Incumbent Executive Officers
3X
Doc Number 705885v5
VECTREN CORPORATION
EMPLOYMENT AGREEMENT
This AGREEMENT by and between Vectren Corporation, an Indiana
corporation (the "Company"), and ___________________________ (the
"Executive"), dated as of February 1, 2005 (the "Commencement Date").
1. Employment Period. The Company hereby agrees to employ the
Executive, and the Executive hereby agrees to remain in the employ of
the Company subject to the terms and conditions of this Agreement, for
the period commencing on the Commencement Date and ending on January
31, 2008 (the "Employment Period"); provided, however, that unless the
Company or the Executive shall have served written notice to the other
party prior to January 31, 2007, of its or his intention that the
Agreement be terminated as of January 31, 2008, the Employment Period
shall automatically be extended without action by either party until
the date as of which the Executive or the Company designates as the
termination date in a notice delivered to the other party (the
"Nonrenewal Notice") which date, under no circumstances, including the
nonrenewal of the term ending January 31, 2008, shall be earlier than
the last day of the calendar month which is at least one (1) year
following the date on which the Nonrenewal Notice is delivered. For
purposes of this Agreement, employment and compensation paid by any
direct or indirect subsidiary of the Company will be deemed to be
employment and compensation paid by the Company.
2. Terms of Employment.
(a) Position and Duties.
(i) During the Employment Period, the Executive shall
serve in the position and at the location set forth on
Exhibit A hereto, or such other executive position(s)
appropriate to the Executive's training, qualifications or
experience, as the Compensation and Benefits Committee of
the Board of Directors of the Company (the "Compensation
Committee") may from time to time determine which
position(s) are reasonably comparable to the Executive's
initial position.
(ii) During the Employment Period, and excluding any
periods of vacation and sick leave to which the Executive is
entitled, the Executive agrees to devote full attention and
time during normal business hours to the business and
affairs of the Company and to use the Executive's reasonable
best efforts to perform such responsibilities in a
professional manner. It shall not be a violation of this
Agreement for the Executive to (A) serve on corporate, civic
or charitable boards or committees, (B) deliver lectures,
fulfill speaking engagements or teach at educational
institutions and (C) manage personal investments, so long as
such activities do not significantly interfere with the
performance of the Executive's responsibilities as an
employee of the Company in accordance with this Agreement.
It is expressly understood and agreed that to the extent
that any such activities have been conducted by the
Executive prior to the Commencement Date, the continued
conduct of such activities (or the conduct of activities
similar in nature and scope thereto) subsequent to the
Commencement Date shall not thereafter be deemed to
interfere with the performance of the Executive's
responsibilities to the Company.
(b) Compensation.
(i) Base Salary. During the Employment Period, the
Executive shall receive an annual base salary ("Annual Base
Salary") in an amount no less than the Executive's annual
base salary in effect on the Commencement Date, payable in
cash. The Annual Base Salary shall be reviewed periodically
by the Compensation Committee. If the Annual Base Salary is
increased after the Commencement Date, the increased Base
Salary amount shall become the minimum level of Annual
Salary for the Executive. The Annual Base Salary shall be
paid no less frequently than in equal monthly installments.
(ii) Annual Bonus. During the Employment Period, the
Executive shall have an annual bonus opportunity based on a
target award percentage determined periodically by the
Compensation Committee, in its sole discretion using the
Compensation Committee's market determination of the
applicable annual bonus market for persons with duties
similar to the Executive; provided, however, that the target
bonus established for the Executive by the Compensation
Committee shall not be less than the target award percentage
established for other Company employees at the same
employment level as the Executive.
(iii) Long-Term Incentives. During the Employment
Period the Executive shall be eligible to participate in all
long-term incentive plans and in all Company stock incentive
plans (the "Stock Incentive Plan"), practices, policies and
programs to the extent applicable generally to other peer
executives of the Company and its affiliated companies. The
Executive's awards under the Stock Incentive Plan shall be
determined periodically by the Compensation Committee in its
sole discretion using the Compensation Committee's market
determination of the applicable long term incentive market
for persons with duties similar to the Executive; provided,
however, that the target bonus established for the Executive
by the Compensation Committee shall not be less than the
target award percentage established for other Company
employees at the same employment level as the Executive.
