A proposed a termination fee of 3% of the equity value of the transaction to be payable by the Company if the Company terminated the merger agreement to accept another acquisition proposal and 4% of the equity value of the transaction to be payable by Bidder A in the event of a regulatory failure. Bidder A also proposed that certain of the Company’s expenses be reimbursed if Bidder A’s shareholders did not approve the transaction. Bidder A also proposed that it would maintain gas and electric joint operating headquarters in Evansville and maintain the Company’s historic programs regarding diversity, human equity and safety. Bidder A also proposed to give two former Company directors seats on Bidder A’s board of directors following the closing. Bidder A did not propose any closing condition relating to approval of the transaction or any related items by the IURC or the PUCO.

On April 7, 2018, the Board met to consider the proposals that had been received from CenterPoint Energy and Bidder A. Senior management of the Company and representatives from BofA Merrill Lynch and Baker Botts were present during parts of the meeting. Senior management and representatives of BofA Merrill Lynch reviewed in detail the proposals that had been received from CenterPoint Energy and Bidder A. Representatives of BofA Merrill Lynch also reviewed with the Board BofA Merrill Lynch’s financial analysis of the proposals, certain valuation information relating to the Company and financial information about CenterPoint Energy and Bidder A. Mr. Ronald Christian, executive vice president and chief legal and external affairs officer of the Company, and a representative from Baker Botts also reviewed with the Board the changes to the merger agreement that had been proposed by each of CenterPoint Energy and Bidder A. After reviewing the proposals and the other information presented at the meeting, the members of the Board instructed management to continue negotiations with each of CenterPoint Energy and Bidder A. They also indicated to management that they were not prepared to move forward with a transaction at less than $72.00 per share and that they had a strong preference for a transaction in which as much of the consideration as possible was cash.

On April 9, 2018, representatives from BofA Merrill Lynch spoke with both Mr. Rogers and representatives of Bidder A. The BofA Merrill Lynch representatives advised each bidder that the Board was not prepared to enter into a transaction at the proposed price, that more than one bid had been received, that the bids were extremely close in terms of value and that there was no clear leader based on value and proposed contract terms. In addition, the BofA Merrill Lynch representatives advised Bidder A that the Company wanted to conduct a due diligence review of Bidder A in light of the stock component of Bidder A’s proposal. The BofA Merrill Lynch representatives also explained that each bidder would be given an opportunity to improve the terms of its proposal, including by increasing its price and by submitting a revised form of merger agreement.    

On April 10, 2018, Baker Botts sent revised drafts of the merger agreement to each of CenterPoint Energy and Bidder A. In the revised draft sent to CenterPoint Energy, the Company counter-proposed that all performance-based equity awards be cashed out at the greater of target and actual performance and that the termination fees be set at 2% of transaction equity value for the Company’s fee and 4% for CenterPoint Energy. The Company also rejected CenterPoint Energy’s proposed closing condition relating to approvals by the IURC and PUCO because the approval of those regulatory commissions is not required to close the merger. Finally, the Company proposed that CenterPoint Energy appoint at least one former Company director to CenterPoint Energy’s board of directors upon closing of the merger.

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In the revised draft sent to Bidder A, the Company counter-proposed that the collar on Bidder A’s stock price be widened to 10% and that the termination fees be 2% of the transaction equity value payable by the Company, 4% of equity value payable by Bidder A in the event of a regulatory failure and 1.5% of equity value payable by Bidder A in the event that Bidder A’s shareholders did not approve the transaction.

On April 11, 2018, Mr. Chapman met with Mr. Prochazka to discuss how CenterPoint Energy might improve the terms of its bid. Mr. Chapman indicated that he did not think the Board would approve a transaction at the price CenterPoint Energy had proposed and that CenterPoint Energy should raise the price of its offer. Mr. Prochazka responded that he might be able to improve some of the terms of CenterPoint Energy’s offer, including price, if some of the other open issues were resolved to the satisfaction of CenterPoint Energy. Among other things, Mr. Prochazka indicated that he did not want CenterPoint Energy to be required to close the transaction until the IURC and PUCO had issued orders relating to the transaction. Mr. Prochazka also reiterated that CenterPoint Energy would locate the headquarters of the combined company’s gas operations in Evansville for a minimum of three years following the closing, would maintain the Indiana electric operations headquarters in Evansville and that it was committed to maintaining and in some cases increasing the level of community involvement by the Company and its employees following the closing. Mr. Prochazka also told Mr. Chapman that CenterPoint Energy objected to some of the proposed provisions relating to employee compensation and commitments in the merger agreement. Mr. Chapman indicated that compensation matters relating to himself and the other senior officers of the Company would be addressed by the Compensation Committee of the Board. Mr. Chapman also indicated to Mr. Prochazka that he thought it would be appropriate for CenterPoint Energy to appoint a Company director to CenterPoint Energy’s board of directors following the closing. Mr. Chapman also told Mr. Prochazka that he would not accept such a position if it were offered to him so that the representative would have to be another member of the Board. Mr. Prochazka indicated that he did not agree that a Company director should be appointed to the CenterPoint Energy’s board of directors following the closing.

Also on April 11, 2018, the Company received a revised draft of Bidder A’s proposed form of merger agreement from Bidder A’s counsel. In this draft, Bidder A proposed a 7.5% collar on its stock price and reiterated its proposal that two Company directors be appointed to Bidder A’s board of directors upon closing of the merger. Bidder A also accepted the 2.5% termination fee payable by the Company and the 4% fee payable by Bidder A in the event of a regulatory failure, but reverted to its proposed expense reimbursement if Bidder A shareholders did not approve the transaction.

On April 12, 2018, Mr. Chapman called Mr. Prochazka to discuss the open issues with respect to CenterPoint Energy’s proposal. Mr. Prochazka suggested that representatives from their respective management teams and outside law firms discuss the issues by telephone to try to resolve them. Later that day, representatives of the Company, Bidder A, Baker Botts and Bidder A’s counsel held a telephone conference to discuss the revised draft merger agreement that had been received from Bidder A the day before. The discussion focused on the key differences between the drafts that had been exchanged by the parties as described above.

