-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MuEztXsq2rf0XAXSPhSAU5QLeuSyqqv4dnnXHJQVWvW21iXZj2xEAhZ26KJCjPTH X4+4nzjlJbiJ+Ml9qr6uBg== 0000950131-01-000590.txt : 20010131 0000950131-01-000590.hdr.sgml : 20010131 ACCESSION NUMBER: 0000950131-01-000590 CONFORMED SUBMISSION TYPE: S-3/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20010130 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VECTREN CORP CENTRAL INDEX KEY: 0001096385 STANDARD INDUSTRIAL CLASSIFICATION: GAS & OTHER SERVICES COMBINED [4932] IRS NUMBER: 352086905 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3/A SEC ACT: SEC FILE NUMBER: 333-53930 FILM NUMBER: 1519416 BUSINESS ADDRESS: STREET 1: 20 NW FOURTH ST CITY: EVANSVILLE STATE: IN ZIP: 47741 BUSINESS PHONE: 3179263351 MAIL ADDRESS: STREET 1: 20 NW FOURTH ST CITY: EVANSVILLE STATE: IN ZIP: 47741 S-3/A 1 0001.txt FORM S-3/A As Filed With The Securities and Exchange Commission On January 30, 2001 Registration No. 333-53930 - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------- AMENDMENT NO. 1 TO FORM S-3 REGISTRATION STATEMENT Under The Securities Act of 1933 ---------------- VECTREN CORPORATION (Exact Name of Registrant as Specified in its Charter) ---------------- Indiana 35-2086905 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification Number) 20 N.W. Fourth Street Evansville, Indiana 47741 (812) 491-4000 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) ---------------- Ronald E. Christian Senior Vice President, General Counsel and Secretary 20 N.W. Fourth Street Evansville, Indiana 47741 (812) 491-4000 (Name, address, including zip code, and telephone number, including area code, of agent for service) Copies To: Catherine L. Bridge Edward F. Petrosky Barnes & Thornburg Brown & Wood LLP 11 South Meridian Street One World Trade Center Indianapolis, Indiana 46204 New York, New York 10048 (317) 236-1313 (212) 839-5300 ---------------- Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [_] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, please check the following box. [_] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [_] ---------------- The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this registration statement shall become effective on such date as the commission, acting pursuant to said Section 8(a), may determine. - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ +The information in this prospectus is not complete and may be changed. We may + +not sell these securities until the registration statement filed with the + +Securities and Exchange Commission is effective. This prospectus is not an + +offer to sell these securities and we are not soliciting offers to buy these + +securities in any jurisdiction where the offer or sale is not permitted. + ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subject to Completion Preliminary Prospectus dated January 30, 2001 PROSPECTUS 5,500,000 Shares Vectren Corporation [LOGO] Common Stock (and Common Stock Purchase Rights) ----------- Vectren Corporation is selling 5,500,000 shares of common stock with the related common stock purchase rights. The shares trade on the New York Stock Exchange under the symbol "VVC." On January 26, 2001, the last sale price of the shares as reported on the New York Stock Exchange was $22.6875 per share. Investing in the common stock involves risks that are described in the "Risk Factors" section beginning on page 6 of this prospectus. -----------
Per Share Total --------- ----- Public offering price.................................... $ $ Underwriting discount.................................... $ $ Proceeds, before expenses, to Vectren.................... $ $
The underwriters may also purchase up to an additional 825,000 shares from Vectren at the public offering price, less the underwriting discount, within 30 days from the date of this prospectus to cover over-allotments. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. The shares will be ready for delivery on or about , 2001. ----------- Merrill Lynch & Co. Credit Suisse First Boston A.G. Edwards & Sons, Inc. Edward D. Jones & Co., L.P. UBS Warburg LLC ----------- The date of this prospectus is , 2001. [ORGANIZATION CHART APPEARS HERE] Transmits Generates Trades and Provides Provides and and markets utility integrated distributes markets natural gas products broadband natural electric and provides and communication gas and power energy services, services electricity performance and the contracting mining and sale of coal Vectren Corporation is an energy and applied technology holding company headquartered in Evansville, Indiana. Our operations began on March 31, 2000 through the combination of two Indiana-based companies, Indiana Energy, Inc. and SIGCORP, Inc. On October 31, 2000, we acquired the natural gas distribution assets of The Dayton Power and Light Company, located in western Ohio. Vectren's regulated subsidiaries provide gas and/or electricity to approximately one million customers in adjoining service territories that cover nearly two-thirds of Indiana and 16 counties in west central Ohio, and generate and market electric power. Vectren's non-regulated subsidiaries and affiliates primarily consist of three business units providing services to customers throughout the region: Energy Services, Utility Services and Communications. Our strategy is focused on becoming the leading regional provider of energy and related applied technology solutions to business, residential and municipal customers. [MAP APPEARS HERE] TABLE OF CONTENTS
Page ---- Summary.................................................................... 5 Risk Factors............................................................... 7 Forward-Looking Statements................................................. 9 Business................................................................... 10 Use of Proceeds............................................................ 20 Market Price of Common Stock and Dividends................................. 20 Capitalization............................................................. 21 Selected Historical and Pro Forma Consolidated Financial Data.............. 22 Description of Stock....................................................... 25 Certain United States Tax Considerations for Non-United States Holders..... 27 Underwriting............................................................... 30 Legal Matters.............................................................. 32 Experts.................................................................... 32 Where You Can Find More Information........................................ 33
--------------- You should rely only on the information contained or incorporated by reference in this prospectus. We have not, and the underwriters have not, authorized anyone to provide you with different or additional information. If anyone provides you with different or additional information, you should not rely on it. We are not, and the underwriters are not, making an offer to sell these securities in any jurisdiction where the offer is not permitted. You should assume that the information contained in this prospectus is accurate only as of the date on the cover page of this prospectus or, in the case of information contained in documents incorporated by reference in this prospectus, as of the date of those documents. Our business, financial condition, results of operations and prospects may have changed since those dates. --------------- Unless otherwise indicated, all information contained in this prospectus assumes that the underwriters' over-allotment option is not exercised and the terms "Vectren," "we," "us" and "our" refer to Vectren Corporation and, where appropriate, our subsidiaries. --------------- As used in this prospectus, the abbreviation "MMdth" means million decatherms, "MW" means megawatts, "MWhrs" means megawatt hours, "RGUs" means revenue generating units and "throughput" means combined gas sales and gas transportation volumes. 3 [THIS PAGE INTENTIONALLY LEFT BLANK] SUMMARY This summary provides an overview of the key aspects of the offering. This summary is not complete and does not contain all of the information you should consider before purchasing our common stock. You should read all of the information contained or incorporated by reference in this prospectus carefully, including the "Risk Factors" section and the financial statements and related notes. Our Company Vectren Corporation is an energy and applied technology holding company headquartered in Evansville, Indiana. Our operations began on March 31, 2000 through the combination of two Indiana-based companies, Indiana Energy, Inc. and SIGCORP, Inc. On October 31, 2000, we acquired the natural gas distribution assets of The Dayton Power and Light Company, located in western Ohio. Vectren's regulated subsidiaries provide gas and/or electricity to approximately one million customers in adjoining service territories that cover nearly two-thirds of Indiana and 16 counties in west central Ohio, and generate and market electric power. Vectren's non-regulated subsidiaries and affiliates primarily consist of three business units providing services to customers throughout the region: Energy Services, Utility Services and Communications. Energy Services trades and markets natural gas and provides energy performance contracting services. Utility Services provides utility products and services, such as underground construction and facilities locating, meter reading and materials management, and the mining and sale of coal. Communications provides integrated broadband communications services, including local and long distance telephone, internet access and cable television. We segregate our businesses into regulated and non-regulated entities. At December 31, 2000, we had $2.9 billion in total assets, with $2.4 billion (83%) being regulated and $0.5 billion (17%) being non-regulated. Our earnings for fiscal year 2000 were $72.0 million, or $1.18 per share of common stock. Excluding merger and integration related charges, our earnings for fiscal year 2000 were $108.8 million, or $1.78 per share of common stock. Excluding merger and integration related charges, the results reflect a 20% increase over 1999 results of $90.7 million, or $1.48 per share of common stock. Our Strategy Our strategy is focused on becoming the leading regional provider of energy and related applied technology solutions to business, residential and municipal customers. We believe strong customer relationships are key to our success, and we will continue to build upon our strong utility foundation to help make our customers more productive, comfortable and secure. More specifically, . We will build upon our strong utility foundation by remaining a low cost, safe and reliable provider of energy and related products and services. . We will continue to build on the loyalty of existing and new customers by anticipating and meeting their needs with value added products and services. . We will grow our core business through the disciplined pursuit of mergers, acquisitions, alliances, joint ventures and partnerships. . We will pursue superior returns for our shareholders through our goal of providing, on average over five years, annual earnings growth per share of 8% to 10%. Vectren was incorporated under the laws of Indiana on June 10, 1999. Our corporate offices are located at 20 N.W. Fourth Street, Evansville, Indiana 47741. Our telephone number is (812) 491-4000. 5 The Offering Common stock offered by Vectren.... 5,500,000 shares Shares outstanding after the offering........................... 66,887,468 shares Use of proceeds.................... We estimate that our net proceeds from this offering without exercise of the underwriters' over-allotment option will be approximately $120,934,000. We intend to use the net proceeds to repay a portion of the commercial paper issued to fund the acquisition of the natural gas distribution assets of The Dayton Power and Light Company, our share of the additional investment in Reliant Services, LLC for the purchase price for Miller Pipeline Corporation, and our additional investments in Haddington Energy Partners and the integrated broadband communications joint venture with Utilicom Networks, LLC. Risk factors....................... See "Risk Factors" and other information included or incorporated by reference in this prospectus for a discussion of factors you should carefully consider before deciding to invest in shares of the common stock. New York Stock Exchange symbol..... VVC
The number of shares outstanding after the offering is based on our shares outstanding as of January 11, 2001 and excludes (i) 859,441 shares reserved for issuance under outstanding options and (ii) 4,000,000 shares that will be reserved for issuance as shares or as options over a five year period under our At Risk Compensation Plan, which has been authorized by our board of directors but not yet presented to our shareholders for their approval. This number assumes that the underwriters' over-allotment option is not exercised. If the over-allotment option is exercised in full, we will issue and sell an additional 825,000 shares. 6 RISK FACTORS You should carefully consider the risk factors described below, as well as the other information included or incorporated by reference in this prospectus, before making an investment in our common stock. The risks and uncertainties described below are not the only ones facing our company. Additional risks and uncertainties not presently known or that we currently believe to be immaterial may also adversely affect us. Our acquisitions may not perform as expected. We have achieved growth through mergers and acquisitions and expect that we will continue to grow, in part, through acquisitions. Although each of the acquired businesses had a significant operating history at the time we acquired it, we have a limited history of owning and operating many of these businesses. There can be no assurances that these businesses will perform as expected, that the returns from these businesses will support the indebtedness incurred to acquire them or the capital expenditures needed to maintain or develop them or that we will realize the synergies associated with our merger and investment strategies. We operate in an increasingly competitive industry, which may affect our future earnings. The utility industry has been undergoing dramatic structural change for several years, resulting in increasing competitive pressures faced by electric and gas utility companies. Increased competition may create greater risks to the stability of utility earnings generally and may in the future reduce our earnings from retail electric and gas sales. Currently, several states, including Ohio, have passed legislation that allows electricity customers to choose their electricity supplier in a competitive electricity market, and several other states are considering such legislation. At the present time, Indiana has not adopted such legislation. Ohio regulation provides for choice of commodity for all gas customers. We plan to implement this choice for all of our gas customers in Ohio by 2002. Indiana has not adopted any regulation requiring gas choice except for large volume customers. We cannot assure that increased competition or other changes in legislation, regulation or policies will not have a material adverse effect on our business, prospects, financial condition or results of operations. From time to time, we are subject to material litigation and regulatory proceedings. On November 3, 1999, the United States Environmental Protection Agency ("USEPA") filed a lawsuit against Southern Indiana Gas and Electric Company ("SIGECO"), a wholly owned subsidiary of Vectren, alleging violations of the Clean Air Act at the Culley Generating Station. The lawsuit seeks fines against SIGECO for as much as $27,500 per day per violation without specifying the number of days or violations that the USEPA believes occurred. The USEPA also seeks an order requiring SIGECO to install the best available emission technology at the Culley Generating Station, the costs of which are estimated to be $40 million to $50 million. The majority of these costs are included in the approximately $160 million which SIGECO would be required to expend if the USEPA's rule requiring certain states, including Indiana, to file revised state implementation plans to reduce nitrogen oxide ("NOx") emissions is upheld by a final court order and, as a result, SIGECO is required to install system-wide NOx emission control. The estimate is based on the level of system-wide emissions reductions ultimately required and the control technology utilized to achieve the reductions and is expected to be expended during the 2001-2004 period. Related additional operation and maintenance expenses could be an estimated $8 to $10 million annually. The Indiana Utility Regulatory Commission (the "Indiana Commission") has determined that there should be additional review of certain pricing terms for the purchase of gas by Indiana Gas Company, Inc., a wholly owned subsidiary of Vectren ("Indiana Gas"), from ProLiance Energy, LLC ("ProLiance"), our 50% owned unregulated marketing affiliate, in a pending gas cost adjustment proceeding before the Indiana Commission involving Indiana Gas and Citizens Gas & Coke Utility, a public charitable trust that provides gas service to the City of Indianapolis ("Citizens Gas"). An affiliate of Citizens Gas is our partner in the ProLiance joint venture. A hearing schedule has not yet been established. Pending resolution of these issues, Indiana Gas continues to record gas costs in accordance with the ProLiance contract and Vectren continues to record its proportional share of ProLiance's earnings. 7 In addition to the matters described above, we may be subject to other material litigation and regulatory proceedings from time to time. There can be no assurance that the outcome of these matters will not have a material adverse effect on our consolidated financial condition or results of operations. We may not be able to realize our communications strategy. Since we have a minority interest in our investments in Utilicom Networks, LLC ("Utilicom"), the nature of our broadband communications investments and the manner in which we offer such services to customers may change. Further, we face strong competition in the broadband communications business. Competitors include regional, national and global companies. Many of our competitors are well-established and have larger and better developed networks and systems, greater name recognition, longer operating histories in certain businesses and significantly greater financial, technical and marketing resources. As a result, there can be no assurance that we will achieve penetration rates in Indianapolis, Indiana, Dayton, Ohio or any other future markets comparable to the rates achieved by SIGECOM, LLC ("SIGECOM") in the Evansville, Indiana market. We are experiencing significantly increased gas costs. Commodity prices for natural gas purchases during the winter months of calendar year 2001 have unexpectedly increased significantly, primarily due to the expectation of a colder winter, which has led to increased demand and tighter supplies. Subject to regulatory approval, Vectren's utility subsidiaries charge their customers the actual cost they pay for the natural gas purchased on their customers' behalf. As a result, profit margins on gas sales should not be impacted. In 2001, Vectren's utility subsidiaries may experience higher working capital requirements, increased expenses, including interest costs and uncollectibles, and possibly some level of price sensitive reduction in volumes sold. On October 11, 2000, Indiana Gas filed for approval of its quarterly gas cost adjustment. In early December, the Indiana Commission issued an interim order approving the request by Indiana Gas for a gas cost adjustment factor for December 2000. On January 4, 2001, the Indiana Commission approved the January and February 2001 gas cost adjustment as filed. The order also addressed the claim by the Office of Utility Consumer Counselor that a portion of the requested gas cost adjustment be disallowed because Indiana Gas should have entered into additional commitments for this winter's gas supply in late 1999 and early 2000. In procuring gas supply for this winter, Indiana Gas followed the practices that it had employed in the past and which were subject to review by the Indiana Commission. In response to the claim by the Office of Utility Consumer Counselor, the Indiana Commission found that there should be a one- time, $3.8 million disallowance related to gas procurement for this winter season. As a result, Indiana Gas recognized a pre-tax charge of $3.8 million during fiscal year 2000. Indiana Gas or the Office of Utility Consumer Counselor could file appeals to the Indiana Commission's order through February 5, 2001. On January 25, 2001, the Citizens Action Coalition of Indiana, Inc., a not for profit consumer advocate, filed with the Indiana Commission a petition to intervene and a notice of appeal of the order. 8 FORWARD-LOOKING STATEMENTS Statements contained or incorporated by reference in this prospectus regarding future events and developments are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933. Forward- looking statements are based on management's beliefs as well as assumptions made by, and information currently available to, management. Because such statements are based on expectations and not historical facts, actual results may differ materially from those projected in the particular statements. Important factors that could cause future results to differ include those listed under "Risk Factors" and the following: . Weather conditions; . The federal and state regulatory environment, including changes in rate-setting and cost-recovery policies, environmental regulations, tax or accounting matters and other laws and regulations to which we are subject; . The economic climate, including inflation rates and monetary policies; . Unusual or unanticipated changes in normal business operations, including unusual maintenance or repairs; . Fluctuation in supply, demand, transmission capacity and prices for energy commodities; . Customer growth within our service territories and changes in customers' usage patterns and energy preferences; . Financial market conditions, including changes in availability of capital or interest rate fluctuations; . Our ability to carry out our marketing and sales plans, along with the ability to realize synergies associated with our merger and investment strategies; and . Employee workforce factors, including changes in collective bargaining unit agreements, strikes or work stoppages. These and other matters are difficult to predict, and many are beyond our control, including those we discuss in this prospectus and our filings with the Securities and Exchange Commission. Accordingly, you should not rely on the accuracy of predictions contained in forward-looking statements. These statements speak only as of the date of this prospectus or, in the case of documents incorporated by reference, as of the date of those documents. 