(iv) Savings and Retirement Plans. During the
Employment Period, the Executive shall be eligible to
participate in all savings and retirement plans, practices,
policies and programs to the extent applicable generally to
other peer executives of the Company and its affiliated
entities.
(v) Welfare and Other Benefit Plans. During the
Employment Period, the Executive and/or the Executive's
family, as the case may be, shall be eligible for
participation in and shall receive all benefits and
executive perquisites under welfare, fringe, change of
control protection, incentive, vacation and other similar
benefit plans, practices, policies and programs provided by
the Company and its affiliated entities (including, without
limitation, medical, prescription, dental, disability,
employee life, group life, accidental death and travel
accident insurance plans and programs) to the extent
applicable generally to other peer executives of the Company
and its affiliated entities.
(vi) Expenses. During the Employment Period, the
Executive shall be entitled to receive prompt reimbursement
for all reasonable business expenses incurred by the
Executive, in accordance with the policies of the Company.
(vii) Indemnity. The Executive shall be indemnified by
the Company against claims arising in connection with the
Executive's status as an employee, officer, director or
agent of the Company in accordance with the Company's
indemnity policies for its senior executives, subject to
applicable law.
3. Termination of Employment.
(a) Death or Disability. The Executive's employment shall
terminate automatically upon the Executive's death during the
Employment Period. If the Company determines in good faith that
the Disability (as defined below) of the Executive has occurred
during the Employment Period, it may give to the Executive
written notice in accordance with Section 9(b) of this Agreement
of its intention to terminate the Executive's employment. In such
event, the Executive's employment with the Company shall
terminate effective on the thirtieth day after receipt of such
notice by the Executive (the "Disability Commencement Date"),
provided that, within the thirty day period after such receipt,
the Executive shall not have returned to full-time performance of
the Executive's duties. For purposes of this Agreement,
"Disability" shall have the meaning set forth in the Company's
long-term disability plan.
(b) Cause. The Company may terminate the Executive's
employment during the Employment Period for Cause. For purposes
of this Agreement, "Cause" shall mean:
(i) intentional gross misconduct by the Executive
damaging in a material way to the Company,
(ii) the Executive's commission of fraud against the
Company,
(iii) the Executive's public acts of dishonesty or
conviction of a felony, or
(iv) a material breach of this Agreement, after the
Company has given the Executive notice thereof and a
reasonable opportunity to cure.
(c) Good Reason. The Executive's employment may be
terminated by the Executive for Good Reason. For purposes of this
Agreement and before the conclusion of the Window Period (as
defined in Section 3(f) below) of the Company, "Good Reason"
shall mean a material breach by the Company of this Agreement
after the Executive has given the Company notice of the breach
and a reasonable opportunity to cure. After the Window Period,
"Good Reason" shall mean, without the Executive's written
consent, (i) a demotion in the Executive's status, position or
responsibilities which, in the Executive's reasonable judgment,
does not represent a promotion from the Executive's status,
position or responsibilities as in effect immediately prior to
the Change in Control (as defined in Section 3(f) below); (ii)
the assignment to the Executive of any duties or responsibilities
which, in the Executive's reasonable judgment, are inconsistent
with such status, position or responsibilities immediately prior
to the Change in Control; or any removal of the Executive from or
failure to reappoint or reelect the Executive to any of such
positions that the Executive had immediately prior to the Change
in Control, except in connection with the termination of the
Executive's employment for total and permanent Disability, death
or Cause or by the Executive other than for Good Reason; (iii) a
reduction by the Company in the Executive's base salary as in
effect on the date hereof or as the same may be increased from
time to time during the term of this Agreement or the Company's
failure to increase (within twelve (12) months of the Executive's
last increase in base salary) the Executive's base salary after a
Change in Control in an amount which at least equals, on an
appropriate percentage basis, an amount reasonably comparable to
the percentage increases in base salary for all Company employees
at the same employment level as the Executive effected in the
preceding twelve (12) months; (iv) the relocation of the
principal executive offices of the Company or Company affiliate,
whichever entity on behalf of which the Executive performs a
principal function of that entity as part of the Executive's
employment services, to a location more than fifty (50) miles
outside the Evansville, Indiana metropolitan area or, if the
Executive's services are not performed in Evansville, Indiana,
the Company's requiring the Executive to be based at any place
other than the location at which the Executive performed the
Executive's duties immediately prior to the end of the Window
Period, except for required travel on the Company's business to
an extent substantially consistent with the Executive's business
travel obligations at the time of a Change in Control; (v) a
reduction in the Executive's total direct compensation
opportunity; (vi) the failure by the Company to continue in
effect any incentive, bonus or other compensation plan in which
the Executive participates immediately prior to the Change in
Control, including but not limited to the Company's stock option
and restricted stock plans, if any, unless an equitable
arrangement (embodied in an ongoing substitute or alternative
plan) has been made with respect to such plan in connection with
the Change in Control, or the failure by the Company to continue
the Executive's participation therein, or any action by the
Company which would directly or indirectly materially reduce the
Executive's participation therein; (vii) the failure by the
Company to provide benefits (including, but not limited to,
annual and long term bonus opportunities), in the aggregate, that
are reasonably comparable to the benefits, in the aggregate,
being provided for the majority of the other Company employees at
the same employment level as the Executive; (viii) the failure of
the Company to obtain a satisfactory agreement from any successor
or assign of the Company to assume and agree to perform this
Agreement; or (ix) any request by the Company that the Executive
participate in an unlawful act or take any action constituting a
breach of the Executive's professional standard of conduct.