That same day, Bidder A sent the Company a letter indicating that it was prepared to increase the price of its proposal to $71.00 per share. The consideration mix was unchanged. Bidder A did not propose any additional changes to the form of merger agreement it had submitted on April 11, 2018.

Also on April 12, 2018, Mr. Chapman met with the CEO of Bidder A to discuss how Bidder A might improve the terms of its offer. Mr. Chapman indicated that he did not think the Board would approve a transaction at the price Bidder A had proposed. The CEO of Bidder A indicated that he would discuss the possibility of an additional price increase with Bidder A’s board of directors. The CEO of Bidder A also explained that he thought there would be roles for some of the Company senior officers in the combined company after the merger, although there was no discussion of any role for Mr. Chapman after the merger. They also discussed some of the remaining open items in the merger agreement, including employee commitments and the level of dividends that Company shareholders would receive on the stock portion of the consideration following the merger. Mr. Chapman also updated the CEO of Bidder A on the reverse due diligence process and requested that certain information be provided to the Company team as soon as possible.

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On April 13, 2018, CenterPoint Energy sent the Company a list of open issues in the draft merger agreement that the Company had sent to CenterPoint Energy on April 10, 2018. The key open issues identified in the issues list included CenterPoint Energy’s request for a closing condition that would permit CenterPoint Energy not to proceed with the merger in the event that any regulatory order issued in connection with the transaction would be reasonably likely to result in a Burdensome Condition, employee compensation commitments, treatment of outstanding performance-based equity awards, whether any Company directors would serve on the CenterPoint Energy board following the closing, interim operating restrictions and termination fees.

Also, on April 13, 2018, the Board held a telephonic meeting to receive an update regarding the status of negotiations with CenterPoint Energy and Bidder A. Senior management of the Company and representatives from BofA Merrill Lynch, Baker Botts and Taft were present during parts of the meeting. The representatives from Baker Botts and Taft met with the independent directors in executive session and reviewed with them certain legal matters relating to the potential transactions the Board was considering. Management and BofA Merrill Lynch updated the Board on the status of negotiations with CenterPoint Energy and Bidder A, including the diligence that was being conducted on Bidder A. Mr. Chapman reported to the Board on his separate conversations with the CEOs of CenterPoint Energy and Bidder A. After these presentations and further discussion among the directors, the Board instructed management to continue negotiations with both bidders. The Directors also reiterated their view that they were not prepared to enter into a transaction at a price of less than $72.00 per share.

On April 14, 2018, Ms. Hardwick spoke with representatives of Bidder A by telephone to discuss Bidder A’s financial forecast and other matters related to the Company’s diligence review of Bidder A.

On April 14 and 15, 2018, representatives of BofA Merrill Lynch spoke with CenterPoint Energy and Bidder A. BofA Merrill Lynch requested that each bidder present its “best and final” proposal by April 16, 2018 and indicated that the Company intended to select a preferred bidder based on the revised proposals.

On April 15, 2018, Mr. Prochazka called Mr. Chapman to discuss the final issues that would be addressed in CenterPoint Energy’s revised offer. The issues of particular concern to Mr. Prochazka were the mechanism proposed by the Company for the enforcement of CenterPoint Energy’s post-closing merger commitments, board representation by former Company directors on CenterPoint Energy’s board of directors following the merger, the Company’s ability to grant retention bonuses to certain non-officer employees of the Company prior to closing of the merger without CenterPoint Energy’s consent and the valuation of restricted stock units upon consummation of the merger. Mr. Prochazka indicated that CenterPoint Energy would reflect its position on these issues in its revised offer that would be submitted the next day. Mr. Chapman explained to Mr. Prochazka that he would not participate in any discussions about equity awards and that he would defer to the Compensation Committee of the Board on that issue.

On April 16, 2018, CenterPoint Energy and Bidder A submitted revised offers to acquire the Company. Bidder A continued to offer $71.00 per share, with 83% of the consideration in cash and 17% in common stock of Bidder A. The stock portion of the consideration was subject to a 7.5% collar based on fluctuation in the price of Bidder A’s common stock between the date a merger agreement was signed and closing. CenterPoint Energy increased its offer to $71.50 per share, with the consideration being all cash. CenterPoint Energy submitted a revised draft of the merger agreement with its revised bid. In this draft, CenterPoint Energy proposed revised terms with respect to compensation and equity awards for Company officers and employees, and the interim operational restrictions on the Company’s ability to incur debt and make capital expenditures beyond certain levels. CenterPoint Energy also proposed that it would not be required to complete the merger if any regulatory order issued in connection with the merger would impose a Burdensome Condition on either the Company or CenterPoint Energy (assuming for these purposes that CenterPoint Energy is a company the same size as the Company), although it would have to pay a termination fee in the event that it did not complete the merger because a Burdensome Condition had been imposed. CenterPoint Energy proposed termination fees of 2.5% of equity value for the Company and 3.5% of equity value for CenterPoint Energy.

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On April 18, 2018, Baker Botts sent to CenterPoint Energy and its counsel a revised draft of the merger agreement. The primary open issues in this draft related to interim operational restrictions, financing covenants and termination fees.

Also on April 18, 2018, a representative of BofA Merrill Lynch spoke to Mr. Rogers by telephone. At the direction of Company management, the BofA Merrill Lynch representative informed Mr. Rogers that the Company would like to move forward on a transaction with CenterPoint Energy, provided that acceptable price and other terms could be negotiated. The BofA Merrill Lynch representative indicated that the terms of the merger agreement proposed by CenterPoint Energy were not as favorable as those proposed by Bidder A. He also indicated that the Company would like CenterPoint Energy to consider increasing the price of its proposal to at least $72.00 per share because of the guidance the Board had given Company management with respect to the minimum price the Board would be willing to accept. Mr. Rogers indicated that CenterPoint Energy would be prepared to increase its price to $72.00 per share if the Company would agree to modify certain provisions in the merger agreement, including those relating to funding of certain employee incentive programs and compliance with certain covenants, including limits on maximum debt outstanding as of closing and capital expenditures prior to closing. Following this conversation, Mr. Prochazka called Mr. Chapman to discuss the outstanding provisions of the merger agreement as described in the previous sentence.