9 BUSINESS [ORGANIZATION CHART OF VECTREN APPEARS HERE] Vectren Corporation is an energy and applied technology holding company headquartered in Evansville, Indiana. Our operations began on March 31, 2000 through the combination of two Indiana-based companies, Indiana Energy, Inc. ("Indiana Energy") and SIGCORP, Inc. ("SIGCORP"). On October 31, 2000, we acquired the natural gas distribution assets of The Dayton Power and Light Company ("Dayton Power"), located in western Ohio, which are now operated by Vectren Energy Delivery of Ohio, Inc. ("Vectren of Ohio"), a wholly-owned subsidiary. Vectren's regulated subsidiaries provide gas and/or electricity to approximately one million customers in adjoining service territories that cover nearly two-thirds of Indiana and 16 counties in west central Ohio, and generate and market electric power. Vectren's non-regulated subsidiaries and affiliates primarily consist of three business units providing services to customers throughout the region: Energy Services, Utility Services and Communications. Energy Services trades and markets natural gas and provides energy performance contracting. Utility Services provides utility products and services, such as underground construction and facilities locating, meter reading and materials management, and the mining and sale of coal. Communications provides integrated broadband communications services, including local and long distance telephone, internet access and cable television. We segregate our businesses into regulated and non-regulated entities. At December 31, 2000, we had $2.9 billion in total assets, with $2.4 billion (83%) being regulated and $0.5 billion (17%) being non-regulated. For the year ended December 31, 2000, our earnings were $72.0 million, or $1.18 per share of common stock. Excluding merger and integration related charges, our earnings for fiscal year 2000 were $108.8 million, or $1.78 per share of common stock, with $84.0 million (77%) from our regulated entities and $24.8 million (23%) from our non-regulated entities. Excluding merger and integration related charges, the results reflect a 20% increase over 1999 results of $90.7 million, or $1.48 per share of common stock. Regulated vs. Non-Regulated Earnings* Total Assets (12/31/00) Year Ended 12/31/00 [PIE CHART] Total Assets (12/31/00) ----------------------- $2.9 billion Regulated 83% Non-Regulated 17% [PIE CHART] Earnings* Year Ended 12/31/00 ------------------- $108.8 million Regulated 77% Non-Regulated 23% *Before merger and integration related costs. Includes results of Vectren of Ohio for two months. 10 Our Strategy Our strategy is focused on becoming the leading regional provider of energy and related applied technology solutions to business, residential and municipal customers. We believe strong customer relationships are key to our success, and we will continue to build upon our strong utility foundation to help make our customers more productive, comfortable and secure. We will build upon our strong utility foundation by remaining a low cost, safe and reliable provider of energy and related products and services. Our strong utility foundation is built upon low cost electric generating and energy distribution assets. We have aligned our business groups and have formed strategic alliances and partnerships to utilize our core competencies, reduce costs and better manage our operations. We will continue to build on the loyalty of existing and new customers by anticipating and meeting their needs with value added products and services. Customer-care is a primary focus, and we have implemented a customer care organization, including marketing and sales and a centralized call center in Evansville. This helps position us to provide future products and services. We will grow our core business through the disciplined pursuit of mergers, acquisitions, alliances, joint ventures and partnerships. Most recently, we successfully completed the merger of Indiana Energy and SIGCORP to form Vectren, acquired the natural gas distribution assets of Dayton Power and acquired, through a joint venture, Miller Pipeline Corporation ("Miller Pipeline"). We will opportunistically pursue other businesses where we have developed expertise. We will also look to divest certain businesses judged to be non-core to Vectren's customer relationship focused strategy. We will pursue superior returns for our shareholders. It is our goal to produce, on average over five years, annual earnings growth per share of 8% to 10%. Our goal is to grow regulated earnings on average up to 4%. Furthermore, our goal is for non-regulated operations, which contribute approximately 23% of consolidated earnings before merger and integration related costs, to contribute as much as 35% in five years. We plan to continue to grow our cash dividend and maintain investment grade credit ratings for our debt. Our Competitive Strengths We believe we have developed competitive strengths that will enable us to successfully execute our strategy. These strengths include: . Customer focus . Superior service . Experienced management team . Solid, cost conscious utility foundation . Low cost provider of electric generation . Successful non-regulated growth strategy . Market leading supplier of gas to industrial customers and municipal utilities . Disciplined approach to growth through business combinations . Outstanding dividend growth record 11 Regulated Business Segment Review Gas vs. Electric Year Ended 12/31/00 Gas-Revenues* Electric-Revenues Regulated Earnings* [PIE CHART] Electric-Revenues - ----------------- $336.4 million Wholesale 23% Other 2% Industrial 25% Residential 28% Commercial 22% [PIE CHART] Gas-Revenues* - ------------- $818.8 million Industrial 10% Residential 59% Commercial 21% Other 10% *Includes Vectren of Ohio for two months. [PIE CHART] Regulated Earnings* - ------------------- $84.0 million Electric 56% Gas 44% *Before merger and integration related costs. Energy Delivery With the addition of the Vectren of Ohio operations, which were acquired on October 31, 2000, our Energy Delivery group provides natural gas and electric service to approximately one million customers in Indiana and west central Ohio. Through Energy Delivery, we strive to remain a safe, reliable, low cost provider of energy to our customers helping to make them more productive, comfortable and secure. Energy Delivery is made up of three utility companies. SIGECO currently markets and delivers electricity and natural gas to approximately 150,000 customers in southwestern Indiana. Indiana Gas provides natural gas distribution to approximately 510,000 customers in central Indiana. Vectren of Ohio provides natural gas distribution to approximately 310,000 customers in west central Ohio. Indiana Gas, SIGECO and Vectren of Ohio are wholly owned subsidiaries of Vectren. Gas Throughput and Customers [BAR CHART] Throughput MMdth Heating Degree Days __% of Normal 1998 139 79 1999 151 87 2000 Throughput 181 96 includes Vectren of Ohio for two months [BAR CHART] Customers (000's) 1998 610 1999 622 2000* 946 *Includes Vectren of Ohio Gas volumes steadily increased in recent years as measured by throughput. Throughput in 2000 was 181 MMdth compared to 151 MMdth in 1999 and 139 MMdth in 1998. Year end customer counts were approximately 946,000 in 2000, 622,000 in 1999 and 610,000 in 1998. Growth in gas throughput was impacted by weather, favorable economic conditions and customer growth, and the inclusion of the operations of Vectren of Ohio for two months in 2000. 12 Electric Sales and Customers [BAR CHART] Electric Sales Mwhrs (000's) Cooling Degree Days __% of Normal 1998 6,900 118 1999 7,000 94 2000 7,500 93 [BAR CHART] Customers (000's) 1998 124 1999 127 2000 132 Electric sales totaled approximately 7,525,000 MWhrs in 2000, 6,941,000 MWhrs in 1999 and 6,859,000 MWhrs in 1998. Year end electric customer counts were approximately 132,000 in 2000, 127,000 in 1999 and 124,000 in 1998. Electric sales grew despite milder than normal weather, as measured in terms of cooling degree days. These results reflect customer growth and our successful efforts to market our low cost excess generating capacity to wholesale customers. Energy Delivery Strategic Objectives . Be a top quartile performer in the industry in terms of customer service, safety, operating costs and prices . Enhance customer relationships to serve as a foundation for providing additional products and services . Continually improve through process revisions and development of new technology Power Supply Our Power Supply group operates and maintains Vectren's six coal fired electric power plants and five peaking units in southwest Indiana, contracts for purchased power and sells power in the wholesale market. We presently own 1,256 MWs of installed operating generating capacity. Coal-fired generating units provide 1,041 MWs of capacity, and gas or oil-fired turbines used for peaking or emergency conditions provide 215 MWs. We have 50 MWs available under firm contracts and 120 MWs available under interruptible contracts. We also have 80 MWs of new peaking capacity under development, which will be available for our summer peak in 2002 and will be fueled by natural gas. Firm Capacity (1,306 MWs) Source of Supply in 2000 (MWhrs) [PIE CHART] Firm Capacity (1,306 MWs) Purchased Power 4% Oil & Gas 16% Coal 80% [PIE CHART] Source of Supply in 2000 (MWhrs) Purchased Power 12% Oil & Gas 1% Coal 87% 13 In addition, our Power Supply group has interconnections with Louisville Gas and Electric Company, Cinergy Services, Inc., Indianapolis Power & Light Company, Hoosier Energy Rural Electric Cooperative, Inc., Big Rivers Electric Corporation, Wabash Valley Power Association and the City of Jasper, providing an ability to simultaneously interchange approximately 750 MWs. We believe that a distinct competitive advantage of our Power Supply group is the low cost generation of electric power made possible through low production costs. Our power production costs, which include coal costs, in 1999 were approximately 1.75 cents per kilowatt hour, placing us among the lowest cost providers in the nation, as demonstrated by the following graph: Electric Cost of Production in 1999(1) [Logo Graph] [BAR GRAPH] Cents Per KW/h SIECO ECAR Average(2) National Average 1.75 1.93 1.86 - -------- (1) Electric Cost of Production is defined as total fuel cost and non-fuel operation and maintenance cost. (2) ECAR means East Central Area Reliability Coordination Agreement. Source: Resource Data International Inc. This advantage allows us to make sales into the public power markets. While we must first serve our Energy Delivery group, excess power has been available for sale to other buyers during non-peak load periods. Low production costs enable us to sell a greater volume of power at favorable market prices. Power Supply Strategic Objectives . Maximize return on generation assets . Maintain position as a low cost, reliable producer of electric power . Operate in a manner that reflects Vectren's commitment to environmental stewardship 14 Non-Regulated Business Segment Review Non-Regulated Earnings Contribution Year Ended 12/31/00 $108.8 million* [PIE CHART] Non-Regulated $24.8 million Energy Services 7% Utility Services 2% Communications 4% Corporate and Other 10% Regulated 77% *Before merger and integration related costs. Includes results of Vectren of Ohio for two months. Energy Services Our Energy Services group relies heavily upon a customer focused, value added strategy. The group provides gas marketing and fuel supply management to over 600 customers in twelve states across the Midwest, as well as market intelligence through disciplined trading. In addition to being a leading provider of these services to municipal utilities, we serve large end users and other utilities. This group is also the gas supplier for our Energy Delivery group. At December 31, 2000, Energy Services had 624 customers, up from 377 in 1998. Volume has grown about 34% with customer growth as volumes traded increased to 327 MMdth in 2000, up from 244 MMdth in 1998. Energy Services Growth [BAR CHART] Customers Throughput Volume in MMdth --------- -------------------------- 1998 1999 2000 1998 1999 2000 ---- ---- ---- ---- ---- ---- 377 472 624 244 287 327 Energy Services includes two gas marketing companies. ProLiance is 50% owned by Vectren and 50% owned by an affiliate of Citizens Gas. SIGCORP Energy Services, Inc. is a wholly owned subsidiary of Vectren. In addition, Energy Services Group, LLC provides energy performance contracting and facility upgrades through its design and installation of energy-efficient equipment. Energy Systems Group, LLC is a venture between Vectren and Citizens Gas, with Vectren owning 67%. We expect Energy Services to continue its growth and increase its relative earnings contribution to Vectren. 15 Energy Services Strategic Objectives . Deploy a customer relationship strategy . Continue to build natural gas marketed volumes . Develop a platform to sell power to end users and municipal customers Utility Services Our Utility Services group is a low cost provider of outsourcing services for electric, gas, water and telecommunication utilities, including Vectren's Energy Delivery businesses. Those outsourced services include underground construction and facilities locating, meter reading, warehousing and distribution of materials and third party collections. In addition, the group provides Vectren's Power Supply group with a dependable, low cost source of coal from its own mines in southwest Indiana. It also markets coal to other utilities and wholesale customers. This group includes the following entities: Reliant Services, LLC ("Reliant"), an equally owned strategic alliance with Cinergy Corp.; CIGMA, LLC, an equally owned strategic alliance with an affiliate of Citizens Gas; IEI Financial Services, LLC, a wholly owned subsidiary of Vectren; and Vectren Fuels, Inc., a wholly owned subsidiary of Vectren. We expect Utility Services to grow steadily and its earnings to improve over the next few years. Utility Services Strategic Objectives . Continue to optimize core competencies and expand service offerings to other utilities . Provide improved service and reduced costs to utility affiliates Communications Our Communications group provides services to approximately 21,800 residential and commercial customers in the greater Evansville area in southern Indiana through an 880-mile fiber network. This network has been active since mid-2000. The present customer base has yielded approximately 57,600 RGUs, indicating multiple lines and/or services being utilized by the same customer. Penetration of our existing energy customer base in Evansville with communications services has been in excess of one-third. The Evansville system is operated in a joint venture with Utilicom. Utilicom is a provider of bundled communications services that focuses on last mile delivery to residential and commercial customers in second and third tier markets. [BAR CHART] Communications Customers Total Passing Customers Served RGU's 1999 41,900 8,500 15,400 2000 83,400 21,800 57,600 16 Our Communications strategy is to be the first mover to connect customers in the second and third tier markets in Indiana and west central Ohio. We intend to execute our strategy by investing in broadband cable overbuilds and by optimizing the existing relationships between our other business groups and their customers. In addition to the operating Evansville network, we have invested $8.1 million in Utilicom and have also committed to invest up to $100 million in Utilicom in the form of convertible subordinated debt, subject to obtaining all required financing. Vectren's commitment will support Utilicom's plan to raise $600 million of additional capital to fund ventures in Indianapolis, Indiana and Dayton, Ohio. Utilicom has also obtained $220 million of capital commitments from Blackstone Capital Partners III, First Union Capital Partners, and JP Morgan Capital. These commitments are also subject to the achievement of the funding of the entire $600 million of additional capital. In the near future, we expect growth in customers and RGUs to continue, but we do not expect a significant near term earnings impact to Vectren overall from either the Indianapolis or Dayton venture. Communications reported positive income in 2000 due to a one-time gain. Communications Strategic Objectives . Generate positive EBITDA from the Evansville investment in 2001 . Begin construction of broadband strategy in Indianapolis and Dayton Corporate and Other In addition to the non-regulated business groups previously discussed, our Corporate and Other group invests in and realizes tax credits from: . a portfolio of energy development projects in gas storage, gathering and processing, and fuel cells and other distributed generation projects; . real estate, including structured finance and leveraged leases, as well as low income housing projects; . projects to develop coal based synthetic fuels; and . corporate information technology, including billing and financial reporting systems. Major investments include Haddington Energy Partners, L.P. ("Haddington Energy"), Southern Indiana Properties, Inc., Pace Carbon Synfuels Investors, L.P., Energy Realty, Inc. and Vectren Resources LLC. Due to the investment nature of this group, contributions to future earnings may exhibit some volatility. 17 Recent Developments Acquisition of the Gas Utility Assets of The Dayton Power and Light Company Vectren purchased the natural gas distribution assets of Dayton Power for a purchase price of approximately $465 million on October 31, 2000. The acquisition added approximately 305,000 gas utility customers in 16 counties in western Ohio. Vectren acquired the gas utility assets as a tenancy in common through two separate subsidiaries. Indiana Gas acquired a 47% undivided ownership interest in the assets and Vectren of Ohio acquired the remaining 53% undivided ownership interest. Vectren of Ohio is the operator of all of the assets. Because Ohio law requires domestic incorporation of any entity providing utility services in Ohio, Indiana Gas has incorporated under Ohio, as well as Indiana, law. Vectren Utility Holdings, Inc. ("Utility Holdings") is the intermediate holding company for Vectren's utility interests. As part of the acquisition financing, Utility Holdings borrowed approximately $435 million under its commercial paper program. From the proceeds of this financing, Indiana Gas borrowed $189 million, and Vectren of Ohio borrowed $246 million from Utility Holdings. Indiana Gas also borrowed $29 million under its commercial paper program. Indiana Gas and Vectren of Ohio each applied these proceeds to pay its respective share of the purchase price for the gas utility assets of Dayton Power. On December 28, 2000, Utility Holdings issued $150 million in floating rate notes due December 27, 2001 and applied the net proceeds to reduce the balance outstanding under its commercial paper program. These notes bear interest at a per annum rate equal to the three month U.S. dollar LIBOR rate plus .75%. Concurrently with completion of this financing, a floating rate to fixed rate swap was executed which in effect resulted in a fixed rate of 6.64% on this debt. We anticipate that the related commercial paper and short-term financings will be replaced over time with permanent, long term financing. Additional Investment in Utilicom On December 21, 2000, Vectren invested $8.1 million in Utilicom. Vectren has also committed to invest up to $100 million in Utilicom in the form of convertible subordinated debt, subject to obtaining all required financing. Vectren is a current partner in Utilicom's initial operation in Evansville, Indiana, operating under the brand name of SIGECOM, a TOTALink affiliate. Utilicom, operating under the brand name TOTALink, is a provider of bundled communications services, focusing on last mile delivery to residential and commercial customers in second and third tier markets. It builds, owns and operates high capacity broadband networks and delivers cable TV, high speed internet service and telephone service to customers in partnership with affiliates of local electric and gas utilities. Vectren's commitment will support the plan of Utilicom to raise $600 million of additional capital to fund ventures in Indianapolis, Indiana and Dayton, Ohio, where Utilicom has recently received authorization to build and operate networks, and to recapitalize the SIGECOM venture. Utilicom has also obtained $220 million of capital commitments from Blackstone Capital Partners III, First Union Capital Partners, and JP Morgan Capital. These commitments are also subject to the funding of the entire $600 million of additional capital. A launch date of late 2001 is expected for both the Indianapolis and Dayton projects. The Indianapolis venture, TOTALink of Indiana, LLC, will consist of approximately 3,400 miles of broadband network passing 350,000 homes and businesses. The Dayton venture, TOTALink of Ohio LLC, will consist of approximately 1,100 miles of broadband network passing 120,000 homes and businesses. 18 Vectren has a 14% equity interest in SIGECOM following the recapitalization of Utilicom in January 2000. Upon completion of all new funding and later conversion of convertible debt, Vectren would have up to a 31% ownership in both the Indianapolis and Dayton ventures and would own approximately 8% of Utilicom. With the $8.1 million investment, Vectren has now invested $25 million in Utilicom as convertible subordinated debt and $8 million as equity in SIGECOM Holdings, Inc. Vectren does not expect the Indianapolis and Dayton investments to have any significant financial impact on earnings in 2001 or 2002. Construction in Indianapolis and Dayton will be funded over the next five years. Acquisition of Miller Pipeline Corporation On December 13, 2000, Reliant, a joint venture equally owned by subsidiaries of Cinergy Corp. and Vectren, purchased the stock of Indianapolis- based Miller Pipeline from NiSource Inc. for approximately $68.3 million. Miller Pipeline is one of the nation's premier natural gas distribution contractors with nearly 50 years of experience in the construction industry. The acquisition will expand our utility services business by adding underground pipeline construction, replacement and repair to our current services of underground facility locating, contract meter reading and installation of telecommunications and electric facilities. 19 USE OF PROCEEDS We estimate that we will receive net proceeds from this offering without exercise of the underwriters' over-allotment option of approximately $121 million ($139 million if the underwriters' over-allotment option is exercised in full), after deducting the underwriting discount and commissions and estimated offering expenses payable by us. We intend to use the net proceeds to repay a portion of the commercial paper of Utility Holdings outstanding as of December 31, 2000, which has a weighted average interest rate of 6.7% per annum as of January 25, 2001 and has maturities ranging from 1 day to 55 days. We issued the commercial paper and other short term debt to fund the acquisition of the natural gas distribution assets of Dayton Power, our share of the additional investment in Reliant for the purchase price for Miller Pipeline and our additional investments in Haddington Energy and the integrated broadband communications joint venture with Utilicom. MARKET PRICE OF COMMON STOCK AND DIVIDENDS Our shares of common stock are traded on the New York Stock Exchange under the symbol "VVC." The high and low sales prices for our common stock as reported on the New York Stock Exchange composite transactions reporting system and dividends paid are shown in the following table for the periods indicated.