(d) Notice of Termination. Any termination by the Company
for Cause, or by the Executive for Good Reason, shall be
communicated by Notice of Termination to the other party hereto
given in accordance with Section 9(b) of this Agreement. For
purposes of this Agreement, a "Notice of Termination" means a
written notice which (i) indicates the specific termination
provision in this Agreement relied upon, (ii) to the extent
applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated and (iii)
if the Date of Termination (as defined below) is other than the
date of receipt of such notice, specifies the termination date
(which date shall be not more than thirty days after the giving
of such notice). The failure by the Executive or the Company to
set forth in the Notice of Termination any fact or circumstance
which contributes to a showing of Good Reason or Cause shall not
waive any right of the Executive or the Company, respectively,
hereunder or preclude the Executive or the Company, respectively,
from asserting such fact or circumstance in enforcing the
Executive's or the Company's rights hereunder.
(e) Date of Termination. "Date of Termination" means (i) if
the Executive's employment is terminated by the Company for
Cause, or by the Executive for Good Reason, the date of receipt
of the Notice of Termination or any later date specified therein,
as the case may be, (ii) if the Executive's employment is
terminated by the Company other than for Cause or Disability, the
Date of Termination shall be the date on which the Company
notifies the Executive of such termination and (iii) if the
Executive's employment is terminated by reason of death or
Disability, the Date of Termination shall be the date of death of
the Executive or the Disability Commencement Date, as the case
may be.
(f) Other Termination. The Executive's employment may be
terminated by the Executive voluntarily, without Good Reason,
during a thirty (30) day period immediately following the first
annual anniversary of a Change in Control of the Company ("Window
Period"). For purposes of this Agreement, a "Change in Control"
means:
(i) The acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Exchange
Act")) (a "Person") of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of
twenty percent (20%) or more of either (A) the then
outstanding shares of common stock of the Company (the
"Outstanding Company Common Stock") or (B) the combined
voting power of the then outstanding voting securities of
the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities");
provided, however, that the following acquisitions shall not
constitute an acquisition of control: (A) any acquisition
directly from the Company (excluding an acquisition by
virtue of the exercise of a conversion privilege), (B) any
acquisition by the Company, (C) any acquisition by any
employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by
the Company or (D) any acquisition by any corporation
pursuant to a reorganization, merger or consolidation, if,
following such reorganization, merger or consolidation, the
conditions described in clauses (A), (B) and (C) of
subsection (iii) of this paragraph are satisfied;
(ii) Individuals who, as of the Commencement Date,
constitute the Board of Directors of the Company (the
"Incumbent Board") cease for any reason to constitute at
least a majority of the Board of Directors of the Company
(the "Board"); provided, however, that any individual
becoming a director subsequent to the date hereof whose
election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority
of the directors then comprising the Incumbent Board shall
be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a
result of either an actual or threatened election contest
(as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board; or
(iii) Consummation of a reorganization, merger or
consolidation, in each case, unless, following such
reorganization, merger or consolidation, (A) more than sixty
percent (60%) of, respectively, the then outstanding shares
of common stock of the corporation resulting from such
reorganization, merger or consolidation and the combined
voting power of the then outstanding voting securities of
such corporation entitled to vote generally in the election
of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals
and entities who were the beneficial owners, respectively,
of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such
