Item 3.03 Material Modification to Rights of Security Holders.
On December 27, 2018, NiSource Inc. (the Company) issued 20,000 shares of its Series
B-1
Preferred Stock, par value $0.01 per share, liquidation preference $0.01 per share (Series
B-1
Preferred Stock), as a distribution with respect to its
outstanding 20,000 shares of 6.50% Series B Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Stock, par value $0.01 per share, liquidation preference $25,000 per share (the Series B Preferred Stock). As a result, each of the
depositary shares issued on December 5, 2018 (the Depositary Shares) now represents a 1/1,000
th
ownership interest in a share of Series B Preferred Stock and a 1/1,000
th
ownership interest in a share of Series
B-1
Preferred Stock. The Company and Computershare Inc. and Computershare Trust Company, N.A., acting jointly as
depositary, amended and restated the Deposit Agreement relating to the depositary shares on December 27, 2018 to reflect the distribution.
The Series
B-1
Preferred Stock is paired with the Series B Preferred Stock and may not be transferred,
redeemed or repurchased except in connection with the simultaneous transfer, redemption or repurchase of the underlying Series B Preferred Stock, and upon the transfer, redemption or repurchase of the underlying Series B Preferred Stock, the same
number of shares of Series
B-1
Preferred Stock must simultaneously be transferred (to the same transferee), redeemed or repurchased, as the case may be.
The Company issued the Series
B-1
Preferred Stock to enhance the voting rights of the Series B
Preferred Stock in the event of a Nonpayment Event (as defined below) to comply with the minimum voting rights policy of the New York Stock Exchange. Subject to certain terms and conditions set forth in the Certificate of Designations for the Series
B-1
Preferred Stock (the Certificate of Designations), if and whenever dividends on any shares of Series B Preferred Stock shall not have been declared and paid for at least six dividend periods,
whether or not consecutive (a Nonpayment Event), the number of directors then constituting the Companys Board of Directors shall automatically be increased by two until all accumulated and unpaid dividends on the Series B Preferred
Stock shall have been paid in full, and the holders of Series
B-1
Preferred Stock, voting as a class together with the holders of any outstanding securities ranking on a parity with the Series
B-1
Preferred Stock and having like voting rights that are exercisable at the time and entitled to vote thereon, shall be entitled to elect the two additional directors.
Holders of Series
B-1
Preferred Stock are not entitled to receive dividend payments. Accordingly, the
Series
B-1
Preferred Stock does not impose any additional restrictions on the Companys ability to declare or pay dividends on, or purchase, redeem or otherwise acquire, shares of its common stock or any
equity securities of the Company that rank junior to, or on a parity with, the Series B Preferred Stock and the Series
B-1
Preferred Stock.
The description of the Series
B-1
Preferred Stock contained in this Item 3.03 does not purport to be
complete and is qualified in its entirety by reference to the Certificate of Designations, a copy of which is attached as Exhibit 3.1 to this Current Report on
Form 8-K
and is incorporated herein by
reference.