Also on April 18, 2018, BofA Merrill Lynch provided to Company management, which in turn promptly provided this to the Board, an updated version of its material relationships disclosure memorandum. Prior versions of this disclosure memorandum, dated January 9, 2018 and February 23, 2018, had been previously presented to the Board. The disclosure memorandum included certain information concerning BofA Merrill Lynch’s material relationships with CenterPoint Energy and Bidder A and noted, among other things, that (i) certain senior members of the BofA Merrill Lynch financial advisory deal team working with the Company are also members of the coverage team for CenterPoint Energy, including the relationship manager of the CenterPoint Energy coverage team, and (ii) certain members of the financial advisory team working with the Company have provided advisory services to CenterPoint Energy unrelated to the Company from time to time, but ceased providing such services prior to BofA Merrill Lynch being engaged by the Company. Also on April 18, 2018, a representative from BofA Merrill Lynch spoke with the chief executive officer of Bidder A to inform him that the Board had instructed management to move forward with another bidder, which, although not identified to Bidder A, was CenterPoint Energy.

On April 19, 2018 and April 20, 2018, Ms. Hardwick spoke to Mr. Rogers regarding the terms of the interim operations covenant relating to total indebtedness and the Company’s ability to pay retention bonuses to non-officer employees during the period between execution of the merger agreement and closing.

On April 20, 2018, the Compensation Committee of the Board met to consider the provisions of the merger agreement relating to compensation of Company officers and employees. Members of Company senior management, representatives of the Compensation Committee’s independent compensation consultant, Korn Ferry Hay Group, and representatives of Baker Botts were present during parts of the meeting. Among other things, the committee discussed the primary terms and conditions of the proposed merger agreement, including the amount proposed by CenterPoint Energy to be paid per share for the company’s common stock, the proposed treatment of outstanding stock units (time based, measured performance units and unmeasured performance units) under the company’s At-Risk Compensation Plan, as well as other compensation matters addressed in the proposed merger agreement. Following discussion, the committee approved the terms of the merger agreement as they related to compensation of Company officers and employees.

Also on April 20, 2018, CenterPoint Energy’s counsel sent Baker Botts and the Company a revised draft of the merger agreement. The primary open issues in this draft related to the interim operating covenants that would be applicable to the Company during the period between execution of the merger agreement and closing of the transaction and termination fees.

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On April 21, 2018, Mr. Prochazka called Mr. Chapman to discuss the remaining open issues in the merger agreement. Following this discussion and after additional discussions among the Company’s and CenterPoint Energy’s counsel, Baker Botts provided to CenterPoint Energy and its counsel a revised form of merger agreement that reflected the resolution of all open items in the merger agreement. This draft provided that performance-based equity awards would be cashed out at the greater of target and actual performance, other than 2019 grants, if any were issued, which would be cashed out on a pro-rated basis based on target performance, that CenterPoint Energy would not have to proceed with the merger if any regulatory order issued in connection with the merger resulted in a Burdensome Condition (although it might have to pay a termination fee depending upon the circumstances) and that the termination fees would be 2.5% of equity value for the Company and 3.5% of equity value for CenterPoint Energy.

Later that day, the Board met at a special meeting to consider the final terms of the offer from CenterPoint Energy. Members of Company senior management and representatives from BofA Merrill Lynch, Baker Botts and Taft were present during parts of the meeting. Mr. Chapman and other members of Company senior management reviewed with the Board the final terms of the transaction that had been negotiated with CenterPoint Energy, including the price of $72.00 per share in cash and the protections and commitments for employees, customers and the local communities in which the Company operates. Those stakeholder commitments outlined with the Board included the following:

Following the presentation by Company management, BofA Merrill Lynch reviewed the financial aspects of the transaction and provided the Board with an update of its valuation analysis with respect to the Company. The representatives from Baker Botts and Taft reviewed with the Board certain legal matters relating to the proposed transaction. Mr. Christian and a representative from Baker Botts reviewed with the Board the final terms of the merger agreement, a copy of which had been provided to the Board in advance of the meeting. BofA Merrill Lynch then delivered to the Board an oral opinion, which was confirmed by delivery of a written opinion dated April 21, 2018, to the effect that, as of that date and based on and subject to various assumptions and limitations described in its opinion, the merger consideration to be received by holders of Company common stock was fair, from a financial point of view, to such holders.

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Following receipt of BofA Merrill Lynch’s fairness opinion and further discussion, the Board unanimously adopted resolutions (i) determining that it is in the best interests of the Company and its shareholders for the Company to enter into the merger agreement, (ii) adopting the merger agreement and approving the Company’s execution, delivery and performance of the merger agreement and the consummation of the transactions contemplated by the merger agreement, and (iii) resolving to recommend that the shareholders of the Company approve the merger agreement and directing that the merger agreement be submitted to the Company’s shareholders for approval at a duly held meeting of the Company’s shareholders for such purpose.

Following the meeting, on April 21, 2018, the merger agreement was executed and, on April 23, 2018, the transaction was publicly announced.

Recommendation of Company’s Board of Directors and its Reasons for the Merger

The Board has reviewed and considered the terms of the merger and the merger agreement and has unanimously determined that the merger is advisable and in the best interests of the Company and our shareholders and unanimously recommends that our shareholders vote  FOR  the Merger proposal. The Board also unanimously recommends that our shareholders vote FOR the Merger-Related Compensation proposal and FOR  any Special Meeting Adjournment proposal.