Price Range Quarterly Cash ----------------- Dividends High Low -------------- -------- -------- 2000: Second Quarter.............................. $0.2425 $21.3125 $15.7500 Third Quarter............................... 0.2425 20.3750 17.5625 Fourth Quarter.............................. 0.2550 26.5000 20.0000 2001: First Quarter (through January 26).......... (1) $24.4375 $21.6875
- -------- (1) On January 24, 2001, our board of directors declared a dividend of $0.255 per share, payable on March 1, 2001, to common shareholders of record on February 15, 2001. The last reported sale price of our common stock on the New York Stock Exchange on January 26, 2001 was $22.6875 per share, and, as of January 12, 2001, there were 14,904 shareholders of record of our common stock. Dividends on our shares of common stock are payable at the discretion of our board of directors out of legally available funds. Future payments of dividends, and the amounts of these dividends, will depend on our financial condition, results of operations, capital requirements and other factors. The mortgage indenture and the terms of preferred stock of SIGECO contained in its articles of incorporation could limit the ability of SIGECO to pay dividends to Vectren. Under the applicable provisions, SIGECO may pay dividends on common stock from accumulated surplus earned subsequent to 1947 to the extent this surplus exceeds two times the annual dividend requirements on preferred stock. The amount restricted against cash dividends on common stock at December 31, 2000 under the restriction based on annual dividend requirements was $1,925,951, leaving $251,630,083 unrestricted for the payment of dividends. 20 CAPITALIZATION The following table sets forth our capitalization as of December 31, 2000: . on an actual basis; and . on an adjusted basis, which gives effect to the sale of 5,500,000 shares in this offering at an assumed public offering price of $23.00, after deducting the estimated underwriting discount and commissions and estimated offering expenses payable by us, and application of the estimated net proceeds of $120,934,000 to repay outstanding commercial paper, as if the issuance occurred on December 31, 2000. You should read this table in conjunction with the consolidated financial statements and related notes included or incorporated by reference in this prospectus.
As of December 31, 2000 ----------------------------- (In thousands) Actual As Adjusted(1) ---------- -------------- Short-term debt Current maturities of long term debt........... $ 249 $ 249 Other short term borrowings.................... 813,608 692,674 ---------- ---------- Total short term debt........................ $ 813,857 $ 692,923 ========== ========== Long-term debt and other obligations............. $ 631,954 $ 631,954 ---------- ---------- Shareholders' equity: Preferred stock of subsidiary.................. $ 16,965 $ 16,965 Common stock (no par value) 480,000 shares authorized; 61,387 shares issued and outstanding.......... 217,720 338,654 Retained earnings.............................. 506,462 506,462 Accumulated other comprehensive income......... 7,502 7,502 ---------- ---------- Total shareholders' equity................... $ 748,649 $ 869,583 ---------- ---------- Total capitalization............................. $1,380,603 $1,501,537 ========== ==========
- -------- (1) The "As Adjusted" column does not include up to 825,000 shares of our common stock issuable upon the exercise of the underwriters' over-allotment option. 21 SELECTED HISTORICAL AND PRO FORMA CONSOLIDATED FINANCIAL DATA Selected Historical Financial Information The following table presents selected consolidated financial information. The information should be read in conjunction with the consolidated financial statements of Vectren incorporated by reference in this prospectus. The financial information as of December 31, 1998 and 1999 and for the years ended December 31, 1997, 1998 and 1999 are derived from our audited consolidated financial statements, which were audited by Arthur Andersen, LLP. The financial information as of December 31, 1995, 1996, 1997 and 2000 and for the years ended December 31, 1995, 1996 and 2000 are derived from our internal unaudited consolidated financial statements. This information has been restated to reflect the pooling of interests transaction pursuant to which each of Indiana Energy and SIGCORP merged into Vectren.
Year Ended December 31 ------------------------------------------------------------ 1995 1996 1997 1998 1999 2000 -------- -------- -------- -------- ---------- ---------- (in thousands, except per share data) Operating Data Operating revenue....... $805,828 $965,335 $972,081 $997,706 $1,068,417 $1,648,690 Operating income........ $126,650 $160,146 $124,556(1) $148,537 $ 160,772 $ 130,921(2) Net income.............. $ 85,994 $ 83,657 $ 67,714(1) $ 86,600 $ 90,748 $ 72,040(2) Average common shares outstanding............ 61,567 61,522 61,611 61,578 61,306 61,297 Basic earnings per share on common stock........ $ 1.40 $ 1.36 $ 1.10(1) $ 1.41 $ 1.48 $ 1.18(2) Diluted earnings per share on common stock.. $ 1.40 $ 1.36 $ 1.10 $ 1.41 $ 1.48 $ 1.17(2) Dividends per share on common stock........... $ 0.83 $ 0.85 $ 0.88 $ 0.90 $ 0.94 $ 0.98
- -------- (1) During 1997, the Indiana Gas Board of Directors authorized management to undertake the actions necessary and appropriate to restructure Indiana Gas' operations and recognize a resulting restructuring charge of $39.5 million ($24.5 million after tax) which included estimated costs related to involuntary workforce reductions. (2) Merger and integration related costs incurred for the year ended December 31, 2000 totaled $41.1 million. These costs relate primarily to transaction costs, severance and other merger and acquisition integration activities. Vectren expects to realize net merger savings of nearly $200 million over the next ten years from the elimination of duplicate corporate and administrative programs and greater efficiencies in operations, business processes and purchasing. The continued merger integration activities, which will contribute to the merger savings, will be substantially complete during 2001. As a result of merger integration activities, management has identified certain information systems that are expected to be retired in 2001. Accordingly, the useful lives of these assets have been shortened to reflect this decision, resulting in an increase in depreciation expense of approximately $11.4 million for the year ended December 31, 2000. In total, merger and integration related costs incurred for the year ended December 31, 2000 were $52.5 million ($36.8 million after tax). 22
As of December 31 ----------------------------------------------------------------- 1995 1996 1997 1998 1999 2000(1) ---------- ---------- ---------- ---------- ---------- ---------- (in thousands, except per share data) Balance Sheet Data Total assets............ $1,673,310 $1,719,547 $1,758,634 $1,798,840 $1,980,467 $2,909,187 Redeemable preferred stock.................. $ 8,424 $ 8,424 $ 8,424 $ 8,308 $ 8,192 $ 8,076 Long-term obligations... $ 460,379 $ 409,058 $ 475,490 $ 388,938 $ 486,726 $ 631,954 Common stock equity..... $ 607,967 $ 639,067 $ 653,666 $ 677,914 $ 709,757 $ 731,684
- -------- (1) Vectren and Indiana Gas are not currently in compliance with the total indebtedness to capitalization ratios contained in the back up credit facilities for the commercial paper programs of Utility Holdings and Indiana Gas. The maximum amount available under the Utility Holdings facility is $435 million, and the maximum amount available under the Indiana Gas facility is $155 million. The Utility Holdings facility requires that the ratio be no greater than 0.65 to 1 and the Indiana Gas facility requires that the ratio be no greater than 0.60 to 1. At December 31, 2000, the ratio for the Company was 0.658 to 1 and the ratio for Indiana Gas was 0.73 to 1. The Company's non-compliance arises primarily from abnormally high natural gas prices in recent months and the resulting working capital requirements. We are in the process of obtaining consents from the banks on the Utility Holdings facility to waive the non-compliance and increase the ratio from 0.65 to 1 to 0.67 to 1 until March 29, 2001. The application of the proceeds of this offering to repay short-term debt should allow the Company to satisfy the 0.65 to 1 ratio beginning March 30, 2001. The Indiana Gas non-compliance resulted from the indebtedness incurred to purchase its ownership interest in the natural gas distribution assets of Dayton Power. Upon receiving approval from the Indiana Commission, which is expected in the second quarter of this year, the Company plans to convert a portion of the outstanding indebtedness of Indiana Gas to equity thereby infusing $125 million in capital into Indiana Gas, which is anticipated to cause the ratio to decline to approximately 0.57 to 1. The banks on the Indiana Gas facility have agreed to waive the non-compliance through and including March 31, 2001. There are no amounts outstanding under either facility. 23 Selected Pro Forma Condensed Financial Information The accompanying pro forma financial information presents the condensed unaudited pro forma balance sheet of Vectren as of September 30, 2000 and the unaudited pro forma statement of income for the nine months ended September 30, 2000 and for the year ended December 31, 1999. On October 31, 2000, Vectren completed its acquisition of the natural gas distribution assets of Dayton Power for approximately $465 million pursuant to an Asset Purchase Agreement dated December 14, 1999. Vectren acquired the gas utility assets as a tenancy in common through two separate wholly-owned subsidiaries. Operations will be conducted under the name of Vectren of Ohio. Under the acquisition structure Indiana Gas, one of Vectren's operating public utilities, holds a 47% undivided ownership interest and Vectren of Ohio has a 53% undivided ownership interest. The unaudited condensed pro forma balance sheet information as of September 30, 2000 is presented as if the acquisition had occurred on September 30, 2000. The unaudited condensed pro forma income statement information for the nine month period ended September 30, 2000 and for the year ended December 31, 1999 are presented as if the acquisition had occurred at January 1, 1999. The following as adjusted pro forma information reflects the effects of the Dayton Power acquisition, as well as the issuance by Indiana Gas on December 28, 2000 of $70,000,000 in insured quarterly notes, the issuance by Vectren Capital on December 21, 2000 of $78,000,000 in senior notes, and the common stock offering and use of related net proceeds of $120,934,000 to repay outstanding commercial paper. Pro forma net income and earnings per share is presented as if these events had occurred as of January 1, 1999. Pro forma short-term debt, long-term debt and common stock equity are presented as if these events occurred as of September 30, 2000. Preparation of the pro forma financial information was based on assumptions deemed appropriate by us. The pro forma information is unaudited and is not necessarily indicative of the results which actually would have occurred if the transaction had been consummated at the beginning of the period presented, nor does it purport to represent the future financial position and results of operations for future periods. The pro forma information should be read in conjunction with the audited consolidated financial statements of Vectren filed on Form 8-K for the year ended December 31, 1999, the unaudited financial statements of Vectren filed on Form 10-Q for the quarter ended September 30, 2000, and the audited financial statements of The Dayton Power and Light Company Natural Gas Distribution Business and pro forma financial statements of Vectren filed on Form 8-K on January 16, 2001.
Pro Forma As Adjusted Pro Forma As Adjusted Nine Months Nine Months Year Ended Year Ended Ended Ended December 31, December 31, September 30, September 30, 1999 1999 2000 2000 ------------ ------------ ------------- ------------- (in thousands, except per share data) Income Statement Information, For Period Ended Operating revenue..... $1,287,283 $1,287,283 $1,108,471 $1,108,471 Operating income...... 182,979 182,979 96,880 96,880 Net income............ 87,402 92,552 45,007 48,870 Basic earnings per share on common stock................ $ 1.43 $ 1.39 $ .73 $ 73 Diluted earnings per share on common stock................ $ 1.42 $ 1.38 $ .73 $ .73 Balance Sheet Information, At Period End Cash and cash equivalents.......... $ 17,353 $ 17,353 Total assets.......... 2,544,830 2,544,830 Short term debt....... 828,484 561,610 Long term debt........ 484,074 632,074 Preferred stock....... 16,965 16,965 Common stock equity... 709,702 830,636
24 DESCRIPTION OF STOCK General The total amount of authorized capital stock of Vectren is 480,000,000 shares of common stock and 20,000,000 shares of preferred stock. As of January 11, 2001, 61,387,468 shares of common stock and no shares of preferred stock were issued and outstanding. The following summary highlights the material provisions of our Articles of Incorporation, our bylaws and the Indiana Business Corporation Law ("IBCL") relating to our capital stock. Board of Directors Our Articles and bylaws contain provisions that are intended to enhance the likelihood of continuity and stability in the composition of our board of directors and which may have the effect of delaying, deferring, or preventing a future takeover or change in control of Vectren unless the takeover or change in control is approved by the board. The Articles provide for a minimum of one and a maximum of 16 members of the board, the actual number to be specified by the bylaws, which currently set the number of directors at 16. The Articles also provide that the bylaws may provide for classes of directors, and in accordance therewith, there are currently three classes of directors on the board. Notice of nominations of persons to the board may be made by our shareholders and must be sent to us not less than 90 nor more than 120 days before the meeting at which directors will be elected. Common Stock Dividends and Rights upon Liquidation The holders of outstanding Vectren common stock are entitled to receive dividends out of assets legally available at the time and in the amounts as the board of directors may from time to time determine. Our common stock is not convertible or exchangeable into other securities, and the holders of common stock have no preemptive or subscription rights to purchase any of our securities. Upon liquidation, dissolution or winding up of Vectren, the holders of our common stock are entitled to receive pro rata the assets of Vectren which are legally available for distribution, after payment of all debts and other liabilities and subject to the prior rights of any holders of preferred stock then outstanding. Voting Rights Each outstanding Vectren common share is entitled to one vote on all matters submitted to a vote of our shareholders. Except as otherwise required by law or our Articles, the holders of Vectren common stock vote together on all matters submitted to a vote of the shareholders, including the election of directors. The bylaws provide that the representation, in person or proxy, of a majority of the stock outstanding and entitled to vote at a meeting of shareholders constitutes a quorum for conducting business. The Articles provide that the following actions may be taken only with the affirmative vote of holders of 80% of the combined voting power of the outstanding Vectren stock entitled to vote: . removal for cause of a director; . amendment or repeal of the provision regarding director removal for cause; and . certain business combinations unless the business combination is approved by a majority of continuing directors or the business combination satisfies a fair price test. A "continuing director" means any member of the board who is unaffiliated with the other party to a business combination which is the beneficial owner of more than 10% of the voting power of Vectren stock and who was a member of the board prior to the time that such other party to a business combination became the 25 beneficial owner of more than 10% of the voting power of Vectren stock, and any successor of a continuing director who is unaffiliated with the other party to a business combination and is recommended to succeed a continuing director by a majority of continuing directors then on the board. Advance Notice of Shareholder Business; Special Meetings of Shareholders Notice of any business proposed by a Vectren shareholder to be conducted at any meeting of shareholders must be sent to us not less than 90 nor more than 120 days before the meeting at which the business is conducted. The board or our Chief Executive Officer may call special meetings of our shareholders. Our shareholders have no right to call a special meeting of the shareholders or to amend the bylaws. Our shares of common stock are traded on the New York Stock Exchange under the symbol "VVC." The transfer agent and registrar for Vectren's common stock is EquiServe Trust Company N.A. Preferred Stock The board may, without further action by our shareholders, from time to time, direct the issuance of preferred stock in series and may, at the time of issuance, determine the rights, preferences and limitations of each series. Satisfaction of any dividend preferences of outstanding preferred stock would reduce the amount of funds available for the payment of dividends on our common stock. Holders of preferred stock may be entitled to receive a preference payment in the event of any liquidation, dissolution or winding-up of Vectren before any payment is made to the holders of our common stock. The issuance of preferred stock may render more difficult or tend to discourage a merger, tender offer or proxy contest, the assumption of control by a holder of a large block of our securities or the removal of incumbent management. The board, without shareholder approval, may issue preferred stock with voting and conversion and/or exchange rights, which could adversely affect the holders of our common stock. There are no shares of preferred stock outstanding. Shareholder Rights Agreement The board has adopted a Shareholder Rights Agreement which is generally designed to deter coercive takeover tactics and to encourage all persons interested in potentially acquiring control of Vectren to treat each shareholder on a fair and equal basis. Under the Shareholder Rights Agreement, the board has declared a dividend distribution of one right for each outstanding Vectren common share. A right will attach to each common share Vectren issues. Each right entitles the holder to purchase from Vectren one share of common stock at a price of $65.00 per share (subject to adjustment to prevent dilution). Initially, the rights will not be exercisable. The rights become exercisable 10 days following a public announcement that a person or group of affiliated or associated persons (a "Vectren Acquiring Person") has acquired beneficial ownership of 15% or more of the outstanding Vectren common stock (or a 10% acquiror who is determined by the Vectren board to be an adverse person), or 10 days following the announcement of an intention to make a tender offer or exchange offer the consummation of which would result in any person or group becoming a Vectren Acquiring Person. The Vectren Shareholder Rights Agreement expires October 25, 2009. Indiana Statutes The IBCL limits some transactions between an Indiana company and any person who acquires 10% or more of the company's common stock (an "interested shareholder"). During the five-year period after the acquisition, an interested shareholder cannot enter into a business combination with the company unless, before the interested shareholder acquired the common stock, the board of directors of the company approved the acquisition of common stock or approved the business combination. After the five-year period, an interested shareholder can enter into only the following three types of business combinations with the company: (i) a business combination approved by the board of directors of the company before the interested shareholder acquired the common stock; (ii) a business combination approved by holders of a majority of the common 26 stock not owned by the interested shareholder; and (iii) a business combination in which the shareholders receive a price for their common stock at least equal to a formula price based on the highest price per common share paid by the interested shareholder. In addition, a person who makes a tender offer for, or otherwise acquires shares giving that person more than 20%, 33 1/3%, and 50% of the outstanding voting securities of an Indiana corporation that is subject to the "Control Share Acquisitions Statute" of the IBCL may lose the right to vote the shares which take the acquiror over these respective levels of ownership. Before an acquiror may vote the shares that take the acquiror over these ownership thresholds, the acquiror must obtain the approval of a majority of the shares of each class or series of shares entitled to vote separately on the proposal, excluding shares held by officers of the corporation, by employees of the corporation who are directors thereof and by the acquiror. The Control Share Acquisitions Statute also authorizes a corporation to redeem the shares held by a person that exceed the ownership thresholds in the statute, provided that the corporation's articles or bylaws authorized such a redemption prior to the date the person acquires such shares. Our articles and bylaws do not include a provision authorizing such a redemption. An Indiana corporation otherwise subject to the Control Share Acquisitions Statute may elect not to be covered by the statute by so providing in its articles of incorporation or bylaws. Because we have not made such an election in our articles or bylaws, acquisitions of our shares remain subject to the statute. CERTAIN UNITED STATES TAX CONSIDERATIONS FOR NON-UNITED STATES HOLDERS The following is a general discussion of certain U.S. federal income and estate tax consequences of the ownership and disposition of the common stock by holders who are not U.S. persons (non-United States holders) and who acquire and own the common stock as capital assets within the meaning of Section 1221 of the Internal Revenue Code of 1986, as amended (Code). For this purpose, a "non-United States holder" is any holder that is not a "U.S. person" (as defined below). For purposes of this discussion, the term "U.S. person" means (i) a citizen or resident of the United States, (ii) a corporation, partnership, or other entity created or organized in the United States or under the laws of the United States or of any political subdivision of the United States, (iii) an estate whose income is includible in gross income for U.S. federal income tax purposes regardless of its source, or (iv) a trust whose administration is subject to the primary supervision of a U.S. court and which has one or more U.S. persons who have the authority to control all substantial decisions of the trust. This discussion does not address all aspects of U.S. federal income and estate taxation that may be relevant in light of any non- United States holder's particular facts and circumstances (such as being a U.S. expatriate) and does not address any tax consequences arising under the laws of any state, local or non-U.S. taxing jurisdiction. Furthermore, the following discussion is based on current provisions of the Code and administrative and judicial interpretations, all as in effect on the date of this prospectus supplement, and all of which are subject to change, possibly with retroactive effect. Prospective non-U.S. investors are urged to consult their tax advisors regarding the U.S. federal, state, local