reorganization, merger or consolidation in substantially the
same proportions as their ownership, immediately prior to
such reorganization, merger or consolidation, of the
Outstanding Company Common Stock and Outstanding Company
Voting Securities, as the case may be, (B) no Person
(excluding the Company, any employee benefit plan or related
trust of the Company, or such corporation resulting from
such reorganization, merger or consolidation and any Person
beneficially owning, immediately prior to such
reorganization, merger or consolidation, directly or
indirectly, twenty percent (20%) or more of the Outstanding
Company Common Stock or Outstanding Company Voting
Securities, as the case may be) beneficially owns, directly
or indirectly, twenty percent (20%) or more of,
respectively, the then outstanding shares of common stock of
the corporation resulting from such reorganization, merger
or consolidation or the combined voting power of the then
outstanding voting securities of such corporation entitled
to vote generally in the election of directors and (C) at
least a majority of the members of the board of directors of
the corporation resulting from such reorganization, merger
or consolidation were members of the Incumbent Board at the
time of the execution of the initial agreement providing for
such reorganization, merger or consolidation;
(iv) Approval by the shareholders of the Company of (A)
a complete liquidation or dissolution of the Company or (B)
the sale or other disposition of all or substantially all of
the assets of the Company, other than to a corporation, with
respect to which following such sale or other disposition
(1) more than sixty percent (60%) of, respectively, the then
outstanding shares of common stock of such corporation and
the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned,
directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to
such sale or other disposition in substantially the same
proportion as their ownership, immediately prior to such
sale or other disposition, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities, as the case
may be, (2) no Person (excluding the Company and any
employee benefit plan or related trust of the Company or
such corporation and any Person beneficially owning,
immediately prior to such sale or other disposition,
directly or indirectly, twenty percent (20%) or more of the
Outstanding Company Common Stock or Outstanding Company
Voting Securities, as the case may be) beneficially owns,
directly or indirectly, twenty percent (20%) or more of,
respectively, the then outstanding shares of common stock of
such corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled
to vote generally in the election of directors and (3) at
least a majority of the members of the board of directors of
such corporation were members of the Incumbent Board at the
time of the execution of the initial agreement or action of
the Board providing for such sale or other disposition of
assets of the Company; or
(v) The closing, as defined in the documents relating
to, or as evidenced by a certificate of any state or federal
governmental authority in connection with, a transaction
approval of which by the shareholders of the Company would
constitute an "Change in Control" under subsection (iii) or
(iv) of this Section 3(f) of this Agreement.
Notwithstanding anything contained in this Agreement to the contrary,
if the Executive's employment is terminated before a Change in Control
as defined in this Section 3(f) and the Executive reasonably
demonstrates that such termination (i) was at the request of a third
party who has indicated an intention or taken steps reasonably
calculated to effect a "Change in Control" and who effectuates a
"Change in Control" or (ii) otherwise occurred in connection with, or
in anticipation of, a "Change in Control" which actually occurs, then
for all purposes of this Agreement, the date of a "Change in Control"
with respect to the Executive shall mean the date immediately prior to
the date of such termination of the Executive's employment.
4. Obligations of the Company upon Termination.
(a) Good Reason; Other Than for Cause. If, during the
Employment Period, the Company shall terminate the Executive's
employment other than for Cause, death or Disability, or the
Executive shall terminate employment for Good Reason or, if still
available under Section 3(f), without reason during the Window
Period.
