2017 Management Information Circular

Notice of annual and special meeting May 4, 2017 Management information circular Notice of our 2017 annual and special meeting When Where May 4, 2017 Holiday Inn St. John’s, Salon A 10:30 a.m. (Newfoundland Daylight Time) 180 Portugal Cove Road St. John’s, Newfoundland and Labrador What the meeting will cover 1. Receive the Fortis Inc. (Fortis) consolidated financial statements for the financial year ended December 31, 2016 and the auditors’ report 2. Elect the directors 3. Appoint the auditors and authorize the directors to fix the auditors’ remuneration 4. Have a say on executive pay 5. Vote on approving the amended and restated employee share purchase plan 6. Transact any other business that may properly come before the meeting Your right to vote You are entitled to receive notice of and vote at the shareholder meeting if you held Fortis common shares at the close of business on March 17, 2017. If you acquired your shares after this date, you can ask for your name to be included in the list of eligible shareholders until 10 days before the meeting, as long as you have proper proof that you own shares of Fortis. The board of directors recommends that shareholders vote FOR all the resolutions. You can read more about these items in the attached management information circular. Vote in person or by proxy If you want to attend the meeting and vote your shares in person, you will need to register with our transfer agent, Computershare Trust Company of Canada, when you arrive. If you are appointing someone else to be your proxyholder or if you are a non-registered (beneficial) shareholder, please read the information beginning on page 6 of the circular. We’ll have a live webcast of the meeting on our website (www.fortisinc.com) if you are unable to attend in person. The board of directors has approved the contents of the notice and authorized us to send this information to our shareholders, directors and our auditors. By order of the board of directors, David C. Bennett Executive Vice President, Chief Legal Officer and Corporate Secretary St. John’s, Newfoundland and Labrador March 17, 2017 Message from the Chair of the Board and the President and Chief Executive Officer Dear fellow shareholders, On behalf of the board and management of Fortis Inc., it is our pleasure to invite you to the 2017 annual and special meeting of shareholders on Thursday, May 4, 2017 in St. John’s, Newfoundland and Labrador. The meeting will be held in Salon A of the Holiday Inn St. John’s at 180 Portugal Cove Road, beginning at 10:30 a.m. local time. The shareholder meeting is your opportunity to vote on specific items of business and meet members of the board and management. We will also present our results for the year, discuss our plans for the future and answer questions from shareholders. The enclosed management information circular contains important information about the meeting and the items of business. Please take some time to read the circular before you vote your shares. This year you will elect 12 directors to the board. Each is qualified and experienced and brings a strong mix of skills to the board. You can read about each nominee beginning on page 13. You will also have a say on executive pay with our annual advisory vote on our approach to executive compensation. You can read more about executive compensation at Fortis in the message from the chair of the human resources committee beginning on page 44 and the detailed discussion of the program and decisions for the year beginning on page 47. At this year’s meeting you will also vote on approving an amendment to our employee share purchase plan which has been expanded to allow our United States (U.S.) employees to participate in the plan and become Fortis shareholders. A year of strong growth Fortis posted another year of strong results in 2016, highlighting the value of our low-risk and diversified portfolio of utilities. On an adjusted basis, reported net earnings were $721 million or $2.33 per common share, 10% higher than our 2015 adjusted earnings per share (EPS) of $2.11. The most significant adjustments to earnings were to exclude utility acquisition-related expenses in 2016, and the gain on sales of non-core businesses in 2015. We also achieved a number of other successes in 2016: > We closed the acquisition of ITC Holdings Corp. (ITC) on October 14, 2016, two and half months earlier than expected, and fast for acquisitions in the utility sector > We listed our common shares and began trading on the New York Stock Exchange (NYSE) > We acquired Aitken Creek, the largest natural gas storage facility in British Columbia, which is uniquely positioned to benefit from the future development of natural gas resources in that province > We also made significant progress on a number of key regulatory proceedings, resulting in reasonable regulatory stability for our utilities in the near term. The acquisition of ITC, the largest independent electric transmission utility in the United States, is transformational and reinforces Fortis as a leader in the North American gas and electric utility industry. ITC dramatically extends our reach in the United States to eight additional states and the NYSE listing increases liquidity for Fortis through access to a broader group of investors and trading activity for Fortis shares in the United States, all of which are critical to our growth strategy. 2017 MESSAGE TO SHAREHOLDERS 1 Delivering value to shareholders In 2016, Fortis continued to deliver value to shareholders with an annual dividend of $1.525 per common share and a one-year total shareholder return of 15.2%. Since our initial push into the U.S. with the purchase of CH Energy Group, Inc. (CH Energy Group) in 2013, our adjusted EPS has grown at a compound annual growth rate of 11%, one of the highest in the industry for the three-year period through to 2016. Over the past 10 years, Fortis has outperformed the market and delivered a compound annual dividend growth rate of 9% to shareholders. The increase in our dividend from $0.375 to $0.40 per share in the fourth quarter of 2016 marks 43 consecutive years of annual dividend increases – the longest record of any public corporation in Canada – and we have targeted average annual dividend growth of approximately 6% through 2021. Pay aligned with performance Strong corporate performance resulted in compensation for the five most senior executives above target, and up 5.7% from 2015. Annual incentives were awarded at maximum for several executives, including the President and Chief Executive Officer, in recognition of the strong 2016 financial results and the successful and early closing of the ITC transaction. Both the board and the human resources committee take great care to ensure compensation supports the business strategy, links to performance and aligns with shareholder interests. Committed to strong governance The board and management are committed to good governance and sound business practices. We are also committed to engaging more with our shareholders as we continue to grow and expand our investor base. Fortis continues to promote diversity and has committed to having a board where each gender represents at least one-third of the board’s independent directors – a level we currently meet. Board changes Ongoing board refreshment is also a key element of good governance, and we would like to thank David G. Norris and Peter E. Case for their valuable contributions and service on the Fortis board. Mr. Norris stepped down from his role as Chair on September 1, 2016 and will retire from the board at the end of the 2017 shareholder meeting after completing the maximum 12-year tenure as a Fortis director. During his tenure, Mr. Norris also served as chair of the audit committee for five years. Mr. Norris provided outstanding board leadership through a very successful period in our history and we appreciate his efforts to ensure a timely and effective transition from his role as Chair. Mr. Case is also completing 12 years on the Fortis board and therefore is also not standing for re-election. Mr. Case served as chair of the audit committee for six years and was a member of the governance and nominating committee for the past four years. He brought tremendous knowledge of the capital markets and insight to the energy sector. 2 FORTIS INC. Our tenure policy provides an effective way to build deep knowledge and expertise and an orderly process for board renewal. This year two new director nominees are standing for election to the Fortis board. Lawrence T. Borgard, an electrical engineer, brings extensive experience in the U.S. energy sector as a former President and Chief Operating Officer of Integrys Energy Group, a diversified energy holding company that was recently bought by another investor-owned utility. Joseph L. Welch, an electrical engineer, is Chairman of the Board of ITC and also served as its President and Chief Executive Officer until October 31, 2016. Mr. Welch brings deep experience in the U.S. utility business and led ITC’s growth as it became the largest independent electric transmission company in the U.S. Looking ahead Today Fortis serves over three million gas and electricity customers across North America and the Caribbean. We are the largest investor-owned, electric and gas utility in Canada and one of the top 15 in North America when measured by enterprise value. We are confident about a bright future for Fortis and our prospects for long-term, profitable growth.

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