In reaching its decision to recommend that our shareholders approve the Merger proposal and the Merger-Related Compensation proposal, the Board consulted with our management, as well as BofA Merrill Lynch, our financial advisor in connection with the merger, Baker Botts L.L.P., our outside counsel in connection with the merger, and Taft Stettinius & Hollister LLP, our outside counsel, and considered various other factors, both positive and negative. The following discussion of the information and factors considered by the Board is not intended to be exhaustive and may not include all of the factors considered by the Board. In view of the wide variety of factors considered by the Board in connection with its evaluation of the merger, the Board did not consider it practical to, nor did it attempt to, quantify, rank or otherwise assign relative weights to the specific factors that it considered in reaching its decision. In considering the factors described below, individual members of the Board may have given different weight to different factors. The Board considered this information as a whole and considered overall the information and factors to be favorable to, and in support of, its determinations and recommendations. The material information and factors pertaining to the strategic rationale for the merger considered by the Board were as follows:

Impact of the Merger on Customers . The Board evaluated the expected impact of the merger on our customers, including the fact that the surviving corporation will serve approximately 4.5 million natural gas customers in eight states and the potential for long-term cost savings based on the increased potential for cost reductions of the combined companies following the merger.

Impact of the Merger on Communities . The Board considered the expected impact of the merger on the communities we serve and the benefits that the merger will likely generate for these communities from the greater strength of the combined company as compared to the Company on a stand-alone basis. In particular, the Board considered the following:

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Impact of the Merger on Employees . The Board evaluated the expected impact of the merger on our employees and considered that the merger agreement provides that for a period of two years following the effective time, CenterPoint Energy agrees to provide each Company employee (excluding union employees) with certain protections, including (1) the same or better employment responsibilities in the same location or within 50 miles of the same location as held by the Company employee immediately prior to the effective time of the merger, unless such change in responsibilities or location is consented to by the Company employee, (2) a base salary or wage rate and short-term incentive compensation target opportunities that are no less favorable, in the aggregate, than that provided to the Company employee immediately prior to the effective time of the merger and (3) employee benefits that are substantially comparable, in the aggregate, to those provided to the Company employee immediately prior to the effective time of the merger. CenterPoint Energy retained the right to terminate Company employees at any time, but if a Company employee’s employment is terminated without “cause” or for “good reason” within two years following the effective time, as more fully described in the section entitled “The Merger Agreement—Employee Matters,” CenterPoint Energy must provide certain severance benefits to such terminated Company employees.

Financial Considerations . The Board considered our business plan and historical and projected financial performance, and the expected financial impact of the merger on us. The Board also considered the risks of remaining as a standalone public company, including any risks of execution on our business plan and achieving such financial projections, general macroeconomic challenges and market risks. The Board considered the fact that the merger consideration is to be paid entirely in cash, which provides certainty of value and that, as a result, Company shareholders will not be exposed to the risks and uncertainties relating to the Company’s financial performance and future value if the merger is completed.

Share Price . The Board considered our historical stock prices, including that the merger consideration represented a premium of approximately 9.8 percent to the closing stock price of Company common stock on April 20, 2018, the last trading day prior to the date that the Company and CenterPoint signed the merger agreement. The closing stock price of the Company common stock on August 21, 2017, which was the last trading day prior to media reports regarding takeover interest in the Company, was $61.31 per share. The merger consideration represents a 17.4 percent premium to such closing price. If adjusted for industry peer performance between August 21, 2017 and April 20, 2018, the merger consideration represents a 28.4 percent premium over such adjusted price of $56.07 per share.

Recommendation of Management . The Board took into account the recommendation of our management in favor of the merger.

Opinion of Financial Advisor . The Board considered the opinion of BofA Merrill Lynch, dated April 21, 2018, to the Board as to the fairness, from a financial point of view and as of the date of the opinion, to the holders of Company common stock of the merger consideration to be received by such holders, as more fully described below in the section entitled “Opinion of the Company’s Financial Advisor” beginning on page 32.

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Strategic Alternatives . The Board considered the trends and competitive developments in the industry and the range of strategic alternatives available to us, including the prospects for the Company continuing to operate as a stand-alone entity, or the possibility and feasibility of pursuing a business combination with another industry participant. The Board conducted a thorough review of a potential sale of the Company, including conducting a competitive sale process in which CenterPoint Energy emerged as the bidder offering the highest per-share consideration, as illustrated by, without limitation the following factors:

The Board determined that these alternatives, including continuing to operate as a stand-alone entity, were less favorable to the Company and its shareholders than the proposed merger.

Terms of the Merger Agreement . The Board reviewed and considered the terms of the merger agreement, including the representations and warranties of each party, the conditions to each party’s obligation to complete the merger, our right to consider and engage in negotiations regarding potentially superior proposals, the Board’s right to withdraw or otherwise change its recommendation to our shareholders in favor of the proposals related to the merger agreement, the rights of each party to terminate the merger agreement and the obligations of each party to pay a termination fee under certain circumstances. See “The Merger Agreement” beginning on page 53 for a detailed discussion of the terms and conditions of the merger agreement.

Likelihood of Completion of the Merger . The Board considered the likelihood that the merger will be completed on a timely basis, including the likelihood that the merger will receive all necessary regulatory approvals without unacceptable conditions and that all conditions to consummation of the merger will be satisfied. To that end, the Board further considered the potential length of the regulatory approvals process and that the merger agreement provides that, subject to certain exceptions, it may not be terminated until April 21, 2019, which may be extended for an additional six months under specified circumstances. The Board also considered the absence of a financing condition in the merger agreement and the facts that CenterPoint Energy has entered into the commitment letter pursuant to which, subject to the terms and conditions set forth therein, the commitment parties have committed to provide a 364-day senior unsecured bridge term loan facility in an aggregate principal amount of up to $5.0 billion, to fund a portion of the merger consideration (See “The Merger Agreement – Financing and Financing Cooperation”). The Board further considered that the commitment letter provides that, to the extent the end date in the merger agreement is extended to a date that is on or prior to October 21, 2019, the outside date for the commitment letter will also be extended to that date.

Continued Payment of Dividend . The Board considered the merger agreement provision permitting us to continue to pay quarterly cash dividends at the current payment rate of $0.45 for quarterly dividends declared before October 31, 2018 and at the increased payment rate of $0.48 for quarterly dividends declared on or after October 31, 2018, and to pay a “stub” dividend in respect of the quarter in which the merger is completed.