and non-U.S. income, estate, and other tax consequences of owning and disposing of the common stock. Dividends If we pay a dividend, the amount payable to a non-United States holder of common stock whose income with respect to its investment in a common stock is not effectively connected with the conduct of a U.S. trade or business generally will be subject to U.S. withholding tax either at a rate of 30% of the gross amount of the dividend or such lower rate as may be specified by an applicable tax treaty. A non-United States holder who is an individual or corporation (or an entity treated as a corporation for federal income tax purposes) holding common stock on its own behalf will be required to submit to the last Withholding Agent, as defined below, an Internal Revenue Service ("IRS") Form W-8BEN or other permitted documentation certifying its entitlement to treaty relief from withholding. A "Withholding Agent" is the United States payor 27 (or a Non-United States payor who is a qualified intermediary, U.S. branch of foreign person, or withholding foreign partnership) in the chain of payment prior to payment to a Non-U.S. Holder, which itself is not a Withholding Agent. Non-United States holders should consult their tax advisors on submission of such documentation. Dividends received by a non-United States holder that are effectively connected with a U.S. trade or business conducted by such non-United States holder are exempt from withhold-ing tax provided the non-United States holder filed IRS Form W-8ECI. However, such effectively connected dividends, net of certain deductions and credits, are taxed at the same graduated rates applicable to U.S. persons. In addition to the graduated tax described above, dividends received by a corporate non-United States holder that are effectively connected with a U.S. trade or business of the corporate non-United States holder may also be subject to a branch profits tax at a rate of 30% or such lower rate as may be specified by an applicable tax treaty. Gain on Disposition of Common Stock A non-United States holder generally will not be subject to U.S. federal income tax on any gain realized upon the sale or other disposition of common stock unless: (i) such gain is effectively connected with a U.S. trade or business of the non-United States holder, (ii) the non-United States holder is an individual who holds common stock as a capital asset and who is present in the United States for a period or periods aggregating 183 days or more during the calendar year in which such sale or disposition occurs and certain other conditions are met, or (iii) we are or have been a "United States real property holding corporation" for federal income tax purposes at any time within the shorter of the five-year period preceding such disposition or such holder's holding period. Although we believe we are not and are unlikely to become a United States real property holding corpora-tion, we may be one, or we may become one, because of our ownership of substantial real estate assets in the United States. If we were to be treated as a United States real property holding company, a non-United States holder who holds, directly or indirectly, more than 5% of our common stock will be subject to U.S. federal income taxation on any gain realized from the sale or exchange of such stock, unless an exemption is provided under an applicable treaty. Backup Withholding and Information Reporting Generally, we must report to the IRS the amount of dividends paid, the name and address of the recipient, and the amount, if any, of tax withheld. A similar report is sent to the holder. Pursuant to tax treaties or other agreements, the IRS may make its reports available to tax authorities in the recipient's country of residence. Backup withholding (which is generally imposed at a rate of 31% on certain payments to persons who fail to furnish certain information to the payer) will generally not apply to dividends to which the 30% gross withholding tax would otherwise apply, absent certification for entitlement to a reduced withholding rate (unless the payer has knowledge that the payee is a U.S. person). Dividends paid to a non-United States holder at an address within the United States may be subject to backup withholding at a rate of 31% if the non- United States holder fails to establish that it is entitled to an exemption or to provide a correct taxpayer identification number and other information to the payer. Generally, the payment of the proceeds of the disposition of common stock to or through the U.S. office of a broker is subject to information reporting and backup withholding at a rate of 31% unless the holder certifies its non- U.S. status on IRS Form W-8BEN or similar form or otherwise establishes an exemption. A U.S. holder that certifies its U.S. status by providing a valid IRS Form W-9 will not be subject to backup withholding. 28 Backup withholding is not an additional tax. Rather, the tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained, provided that the required information is furnished to the IRS. Estate Tax Individual non-United States holders who own common stock at the time of their deaths or made certain lifetime transfers of interests in common stock will be required to include the value of such common stock in their gross estates for U.S. federal estate tax purposes, unless an applicable estate tax treaty provides otherwise. THE FOREGOING DISCUSSION IS A SUMMARY OF THE PRINCIPAL FEDERAL INCOME AND ESTATE TAX CONSEQUENCES OF THE OWNERSHIP, SALE OR OTHER DISPOSITION OF COMMON STOCK BY NON-UNITED STATES HOLDERS. ACCORDINGLY, INVESTORS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE INCOME TAX CONSEQUENCES OF THE OWNER-SHIP AND DISPOSITION OF COMMON STOCK, INCLUDING THE APPLICATION AND EFFECT OF THE LAWS OF ANY STATE, LOCAL, FOREIGN OR OTHER TAX-ING JURISDICTION. 29 UNDERWRITING We intend to offer the shares of common stock through the underwriters named below, for whom Merrill Lynch, Pierce, Fenner & Smith Incorporated is acting as representative. Subject to the terms and conditions described in a purchase agreement among us and the underwriters, we have agreed to sell to the underwriters, and the underwriters severally have agreed to purchase from us, the number of shares listed opposite their names below.
Number Underwriter of Shares ----------- --------- Merrill Lynch, Pierce, Fenner & Smith Incorporated................................................ Credit Suisse First Boston Corporation........................... A.G. Edwards & Sons, Inc......................................... Edward D. Jones & Co., L.P....................................... UBS Warburg LLC.................................................. ------- Total....................................................... =======
The underwriters have agreed to purchase all of the shares sold under the purchase agreement if any of these shares are purchased. If an underwriter defaults, the purchase agreement provides that the purchase commitments of the nondefaulting underwriters may be increased or the purchase agreement may be terminated. We have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act, or to contribute to payments the underwriters may be required to make in respect of those liabilities. Certain of the underwriters will be facilitating Internet distribution for this offering to some Internet subscription customers. These underwriters may allocate a limited number of shares for sale to their respective online brokerage customers. An electronic prospectus is available on the Web sites maintained by these underwriters. Other than the prospectus in electronic format, the information on these Web sites relating to this offering is not a part of this prospectus. The underwriters are offering the shares, subject to prior sale, when, as and if issued to and accepted by them, subject to approval of legal matters by their counsel, including the validity of the shares, and other conditions contained in the purchase agreement, such as the receipt by the underwriters of officer's certificates and legal opinions. The underwriters reserve the right to withdraw, cancel or modify offers to the public and to reject orders in whole or in part. Commissions and Discounts The representative has advised us that the underwriters propose initially to offer the shares to the public at the initial public offering price on the cover page of this prospectus and to dealers at that price less a concession not in excess of $ per share. The underwriters may allow, and the dealers may reallow, a discount not in excess of $ per share to other dealers. After the initial public offering, the public offering price, concession and discount may be changed. 30 The following table shows the public offering price, underwriting discount and proceeds before expenses to us. The information assumes either no exercise or full exercise by the underwriters of their over-allotment option.
Per Share Without Option With Option --------- -------------- ----------- Public offering price............. $ $ $ Underwriting discount............. $ $ $ Proceeds, before expenses, to Vectren.......................... $ $ $
The expenses of the offering, not including the underwriting discount, are estimated at $425,000 and are payable by us. Over-allotment Option We have granted an option to the underwriters to purchase up to 825,000 additional shares at the public offering price less the underwriting discount. The underwriters may exercise this option for 30 days from the date of this prospectus solely to cover any over-allotments. If the underwriters exercise this option, each will be obligated, subject to conditions contained in the purchase agreement, to purchase a number of additional shares proportionate to that underwriter's initial amount reflected in the above table. No Sale of Similar Securities We, our directors, our executive officers and certain of our stockholders have agreed, with exceptions, including the grant of options or shares of common stock pursuant to the At Risk Compensation Plan, not to sell or transfer any common stock for 90 days after the date of this prospectus without first obtaining the written consent of the representative. Specifically, we and these other individuals have agreed not to directly or indirectly . offer, pledge, sell or contract to sell any common stock, . sell any option or contract to purchase any common stock, . purchase any option or contract to sell any common stock, . grant any option, right or warrant for the sale of any common stock, . lend or otherwise dispose of or transfer any common stock, . request or demand that we file a registration statement related to the common stock, or . enter into any swap or other agreement that transfers, in whole or in part, the economic consequence of ownership of any common stock, whether any such swap or transaction is to be settled by delivery of shares or other securities, in cash or otherwise. This lockup provision applies to common stock and to securities convertible into or exchangeable or exercisable for or repayable with common stock. It also applies to common stock owned now or acquired later by the person executing the agreement or for which the person executing the agreement later acquires the power of disposition. New York Stock Exchange Listing Our shares of common stock are traded on the New York Stock Exchange under the symbol "VVC." 31 Price Stabilization and Short Position Until the distribution of the shares offered hereby is completed, SEC rules may limit the underwriters and selling group members from bidding for or purchasing our common stock. However, the representative may engage in transactions that stabilize the price of our common stock, such as bids or purchases that peg, fix or maintain that price. If the underwriters create a short position in the common stock in connection with the offering, i.e., if they sell more shares than are listed on the cover page of this prospectus, the representative may reduce that short position by purchasing shares in the open market. The representative may also elect to reduce any short position by exercising all or part of the over- allotment option described above. Purchases of the common stock to stabilize its price or to reduce a short position may cause the price of the common stock to be higher than it might be in the absence of such purchases. Neither we nor any of the underwriters makes any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of the common stock. In addition, neither we nor any of the underwriters makes any representation that the representative will engage in these transactions or that these transactions, once commenced, will not be discontinued without notice. Other Relationships Some of the underwriters and their affiliates have engaged in, and may in the future engage in, investment banking and other commercial dealings in the ordinary course of business with us and our affiliates. They have received customary fees and commissions for these previous transactions. LEGAL MATTERS The validity of the shares of common stock offered hereby will be passed upon for us by Barnes & Thornburg, Indianapolis, Indiana. Certain legal matters will be passed upon for the underwriters by Brown & Wood llp, New York, New York. EXPERTS The audited consolidated financial statements of Vectren as of December 31, 1999 and 1998 and for each of the years in the three year period ended December 31, 1999 incorporated by reference in this prospectus and elsewhere in the registration statement have been audited by Arthur Andersen LLP, independent public accountants, as indicated in their report with respect thereto, and are included herein in reliance upon the authority of said firm as experts in accounting and auditing in giving said report. The audited financial statements of Dayton Power's natural gas retail distribution business as of December 31, 1999 and for the year then ended incorporated in this prospectus by reference to Vectren Corporation's Current Report on Form 8-K dated January 16, 2001 have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, independent accountants, given on the authority of said firm as experts in auditing and accounting. 32 WHERE YOU CAN FIND MORE INFORMATION We file annual, quarterly and special reports, proxy statements and other information with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended. Our filings are available on the SEC's web site at http://www.sec.gov. You may also read and copy this information at the following locations of the SEC: Public Reference 7 World Trade Citicorp Center Room Center 500 West Madison 450 Fifth Street, Suite 1300 Street N.W. New York, New York Suite 1400 Washington, D.C. 10048 Chicago, 20549 Illinois 60661 You can obtain copies of this information by mail from the Public Reference Room of the SEC, 450 Fifth Street, N.W., Room 10024, Washington D.C. 20549, at prescribed rates. You may obtain information on the operation of the Public Reference Room by calling the SEC at (800) SEC-0330. Our filings are also available at the offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005. Our common stock is listed on the New York Stock Exchange and you can inspect reports, proxy statements and other information about us at the offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005. We have filed with the SEC a registration statement on Form S-3 that registers the securities we are offering. The registration statement, including the attached exhibits and schedules, contains additional relevant information about us and the securities offered. The rules and regulations of the SEC allow us to omit certain information included in the registration statement from this prospectus. The SEC allows us to "incorporate by reference" information into this prospectus. This means that we can disclose important information to you by referring you to another document filed separately with the SEC. The information incorporated by reference is considered to be part of this prospectus, except for any information that is superseded by information that is contained or otherwise incorporated by reference in this prospectus. This prospectus includes by reference the documents listed below that we have previously filed with the SEC and that are not included in or delivered with this document and any future filings we make with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 (i) between the date of this preliminary prospectus and prior to the effectiveness of the registration statement that registers the securities we are offering and (ii) until the termination of the offering being made by this prospectus. Our Commission File No. is 1-15467. . Annual Report on Form 10-K for the year ended December 31, 1999; . Quarterly Report on Form 10-Q for the quarter ended March 31, 2000; . Quarterly Report on Form 10-Q for the quarter ended June 30, 2000; . Quarterly Report on Form 10-Q for the quarter ended September 30, 2000; . Amendment to Quarterly Report on Form 10-Q for the quarter ended September 30, 2000; . Current Report on Form 8-K filed on March 24, 2000; . Current Report on Form 8-K filed on April 14, 2000; . Current Reports on Form 8-K filed on April 27, 2000 (two filings); . Current Report on Form 8-K filed on May 31, 2000; 33 . Current Report on Form 8-K filed on July 11, 2000; . Current Report on Form 8-K filed on July 28, 2000; . Current Report on Form 8-K filed on November 15, 2000; . Current Report on Form 8-K filed on December 15, 2000; . Current Report on Form 8-K filed on December 22, 2000; . Current Report on Form 8-K filed on December 27, 2000; . Current Reports on Form 8-K filed on January 5, 2001 (two filings); . Current Report on Form 8-K filed on January 16, 2001; . Current Report on Form 8-K filed on January 25, 2001; . Current Report on Form 8-K filed on January 30, 2001; . The description of our common stock contained in our registration statement on Form 8-A filed on November 16, 1999; and . The description of our common stock purchase rights contained in our registration statement on Form 8-A filed on November 16, 1999. You can obtain any of the documents incorporated by reference in this document from us without charge, excluding any exhibits to those documents unless the exhibit is specifically incorporated by reference as an exhibit to this prospectus. You can obtain documents incorporated by reference in this prospectus by requesting them in writing or by telephone from us at the following address: Investor Relations Vectren Corporation 20 N.W. Fourth Street Evansville, Indiana 47741 (812) 491-4000 34 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 5,500,000 Shares Vectren Corporation [LOGO OF VECTREN] Common Stock (and Common Stock Purchase Rights) -------------- PROSPECTUS -------------- Merrill Lynch & Co. Credit Suisse First Boston A.G. Edwards & Sons, Inc. Edward D. Jones & Co., L.P. UBS Warburg LLC , 2001 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 14. Other Expenses of Issuance and Distribution. The aggregate estimated expenses, other than underwriting discounts and commissions, in connection with the offering pursuant to this registration statement are currently anticipated to be as follows: Registration Fee................................................ $ 36,813 New York Stock Exchange Filing Fee.............................. 21,875 NASD Filing Fee................................................. 15,225 Printing and Engraving Expenses*................................ 125,000 Legal Fees and Expenses*........................................ 100,000 Accounting Fees and Expenses*................................... 100,000 Miscellaneous*.................................................. 26,087 -------- Total*...................................................... $425,000 ========
- -------- *Estimated. Item 15. Indemnification of Directors and Officers. The Vectren Articles and the Vectren bylaws provide that Vectren will indemnify any individual who is or was a director or officer of Vectren, or is or was serving at the request of Vectren as a director, officer, partner or trustee of another foreign or domestic corporation, partnership, joint venture, trust, employee benefit plan or other enterprise whether or not for profit, against liability and expenses, including attorneys fees, incurred by him in any action, suit, or proceeding, whether civil, criminal, administrative, or investigative, and whether formal or informal, in which he is made or threatened to be made a party by reason of being or having been in any such capacity, or arising out of his status as such, except (i) in the case of any action, suit, or proceeding terminated by judgment, order, or conviction, in relation to matters as to which he is adjudged to have breached or failed to perform the duties of his office and the breach or failure to perform constituted willful misconduct or recklessness; and (ii) in any other situation, in relation to matters as to which it is found by a majority of a committee composed of all directors not involved in the matter in controversy (whether or not a quorum) that the person breached or failed to perform the duties of his office and the breach or failure to perform constituted willful misconduct or recklessness. Vectren may pay for or reimburse reasonable expenses incurred by a director or officer in defending any action, suit, or proceeding in advance of the final disposition thereof upon receipt of (i) a written affirmation of the director's or officer's good faith belief that such director or officer has met the standard of conduct prescribed by Indiana law; and (ii) an undertaking of the director or officer to repay the amount paid by Vectren if it is ultimately determined that the director or officer is not entitled to indemnification by Vectren. The Vectren Articles and the Vectren bylaws provide that the indemnification rights described above are in addition to any other indemnification rights a person may have by law. The employment agreements with its executive officers will require Vectren to indemnify the executive officers in accordance with its indemnification policies for its senior executives, subject to applicable law. Section 23-1-37 et seq. of the IBCL provides for "mandatory indemnification," unless limited by the articles, by a corporation against reasonable expenses incurred by a director who is wholly successful, on the merits or otherwise, in the defense of any proceeding to which the director was a party by reason of the director being or having been a director of the corporation. Section 23-1-37-10 of the IBCL states that a corporation may, in advance of the final disposition of a proceeding, reimburse reasonable expenses incurred by a director who is a party to a proceeding if the director furnishes the corporation with a written affirmation of the director's good faith belief that the director acted in good faith and reasonably believed the actions were in the best interest of the corporation (or if the actions are not in an official capacity, the actions were not opposed to the best interests of the corporation) if the proceeding is a civil proceeding. If the proceeding is criminal, the II-1 director must furnish a written affirmation that the director had reasonable cause to believe he or she was acting lawfully or the director or officer had no reason to believe the action was unlawful. The director must undertake to repay the advance if it is ultimately determined that such director did not meet the standard of conduct required by the IBCL. In addition, those making the decision to reimburse the director must determine that the facts then known would not preclude indemnification under the IBCL. The IBCL permits a corporation to grant indemnification rights in addition to those provided by statute, limited only by the fiduciary duties of the directors approving the indemnification and public policies of the State of Indiana. Item 16. Exhibits.