(i) The Company shall pay to the Executive in a lump
sum in cash within fifteen calendar days after the Date of
Termination the aggregate of the amounts set forth in
clauses A, B and C below:
A. the sum of (1) the Executive's Annual Base
Salary through the Date of Termination to the extent
not theretofore paid, (2) the product of (x) the
greater of the target bonus currently in effect for
the Executive or the average of the actual bonuses
paid to the Executive for the three years ending prior
to the year in which the Date of Termination occurs
(the "Minimum Bonus") and (y) a fraction, the
numerator of which is the number of days in the
current calendar year through the Date of Termination,
and the denominator of which is 365 and (3) any
compensation previously deferred by the Executive
(together with any accrued interest or earnings
thereon) and any other nonqualified benefit plan
balances to the extent not theretofore paid (the sum
of the amounts described in clauses (1), (2), and (3)
shall be hereinafter referred to as the "Accrued
Obligations"); provided, however, that for purposes of
this Section 4, Annual Base Salary shall include any
elective salary reductions in effect for the Executive
under any tax qualified or non-qualified deferred
compensation plan maintained by the Company; and
B. the amount equal to the product of (1) and (2)
where:
(1) is the lesser of (a) three years or (b)
the number of years, rounded to the nearest
twelfth (1/12th) of a year, between the Date of
Termination and the Executive's attainment of age
sixty-five (65), and
(2) is the sum of (x) the Executive's Annual
Base Salary and (y) the Minimum Bonus; and
C. an amount equal to the excess of (a) the
actuarial equivalent of the benefit under the
Company's qualified defined benefit retirement plan or
such other qualified defined benefit pension plan in
which the Executive participates, if any (the
"Retirement Plan") (utilizing actuarial assumptions no
less favorable to the Executive than those in effect
under the Company's Retirement Plan immediately prior
to the Commencement Date), and any excess or
supplemental retirement plan in which the Executive
participates (together, the "SERP") which the
Executive would receive if the Executive's employment
continued for the lesser of (a) three years or (b) the
number of years, rounded to the nearest twelfth
(1/12th) of a year, between the Date of Termination
and the Executive's attainment of age sixty-five (65),
assuming for this purpose that all accrued benefits
are fully vested, and, assuming that the Executive's
compensation during the duration of the Employment
Period is the sum of the Annual Base Salary and
Minimum Bonus over (b) the actuarial equivalent of the
Executive's actual benefit (paid or payable), if any,
under the Retirement Plan and the SERP as of the Date
of Termination; provided, however, that such
determination shall also take into account, to the
extent applicable, any early retirement subsidy, based
on the Executive's age, service or both, for the
additional service and age that the Executive would
have realized if the Executive remained employed for
the period described above in this subparagraph;
(ii) any restricted stock, stock options and any other
stock awards under the Stock Incentive Plan or any other
Company sponsored plan or arrangement that were outstanding
immediately prior to the Commencement Date ("Prior Stock
Awards") shall become immediately vested and/or exercisable,
as the case may be;
(iii) for the period which is the lesser of (a) three
years or (b) the number of years, rounded to the nearest
twelfth (1/12th) of a year, between the Date of Termination
and the Executive's attainment of age sixty-five (65), or
such longer period as may be provided by the terms of the
appropriate plan, program, practice or policy, the Company
shall continue benefits to the Executive and/or the
Executive's family at least equal to those which would have
been provided to them in accordance with the Welfare Plans,
programs, practices, executive perquisites and Policies
described in Section 2(b)(v) of this Agreement if the
Executive's employment had not been terminated or, if more
favorable to the Executive, as in effect generally at any
time thereafter with respect to other peer executives of the
Company and its affiliated companies and their families;
provided, however, that if the Executive becomes reemployed
with another employer and is eligible to receive medical or
other welfare benefits under another employer provided plan,
the medical and other welfare benefits described herein
shall be secondary to those provided under such other plan
during such applicable period of eligibility. For purposes
of determining eligibility (but not the time of commencement
of benefits) of the Executive for retiree benefits pursuant
to such plans, practices, programs and policies, the
Executive shall be considered to have remained employed for
the duration of the Employment Period after the Date of
Termination and to have retired on the last day of such
period; and
(iv) to the extent not theretofore paid or provided,
the Company shall timely pay or provide to the Executive any
other amounts or benefits required to be paid or provided or
which the Executive is entitled to receive under any plan,
program, policy or practice or contract or agreement of the
Company and its affiliated companies, excluding any
severance plan or policy except to the extent that such plan
or policy provides, in accordance with its terms, benefits
with a value in excess of the benefits payable to the
Executive under this Section 4, (such other amounts and
benefits shall be hereinafter referred to as the "Other
Benefits").
(b) Cause; Other than for Good Reason. If the Executive's
employment shall be terminated for Cause or the Executive
terminates employment without Good Reason or, if the Window
Period has not been eliminated under Section 3(f), not during the
Window Period, this Agreement shall terminate without further
obligations to the Executive other than the obligation to pay to
the Executive (x) Accrued Obligations less the amount determined
under Section 4(a)(i)A(2) hereof, and (y) Other Benefits, in each
case to the extent theretofore unpaid.