The Board also considered potential risks associated with the merger, including the following:

No Future Participation . The Board considered that our shareholders will have no ongoing equity participation in the Company following the merger, and that such shareholders will therefore cease to participate

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in the future earnings or growth that we may achieve, or to benefit from increases, if any, in the value of the Company common stock as a result of the merger.

Regulatory Approvals . The Board considered the regulatory approvals that are required in connection with the merger and the risk that governmental authorities and third parties may seek to impose unfavorable terms or conditions on the required approvals or that those approvals may not be obtained at all.

Shareholder Approval and Related Termination Fee . The Board considered the approvals of our shareholders being sought in connection with the merger, and the fact that if the merger agreement is terminated due to a failure of a majority of our shareholders voting at the special meeting to approval the Merger proposal, we may under certain circumstances be required to pay a termination fee to CenterPoint Energy of $150 million.

Alternative Proposals . The Board considered the risk that, although we have the right under certain limited circumstances to consider and participate in negotiations with respect to unsolicited proposals for alternative transactions, the merger agreement contains provisions relating to the potential payment of a termination fee of $150 million in connection with an alternative transaction, which may have the effect of discouraging such proposals. In addition, the Board considered that the merger agreement includes other customary restrictions on our ability to solicit offers for alternative proposals or engage in discussions regarding such proposals, subject to exceptions, or to terminate the merger agreement to enter into an agreement with respect to an alternative transaction, any of which could have the effect of discouraging such proposals from being made or pursued, even if potentially more favorable to our shareholders than the merger.

Additional Interests of Executive Officers and Directors . The Board considered that certain of our executive officers and directors may have interests with respect to the merger in addition to their interests as shareholders of the Company. See “Additional Interests of the Company’s Directors and Executive Officers in the Merger” beginning on page 49 for further information.

Interim Operations . The Board considered the terms of the merger agreement that place restrictions on the conduct of our businesses prior to completion of the merger, generally requiring us to conduct our business in the ordinary course in all material respects and prohibiting us from taking specified actions, which may delay or prevent us from undertaking business opportunities that may arise prior to completion of the merger and the resultant risk if the merger is not consummated.

Transaction Costs . The Board took into account the substantial transaction costs to be incurred in connection with the merger, including in connection with the pursuit of the required regulatory approvals and in connection with potential litigation that may arise in connection with the merger. The Board also considered the significant costs involved in connection with negotiating the merger agreement and completing the merger, the substantial management time and effort required to close the merger and the related disruption to our day-to-day operations during the interim period between execution of the merger agreement and the closing of the merger and the resultant risk if the merger is not consummated.

U.S. Federal Income Tax Impacts . The Board considered that the receipt of cash in exchange for shares of Company common stock pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes for many of our shareholders.

The Board believes that, overall, the potential benefits of the merger to our shareholders outweigh the risks and uncertainties of the merger and the Board unanimously recommends that shareholders vote FOR approval of the Merger proposal.

The foregoing discussion of factors considered by the Board is not intended to be exhaustive but includes the material factors considered by the Board. In light of the variety of factors considered in connection with its evaluation of the merger, the Board did not find it practicable to, and did not, quantify or otherwise assign

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relative weights to the specific factors considered in reaching its determinations and recommendations. Moreover, each member of the Board applied his or her own personal business judgment to the process and may have given different weight to different factors. The Board did not undertake to make any specific determination as to whether any factor, or any particular aspect of any factor, supported or did not support its ultimate determination. The Board based its recommendation on the totality of the information presented.

Opinion of the Company’s Financial Advisor

We have retained BofA Merrill Lynch to act as our financial advisor in connection with the merger. BofA Merrill Lynch is an internationally recognized investment banking firm which is regularly engaged in the valuation of businesses and securities in connection with mergers and acquisitions, negotiated underwritings, secondary distributions of listed and unlisted securities, private placements and valuations for corporate and other purposes. We selected BofA Merrill Lynch to act as our financial advisor in connection with the merger on the basis of BofA Merrill Lynch’s experience in transactions similar to the merger, its reputation in the investment community and its familiarity with us and our business.

On April 21, 2018, at a meeting of the Board held to evaluate the merger, BofA Merrill Lynch delivered to the Board an oral opinion, which was confirmed by delivery of a written opinion dated April 21, 2018, to the effect that, as of the date of the opinion and based on and subject to various assumptions and limitations described in its opinion, the merger consideration to be received by holders of Company common stock was fair, from a financial point of view, to such holders.

The full text of BofA Merrill Lynch’s written opinion to the Board, which describes, among other things, the assumptions made, procedures followed, factors considered and limitations on the review undertaken, is attached as Annex B to this proxy statement and is incorporated by reference herein in its entirety. The following summary of BofA Merrill Lynch’s opinion is qualified in its entirety by reference to the full text of the opinion. BofA Merrill Lynch delivered its opinion to the Board for the benefit and use of the Board (in its capacity as such) in connection with and for purposes of its evaluation of the merger consideration from a financial point of view. BofA Merrill Lynch’s opinion does not address any other aspect of the merger and no opinion or view was expressed as to the relative merits of the merger in comparison to other strategies or transactions that might be available to us or in which we might engage or as to our underlying business decision to proceed with or effect the merger. BofA Merrill Lynch’s opinion does not address any other aspect of the merger and does not constitute a recommendation to any shareholder as to how to vote or act in connection with the proposed merger or any other matter.