Number Description ------ ----------- 1.1 Form of Purchase Agreement 2.1 Agreement and Plan of Merger dated as of June 11, 1999 among Indiana Energy, Inc., SIGCORP, Inc. and Vectren Corporation (the "Merger Agreement") (Incorporated by reference to Exhibit 2 to Registrant's Form S-4 (Registration No. 333-90763) filed on November 12, 1999) 2.2 Amendment No. 1 to the Merger Agreement dated December 14, 1999 (Incorporated by reference to Exhibit 2 to Indiana Energy, Inc.'s (Commission File No. 1-09091) Current Report on Form 8-K filed on December 16, 1999) 2.3 Asset Purchase Agreement dated December 14, 1999 between Indiana Energy, Inc. and The Dayton Power and Light Company and Number-3CHK with a commitment letter for a 364-Day Credit Facility dated December 16, 1999 (Incorporated by reference to Exhibit 2 and 99.1 of Indiana Energy, Inc.'s Current Report on Form 8-K dated December 28, 1999.) 4.1 Amended and Restated Articles of Incorporation of Vectren Corporation effective March 31, 2000 (Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of Registrant filed on April 14, 2000) *4.2 Code of By-Laws of Vectren Corporation 4.3 Shareholders Rights Agreement dated as of October 21, 1999 between Vectren Corporation and Equiserve Trust Company, N.A., as Rights Agent (Incorporated by reference to Exhibit 4 to Registrant's Form S-4 (Registration No. 333- 90763) filed on November 12, 1999) *5.1 Opinion of Barnes and Thornburg 23.1 Consent of Arthur Andersen LLP 23.2 Consent of PricewaterhouseCoopers LLP *23.3 Consent of Barnes and Thornburg (included in Exhibit 5.1) *24.1 Power of Attorney
- -------- *Previously filed with the Form S-3 to which this Amendment No. 1 relates on January 19, 2001. Item 17. Undertakings. The undersigned hereby undertakes: (1) That, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II-2 (2) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities, other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding, is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by itself is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue. (3) That, for purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective. (4) That, for the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II-3 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Evansville, State of Indiana, on January 30, 2001. Vectren Corporation /s/ Ronald E. Christian By: _________________________________ Ronald E. Christian, Senior Vice President, Secretary and General Counsel Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to this registration statement has been signed by the following persons in the capacities and on the dates indicated.
Signature Title Date --------- ----- ---- (1) Principal Executive Officer /s/ Niel C. Ellerbrook Chairman and Chief Executive January 30, 2001 ____________________________________ Officer Niel C. Ellerbrook (2) Principal Financial Officer /s/ Jerome A. Benkert Executive Vice President and January 30, 2001 ____________________________________ Chief Financial Officer Jerome A. Benkert (3) Principal Accounting Officer /s/ M. Susan Hardwick Vice President and January 30, 2001 ____________________________________ Controller M. Susan Hardwick (4) A Majority of the Board of Directors /s/ Ronald E. Christian* Director ____________________________________ John M. Dunn /s/ Ronald E. Christian* Director ____________________________________ Niel C. Ellerbrook /s/ Ronald E. Christian* Director January 30, 2001 ____________________________________ John D. Englebrecht /s/ Ronald E. Christian* Director ____________________________________ Lawrence A. Ferger /s/ Ronald E. Christian* Director ____________________________________ Anton H. George
II-4
Signature Title Date --------- ----- ---- /s/ Ronald E. Christian* Director ____________________________________ Andrew E. Goebel /s/ Ronald E. Christian* Director ____________________________________ Robert L. Koch II /s/ Ronald E. Christian* Director ____________________________________ William G. Mays /s/ Ronald E. Christian* Director ____________________________________ J. Timothy McGinley /s/ Ronald E. Christian* Director ____________________________________ Donald A. Rausch /s/ Ronald E. Christian* Director January 30, 2001 ____________________________________ Richard P. Rechter /s/ Ronald E. Christian* Director ____________________________________ Ronald G. Reherman /s/ Ronald E. Christian* Director ____________________________________ James C. Shook /s/ Ronald E. Christian* Director ____________________________________ Richard W. Shymanski /s/ Ronald E. Christian* Director ____________________________________ James S. Vinson /s/ Ronald E. Christian* Director ____________________________________ Jean L. Wojtowicz *The undersigned, Ronald E. Christian, executes this Amendment No. 1 as attorney-in-fact of the persons designated above. /s/ Ronald E. Christian ____________________________________ Ronald E. Christian
II-5 EXHIBIT INDEX
Number Description ------ ----------- 1.1 Form of Purchase Agreement 2.1 Agreement and Plan of Merger dated as of June 11, 1999 among Indiana Energy, Inc., SIGCORP, Inc. and Vectren Corporation (the "Merger Agreement") (Incorporated by reference to Exhibit 2 to Registrant's Form S-4 (Registration No. 333-90763) filed on November 12, 1999) 2.2 Amendment No. 1 to the Merger Agreement dated December 14, 1999 (Incorporated by reference to Exhibit 2 to Indiana Energy, Inc.'s (Commission File No. 1-09091) Current Report on Form 8-K filed on December 16, 1999) 2.3 Asset Purchase Agreement dated December 14, 1999 between Indiana Energy, Inc. and The Dayton Power and Light Company and Number -3CHK with a commitment letter for a 364-Day Credit Facility dated December 16, 1999 (Incorporated by reference to Exhibit 2 and 99.1 of Indiana Energy, Inc.'s Current Report on Form 8-K dated December 28, 1999.) 4.1 Amended and Restated Articles of Incorporation of Vectren Corporation effective March 31, 2000 (Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of Registrant filed on April 14, 2000) *4.2 Code of By-Laws of Vectren Corporation 4.3 Shareholders Rights Agreement dated as of October 21, 1999 between Vectren Corporation and Equiserve Trust Company, N.A., as Rights Agent (Incorporated by reference to Exhibit 4 to Registrant's Form S-4 (Registration No. 333-90763) filed on November 12, 1999) *5.1 Opinion of Barnes and Thornburg 23.1 Consent of Arthur Andersen LLP 23.2 Consent of PricewaterhouseCoopers LLP *23.3 Consent of Barnes and Thornburg (included in Exhibit 5.1) *24.1 Power of Attorney
- -------- *Previously filed with the Form S-3 to which this Amendment No. 1 relates on January 19, 2001. EX-1.1 2 0002.txt FORM OF PURCHASE AGREEMENT B&W Draft January 22, 2001 - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- VECTREN CORPORATION (an Indiana corporation) Common Stock PURCHASE AGREEMENT ------------------ Dated: February ., 2001 - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- PAGE> Table of Contents
Page ---- SECTION 1. Representations and Warranties..................................... 3 (a) Representations and Warranties by the Company...................... 3 (i) Compliance with Registration Requirements.................. 3 (ii) Incorporated Documents..................................... 4 (iii) Independent Accountants.................................... 4 (iv) Financial Statements....................................... 4 (v) Capitalization............................................. 4 (vi) No Material Adverse Changes................................ 5 (vii) Due Incorporation and Good Standing........................ 5 (viii) Good Standing of Subsidiaries.............................. 5 (ix) Authorization of Agreement................................. 6 (x) Authorization and Description of Securities................ 6 (xi) The Shareholder Rights Plan................................ 6 (xii) Absence of Defaults and Conflicts.......................... 6 (xiii) Absence of Labor Dispute................................... 7 (xiv) Absence of Proceedings..................................... 7 (xv) Accuracy of Exhibits....................................... 7 (xvi) Possession of Intellectual Property........................ 7 (xvii) Absence of Further Requirements............................ 8 (xviii) Possession of Licenses and Permits......................... 8 (xix) Title to Property.......................................... 8 (xx) Environmental Laws......................................... 9 (xxi) Registration Rights........................................ 9 (xxii) Investment Company Act..................................... 9 (xxiii) Exemption from Public Utility Holding Company Act.......... 9 (b) Officer's Certificates.............................................. 9 SECTION 2. Sale and Delivery to Underwriters; Closing......................... 10 (a) Initial Securities................................................. 10 (b) Option Securities.................................................. 10 (c) Payment............................................................ 10 (d) Denominations; Registration........................................ 11 SECTION 3. Covenants of the Company........................................... 11 (a) Compliance with Securities Regulations and Commission Requests..... 11 (b) Filing of Amendments............................................... 11 (c) Delivery of Registration Statements................................ 12 (d) Delivery of Prospectuses........................................... 12 (e) Continued Compliance with Securities Laws.......................... 12 (f) Blue Sky Qualifications............................................ 12 (g) Rule 158........................................................... 13 (h) Use of Proceeds.................................................... 13 (i) Listing............................................................ 13
i (j) Restriction on Sale of Securities..................................... 13 (k) Reporting Requirements................................................ 13 SECTION 4. Payment of Expenses................................................... 13 (a) Expenses.............................................................. 13 (b) Termination of Agreement.............................................. 14 SECTION 5. Conditions of Underwriters' Obligations............................... 14 (a) Effectiveness of Registration Statement............................... 14 (b) Opinion of Counsel for Company........................................ 14 (c) Opinion of Counsel for Underwriters................................... 15 (d) Officers' Certificate................................................. 15 (e) Accountant's Comfort Letter........................................... 15 (f) Bring-down Comfort Letter............................................. 15 (g) Consent Letter........................................................ 15 (h) Approval of Listing................................................... 16 (i) Lock-up Agreements.................................................... 16 (j) Conditions to Purchase of Option Securities........................... 16 (i) Officers' Certificate......................................... 16 (ii) Opinion of Counsel for Company................................ 16 (iii) Opinion of Counsel for Underwriters........................... 16 (iv) Bring-down Comfort Letter..................................... 16 (k) Additional Documents.................................................. 16 (l) Termination of Agreement.............................................. 17 SECTION 6. Indemnification....................................................... 17 (a) Indemnification of Underwriters....................................... 17 (b) Indemnification of Company, Directors and Officers.................... 18 (c) Actions against Parties; Notification................................. 18 (d) Settlement without Consent if Failure to Reimburse.................... 19 SECTION 7. Contribution.......................................................... 19 SECTION 8. Representations, Warranties and Agreements to Survive Delivery........ 20 SECTION 9. Termination of Agreement............................................... 20 (a) Termination; General................................................... 20 (b) Liabilities............................................................ 21 SECTION 10. Default by One or More of the Underwriters............................ 21 SECTION 11. Notices............................................................... 22 SECTION 12. Parties............................................................... 22 SECTION 13. GOVERNING LAW AND TIME................................................ 22 SECTION 14. Effect of Headings.................................................... 22
ii SCHEDULES Schedule A - List of Underwriters....................................... Sch A-1 Schedule B - Significant Subsidiaries................................... Sch B-1 Schedule C - Pricing Information........................................ Sch C-1 Schedule D - List of Persons subject to Lock-up......................... Sch D-1 EXHIBITS Exhibit A-1- Form of Opinion of Company's Counsel....................... A-1 Exhibit A-2- Form of Opinion of Company's General Counsel............... A-5 Exhibit B- Form of Lock-up Letter..................................... B-1
iii B&W Draft January 22, 2001 VECTREN CORPORATION (an Indiana corporation) Common Stock (No Par Value Per Share) PURCHASE AGREEMENT February ., 2001 MERRILL LYNCH & CO. Merrill Lynch, Pierce, Fenner & Smith Incorporated as Representative of the several Underwriters c/o Merrill Lynch & Co. Merrill Lynch, Pierce, Fenner & Smith Incorporated North Tower World Financial Center New York, New York 10281-1209 Ladies and Gentlemen: Vectren Corporation, an Indiana corporation (the "Company"), confirms its agreement with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch") and each of the other Underwriters named in Schedule A hereto (collectively, the "Underwriters", which term shall also include any underwriter substituted as hereinafter provided in Section 10 hereof), for whom Merrill Lynch is acting as Representative (in such capacity, the "Representative"), with respect to the issue and sale by the Company and the purchase by the Underwriters, acting severally and not jointly, of the respective numbers of shares of Common Stock, no par value per share, of the Company ("Common Stock") set forth in said Schedule A, and with respect to the grant by the Company to the Underwriters, acting severally and not jointly, of the option described in Section 2(b) hereof to purchase all or any part of 825,000 additional shares of Common Stock to cover over-allotments, if any. The aggregate 5,500,000 shares of Common Stock (the "Initial Securities") to be purchased by the Underwriters and all or any part of the 825,000 shares of Common Stock subject to the option described in Section 2(b) hereof (the "Option Securities") are herein called, collectively, the "Securities". The Company understands that the Underwriters propose to make a public offering of the Securities as soon as the Representative deems advisable after this Agreement has been executed and delivered. The Company has filed with the Securities and Exchange Commission (the "Commission") a registration statement on Form S-3 (No. 333-53930) covering the registration of the Securities under the Securities Act of 1933, as amended (the "1933 Act"), including the related preliminary prospectus or prospectuses. Promptly after execution and delivery of this Agreement, the Company will either (i) prepare and file a prospectus in accordance with the provisions of Rule 430A ("Rule 430A") of the rules and regulations of the Commission under the 1933 Act (the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of the 1933 Act Regulations or (ii) if the Company has elected to rely upon Rule 434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term sheet (a "Term Sheet") in accordance with the provisions of Rule 434 and Rule 424(b). The information included in such prospectus or in such Term Sheet, as the case may be, that was omitted from such registration statement at the time it became effective but that is deemed to be part of such registration statement at the time it became effective pursuant to (a) paragraph (b) of Rule 430A is referred to as "Rule 430A Information" or (b) paragraph (d) of Rule 434 is referred to as "Rule 434 Information." Each prospectus used before such registration statement became effective, and any prospectus that omitted, as applicable, the Rule 430A Information or the Rule 434 Information, that was used after such effectiveness and prior to the execution and delivery of this Agreement, is herein called a "preliminary prospectus." Such registration statement, including the exhibits thereto, and schedules thereto at the time it became effective and including the Rule 430A Information and the Rule 434 Information, as applicable, is herein called the "Registration Statement." Any registration statement filed pursuant to Rule 462(b) of the 1933 Act Regulations is herein referred to as the "Rule 462(b) Registration Statement," and after such filing the term "Registration Statement" shall include the Rule 462(b) Registration Statement. The final prospectus, including the documents incorporated by reference therein, in the form first furnished to the Underwriters for use in connection with the offering of the Securities, is herein called the "Prospectus." If Rule 434 is relied on, the term "Prospectus" shall refer to the preliminary prospectus dated January 19, 2001 and the Term Sheet, and all references in this Agreement to the date of the Prospectus shall mean the date of the Term Sheet. For purposes of this Agreement, all references to the Registration Statement, any preliminary prospectus, the Prospectus or any Term Sheet or any amendment or supplement to any of the foregoing shall be deemed to include the copy filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval system ("EDGAR"). All references in this Agreement to financial statements and schedules and other information which is "contained," "included" or "stated" in the Registration Statement, any preliminary prospectus or the Prospectus (or other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information which is incorporated by reference in the Registration Statement, any preliminary prospectus or the Prospectus, as the case may be, prior to the delivery of the Prospectus to the Underwriters for use in connection with the offering of the Securities; and all references in this Agreement to amendments or supplements to the Registration Statement, any preliminary prospectus or the Prospectus shall be deemed to mean and include the filing of any document under the Securities Exchange Act of 1934, as amended (the "1934 Act"), which is incorporated by reference in the Registration Statement, such preliminary prospectus or the Prospectus, as the case may be, subsequent to the delivery of the Prospectus to the Underwriters for use in connection with the offering of the Securities. 2 SECTION 1. Representations and Warranties. (a) Representations and Warranties by the Company. The Company represents and warrants to each Underwriter as of the date hereof, as of the Closing Time referred to in Section 2(c) hereof, and as of each Date of Delivery (if any) referred to in Section 2(b) hereof, and agrees with each Underwriter, as follows: (i) Compliance with Registration Requirements. The Company meets the ----------------------------------------- requirements for use of Form S-3 under the 1933 Act. The Registration Statement, including any Rule 462(b) Registration Statement, has become effective under the 1933 Act and no stop order suspending the effectiveness of the Registration Statement has been issued under the 1933 Act and no proceedings for that purpose have been instituted or are pending or, to the knowledge of the Company, are contemplated by the Commission, and any request on the part of the Commission for additional information has been complied with. At the respective times the Registration Statement, including any Rule 462(b) Registration Statement, and any post-effective amendments thereto (including the filing of the Company's most recent Annual Report on Form 10-K with the Commission) became effective, at the date of this Agreement and at the Closing Time (and, if any Option Securities are purchased, at the Date of Delivery), the Registration Statement and any amendments thereto complied and will comply in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations and did not, do not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. Neither the Prospectus nor any amendments or supplements thereto, at the date of this Agreement, at the time the Prospectus or any such amendment or supplement thereto is issued or at the Closing Time (and, if any Option Securities are purchased, at the Date of Delivery), included, includes or will include an untrue statement of a material fact or omitted, omits or will omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. If Rule 434 is used, the Company will comply with the requirements of Rule 434 and the Prospectus shall not be "materially different", as such term is used in Rule 434, from the prospectus included in the Registration Statement at the time it became effective. The representations and warranties in this subsection shall not apply to statements in or omissions from the Registration Statement or the Prospectus made in reliance upon and in conformity with information furnished to the Company in writing by any Underwriter through Merrill Lynch expressly for use in the Registration Statement or the Prospectus. Each preliminary prospectus and the prospectus filed as part of the Registration Statement as originally filed or as part of any amendment thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so filed in all material respects with the 1933 Act Regulations and each preliminary prospectus and the Prospectus delivered to the Underwriters for use in connection with this offering was identical to the 3 electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T. (ii) Incorporated Documents. The documents incorporated or deemed ---------------------- to be incorporated by reference in the Registration Statement and the Prospectus, at the time they were or hereafter are filed with the Commission, complied and will comply in all material respects with the requirements of the 1934 Act and the rules and regulations of the Commission thereunder (the "1934 Act Regulations"), and, when read together with the other information in the Prospectus, at the time the Registration Statement or any amendment thereto became effective, at the date of this Agreement, at the time the Prospectus or any amendment or supplement thereto was issued and at the Closing Time and at the Date of Delivery, did not, do not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. (iii) Independent Accountants. The accountants who have certified ----------------------- certain consolidated financial statements and supporting schedules included in the Registration Statement and the Prospectus are independent public accountants as required by the 1933 Act and the 1933 Act Regulations. (iv) Financial Statements. The consolidated financial statements -------------------- included in the Registration Statement and the Prospectus, together with the related schedules and notes, present fairly the financial position of the Company and its consolidated subsidiaries and, if applicable, such other entities, as the case may be, at the dates indicated and the statement of operations, stockholders' equity and cash flows of the Company and its consolidated subsidiaries and, if applicable, such other entities, as the case may be, for the periods specified; said consolidated financial statements have been prepared in conformity with generally accepted accounting principles ("GAAP") applied on a consistent basis throughout the periods involved. The supporting schedules included in the Registration Statement and the Prospectus present fairly in accordance with GAAP the information required to be stated therein. The selected financial data and the summary financial information included in