(c) Death. If the Executive's employment is terminated by
reason of the Executive's death during the Employment Period,
this Agreement shall terminate without further obligations to the
Executive's legal representatives under this Agreement, other
than for payment of Accrued Obligations and the timely payment or
provision of Other Benefits. Accrued Obligations shall be paid to
the Executive's estate or beneficiary, as applicable, in a lump
sum in cash within 30 days of the Date of Termination.
(d) Disability. If the Executive's employment is terminated
by reason of the Executive's Disability during the Employment
Period, this Agreement shall terminate without further
obligations to the Executive, other than for payment of Accrued
Obligations and the timely payment or provision of Other
Benefits. Accrued Obligations shall be paid to the Executive in a
lump sum in cash within 30 days of the Date of Termination. With
respect to the provision of Other Benefits, the term Other
Benefits as utilized in this Section 4(d) shall include, and the
Executive shall be entitled after the Disability Commencement
Date to receive, disability and other benefits as in effect
generally with respect to other peer executives of the Company
and its affiliated companies and their families.
5. Confidential Information; Noncompetition.
(a) The Executive shall hold in a fiduciary capacity for the
benefit of the Company all secret or confidential information,
knowledge or data relating to the Company or any of its
affiliated companies, and their respective businesses, which
shall have been obtained by the Executive during the Executive's
employment by the Company or any of its affiliated companies and
which shall not be or become public knowledge (other than by acts
by the Executive or representatives of the Executive in violation
of this Agreement). After termination of the Executive's
employment with the Company, the Executive shall not, without the
prior written consent of the Company or as may otherwise be
required by law or legal process (provided the Company has been
given notice of and opportunity to challenge or limit the scope
of disclosure purportedly so required), communicate or divulge
any such information, knowledge or data to anyone other than the
Company and those designated by it. In addition, Executive shall
not solicit employees of the Company for at least a one (1) year
period beginning on the Date of Termination.
(b) In the event of a termination of the Executive by the
Company for Cause or by the Executive before a Change in Control
and without Good Reason, until the second anniversary of the
Executive's Date of Termination, the Executive will not directly
or indirectly, own, manage, operate, control or participate in
the ownership, management, operation or control of, or be
connected as an officer, employee, partner, director or otherwise
with, or have any financial interest in, any business which
competes, or that is planning to compete, with the utility
business of the Company or any of its affiliates or any other
business in which the Company or any of its affiliates are
engaged immediately prior to the Date of Termination in:
(i) the State of Indiana;
(ii) the State of Ohio; and
(iii) the States and Commonwealths of Michigan,
Illinois, Kentucky, West Virginia and Pennsylvania.
The parties expressly agree that the terms of this limited
non-competition provision under this section are reasonable,
enforceable, and necessary to protect the Company's interests,
and are valid and enforceable. In the unlikely event, however,
that a court of competent jurisdiction were to determine that any
portion of this limited non-competition provision is
unenforceable, then the parties agree that the remainder of the
limited non-competition provision shall remain valid and
enforceable to the maximum extent possible.
(c) Specific Enforcement/Injunctive Relief. The Executive
agrees that it would be difficult to measure damages to the
Company from any breach of the covenants contained in Subsection
(b) above, but that such damages from any breach would be great,
incalculable and irremediable, and that damages would be an
inadequate remedy. Accordingly, the Executive agrees that the
Company may have specific performance of the terms of this
Agreement in any court permitted by this Agreement. The parties
agree however, that specific performance and the "add back"
remedies described above shall not be the exclusive remedies, and
the Company may enforce any other remedy or remedies available to
it either in law or in equity including, but not limited to,
temporary, preliminary, and/or permanent injunctive relief.
6. Full Settlement. After a Change in Control, the Company's
obligation to make the payments provided for in this Agreement and
otherwise to perform its obligations hereunder shall not be affected
by any set-off, counterclaim, recoupment, defense or other claim,
right or action which the Company may have against the Executive or
others. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the
amounts payable to the Executive under any of the provisions of this
Agreement and such amounts shall not be reduced whether or not the
Executive obtains other employment. The Company agrees to pay as
incurred, to the full extent permitted by law, all legal fees and
expenses which the Executive may reasonably incur as a result of any
non-frivolous contest (regardless of the outcome thereof) by the
Company, the Executive or others of the validity or enforceability of,
or liability under, any provision of this Agreement or any guarantee
of performance thereof (including as a result of any contest by the
Executive about the amount of any payment pursuant to this Agreement),
plus in each case interest on any delayed payment at the applicable
Federal rate provided for in Section 7872(f)(2)(A) of the Internal
Revenue Code of 1986, as amended (the "Code").