In connection with rendering its opinion, BofA Merrill Lynch, among other things:

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In arriving at its opinion, BofA Merrill Lynch assumed and relied upon, without independent verification, the accuracy and completeness of the financial and other information and data publicly available or provided to or otherwise reviewed by or discussed with it and relied upon the assurances of the management of the Company that they were not aware of any facts or circumstances that would make such information or data inaccurate or misleading in any material respect. With respect to our management forecasts, BofA Merrill Lynch was advised by us, and assumed that they were reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of the management of the Company as to the future financial performance of the Company. BofA Merrill Lynch relied, at our direction, upon the assessments of the management of the Company as to the potential impact of market, governmental and regulatory trends and developments relating to or affecting us and our business. BofA Merrill Lynch did not make and was not provided with any independent evaluation or appraisal of the assets or liabilities (contingent or otherwise) of the Company, nor did it make any physical inspection of our properties or assets. BofA Merrill Lynch did not evaluate the solvency or fair value of the Company or CenterPoint Energy under any state, federal or other laws relating to bankruptcy, insolvency or similar matters. BofA Merrill Lynch assumed, at the direction of the Company, that the merger would be consummated in accordance with its terms, without waiver, modification or amendment of any material term, condition or agreement. BofA Merrill Lynch also assumed, at the direction of the Company, that the final executed merger agreement would not differ in any material respect from the Draft Agreement reviewed by it.

BofA Merrill Lynch expressed no view or opinion as to any terms or other aspects or implications of the merger (other than the merger consideration to the extent expressly specified in its opinion), including, without limitation, the form or structure of the merger, any related transactions or any other agreement, arrangement or understanding entered into in connection with or related to the merger or otherwise. BofA Merrill Lynch’s opinion was limited to the fairness, from a financial point of view, of the merger consideration to be received by the holders of Company common stock and no opinion or view was expressed with respect to any consideration received in connection with the merger by the holders of any other class of securities, creditors or other constituencies of any party. In addition, no opinion or view was expressed with respect to the fairness (financial or otherwise) of the amount, nature or any other aspect of any compensation to any of the officers, directors or employees of any party to the merger, or class of such persons, relative to the merger consideration or otherwise. Furthermore, no opinion or view was expressed as to the relative merits of the merger in comparison to other strategies or transactions that might be available to us or in which we might engage or as to our underlying business decision to proceed with or effect the merger. BofA Merrill Lynch also did not express any view or opinion with respect to, and BofA Merrill Lynch relied, at the direction of the Company, upon the assessments of our representatives regarding, legal, regulatory, accounting, tax and similar matters relating to us or the merger, as to which matters BofA Merrill Lynch understood that we obtained such advice as it deemed necessary from qualified professionals. In addition, BofA Merrill Lynch expressed no opinion or recommendation as to how any shareholder should vote or act in connection with the merger or any other matter.

BofA Merrill Lynch’s opinion was necessarily based on financial, economic, monetary, market and other conditions and circumstances as in effect on, and the information made available to BofA Merrill Lynch as of, the date of its opinion. It should be understood that subsequent developments may affect its opinion, and BofA Merrill Lynch does not have any obligation to update, revise or reaffirm its opinion. The issuance of BofA Merrill Lynch’s opinion was approved by a fairness opinion review committee of BofA Merrill Lynch. Except as described in this summary, we imposed no other limitations on the investigations made or procedures followed by BofA Merrill Lynch in rendering its opinion.

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The discussion set forth below in the section entitled “Summary of Material Financial Analyses” represents a brief summary of the material financial analyses presented by BofA Merrill Lynch to the Board in connection with its opinion. The financial analyses summarized below include information presented in tabular format. In order to fully understand the financial analyses performed by BofA Merrill Lynch, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses performed by BofA Merrill Lynch. Considering the data set forth in the tables below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of the financial analyses performed by BofA Merrill Lynch.

Summary of Material Financial Analyses.

Selected Publicly Traded Companies Analysis. BofA Merrill Lynch reviewed publicly available financial and stock market information for the Company, the following six publicly traded companies in the gas utility sector, the following six publicly traded companies in the electric utility sector and the following six publicly traded companies in the non-regulated (engineering and construction) sector:

Gas Utility Sector

Electric Utility Sector

Non-Regulated Sector

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BofA Merrill Lynch reviewed, among other things, per share equity values, based on closing stock prices on April 19, 2018, of the selected publicly traded companies in the gas utility, electric utility and non-regulated sectors as a multiple of calendar years 2018 and 2019 estimated earnings per share, commonly referred to as EPS. The overall low to high calendar year 2018 estimated EPS multiples observed for these companies were (i) 17.0x to 26.9x (with an average of 21.3x and a median of 21.5x) for the companies in the gas utility sector, (ii) 15.8x to 21.4x (with an average of 18.9x and a median of 18.9x) for the companies in the electric utility sector and (iii) 13.6x to 18.7x (with an average of 16.6x and a median of 16.6x) for the companies in the non-regulated sector. The overall low to high calendar year 2019 estimated EPS multiples observed for these companies were (i) 17.9x to 24.5x (with an average of 20.2x and a median of 19.8x) for the companies in the gas utility sector, (ii) 15.6x to 20.4x (with an average of 17.7x and a median of 17.5x) for the companies in the electric utility sector and (iii) 11.8x to 17.1x (with an average of 14.2x and a median of 14.6x) for the companies in the non-regulated sector.

BofA Merrill Lynch also reviewed enterprise values of the selected publicly traded companies, calculated as the equity values based on closing stock prices on April 19, 2018 plus debt and less cash, as a multiple of calendar years 2018 and 2019 estimated earnings before interest, taxes, depreciation and amortization, commonly referred to as EBITDA. The overall low to high calendar year 2018 EBITDA multiples observed for these companies were (i) 9.2x to 12.8x (with an average of 11.5x and a median of 11.9x) for the companies in the gas utility sector, (ii) 8.4x to 13.4x (with an average of 10.8x and a median of 10.8x) for the companies in the electric utility sector and (iii) 6.9x to 9.9x (with an average of 8.1x and a median of 7.8x) for the companies in the non-regulated sector. The overall low to high calendar year 2019 EBITDA multiples observed for these companies were (i) 8.6x to 15.2x (with an average of 11.3x and a median of 10.9x) for the companies in the gas utility sector, (ii) 7.9x to 11.7x (with an average of 9.9x and a median of 10.0x) for the companies in the electric utility sector and (iii) 6.4x to 9.2x (with an average of 7.3x and a median of 7.0x) for the companies in the non-regulated sector.