the Registration Statement and the Prospectus present fairly the information shown therein and have been compiled on a basis consistent with that of the audited consolidated financial statements included in the Registration Statement and the Prospectus. The pro forma financial statements and the related notes thereto included in the Registration Statement and the Prospectus present fairly the information shown therein, have been prepared in accordance with the Commission's rules and guidelines with respect to pro forma financial statements and have been properly compiled on the bases described therein, and the assumptions used in the preparation thereof are reasonable and the adjustments used therein are appropriate to give effect to the transactions and circumstances referred to therein. (v) Capitalization. The authorized, issued and outstanding capital -------------- stock of the Company is as set forth in the Prospectus in the column entitled "Actual" under the caption "Capitalization" (except for subsequent issuances, if any, pursuant to this Agreement or pursuant to the exercise of options referred to in the Prospectus). All of the 4 issued and outstanding shares of capital stock of the Company have been duly authorized and validly issued and are fully paid and non-assessable. None of the outstanding shares of capital stock of the Company was issued in violation of the preemptive or other similar rights of any securityholder of the Company. (vi) No Material Adverse Changes. Since the respective dates as of --------------------------- which information is given in the Registration Statement and the Prospectus, except as otherwise stated therein, (A) there has been no material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business (a "Material Adverse Effect"), (B) there have been no transactions entered into by the Company or any of its subsidiaries, other than those in the ordinary course of business, which are material with respect to the Company and its subsidiaries considered as one enterprise, and (C) except for regular quarterly dividends on the Common Stock in amounts per share that are consistent with past practice, there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of its capital stock. (vii) Due Incorporation and Good Standing. The Company has been ----------------------------------- duly incorporated and is validly existing as a corporation under the laws of the State of Indiana and has power and authority (corporate and other) to own, lease and operate its properties and to conduct its business as described in the Prospectus and to enter into and perform its obligations under this Agreement; and the Company is duly qualified as a foreign corporation to transact business and is in good standing in each other jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not result in a Material Adverse Effect. (viii) Good Standing of Subsidiaries. Each "significant subsidiary" ----------------------------- of the Company (as such term is defined in Rule 1-02 of Regulation S-X) (each a "Subsidiary" and, collectively, the "Subsidiaries") is set forth on Schedule B and has been duly organized and is validly existing as a corporation in good standing, where applicable, under the laws of the jurisdiction of its incorporation, has power and authority (corporate and other) to own, lease and operate its properties and to conduct its business as described in the Prospectus and is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not result in a Material Adverse Effect. Except as otherwise disclosed in the Registration Statement and the Prospectus, all of the issued and outstanding shares of capital stock of each Subsidiary have been duly authorized and validly issued, are fully paid and non-assessable and are owned by the Company, directly or through subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity. None of the outstanding shares of capital stock of any Subsidiary was issued in violation of the preemptive or similar rights of any securityholder of such Subsidiary. The only subsidiaries of the Company are (a) the subsidiaries listed in the Registration Statement 5 and (b) certain other subsidiaries which, considered in the aggregate as a single Subsidiary, do not constitute a "significant subsidiary" (as defined in Rule 1-02 of Regulation S-X). (ix) Authorization of Agreement. This Agreement has been duly -------------------------- authorized, executed and delivered by the Company. (x) Authorization and Description of Securities. The Securities ------------------------------------------- have been duly authorized for issuance and sale to the Underwriters pursuant to this Agreement and, when issued and delivered by the Company pursuant to this Agreement against payment of the consideration set forth herein, will be validly issued and fully paid and non-assessable. No holder of the Securities will be subject to personal liability by reason of being such a holder. The issuance of the Securities is not subject to the preemptive or other similar rights of any securityholder of the Company. The Common Stock conforms to all statements relating thereto contained in the Prospectus and such description conforms to the rights set forth in the instruments defining the same. (xi) The Shareholders Rights Plan. The Shareholders Rights ---------------------------- Agreement dated as of October 21, 1999 between the Company and EquiServe Trust Company, N.A., as Rights Agent (the "Rights Agreement") has been duly authorized, executed and delivered by the Company and constitutes a valid and legally binding agreement, enforceable against the Company in accordance with its terms, subject, as to enforceability, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors' rights and to general equity principles, and the rights under the Rights Agreement to which holders of the Securities will be entitled have been duly authorized and validly issued. (xii) Absence of Defaults and Conflicts. Neither the Company nor --------------------------------- any of its subsidiaries is in violation of its charter or by-laws (or other organizational documents) or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which it or any of them may be bound, or to which any of the property or assets of the Company or any subsidiary is subject (collectively, "Agreements and Instruments"), except for such defaults that would not result in a Material Adverse Effect. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated herein and in the Registration Statement and the Prospectus (including the issuance and sale of the Securities and the use of the proceeds from the sale of the Securities as described in the Prospectus under the caption "Use of Proceeds") and compliance by the Company with its obligations hereunder have been duly authorized by all necessary corporate action and do not and will not, whether with or without the giving of notice or passage of time or both, conflict with or constitute a breach of, or default or Repayment Event (as defined below) under, or result in the creation or imposition of any lien, charge or encumbrance upon any assets, properties or operations of the Company or any subsidiary pursuant to, the Agreements and Instruments, nor will such action result in any violation of the provisions 6 of the charter or by-laws (or other organizational documents) of the Company or any subsidiary or any applicable law, statute, rule, regulation, judgment, order, writ or decree of any government, government instrumentality or court, domestic or foreign, having jurisdiction over the Company or any subsidiary or any of their assets, properties or operations. As used herein, a "Repayment Event" means any event or condition which gives the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder's behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company or any subsidiary. (xiii) Absence of Labor Dispute. No labor dispute with the ------------------------ employees of the Company or any subsidiary exists or, to the knowledge of the Company, is imminent, and the Company is not aware of any existing or imminent labor disturbance by the employees of any of its or any subsidiary's principal suppliers, customers or contractors, which, in either case, may reasonably be expected to result in a Material Adverse Effect. (xiv) Absence of Proceedings. Except as otherwise disclosed in the ---------------------- Registration Statement or the Prospectus, there is no action, suit, proceeding, inquiry or investigation before or brought by any court or governmental agency or body, domestic or foreign, now pending, or, to the knowledge of the Company, threatened, against or affecting the Company or any subsidiary, (A) which is required to be disclosed in the Registration Statement and the Prospectus (other than as disclosed therein), or (B) which may reasonably be expected to result in a Material Adverse Effect, or (C) which may reasonably be expected to materially and adversely affect the assets, properties or operations thereof or the consummation of the transactions contemplated in this Agreement or the performance by the Company of its obligations hereunder. The aggregate of all pending legal or governmental proceedings to which the Company or any subsidiary is a party or of which any of their respective assets, properties or operations is the subject which are not described in the Registration Statement and the Prospectus, including ordinary routine litigation incidental to the business, would not result in a Material Adverse Effect. (xv) Accuracy of Exhibits. There are no contracts or documents -------------------- which are required to be described in the Registration Statement or the Prospectus or the documents incorporated by reference therein or to be filed as exhibits thereto which have not been so described and filed as required. (xvi) Possession of Intellectual Property. The Company and its ----------------------------------- subsidiaries own or possess, or can acquire on reasonable terms, adequate patents, patent rights, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks, trade names or other intellectual property (collectively, "Intellectual Property") necessary to carry on the business now operated by them, and neither the Company nor any of its 7 subsidiaries therein, and which infringement or conflict (if the subject of any unfavorable decision, ruling or finding) or invalidity or inadequacy, singly or in the aggregate, may reasonably be expected to result in a Material Adverse Effect. (xvii) Absence of Further Requirements. No filing with, or ------------------------------- authorization, approval, consent, license, order, registration, qualification or decree of, any court or governmental authority or agency, domestic (whether federal, state or local) or foreign, is necessary or required for the performance by the Company of its obligations hereunder, in connection with the offering, issuance or sale of the Securities hereunder or the consummation of the transactions contemplated by this Agreement, except such as have been already obtained or as may be required under the 1933 Act or the 1933 Act Regulations or state securities laws. (xviii) Possession of Licenses and Permits. Except as otherwise disclosed ---------------------------------- in the Registration Statement or the Prospectus, the Company and its subsidiaries possess such permits, licenses, approvals, consents and other authorizations (collectively, "Governmental Licenses") issued by the appropriate federal, state or local regulatory agencies or bodies necessary to conduct the business now operated by them. Except as otherwise disclosed in the Registration Statement or the Prospectus, the Company and its subsidiaries are in compliance with the terms and conditions of all such Governmental Licenses, except where the failure so to comply would not, singly or in the aggregate, result in a Material Adverse Effect. Except as otherwise disclosed in the Registration Statement or the Prospectus, all of the Governmental Licenses are valid and in full force and effect, except when the invalidity of such Governmental Licenses or the failure of such Governmental Licenses to be in full force and effect would not result in a Material Adverse Effect. Except as otherwise disclosed in the Registration Statement or the Prospectus, neither the Company nor any of its subsidiaries has received any notice of proceedings relating to the revocation or modification of any such Governmental Licenses which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would result in a Material Adverse Effect. (xix) Title to Property. The Company and its subsidiaries have good and ----------------- marketable title to all real property owned by the Company and its subsidiaries and good title to all other properties owned by them, in each case, free and clear of all mortgages, pledges, liens, security interests, claims, restrictions or encumbrances of any kind, except such as (a) are described in the Registration Statement and the Prospectus or (b) do not, singly or in the aggregate, materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company or any of its subsidiaries. All of the leases and subleases material to the business of the Company and its subsidiaries, considered as one enterprise, and under which the Company or any of its subsidiaries holds properties described in the Registration Statement and the Prospectus, are in full force and effect, and neither the Company nor any subsidiary has any notice of any material claim of any sort that has been asserted by anyone adverse to the rights of the Company or any subsidiary under any of the leases or subleases mentioned above, or affecting or questioning the rights of the Company or such 8 subsidiary to the continued possession of the leased or subleased premises under any such lease or sublease. (xx) Environmental Laws. Except as described in the Registration ------------------ Statement or the Prospectus and except as would not, singly or in the aggregate, result in a Material Adverse Effect, (A) neither the Company nor any of its subsidiaries is in violation of any federal, state, local or foreign statute, law, rule, regulation, ordinance, code, policy or rule of common law or any judicial or administrative interpretation thereof, including any judicial or administrative order, consent, decree or judgment, relating to pollution or protection of human health, the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata) or wildlife, including, without limitation, laws and regulations relating to the release or threatened release of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum or petroleum products (collectively, "Hazardous Materials") or to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials (collectively, "Environmental Laws"), (B) the Company and its subsidiaries have all permits, authorizations and approvals required under any applicable Environmental Laws and are each in compliance with their requirements, (C) there are no pending or threatened administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation, investigation or proceedings relating to any Environmental Law against the Company or any of its subsidiaries and (D) there are no events or circumstances that might reasonably be expected to form the basis of an order for clean-up or remediation, or an action, suit or proceeding by any private party or governmental body or agency, against or affecting the Company or any of its subsidiaries relating to Hazardous Materials or any Environmental Laws. (xxi) Registration Rights. There are no persons with registration ------------------- rights or other similar rights to have any securities registered on the Registration Statement or otherwise registered by the Company under the 1933 Act. (xxii) Investment Company Act. The Company is not, and upon the ---------------------- issuance and sale of the Securities as herein contemplated and the application of the net proceeds therefrom as described in the Prospectus will not be, an "investment company" or an entity "controlled" by an "investment company" (as such terms are defined in the Investment Company Act of 1940, as amended (the "1940 Act")). (xxiii) Exemption from Public Utility Holding Company Act. Neither ------------------------------------------------- the Company nor Vectren Utility Holdings, Inc. is subject to the provisions of the Public Utility Holding Company Act of 1935, as amended (the "1935 Act"). (b) Officer's Certificates. Any certificate signed by any officer of the Company or any of its subsidiaries delivered to the Representative or to counsel for the Underwriters shall be deemed a representation and warranty by the Company to each Underwriter as to the matters covered thereby. 9 SECTION 2. Sale and Delivery to Underwriters; Closing. ------------------------------------------ (a) Initial Securities. On the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, the Company agrees to sell to each Underwriter, severally and not jointly, and each Underwriter, severally and not jointly, agrees to purchase from the Company, at the price per share set forth in Schedule C, the number of Initial Securities set forth in Schedule A opposite the name of such Underwriter, plus any additional number of Initial Securities which such Underwriter may become obligated to purchase pursuant to the provisions of Section 10 hereof. (b) Option Securities. In addition, on the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, the Company hereby grants an option to the Underwriters, severally and not jointly, to purchase all or any portion of an additional 825,000 shares of Common Stock at the price per share set forth in Schedule C, less, if applicable, an amount per share equal to any dividends or distributions declared by the Company and payable on the Initial Securities but not payable on the Option Securities. The option hereby granted will expire 30 days after the date hereof and may be exercised in whole or in part from time to time only for the purpose of covering over-allotments which may be made in connection with the offering and distribution of the Initial Securities upon notice by the Representative to the Company setting forth the number of Option Securities as to which the several Underwriters are then exercising the option and the time and date of payment and delivery for such Option Securities. Any such time and date of delivery (a "Date of Delivery") shall be determined by the Representative, but shall not be later than seven full business days after the exercise of said option, nor in any event prior to the Closing Time. If the option is exercised as to all or any portion of the Option Securities, each of the Underwriters, acting severally and not jointly, will purchase that proportion of the total number of Option Securities then being purchased which the number of Initial Securities set forth in Schedule A opposite the name of such Underwriter bears to the total number of Initial Securities, subject in each case to such adjustments as the Representative in its discretion shall make to eliminate any sales or purchases of fractional shares. (c) Payment. Payment of the purchase price for, and delivery of certificates for, the Initial Securities shall be made at the offices of Brown & Wood LLP, One World Trade Center, New York, New York, 10048, or at such other place as shall be agreed upon by the Representative and the Company, at 9:00 A.M. (Eastern time) on the third (fourth, if the pricing occurs after 4:30 P.M. (Eastern time) on any given day) business day after the date hereof (unless postponed in accordance with the provisions of Section 10), or such other time not later than ten business days after such date as shall be agreed upon by the Representative and the Company (such time and date of payment and delivery being herein called "Closing Time"). In addition, in the event that any or all of the Option Securities are purchased by the Underwriters, payment of the purchase price for, and delivery of certificates for, such Option Securities shall be made at the above-mentioned offices, or at such other place as shall be agreed upon by the Representative and the Company, on each Date of Delivery as specified in the notice from the Representative to the Company. 10 Payment shall be made to the Company by wire transfer of immediately available funds to a bank account designated by the Company, against delivery to the Representative for the respective accounts of the Underwriters of certificates for the Securities to be purchased by them. It is understood that each Underwriter has authorized the Representative, for its account, to accept delivery of, receipt for, and make payment of the purchase price for, the Initial Securities and the Option Securities, if any, which it has agreed to purchase. Merrill Lynch, individually and not as representative of the Underwriters, may (but shall not be obligated to) make payment of the purchase price for the Initial Securities or the Option Securities, if any, to be purchased by any Underwriter whose funds have not been received by the Closing Time or the relevant Date of Delivery, as the case may be, but such payment shall not relieve such Underwriter from its obligations hereunder. (d) Denominations; Registration. Certificates for the Initial Securities and the Option Securities, if any, shall be in such denominations and registered in such names as the Representative may request in writing at least one full business day before the Closing Time or the relevant Date of Delivery, as the case may be. The certificates for the Initial Securities and the Option Securities, if any, will be made available for examination and packaging by the Representative in The City of New York not later than 10:00 A.M. (Eastern time) on the business day prior to the Closing Time or the relevant Date of Delivery, as the case may be. SECTION 3. Covenants of the Company. The Company covenants with each ------------------------ Underwriter as follows: (a) Compliance with Securities Regulations and Commission Requests. The Company, subject to Section 3(b), will comply with the requirements of Rule 430A or Rule 434, as applicable, and will notify the Representative immediately, and confirm the notice in writing, (i) when any post-effective amendment to the Registration Statement shall become effective, or any supplement to the Prospectus or any amended Prospectus shall have been filed, (ii) of the receipt of any comments from the Commission, (iii) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or for additional information, and (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of any order preventing or suspending the use of any preliminary prospectus, or of the suspension of the qualification of the Securities for offering or sale in any jurisdiction, or of the initiation or threatening of any proceedings for any of such purposes. The Company will promptly effect the filings necessary pursuant to Rule 424(b) and will take such steps as it deems necessary to ascertain promptly whether the form of prospectus transmitted for filing under Rule 424(b) was received for filing by the Commission and, in the event that it was not, it will promptly file such prospectus. The Company will make every reasonable effort to prevent the issuance of any stop order and, if any stop order is issued, to obtain the lifting thereof at the earliest possible moment. (b) Filing of Amendments. The Company will give the Representative notice of its intention to file or prepare any amendment to the Registration Statement (including any filing under Rule 462(b)), any Term Sheet or any amendment, supplement or revision to either the prospectus included in the Registration Statement at the time it became effective or to the Prospectus, will furnish the Representative with copies of any such amendment, supplement or 11 revision a reasonable amount of time prior to such proposed filing or use, as the case may be, and will not file or use any such document to which the Representative or counsel for the Underwriters shall object. (c) Delivery of Registration Statements. The Company has furnished or will deliver to the Representative and counsel for the Underwriters, without charge, signed copies of the Registration Statement as originally filed and of each amendment thereto (including