7. Successors.
(a) This Agreement is personal to the Executive and without
the prior written consent of the Company shall not be assignable
by the Executive otherwise than by will or the laws of descent
and distribution. This Agreement shall inure to the benefit of
and be enforceable by the Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns.
(c) The Company will require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the
Company to assume expressly and agree to perform this Agreement
in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place.
As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or
assets as aforesaid which assumes and agrees to perform this
Agreement by operation of law, or otherwise.
8. Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary or any
termination of this Agreement notwithstanding and except as
provided in subsection (e) of this Section 8, in the event it
shall be determined that any payment or distribution or benefit
made or provided by the Company or its affiliates to or for the
benefit of the Executive whether pursuant to this Agreement or
otherwise, and determined without regard to any additional
payments required under this Section 8 (a "Payment") would be
subject to the excise tax imposed by Section 4999 of the Code or
any interest or penalties are incurred by the Executive with
respect to such excise tax (such excise tax, together with any
such interest and penalties, are hereinafter collectively
referred to as the "Excise Tax"), then the Executive shall be
entitled to receive an additional payment (a "Gross- Up Payment")
in an amount such that after payment by the Executive of all
taxes (including any interest or penalties imposed with respect
to such taxes), including, without limitation, any income taxes
(and any interest and penalties imposed with respect thereto) and
Excise Tax imposed upon the Gross-Up Payment, the Executive
retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.
(b) Subject to the provisions of Section 8(c), all
determinations required to be made under this Section 8,
including whether and when a Gross-Up Payment is required, the
amount of such Gross-Up Payment and the assumptions to be
utilized in arriving at such determination and whether subsection
(e) is applicable, shall be made by the Company's independent
auditor (the "Accounting Firm") which shall provide detailed
supporting calculations both to the Company and the Executive
within 15 business days of the receipt of notice from the
Executive that there has been a Payment, or such earlier time as
is requested by the Company. All fees and expenses of the
Accounting Firm shall be borne solely by the Company. Any
Gross-Up Payment, as determined pursuant to this Section 8, shall
be paid by the Company to the Executive within five days of the
receipt of the Accounting Firm's determination. Any determination
by the Accounting Firm shall be binding upon the Company and the
Executive. As a result of the uncertainty in the application of
Section 4999 of the Code at the time of the initial determination
by the Accounting Firm hereunder, it is possible that Gross-Up
Payments which will not have been made by the Company should have
been made ("Underpayment"), consistent with the calculations
required to be made hereunder. In the event that the Company
exhausts its remedies pursuant to Section 8(c) and the Executive
thereafter is required to make a payment of any Excise Tax, the
Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly
paid by the Company to or for the benefit of the Executive.
(c) The Executive shall notify the Company in writing of any
claim by the Internal Revenue Service that, if successful, would
require the payment by the Company of the Gross-Up Payment. Such
notification shall be given as soon as practicable but no later
than ten business days after the Executive is informed in writing
of such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid.
The Executive shall not pay such claim prior to the expiration of
the 30-day period following the date on which it gives such
notice to the Company (or such shorter period ending on the date
that any payment of taxes with respect to such claim is due). If
the Company notifies the Executive in writing prior to the
expiration of such period that it desires to contest such claim,
the Executive shall:
(i) give the Company any information reasonably
requested by the Company relating to such claim,
(ii) take such action in connection with contesting
such claim as the Company shall reasonably request in
writing from time to time, including, without limitation,
accepting legal representation with respect to such claim by
an attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order
effectively to contest such claim, and
(iv) permit the Company to participate in any
proceedings relating to such claim;
provided, however, that the Company shall bear and pay directly
all costs and expenses (including additional interest and
penalties) incurred in connection with such contest and shall
indemnify and hold the Executive harmless, on an after-tax basis,
for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such
representation and payment of costs and expenses. Without
limitation on the foregoing provisions of this Section 8(c), the
Company shall control all proceedings taken in connection with
such contest and, at its sole option, may pursue or forego any
and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim
and may, at its sole option, either direct the Executive to pay
the tax claimed and sue for a refund or contest the claim in any
permissible manner, and the Executive agrees to prosecute such
contest to a determination before any administrative tribunal, in
a court of initial jurisdiction and in one or more appellate
courts, as the Company shall determine; provided, however, that
if the Company directs the Executive to pay such claim and sue
for a refund, the Company shall advance the amount of such
payment to the Executive, on an interest-free basis and shall
indemnify and hold the Executive harmless, on an after-tax basis,
from any Excise Tax or income tax (including interest or
penalties with respect thereto) imposed with respect to such
advance or with respect to any imputed income with respect to
such advance; and further provided that any extension of the
statute of limitations relating to payment of taxes for the
taxable year of the Executive with respect to which such
contested amount is claimed to be due is limited solely to such
contested amount. Furthermore, the Company's control of the
contest shall be limited to issues with respect to which a
Gross-Up Payment would be payable hereunder and the Executive
shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other
taxing authority.