BofA Merrill Lynch then applied, for each Company business segment, calendar year 2018 and 2019 estimated EPS multiples of (i) 20.5x to 22.5x and 19.0x to 21.0x, respectively, derived from the selected publicly traded companies in the gas utility sector to the calendar year 2018 and 2019 estimated EPS for our gas utility business, (ii) 18.0x to 20.0x and 16.5x to 18.5x, respectively, derived from the selected publicly traded companies in the electric utility sector to the calendar year 2018 and 2019 estimated EPS for our electric utility business, and (iii) 15.5x to 17.5x and 13.5x to 15.5x, respectively, derived from the selected publicly traded companies in the non-regulated sector to calendar year 2018 and 2019 estimated EPS for our non-regulated business. BofA Merrill Lynch applied, for each Company business segment, similar calendar year 2018 and 2019 estimated EBITDA multiples of (i) 11.5x to 12.5x and 10.5x to 11.5x, respectively, derived from the selected publicly traded companies in the gas utility sector to the calendar year 2018 and 2019 estimated EBITDA for our gas utility business, (ii) 10.5x to 11.5x and 9.5x to 10.5x, respectively, derived from the selected publicly traded companies in the electric utility sector to the calendar year 2018 and 2019 estimated EBITDA for our electric utility business, and (iii) 7.5x to 8.5x and 6.5x to 7.5x, respectively, derived from the selected publicly traded companies in the non-regulated sector to the calendar year 2018 and 2019 estimated EBITDA for our non-regulated business. Estimated financial data of the selected publicly traded companies were based on publicly available research analysts’ estimates, and estimated financial data of the Company were based on our management forecasts. This analysis indicated the following approximate implied per share equity value reference ranges for the Company, rounded to the nearest $0.25, as compared to the merger consideration:

No company used in this analysis is identical or directly comparable to us. Accordingly, an evaluation of the results of this analysis is not entirely mathematical. Rather, this analysis involves complex considerations and judgments concerning differences in financial and operating characteristics and other factors that could affect the public trading or other values of the companies to which the Company was compared.

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Selected Precedent Transactions Analysis . BofA Merrill Lynch reviewed, to the extent publicly available, financial information relating to the following five selected transactions involving companies in the gas utility sector, the following fourteen selected transactions involving companies in the electric utility sector and the following seven selected transactions involving companies in the non-regulated sector:

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BofA Merrill Lynch reviewed transaction values, calculated as the enterprise value implied for the target company based on the consideration payable in the selected transaction, as a multiple of the target company’s (i) one-year forward and two-year forward estimated EPS, with respect to the gas utility selected transactions and electric utility selected transactions and (ii) latest twelve months’ EBITDA, with respect to the non-regulated precedent transactions.

The overall low to high multiples of the target companies’ one-year forward and two-year forward estimated EPS for the selected transactions were (i) 19.2x to 30.2x (with an average of 25.3x and a median of 24.8x, in each case excluding the Dominion Resources, Inc./Questar Corporation transaction, for which the transaction value could not be adjusted for master limited partnership eligible assets) and 18.7x to 28.5x (with an average of 26.4x and a median of 26.4x, in each case excluding the Dominion Resources, Inc./Questar Corporation transaction, for which the transaction value could not be adjusted for master limited partnership eligible assets), respectively, in the case of the gas utility selected transactions and (ii) 18.1x to 26.4x (with an average of 22.0x and a median of 22.0x) and 17.4x to 24.1x (with an average of 20.8x and a median of 20.8x), respectively, in the case of the electric utility selected transactions. The overall low to high multiples of the target companies’ latest twelve months’ EBITDA were 2.5x to 9.5x (with an average of 6.4x and a median of 7.0x) in the non-regulated selected transactions.

BofA Merrill Lynch then applied (i) one-year forward and two-year forward EPS multiples of 24.0x to 26.0x and 23.0x to 25.0x, respectively, derived from the gas utility selected transactions to the calendar year 2018 and 2019 estimated EPS for our gas utility business, (ii) one-year forward and two-year forward EPS multiples of 23.0x to 25.0x and 20.0x to 22.0x, respectively, derived from the electric utility selected transactions to the calendar year 2018 and 2019 estimated EPS for our electric utility business, and (iii) one-year forward and two-year forward EBITDA multiples of 7.0x to 9.0x and 6.0x to 8.0x, respectively, derived from the non-regulated selected transactions to the calendar year 2018 and 2019 estimated EBITDA for our non-regulated business. Estimated financial data of the selected transactions were based on publicly available information. Estimated financial data of the Company were based on our management forecasts. This analysis indicated the following approximate implied per share equity value reference ranges for the Company, rounded to the nearest $0.25, as compared to the merger consideration:

No company, business or transaction used in this analysis is identical or directly comparable to us or the merger. Accordingly, an evaluation of the results of this analysis is not entirely mathematical. Rather, this analysis involves complex considerations and judgments concerning differences in financial and operating characteristics and other factors that could affect the acquisition or other values of the companies, business segments or transactions to which the Company and the merger were compared.

Discounted Cash Flow Analysis. BofA Merrill Lynch performed a discounted cash flow sum-of-the-parts analysis of the Company to calculate the estimated present value of the standalone unlevered, after-tax free cash flows that the Company was forecasted to generate during our fiscal years 2018 through 2027 based on our management forecasts. BofA Merrill Lynch calculated terminal values for each Company business segment by applying terminal forward multiples of (i) 17.5x to 19.5x to our fiscal year 2027 estimated EPS for our gas utility business, (ii) 15.3x to 17.3x to our fiscal year 2027 estimated EPS for our electric utility business and (iii) 8.0x to 9.0x to our fiscal year 2027 estimated EBITDA for our non-regulated business. The cash flows and terminal values for each business segment were then discounted to present value as of December 31, 2017 using discount rates ranging from (i) 5.0% to 5.8% for our gas utility business, (ii) 4.7% to 5.4% for our electric utility business and (iii) 7.8% to 9.6% for our non-regulated business, based on estimates of each business segment’s weighted average cost of capital. From the resulting enterprise values for each business segment, BofA Merrill Lynch deducted net debt as of December 31, 2017 to derive equity values for each business segment. Ranges of total

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equity values were then determined by combining the low endpoints of the equity value ranges for the respective business segments to comprise the low endpoint, and combining the high endpoints of the equity value ranges for such business segments to comprise the high endpoint. This analysis indicated the following approximate implied per share equity value reference ranges for the Company, rounded to the nearest $0.25, as compared to the merger consideration:

Other Factors.