exhibits filed therewith or incorporated by reference therein and documents incorporated or deemed to be incorporated by reference therein) and signed copies of all consents and certificates of experts, and will also deliver to the Representative, without charge, a conformed copy of the Registration Statement as originally filed and of each amendment thereto (without exhibits) for each of the Underwriters. The copies of the Registration Statement and each amendment thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T. (d) Delivery of Prospectuses. The Company has delivered to each Underwriter, without charge, as many copies of each preliminary prospectus as such Underwriter reasonably requested, and the Company hereby consents to the use of such copies for purposes permitted by the 1933 Act. The Company will furnish to each Underwriter, without charge, during the period when the Prospectus is required to be delivered under the 1933 Act or 1934 Act, such number of copies of the Prospectus (as amended or supplemented) as such Underwriter may reasonably request. The Prospectus and any amendments or supplements thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T. (e) Continued Compliance with Securities Laws. The Company will comply with the 1933 Act and the 1933 Act Regulations so as to permit the completion of the distribution of the Securities as contemplated in this Agreement and in the Prospectus. If at any time when a prospectus is required by the 1933 Act to be delivered in connection with sales of the Securities any event shall occur or condition shall exist as a result of which it is necessary, in the opinion of counsel for the Underwriters or for the Company, to amend the Registration Statement or amend or supplement the Prospectus in order that the Prospectus will not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in the light of the circumstances existing at the time it is delivered to a purchaser, or if it shall be necessary, in the opinion of such counsel, at any such time to amend the Registration Statement or amend or supplement the Prospectus in order to comply with the requirements of the 1933 Act or the 1933 Act Regulations, the Company will promptly prepare and file with the Commission, subject to Section 3(b), such amendment or supplement as may be necessary to correct such statement or omission or to make the Registration Statement or the Prospectus comply with such requirements, and the Company will furnish to the Underwriters such number of copies of such amendment or supplement as the Underwriters may reasonably request. (f) Blue Sky Qualifications. The Company will use its best efforts, in cooperation with the Underwriters, to qualify the Securities for offering and sale under the applicable securities laws of such states and other jurisdictions as the Representative may designate and to 12 maintain such qualifications in effect for a period of not less than one year from the later of the effective date of the Registration Statement and any Rule 462(b) Registration Statement; provided, however, that the Company shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject. In each jurisdiction in which the Securities have been so qualified, the Company will file such statements and reports as may be required by the laws of such jurisdiction to continue such qualification in effect for a period of not less than one year from the later of the effective date of the Registration Statement and any Rule 462(b) Registration Statement. (g) Rule 158. The Company will timely file such reports pursuant to the 1934 Act as are necessary in order to make generally available to its securityholders as soon as practicable an earnings statement for the purposes of, and to provide the benefits contemplated by, the last paragraph of Section 11(a) of the 1933 Act. (h) Use of Proceeds. The Company will use the net proceeds received by it from the sale of the Securities in the manner specified in the Prospectus under "Use of Proceeds". (i) Listing. The Company will use its best efforts to effect the listing of the Securities on the New York Stock Exchange. (j) Restriction on Sale of Securities. During a period of [90] days from the date of the Prospectus, the Company will not, without the prior written consent of Merrill Lynch, (i) directly or indirectly, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or otherwise transfer or dispose of any share of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock or file any registration statement under the 1933 Act with respect to any of the foregoing or (ii) enter into any swap or any other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of the Common Stock, whether any such swap or transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise. The foregoing sentence shall not apply to (A) the Securities to be sold hereunder, (B) any shares of Common Stock issued by the Company upon the exercise of any option outstanding on the date hereof and referred to in the Prospectus, or (C) any grants pursuant to the Executive At- Risk Compensation Plan duly adopted by the Board of Directors of the Company on January 24, 2001, pursuant to which 4,000,000 shares of Common Stock have been reserved for issuance. (k) Reporting Requirements. The Company, during the period when the Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will file all documents required to be filed with the Commission pursuant to the 1934 Act within the time periods required by the 1934 Act and the rules and regulations of the Commission thereunder. 13 SECTION 4. Payment of Expenses. ------------------- (a) Expenses. The Company will pay all expenses incident to the performance of its obligations under this Agreement, including (i) the preparation, printing and filing of the Registration Statement (including consolidated financial statements and exhibits) as originally filed and of each amendment thereto, (ii) the preparation, printing and delivery to the Underwriters of this Agreement, any Agreement among Underwriters and such other documents as may be required in connection with the offering, purchase, sale, issuance or delivery of the Securities, (iii) the preparation, issuance and delivery of the certificates for the Securities to the Underwriters, including any stock or other transfer taxes and any stamp or other duties payable upon the sale, issuance or delivery of the Securities to the Underwriters, (iv) the fees and disbursements of the Company's counsel, accountants and other advisors, (v) the qualification of the Securities under securities laws in accordance with the provisions of Section 3(f) hereof, including filing fees and the reasonable fees and disbursements of counsel for the Underwriters in connection therewith and in connection with the preparation of the Blue Sky Survey and any supplement thereto, (vi) the printing and delivery to the Underwriters of copies of each preliminary prospectus, any Term Sheets and the Prospectus and any amendments or supplements thereto, (vii) the preparation, printing and delivery to the Underwriters of copies of the Blue Sky Survey and any supplement thereto, (viii) the fees and expenses of any transfer agent or registrar for the Securities and (ix) the fees and expenses incurred in connection with the listing of the Securities on the New York Stock Exchange. (b) Termination of Agreement. If this Agreement is terminated by the Representative in accordance with the provisions of Section 5 or Section 9(a)(i) hereof, the Company shall reimburse the Underwriters for all of their out-of- pocket expenses, including the reasonable fees and disbursements of counsel for the Underwriters. SECTION 5. Conditions of Underwriters' Obligations. The obligations of --------------------------------------- the several Underwriters hereunder are subject to the accuracy of the representations and warranties of the Company contained in Section 1 hereof or in certificates of any officer of the Company or any subsidiary of the Company delivered pursuant to the provisions hereof, to the performance by the Company of its covenants and other obligations hereunder, and to the following further conditions: (a) Effectiveness of Registration Statement. The Registration Statement, including any Rule 462(b) Registration Statement, has become effective and at Closing Time no stop order suspending the effectiveness of the Registration Statement shall have been issued under the 1933 Act or proceedings therefor initiated or threatened by the Commission, and any request on the part of the Commission for additional information shall have been complied with to the reasonable satisfaction of counsel to the Underwriters. A prospectus containing the Rule 430A Information shall have been filed with the Commission in accordance with Rule 424(b) (or a post-effective amendment providing such information shall have been filed and declared effective in accordance with the requirements of Rule 430A) or, if the Company has elected to rely upon Rule 434, a Term Sheet shall have been filed with the Commission in accordance with Rule 424(b). 14 (b) Opinion of Counsel for Company. At Closing Time, the Representative shall have received the favorable opinions, dated as of Closing Time, of Barnes & Thornburg, Indiana counsel for the Company, and Ronald E. Christian, Senior Vice President, General Counsel and Secretary of the Company, in form and substance satisfactory to counsel for the Underwriters, together with signed or reproduced copies of such letters for each of the other Underwriters, to the effect set forth in Exhibits A-1 and A-2 hereto, respectively, and to such further effect as counsel to the Underwriters may reasonably request (including opinions of local counsel with respect to the good standing of Vectren Energy Delivery of Ohio, Inc. and federal regulatory counsel with respect to the Company's exemption from the 1935 Act). Barnes & Thornburg may also state that, insofar as such opinion involves factual matters, they have relied, to the extent they deem proper, upon certificates of officers of the Company and its subsidiaries and certificates of public officials. (c) Opinion of Counsel for Underwriters. At Closing Time, the Representative shall have received the favorable opinion, dated as of Closing Time, of Brown & Wood LLP, counsel for the Underwriters, in form and substance satisfactory to the Representative. In giving such opinion such counsel may rely, as to all matters governed by the laws of jurisdictions other than the law of the State of New York and the federal law of the United States, upon the opinions of counsel satisfactory to the Representative. Such counsel may also state that, insofar as such opinion involves factual matters, they have relied, to the extent they deem proper, upon certificates of officers of the Company and its subsidiaries and certificates of public officials. (d) Officers' Certificate. At Closing Time, there shall not have been, since the date hereof or since the respective dates as of which information is given in the Prospectus, any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business, and the Representative shall have received a certificate of the President or a Vice President of the Company and of the chief financial or chief accounting officer of the Company, dated as of Closing Time, to the effect that (i) there has been no such material adverse change, (ii) the representations and warranties in Section 1(a) hereof are true and correct with the same force and effect as though expressly made at and as of Closing Time, (iii) the Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied at or prior to Closing Time, and (iv) no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are pending or are contemplated by the Commission. (e) Accountant's Comfort Letter. At the time of the execution of this Agreement, the Representative shall have received from Arthur Andersen LLP a letter dated such date, in form and substance satisfactory to the Representative, together with signed or reproduced copies of such letter for each of the other Underwriters, containing statements and information of the type ordinarily included in accountants' "comfort letters" to underwriters with respect to the consolidated financial statements, both historical and pro forma and certain financial information contained in the Registration Statement and the Prospectus. 15 (f) Bring-down Comfort Letter. At Closing Time, the Representative shall have received from Arthur Andersen LLP a letter, dated as of Closing Time, to the effect that they reaffirm the statements made in the letter furnished pursuant to subsection (e) of this Section, except that the specified date referred to shall be a date not more than three business days prior to Closing Time. (g) Consent Letter. At Closing Time, the Representative shall have received from PricewaterhouseCoopers LLP a letter, dated as of the Closing Time, in form and substance satisfactory to the Representative, together with signed or reproduced copies of such letter for each of the other Underwriters, covering the financial statements of the natural gas distribution business of The Dayton Power and Light Company included in the Registration Statement and the Prospectus. (h) Approval of Listing. At Closing Time, the Securities shall have been approved for listing on the New York Stock Exchange, subject only to official notice of issuance (i) Lock-up Agreements. At the date of this Agreement, the Representative shall have received an agreement substantially in the form of Exhibit B hereto signed by the persons listed on Schedule D hereto. (j) Conditions to Purchase of Option Securities. In the event that the Underwriters exercise their option provided in Section 2(b) hereof to purchase all or any portion of the Option Securities, the representations and warranties of the Company contained herein and the statements in any certificates furnished by the Company or any subsidiary of the Company hereunder shall be true and correct as of each Date of Delivery and, at the relevant Date of Delivery, the Representative shall have received: (i) Officers' Certificate. A certificate, dated such Date of --------------------- Delivery, of the President or a Vice President of the Company and of the chief financial or chief accounting officer of the Company confirming that the certificate delivered at the Closing Time pursuant to Section 5(d) hereof remains true and correct as of such Date of Delivery. (ii) Opinion of Counsel for Company. The favorable opinions of ------------------------------ Barnes & Thornburg, Indiana counsel for the Company, and Ronald E. Christian, Senior Vice President, General Counsel and Secretary of the Company, in form and substance satisfactory to counsel for the Underwriters, dated such Date of Delivery, relating to the Option Securities to be purchased on such Date of Delivery and otherwise to the same effect as the opinion required by Section 5(b) hereof. (iii) Opinion of Counsel for Underwriters. The favorable opinion of ----------------------------------- Brown & Wood LLP, counsel for the Underwriters, dated such Date of Delivery, relating to the Option Securities to be purchased on such Date of Delivery and otherwise to the same effect as the opinion required by Section 5(c) hereof. (iv) Bring-down Comfort Letter. A letter from Arthur Andersen LLP, ------------------------- in form and substance satisfactory to the Representative and dated such Date of Delivery, 16 substantially in the same form and substance as the letter furnished to the Representative pursuant to Section 5(f) hereof, except that the "specified date" in the letter furnished pursuant to this paragraph shall be a date not more than three business days prior to such Date of Delivery. (k) Additional Documents. At Closing Time and at each Date of Delivery, counsel for the Underwriters shall have been furnished with such documents and opinions as they may require for the purpose of enabling them to pass upon the issuance and sale of the Securities as herein contemplated, or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the conditions, herein contained; and all proceedings taken by the Company in connection with the issuance and sale of the Securities as herein contemplated shall be satisfactory in form and substance to the Representative and counsel for the Underwriters. (l) Termination of Agreement. If any condition specified in this Section shall not have been fulfilled when and as required to be fulfilled, this Agreement, or, in the case of any condition to the purchase of Option Securities, on a Date of Delivery which is after the Closing Time, the obligations of the several Underwriters to purchase the relevant Option Securities, may be terminated by the Representative by notice to the Company at any time at or prior to Closing Time or such Date of Delivery, as the case may be, and such termination shall be without liability of any party to any other party except as provided in Section 4 and except that Sections 1, 6, 7, 8 and 13 shall survive any such termination and remain in full force and effect. SECTION 6. Indemnification. --------------- (a) Indemnification of Underwriters. The Company agrees to indemnify and hold harmless each Underwriter and each person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows: (i) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), including the Rule 430A Information and the Rule 434 Information, if applicable, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact included in any preliminary prospectus or the Prospectus (or any amendment or supplement thereto), or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; (ii) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission; provided that (subject to 17 Section 6(d) below) any such settlement is effected with the written consent of the Company; and (iii) against any and all expense whatsoever, as incurred (including the fees and disbursements of counsel chosen by Merrill Lynch), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under (i) or (ii) above; provided, however, that this indemnity agreement shall not apply to any -------- ------- loss, liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Company by any Underwriter through Merrill Lynch expressly for use in the Registration Statement (or any amendment thereto), including the Rule 430A Information and the Rule 434 Information, if applicable, or any preliminary prospectus or the Prospectus (or any amendment or supplement thereto). (b) Indemnification of Company, Directors and Officers. Each Underwriter severally agrees to indemnify and hold harmless the Company, its directors, each of its officers who signed the Registration Statement, and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all loss, liability, claim, damage and expense described in the indemnity contained in subsection (a) of this Section, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement (or any amendment thereto), including the Rule 430A Information and the Rule 434 Information, if applicable, or any preliminary prospectus or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with written information furnished to the Company by such Underwriter through Merrill Lynch expressly for use in the Registration Statement (or any amendment thereto) or such preliminary prospectus or the Prospectus (or any amendment or supplement thereto). (c) Actions against Parties; Notification. Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying party of any action commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve such indemnifying party from any liability hereunder to the extent it is not materially prejudiced as a result thereof and in any event shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement. In the case of parties indemnified pursuant to Section 6(a) above, counsel to the indemnified parties shall be selected by Merrill Lynch, and, in the case of parties indemnified pursuant to Section 6(b) above, counsel to the indemnified parties shall be selected by the Company. An indemnifying party may participate at its own expense in the defense of any such action; provided, however, that counsel to the indemnifying party shall not (except with the consent of the indemnified party) also be counsel to the indemnified party. In no event shall the indemnifying parties be liable for fees and expenses of more than one counsel (in addition to any 18 local counsel) separate from their own counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances. No indemnifying party shall, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever in respect of which indemnification or contribution could be sought under this Section 6 or Section 7 hereof (whether or not the indemnified parties are actual or potential parties thereto), unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party from all liability arising out of such litigation, investigation, proceeding or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party. (d) Settlement without Consent if Failure to Reimburse. If at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by Section 6(a) (ii) effected without its written consent if (i) such settlement is entered into more than 45 days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall have received notice of the terms of such settlement at least 30 days prior to such settlement being entered into and (iii) such indemnifying party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement. SECTION 7. Contribution. If the indemnification provided for in Section 6 ------------ hereof is for any reason unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying party shall contribute to the aggregate amount of such losses, liabilities, claims, damages and expenses incurred by such indemnified party, as incurred, (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other hand from the offering of the Securities pursuant to this Agreement or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and of the Underwriters on the other hand in connection with the statements or omissions which resulted in such losses, liabilities, claims, damages or expenses, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other hand in connection with the offering of the Securities pursuant to this Agreement shall be deemed to be in the same respective proportions as the total net proceeds from the offering of the Securities pursuant to this Agreement (before deducting expenses) received by the Company and the total underwriting discount received by the Underwriters, in each case as set forth on the cover of the Prospectus, or, if Rule 434 is used, the corresponding location on the Term Sheet, bear to the aggregate initial public offering price of the Securities as set forth on such cover. The relative fault of the Company on the one hand and the Underwriters on the other hand shall be determined by reference to, among other things, whether any such untrue or 19 alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or by the Underwriters and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 7. The aggregate amount of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred to above in this Section 7 shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged omission. Notwithstanding the provisions of this Section 7, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of any such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 7, each person, if any, who controls an Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as such Underwriter, and each director of the Company, each officer of the Company who signed the Registration Statement, and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as the Company. The Underwriters' respective obligations to contribute pursuant to this Section 7 are several in proportion to the number of Initial Securities set forth opposite their respective names in Schedule A hereto and not joint. SECTION 8. Representations, Warranties and Agreements to Survive Delivery. -------------------------------------------------------------- All representations, warranties and agreements contained in this Agreement or in certificates of officers of the Company or any of its subsidiaries submitted pursuant hereto, shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of any Underwriter or controlling person, or by or on behalf of the Company, and shall survive delivery of the Securities to the Underwriters. 