(d) If, after the receipt by the Executive of an amount
advanced by the Company pursuant to Section 8(c), the Executive
becomes entitled to receive any refund with respect to such
claim, the Executive shall (subject to the Company's complying
with the requirements of Section 8(c)) promptly pay to the
Company the amount of such refund (together with any interest
paid or credited thereon after taxes applicable thereto). If,
after the receipt by the Executive of an amount advanced by the
Company pursuant to Section 8(c), a determination is made that
the Executive shall not be entitled to any refund with respect to
such claim and the Company does not notify the Executive in
writing of its intent to contest such denial of refund prior to
the expiration of 30 days after such determination, then such
advance shall be forgiven and shall not be required to be repaid
and the amount of such advance shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be paid.
(e) Notwithstanding anything contained in this Section 8 to
the contrary, if the present value of the payments made under
this Agreement, without taking into account the Gross-Up Payment,
is no greater than one hundred and ten percent (110%) of the
amount payable to the Executive assuming the Executive's payments
under this Agreement were limited to the maximum amount that
could be payable without application of the excise tax imposed by
Section 4999 of the Code (the "Section 4999 Limit"), the
Executive's payments shall be limited to the Section 4999 Limit.
9. Miscellaneous.
(a) This Agreement shall be governed by and construed in
accordance with the laws of Indiana, without reference to
principles of conflict of laws. The captions of this Agreement
are not part of the provisions hereof and shall have no force, or
effect. This Agreement may not be amended or modified otherwise
than by a written agreement executed by the parties hereto or
their respective successors and legal representatives.
(b) All notices and other communications hereunder shall be
in writing and shall be given by hand delivery to the other party
or by registered or certified mail, return receipt requested,
postage prepaid, addressed as follows:
If to the Executive:
---------------------------
Vectren Corporation
20 N.W. Fourth Street
Evansville, Indiana 47741-0001
If to the Company:
Attention: Niel Ellerbrook, Chief Executive Officer
Vectren Corporation
20 N.W. Fourth Street
Evansville, Indiana 47741-0001
or to such other address as either party shall have furnished to
the other in writing in accordance herewith. Notice and
communications shall be effective when actually received by the
addressee,
(c) The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.
(d) The Company may withhold from any amounts payable under
this Agreement such Federal, state, local or foreign taxes as
shall be required to be withheld pursuant to any applicable law
or regulation. (e) On and after the Commencement Date, this
Agreement shall supersede any other agreement between the parties
with respect to the subject matter hereof and any such agreement
shall be deemed terminated without any remaining obligations of
either party thereunder.
10. Prior Agreements. This Agreement supersedes any employment
agreement previously entered into by the Executive and by the Company,
its predecessors or other affiliates. Executive hereby acknowledges
that the Executive has received sufficient consideration for
substitution of this Agreement for any prior employment agreement.
IN WITNESS WHEREOF, the Executive has hereunto set the
Executive's hand and, pursuant to the authorization from its Board of
Directors, the Company has caused these presents to be executed in its
name on its behalf, all as of the day and year first above written.
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__________________________, the Executive
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Date
Vectren Corporation
By:___________________________________
Chair of Compensation and Benefits Committee
of Board of Directors
- ------------------------------------
Date
EXHIBIT A TO VECTREN
CORPORATION EMPLOYMENT
AGREEMENT
Executive Position
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