Other . BofA Merrill Lynch also noted certain additional factors that were not considered part of BofA Merrill Lynch’s material financial analyses with respect to its opinion but were referenced for informational purposes, including, among other things, the following:

Miscellaneous.

As noted above, the discussion set forth above in the section entitled “ Summary of Material Financial Analyses ” is a summary of the material financial analyses presented by BofA Merrill Lynch to the Board in connection with its opinion and is not a comprehensive description of all analyses undertaken or factors considered by BofA Merrill Lynch in connection with its opinion. The preparation of a financial opinion is a complex analytical process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances and, therefore, a financial opinion is not readily susceptible to partial analysis or summary description. BofA Merrill Lynch believes that its analyses summarized above must be considered as a whole. BofA Merrill Lynch further believes that selecting portions of its analyses and the factors considered or focusing on information presented in tabular format, without considering all analyses and factors or the narrative description of the analyses, could create a misleading or incomplete view of the processes underlying BofA Merrill Lynch’s analyses and opinion. The fact that any specific analysis has been referred to in the summary above is not meant to indicate that such analysis was given greater weight than any other analysis referred to in the summary.

In performing its analyses, BofA Merrill Lynch considered industry performance, general business and economic conditions and other matters, many of which are beyond the control of the Company and CenterPoint Energy. The estimates of the future performance of the Company and CenterPoint Energy in or underlying BofA Merrill Lynch’s analyses are not necessarily indicative of actual values or actual future results, which may be significantly more or less favorable than those estimates or those suggested by BofA Merrill Lynch’s analyses. These analyses were prepared solely as part of BofA Merrill Lynch’s analysis of the fairness, from a financial point of view, to the holders of the Company common stock of the merger consideration to be received by such holders and were provided to the Board in connection with the delivery of BofA Merrill Lynch’s opinion. The analyses do not purport to be appraisals or to reflect the prices at which a company might actually be sold or the prices at which any securities have traded or may trade at any time in the future. Accordingly, the estimates used in, and the ranges of valuations resulting from, any particular analysis described above are inherently subject to

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substantial uncertainty and should not be taken to be BofA Merrill Lynch’s view of the actual values of the Company or CenterPoint Energy.

The type and amount of consideration payable in the merger was determined through negotiations between the Company and CenterPoint Energy, rather than by any financial advisor, and was approved by the Board. The decision to enter into the merger agreement was solely that of the Board. As described above, BofA Merrill Lynch’s opinion and analyses were only one of many factors considered by the Board in its evaluation of the proposed merger and should not be viewed as determinative of the views of the Board or management with respect to the merger or the merger consideration.

We have agreed to pay BofA Merrill Lynch for its services in connection with the merger an aggregate fee estimated to be approximately $32.3 million, $1 million of which was payable upon the delivery of BofA Merrill Lynch’s opinion, approximately $3.23 million of which was payable upon execution of the merger agreement, approximately $6.46 million of which is payable upon receipt of the Company shareholder approval and the remaining portion of which is contingent upon consummation of the merger. We have also agreed to reimburse BofA Merrill Lynch for its expenses incurred in connection with BofA Merrill Lynch’s engagement and to indemnify BofA Merrill Lynch, any controlling person of BofA Merrill Lynch and each of their respective directors, officers, employees, agents and affiliates against specified liabilities, including liabilities under the federal securities laws.

BofA Merrill Lynch and its affiliates comprise a full service securities firm and commercial bank engaged in securities, commodities and derivatives trading, foreign exchange and other brokerage activities, and principal investing as well as providing investment, corporate and private banking, asset and investment management, financing and financial advisory services and other commercial services and products to a wide range of companies, governments and individuals. In the ordinary course of their businesses, BofA Merrill Lynch and its affiliates may invest on a principal basis or on behalf of customers or manage funds that invest, make or hold long or short positions, finance positions or trade or otherwise effect transactions in equity, debt or other securities or financial instruments (including derivatives, bank loans or other obligations) of the Company, CenterPoint Energy and certain of their respective affiliates.

BofA Merrill Lynch and its affiliates in the past have provided, currently are providing, and in the future may provide investment banking, commercial banking and other financial services to us and have received or in the future may receive compensation for the rendering of these services, including (i) having acted or acting as administrative agent, co-lead arranger and joint bookrunner for, and as a lender (including a swing line and letter of credit lender) under, certain credit facilities of our affiliates, (ii) having acted as placement agent in a debt offering undertaken by an affiliate of ours, (iii) having provided or providing certain commodity and derivatives trading services to us and certain of our affiliates, and (iv) having provided or providing certain treasury and trade management services and products to us and certain of our affiliates. From April 1, 2016 through March 31, 2018, BofA Merrill Lynch and its affiliates derived aggregate revenues from us and our affiliates of approximately $5 million for investment and corporate banking services.

In addition, BofA Merrill Lynch and its affiliates in the past have provided, currently are providing, and in the future may provide investment banking, commercial banking and other financial services to CenterPoint Energy and have received or in the future may receive compensation for the rendering of these services, including (i) having acted or acting as co-lead arranger and joint bookrunner for, and as a lender (including in some instances as letter of credit lender) under, certain credit facilities of CenterPoint Energy and certain of its affiliates, (ii) having acted as joint bookrunner on several debt offerings undertaken by affiliates of CenterPoint Energy, and (iii) having provided or providing certain treasury and trade management services and products to CenterPoint Energy and certain of its affiliates. From April 1, 2016 through March 31, 2018, BofA Merrill Lynch and its affiliates derived aggregate revenues from CenterPoint Energy and its affiliates, including Enable Midstream LP, of approximately $10 million for investment and corporate banking services.

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