20 SECTION 9. Termination of Agreement. ------------------------ (a) Termination; General. The Representative may terminate this Agreement, by notice to the Company, at any time at or prior to Closing Time (i) if there has been, since the time of execution of this Agreement or since the respective dates as of which information is given in the Prospectus, any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business, or (ii) if there has occurred any material adverse change in the financial markets in the United States or the international financial markets, any outbreak of hostilities or escalation thereof or other calamity or crisis or any change or development involving a prospective change in national or international political, financial or economic conditions, in each case the effect of which is such as to make it, in the judgment of the Representative, impracticable to market the Securities or to enforce contracts for the sale of the Securities, or (iii) if trading in any securities of the Company, Indiana Gas Company, Inc. or Southern Indiana Gas and Electric Company has been suspended or materially limited by the Commission or a national securities exchange or if trading generally on the American Stock Exchange or the New York Stock Exchange or in the Nasdaq National Market has been suspended or materially limited, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices have been required, by any of said exchanges or by such system or by order of the Commission, the National Association of Securities Dealers, Inc. or any other governmental authority, or (iv) if a banking moratorium has been declared by either Federal or New York authorities. (b) Liabilities. If this Agreement is terminated pursuant to this Section, such termination shall be without liability of any party to any other party except as provided in Section 4 hereof, and provided further that Sections 1, 6, 7, 8 and 13 shall survive such termination and remain in full force and effect. SECTION 10. Default by One or More of the Underwriters. If one or more of ------------------------------------------ the Underwriters shall fail at Closing Time or a Date of Delivery to purchase the Securities which it or they are obligated to purchase under this Agreement (the "Defaulted Securities"), the Representative shall have the right, within 24 hours thereafter, to make arrangements for one or more of the non-defaulting Underwriters, or any other underwriters, to purchase all, but not less than all, of the Defaulted Securities in such amounts as may be agreed upon and upon the terms herein set forth; if, however, the Representative shall not have completed such arrangements within such 24-hour period, then: (a) if the number of Defaulted Securities does not exceed 10% of the number of Securities to be purchased on such date, each of the non- defaulting Underwriters shall be obligated, severally and not jointly, to purchase the full amount thereof in the proportions that their respective underwriting obligations hereunder bear to the underwriting obligations of all non-defaulting Underwriters, or (b) if the number of Defaulted Securities exceeds 10% of the number of Securities to be purchased on such date, this Agreement or, with respect to any Date of Delivery which occurs after the Closing Time, the obligation of the Underwriters to 22 purchase and of the Company to sell the Option Securities to be purchased and sold on such Date of Delivery shall terminate without liability on the part of any non-defaulting Underwriter. No action taken pursuant to this Section shall relieve any defaulting Underwriter from liability in respect of its default. In the event of any such default which does not result in a termination of this Agreement or, in the case of a Date of Delivery which is after the Closing Time, which does not result in a termination of the obligation of the Underwriters to purchase and the Company to sell the relevant Option Securities, as the case may be, either the Representative or the Company shall have the right to postpone Closing Time or the relevant Date of Delivery, as the case may be, for a period not exceeding seven days in order to effect any required changes in the Registration Statement or Prospectus or in any other documents or arrangements. As used herein, the term "Underwriter" includes any person substituted for an Underwriter under this Section 10. SECTION 11. Notices. All notices and other communications hereunder shall ------- be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the Underwriters shall be directed to the Representative at North Tower, World Financial Center, New York, New York 10281-1201, attention of Charles J. Murphy; and notices to the Company shall be directed to it at 20 N.W. Fourth Street, Evansville, Indiana 47741, attention of Jerry A. Benkert. SECTION 12. Parties. This Agreement shall each inure to the benefit of and ------- be binding upon each of the Underwriters and the Company and their respective successors. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or corporation, other than the Underwriters and the Company and their respective successors and the controlling persons and officers and directors referred to in Sections 6 and 7 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained. This Agreement and all conditions and provisions hereof are intended to be for the sole and exclusive benefit of the Underwriters and the Company and their respective successors, and said controlling persons and officers and directors and their heirs and legal representatives, and for the benefit of no other person, firm or corporation. No purchaser of Securities from any Underwriter shall be deemed to be a successor by reason merely of such purchase. SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY ---------------------- AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME. SECTION 14. Effect of Headings. The Article and Section headings herein ------------------ and the Table of Contents are for convenience only and shall not affect the construction hereof. 22 If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement between the Underwriters and the Company in accordance with its terms. Very truly yours, VECTREN CORPORATION By:_____________________________________ Name: Title: CONFIRMED AND ACCEPTED, as of the date first above written: MERRILL LYNCH & CO. Merrill Lynch, Pierce, Fenner & Smith Incorporated CREDIT SUISSE FIRST BOSTON CORPORATION By: MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED By _______________________________ Authorized Signatory For itself and as Representative of the other Underwriters named in Schedule A hereto. 23 SCHEDULE A Number of Name of Underwriter Initial Securities ------------------- ------------------- Merrill Lynch, Pierce, Fenner & Smith Incorporated....................................... Credit Suisse First Boston Corporation.................... A.G. Edwards & Sons, Inc. Edward D. Jones & Co., L.P. UBS Warburg LLC ____________________ Total..................................................... ==================== Sch A - 1 SCHEDULE B VECTREN CORPORATION Significant Subsidiaries Sch B - 1 SCHEDULE C VECTREN CORPORATION Common Stock (No Par Value Per Share) 1. The initial public offering price per share for the Securities, determined as provided in said Section 2, shall be $.. 2. The purchase price per share for the Securities to be paid by the several Underwriters shall be $., being an amount equal to the initial public offering price set forth above less $. per share; provided that the purchase price per share for any Option Securities purchased upon the exercise of the over-allotment option described in Section 2(b) shall be reduced by an amount per share equal to any dividends or distributions declared by the Company and payable on the Initial Securities but not payable on the Option Securities. Sch C - 1 SCHEDULE D [List of persons and entities subject to lock-up] Sch D - 1 Exhibit A-1 FORM OF OPINION OF COMPANY'S COUNSEL TO BE DELIVERED PURSUANT TO SECTION 5(b) Based upon the foregoing and subject to the exceptions hereinafter set forth, we are of the opinion that: (i) The Company has been duly incorporated and is validly existing as a corporation under the laws of the State of Indiana. (ii) The Company has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus and to enter into and perform its obligations under the Agreement. (iii) The Company is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not result in a Material Adverse Effect. (iv) The authorized, issued and outstanding capital stock of the Company is as set forth in the Prospectus in the column entitled "Actual" under the caption "Capitalization" (except for subsequent issuances, if any, pursuant to the Agreement or pursuant to the exercise of convertible securities or options referred to in the Prospectus); all of the issued and outstanding shares of capital stock of the Company have been duly authorized and validly issued and are fully paid and non-assessable; and none of the outstanding shares of capital stock of the Company was issued in violation of the preemptive or other similar rights of any securityholder of the Company. (v) The Shares have been duly authorized for issuance and sale to the Underwriters pursuant to the Agreement and, when issued and delivered by the Company pursuant to the Agreement against payment of the consideration set forth in the Agreement, will be validly issued and fully paid and non-assessable; no holder of the Securities is or will be subject to personal liability by reason of being such a holder; and the Shares conform to the description thereof contain in the Prospectus. (vi) The issuance of the Shares is not subject to preemptive or other similar rights of any securityholder of the Company. (vii) The Rights Agreement has been duly authorized, executed and delivered by the Company and constitutes a valid and legally binding agreement, enforceable against the Company in accordance with its terms, subject, as to enforceability, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors' rights and to general equity principles; the Rights under the Shareholder Rights Plan to which holders of the A-1 Securities will be entitled have been duly authorized and will be validly issued; and the Rights conform to the description thereof contained in the Prospectus. (viii) Each of the Subsidiaries of the Company (with the exception of Vectren Energy Delivery of Ohio, Inc.) has been duly incorporated and is validly existing as a corporation under the laws of the jurisdiction of its incorporation, has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus and is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing, where applicable, would not result in a Material Adverse Effect; except as otherwise disclosed in the Prospectus, all of the issued and outstanding shares of capital stock of each Subsidiary have been duly authorized and validly issued, are fully paid and non-assessable and, to the best of our knowledge, are owned by the Company, directly or through subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity; and none of the outstanding shares of capital stock of any Subsidiary was issued in violation of the preemptive or similar rights of any securityholder of such Subsidiary. (ix) The Agreement has been duly authorized, executed and delivered by the Company. (x) The Registration Statement, including any Rule 462(b) Registration Statement, has been declared effective under the 1933 Act; any required filing of the Prospectus pursuant to Rule 424(b) has been made in the manner and within the time period required by Rule 424(b); and, to the best of our knowledge, no stop order suspending the effectiveness of the Registration Statement has been issued under the 1933 Act and no proceedings for that purpose have been instituted or are pending or threatened by the Commission. (xi) The Registration Statement, including any Rule 462(b) Registration Statement, the Rule 430A Information and the Rule 434 Information, as applicable, the Prospectus, excluding the documents incorporated by reference therein, and each amendment to the Registration Statement and amendment or supplement to the Prospectus, as of their respective effective or issue dates (other than financial statements and related schedules, financial data and statistical information included therein or omitted therefrom, as to which we express no opinion), complied as to form in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations. (xii) The documents incorporated by reference in the Prospectus (other than the financial statements and related schedules, financial data and statistical information included therein or omitted therefrom, as to which we need express no opinion), when they were filed with the Commission, complied as to form in all material respects with the requirements of the 1934 Act and the rules and regulations of the Commission thereunder. (xiii) If Rule 434 has been relied upon, the Prospectus was not "materially different," as such term is used in Rule 434, from the prospectus included in the Registration Statement at the time it became effective. A-2 (xiv) The form of certificate used to evidence the Shares complies in all material respects with all applicable statutory requirements, with any applicable requirements of the charter and by-laws of the Company and the requirements of the New York Stock Exchange. (xv) To the best of our knowledge, except as otherwise disclosed in the Registration Statement and Prospectus, there is not pending or threatened any action, suit, proceeding, inquiry or investigation, to which the Company or any subsidiary is a party, or to which the property of the Company or any subsidiary is subject, before or brought by any court or governmental agency or body, domestic or foreign, which may reasonably be expected to result in a Material Adverse Effect, or which might reasonably be expected to materially and adversely affect the assets, properties or operations thereof, taken as a whole, or the consummation of the transactions contemplated in the Agreement or the performance by the Company of its obligations thereunder. (xvi) The information in the Prospectus under "Description of Stock" and in the Registration Statement under Item 15, to the extent that it constitutes matters of law, summaries of legal matters, the Company's charter and by-laws or legal proceedings, or legal conclusions, has been reviewed by us and is correct in all material respects. (xvii) All descriptions in the Registration Statement and the Prospectus of contracts and other documents to which the Company or its subsidiaries are a party are accurate in all material respects. (xviii) To the best of our knowledge, neither the Company nor any subsidiary is in violation of its charter or by-laws. Based solely on inquiries we have made of the Company's Executive Vice President/Chief Financial Officer, Senior Vice President/General Counsel/Secretary, Vice President/Treasurer and Vice President/Controller, and on the officer's certificate attached hereto as Schedule B, no default by the Company or any ---------- exists in the due performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, loan agreement, note, lease or other agreement or instrument that is described or referred to in the Registration Statement or the Prospectus or filed or incorporated by reference as an exhibit to the Registration Statement, except for defaults which would not have a Material Adverse Effect. (xix) The execution, delivery and performance of the Agreement and the consummation of the transactions contemplated in the Agreement and in the Registration Statement (including the issuance and sale of the Shares and the use of the proceeds from the sale of the Shares as described in the Prospectus under the caption "Use Of Proceeds") and compliance by the Company with its obligations under the Agreement do not and will not, whether with or without the giving of notice or lapse of time or both, conflict with or constitute a breach of, or a default or Repayment Event under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any Subsidiary pursuant to, any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or any other agreement or instrument, known to us, to which the Company or any Subsidiary is a party or by which it or any of them may be bound, or to which any of the property or assets of the Company or any Subsidiary is subject, nor will such action result in any violation of the provisions of the charter or by-laws of the Company or any Subsidiary, or any applicable law, statute, rule, A-3 regulation, judgment, order, writ or decree, known to us, of any government, government instrumentality or court, domestic or foreign, having jurisdiction over the Company or any Subsidiary or any of their respective assets, properties, or operations. (xx) The Company is not an "investment company" or an entity "controlled" by an "investment company," as such terms are defined in the 1940 Act. (xxi) No filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any court or governmental authority or agency, domestic or foreign (other than under the 1933 Act and the 1933 Act Regulations, which have been obtained, or as may be required under the securities or blue sky laws of the various states, as to which we need express no opinion) is necessary or required in connection with the due authorization, execution and delivery of the Agreement or for the offering, issuance or sale of the Shares. (xxii) Further, although we are not passing upon and do not assume any responsibility for, the accuracy and completeness of the statements (except as covered by (v), (vii), (xvi) and (xvii)) contained in the Registration Statement, Prospectus, or any amendment or supplement thereto, including the Rule 430A Information and Rule 434 Information (if applicable), we advise you, on the basis of the discussions and inquiries concerning various legal and related subjects and reviews of and reports on certain corporate records, documents and proceedings and conferences with representatives of the Company at which certain portions of the Registration Statement and the Prospectus were discussed (relying as to materiality to a certain extent upon the opinions and representations of the Company), no facts have come to our attention that would lead us to believe that the Registration Statement or any amendment thereto (other than the financial statements and related schedules, financial data or statistical information included in such financial statements or omitted therefrom as to which we express no opinion), at the time such Registration Statement or any such amendment became effective, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that the Prospectus or any amendment or supplement thereto (other than the financial statements and related schedules, financial data or statistical information included in such financial statements or omitted therefrom as to which we express no opinion), at the time the Prospectus was issued, at the time any such amendment or supplement was issued or at the date hereof, included or includes an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. In rendering such opinion, such counsel may rely as to matters of fact (but not as to legal conclusions), to the extent they deem proper, on certificates of responsible officers of the Company and public officials. Such opinion shall not state that it is to be governed or qualified by, or that it is otherwise subject to, any treatise, written policy or other document relating to legal opinions, including, without limitation, the Legal Opinion Accord of the ABA Section of Business Law (1991). A-4 Exhibit A-2 FORM OF OPINION OF COMPANY'S GENERAL COUNSEL TO BE DELIVERED PURSUANT TO SECTION 5(b) Based upon the foregoing and subject to the exceptions hereinafter set forth, I am of the opinion that: (i) To the best of my knowledge, there are no franchises, contracts, indentures, mortgages, loan agreements, notes, leases or other instruments required to be described or referred to in the Registration Statement or the Prospectus or to be filed as exhibits thereto other than those described or referred to therein or filed or incorporated by reference as exhibits thereto, and the descriptions thereof or references thereto are correct in all material respects. (ii) To the best of my knowledge, neither the Company nor any subsidiary is in violation of its charter or by-laws and no default by the Company or any subsidiary exists in the due performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, loan agreement, note, lease or other agreement or instrument that is described or referred to in the Registration Statement or the Prospectus or filed or incorporated by reference as an exhibit to the Registration Statement, except for defaults which individually or in the aggregate would not have a Material Adverse Effect. A-5 FORM OF LOCK-UP FROM DIRECTORS, OFFICERS OR OTHER STOCKHOLDERS PURSUANT TO SECTION 5(i) Exhibit B February ., 2001 MERRILL LYNCH & CO. Merrill Lynch, Pierce, Fenner & Smith Incorporated as Representative of the several Underwriters to be named in the within-mentioned Purchase Agreement c/o Merrill Lynch & Co. Merrill Lynch, Pierce, Fenner & Smith Incorporated North Tower World Financial Center New York, New York 10281-1209 Re: Proposed Public Offering by Vectren Corporation ----------------------------------------------- Dear Sirs: The undersigned, a [director] [executive officer] [5% stockholder] of Vectren Corporation, an Indiana corporation (the "Company"), understands that Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), as representative of the several underwriters, propose to enter into a Purchase Agreement (the "Purchase Agreement") with the Company providing for the public offering of shares (the "Securities") of the Company's common stock, no par value per share (the "Common Stock"). In recognition of the benefit that such an offering will confer upon the undersigned as a [director] [executive officer] [5% stockholder] of the Company, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned agrees with each underwriter that, during a period of [90] days from the date of the Purchase Agreement, the undersigned will not, without the prior written consent of Merrill Lynch, directly or indirectly, (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant for the sale of, or otherwise dispose of or transfer any shares of the Company's Common Stock or any securities convertible into or exchangeable or exercisable for Common Stock, whether now owned or hereafter acquired by the undersigned or with respect to which the undersigned has or hereafter acquires the power of disposition, or file any registration statement under the Securities Act of 1933, as amended, with respect to any of the foregoing or (ii) enter into any swap or any other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of the Common Stock, whether any such swap or transaction is to be settled by delivery of Common Stock or other securities, in cash or otherwise. B-1 Very truly yours, Signature:_____________________________ Print Name:____________________________ B-2 EX-23.1 3 0003.txt CONSENT OF ARTHUR ANDERSEN LLP Exhibit 23.1 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference in this Registration Statement of our report dated June 30, 2000 included in Vectren Corporation's Form 8-K filed on July 11, 2000 and to all references to our Firm included in this Registration Statement. ARTHUR ANDERSEN LLP Indianapolis, Indiana, January 29, 2001. EX-23.2 4 0004.txt CONSENT OF PRICEWATERHOUSECOOPER LLP Exhibit 23.2 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in this Registration Statement on Form S-3 of our report dated December 15, 2000 relating to the financial statements of The Dayton Power and Light Company's natural gas retail distribution business as of December 31, 1999 and for the year then ended, which appears in Vectren Corporation's Current Report on Form 8-K dated January 16, 2001. We also consent to the reference to us under the heading "Experts" in such Registration Statement. PricewaterhouseCoopers LLP Dayton, Ohio January 29, 2001 -----END PRIVACY-ENHANCED MESSAGE-----