Exhibit 10
VECTREN CORPORATION
EMPLOYMENT AGREEMENT
This AGREEMENT by and among Vectren Corporation ("Vectren") an
Indiana corporation, in consideration of the services to be performed for
Vectren and/or for one or more of its direct or indirect subsidiaries or
affiliates (the "Company"), and ________________________ (the "Executive"), is
dated as of the first day of January, 1999.
1. Employment Period. The Company hereby agrees to employ the Executive,
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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
date the Executive affixes his signature to this Agreement (the "Commencement
Date") and ending on the third annual anniversary of the Commencement Date (the
"Employment Period"); provided, however, that the Employment Period shall
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automatically be extended without action by either party for one (1) month
periods, without further action of the parties, as of the first month
anniversary of the Commencement Date and each succeeding monthly anniversary
unless the Company or the Executive shall have served written notice to the
other party prior to February 1, 1999, or prior to any subsequent monthly
anniversary, as the case may be, of its or his intention that the Agreement
shall terminate at the end of the thirty-six (36) month period that begins with
the monthly anniversary of the Commencement Date immediately following the date
of such written notice; provided, further, that the Employment Period shall
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automatically terminate upon the Executive's attainment of age sixty-five (65).
A notice delivered by the Company or the Executive that it or he does not intend
to extend the term of this Agreement shall hereinafter be referred to as a
"Nonrenewal Notice." For purposes of this Agreement, employment and
compensation paid by any direct or indirect subsidiary or affiliate of the
Company will be deemed to be employment and compensation paid by the Company.
2. Terms of Employment.
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(a) Position and Duties.
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(i) During the Employment Period, the Executive shall serve in
the position and at the location set forth on Exhibit A hereto, or
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such other executive position(s) appropriate to the Executive's
training, qualifications or experience, as the Board of Directors may
from time to time determine.
(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
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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.
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(i) Base Salary - During the Employment Period, the Executive
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shall receive an annual base salary ("Annual Base Salary") in an
amount no less than the Executive's annual base salary in effect
immediately prior to the Commencement Date, payable in cash. 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
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shall have an annual bonus opportunity no less than the applicable
target award percentage in effect for the Executive's employment level
which is in effect immediately prior to the Commencement Date or, if
greater, in effect at any time after the Commencement Date.
(iii) Long-Term Incentives. During the Employment Period,
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the Executive shall be eligible to participate in all long-term
incentive plans, including the Indiana Energy, Inc. Executive
Restricted Stock Plan (the "Restricted Stock Plan"), practices,
policies and programs to the extent applicable generally to other peer
executives of the Company and its affiliated companies. The
Executive's target award percentage under the Restricted Stock Plan
shall be no less than the applicable target award percentage in effect
for the Executive's employment level which is in effect immediately
prior to the Commencement Date or, if greater, the target award
percentage in effect for the Executive any time after the Commencement
Date.
(iv) Savings and Retirement Plans. During the Employment Period,
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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
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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 under welfare, fringe, change of
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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
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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
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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.
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(a) Death or Disability. The Executive's employment shall
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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
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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, or
(ii) 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
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the Executive for Good Reason. For purposes of this Agreement and
before a Change in Control (as defined in Section 3(f) below) of the
Company, "Good
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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 a Change in Control of the
Company, "Good Reason" shall mean, without the Executive's written
consent, (i) a demotion in the Executive's status, position or
responsibilities which, in his reasonable judgment, does not represent
a promotion from his status, position or responsibilities as in effect
immediately prior to the Change in Control; (ii) the assignment to the
Executive of any duties or responsibilities which, in his 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 him
to any of such positions that the Executive had immediately prior to
the Change in Control, except in connection with the termination of
his employment for total and permanent disability, death or Cause or
by him 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 a percentage basis, the average percentage
increase in base salary for all executive and senior Executives of the
Company 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 his employment
services, to a location outside the Indianapolis, Indiana metropolitan
area or the Company's requiring him to be based at any place other
than the location at which he performed his duties immediately prior
to a Change in Control, except for required travel on the Company's
business to an extent substantially consistent with his business
travel obligations at the time of a Change in Control; (v) 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), with which he has consented, has been made with
respect to such plan in connection with the Change in Control, or the
failure by the Company to continue his participation therein, or any
action by the Company which would directly or indirectly materially
reduce his participation therein; (vi) the failure by the Company to
continue to provide the Executive with benefits substantially similar
to those enjoyed by him or to which he was entitled under any of the
Company's pension, profit sharing, life insurance, medical, dental,
health and accident, or disability plans in which he was participating
at the time of a Change in Control, the taking of any action by the
Company which would directly or indirectly materially reduce any of
such benefits or deprive him of any material fringe benefit enjoyed by
him or to which he was entitled at the time of the Change in Control,
or the failure by the Company to provide him with
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the number of paid vacation and sick leave days to which he is
entitled on the basis of years of service with the Company in
accordance with the Company's normal vacation policy in effect on the
date hereof; (vii) 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 (viii) 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
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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
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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
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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
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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 January 1, 1999, 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) Approval by the shareholders of the Company 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
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consolidation in substantially the same proportions as their
ownership, immediately prior to such reorganization, merger or
consolidation, of the Outstanding Company 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, Indiana Gas or such corporation resulting
from such reorganization, merger or consolidation and any Person
beneficially owning, immediately prior to 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
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, Indiana
Gas 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
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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.
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(a) Good Reason; Other Than for Cause. If, during the Employment
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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 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 highest bonus
paid to or the target bonus in effect for the Executive with
respect to 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
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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
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this Section 4, 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) three or, if
less, the number of years remaining in the Executive's Employment
Period at the Date of Termination, rounded to the nearest twelfth
(1/12th) of a year, and (2) 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 duration of the Employment Period at the Date of
Termination 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;
(ii) any restricted stock and any other stock awards under the
Restricted Stock 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 duration of the Employment Period at the Date of
Termination, 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 and policies
described in section 2(b)(v) of this Agreement if
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the Executive's employment had not been terminated or, it 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
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shall be terminated for Cause or the Executive terminates employment
without Good Reason or 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
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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
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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
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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.
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(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.
(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 in:
(i) Indiana;
(ii) Ohio, Michigan, Illinois or Kentucky; and
(iii) the United States.
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
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it
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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. The Company's obligation to make the payments
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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 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.
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(a) This Agreement is personal to the Executive and without the prior
written consent of the Company shall not he 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 he 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.
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8. Certain Additional Payments by the Company.
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(a) Anything in this Agreement to the contrary or any termination of
this Agreement notwithstanding, 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 and the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at such determination, 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
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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 forgo 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 xxx 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 xxx 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 he 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.
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(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 he repaid and
the amount of ouch advance shall offset, to the extent thereof, the amount
of Gross-Up Payment required to he paid.
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 he 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:
-------------------
Name
Address
If to the Company:
------------------
Attention: General Counsel
Vectren Corporation
00 X.X. Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
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.
15
(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.
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.
_____________________________________
Executive Officer
_____________________________________
Date
Vectren Corporation
By___________________________________
Chairman of Compensation Committee
of Board of Directors
_____________________________________
Date
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