EX 99-2
VECTREN CORPORATION
AT RISK COMPENSATION PLAN
NON-QUALIFIED STOCK OPTION AGREEMENT
(OFFICER)
Name of Grantee: ____________________________ No. of Shares:________________
Date of Grant: January 1, 2005 Price per Share:______________
This Non-Qualified Stock Option Agreement (this "Agreement") by and between
VECTREN CORPORATION ("Vectren") and the Grantee named above (the "Grantee")
evidences the grant, by Vectren, of a Non-Qualified Stock Option to the Grantee
on the date stated above (the "Date of Grant") and the Grantee's acceptance of
such option in accordance with the provisions of the Vectren Corporation At Risk
Compensation Plan (the "Plan"). Vectren and the Grantee agree as follows:
1. Shares Optioned and Option Prices. The Grantee is hereby granted a
Non-Qualified Stock Option to purchase the number of shares of Common
Stock, without par value, of Vectren (the "Shares") stated above at
the price per Share stated above, subject to the terms and conditions
of this Agreement and the Plan (the "Option"). The Option is not
intended to be a tax qualified option (within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended (the "Code")).
2. Exercise Period. The term of the Option is a period of ten (10) years
from the Date of Grant (the "Option Term"), subject to earlier
termination as provided below. Except as otherwise provided below, the
Option becomes exercisable with respect to the first 34 percent of the
Shares of Common Stock covered by the Option on and after January 1,
2006 (the "Lift Date"). Thereafter, one-half of the remaining Shares
of Common Stock covered by the Option will become exercisable on the
first anniversary of the Lift Date, and the remainder of the Shares of
Common Stock covered by the Option will become exercisable on the
second anniversary of the Lift Date. When the Option becomes
exercisable with respect to any Shares, those Shares may be purchased
at any time, or from time to time, in whole or in part, until the
Option Term expires, but in no case may fewer than 50 Shares be
purchased at any one time, except to purchase a residue of fewer than
50 Shares. Notwithstanding the above, the Compensation Committee of
the Vectren Board of Directors (the "Committee") may at any time waive
the exercise restrictions contained in this paragraph 2.
3. Termination, Retirement, Death, Disability or Change in Control.
Notwithstanding the provisions of paragraph 2 above:
(a) In the event of a Grantee's death, Disability or Retirement (as
defined in the Plan), or in the event of a Change in Control of
Vectren (as defined in the Plan), Options granted to the Grantee shall
be considered immediately vested and shall be exercisable at such time
as specified in Paragraph 2 of this Option Agreement.
(b) Subject to Article X of the Plan, in the event the Grantee resigns or
is terminated from the Company, Options which have not vested by such
date shall be forfeited, and the Grantee shall have three months from
such date to exercise vested Options (but not beyond the expiration of
the term of the Option, if earlier). Notwithstanding the foregoing, if
the Grantee is terminated from the Company for Cause (as defined in
Section 10.4 of the Plan), the Grantee shall be required to exercise
any vested Options immediately, and any vested Options not immediately
exercised shall lapse.
(c) Notwithstanding the foregoing provisions of this paragraph 3, the
Option shall not in any event be exercisable after the tenth
anniversary of the Date of Grant.
4. Exercise. The Option may be exercised by the Grantee (or, in the case
of the death of the Grantee, by the person or persons to whom the
Option was transferred by will or the laws of descent and
distribution) by delivering or mailing written notice of the exercise
and full payment of the purchase price to the Secretary of Vectren.
The written notice shall be signed by each person entitled to exercise
the Option and shall specify the address and social security number of
each such person. If any person other than the Grantee purports to be
entitled to exercise all or any portion of the Option, the written
notice shall be accompanied by proof, satisfactory to the Secretary of
Vectren, of that entitlement. The written notice shall be accompanied
by full payment in immediately available funds or, if consented to by
the Committee, in Shares (which have been held by him or her for at
least six (6) months) represented by certificates transferring
ownership to Vectren and with an aggregate fair market value (as
determined by the Committee pursuant to the requirements of Section
422 of the Code) equal to the purchase price on the date the written
notice is received by the Secretary, or in any combination of cash and
such Shares; provided, however, that to the extent consented to by the
Committee, the Option may be exercised by delivering a properly
executed exercise note together with irrevocable instructions to a
broker to deliver promptly to the Corporation the total option price
in cash and, if desired, the amount of any taxes to be withheld from
his or her compensation as a result of the withholding tax obligation
of the Corporation or any of the Subsidiaries. The written notice will
be effective and the Option shall be deemed exercised to the extent
specified in the notice on the date that the written notice (together
with the required accompaniments) is received by the Secretary of
Vectren at its then executive offices during regular business hours.
5. Transfer of Shares Upon Exercise. As soon as practicable after receipt
of an effective written notice of exercise and full payment of the
purchase price as provided in paragraph 4, the Secretary of Vectren
shall cause ownership of the appropriate number of Shares to be
transferred to the person or persons exercising the Option by having a
certificate or certificates for those Shares registered in the name of
such person or persons and shall have such certificate delivered to
the appropriate person; provided, however, that if the Grantee elects
to have Shares withheld to meet tax withholding requirements with the
Committee's approval, the number of Shares issued shall be
appropriately reduced. Notwithstanding the foregoing, if Vectren or a
Subsidiary requires reimbursement of any tax required by law to be
withheld with respect to Shares, the Secretary shall not transfer
ownership of those Shares until the required payment is made.
6. Transferability. The rights under this Agreement may not be
transferred except by will or the laws of descent and distribution,
except that this Agreement may be transferred by the Grantee to a
revocable trust, or any other trust qualifying as a "grantor trust"
under Sections 671-677 of the Internal Revenue Code of 1986, as
amended, to be held during the lifetime of the Grantee for his or her
benefit. The rights under this Agreement may be exercised during the
lifetime of the Grantee only by the Grantee.
7. Authorized Leave. Authorized leaves of absence from Vectren or a
Subsidiary shall not constitute a termination of employment for
purposes of this Agreement.
8. Compliance With Rule 144. The transfer of Shares to the Grantee
receives upon the exercise of the Option will have been registered
under the Securities Act of 1933, as amended (the "1933 Act"). If the
Grantee is an "affiliate" of the Company, as that term is defined in
Rule 144, promulgated pursuant to the 1933 Act ("Rule 144"), the
Grantee may not sell the Shares received upon the exercise of the
Option except in compliance with Rule 144. Certificates representing
Shares issued to an "affiliate" of the Company may bear a legend
setting forth such restrictions on the disposition or transfer of the
Shares as the Company deems appropriate to comply with federal and
state securities laws.
9. No Right to Continued Service. Nothing in this Agreement shall be
deemed to confer on the Grantee any right to continue in the employ of
Vectren or the Subsidiaries or to affect any rights of Vectren, a
Subsidiary, or the shareholders of Vectren to terminate the service of
the Grantee at any time.
10. The Plan. The Option and this Agreement are subject to all the terms,
provisions and conditions of the Plan, which is incorporated herein by
reference, and to such regulations as may from time to time be adopted
by the Committee. A copy of the Plan has been furnished to the Grantee
with the execution of this Agreement and an additional copy may be
obtained from Vectren at any time. In the event of any conflict
between the provisions of the Plan and the provisions of this
Agreement, the terms, conditions and provisions of the Plan shall
control, and this Agreement shall be deemed to be modified
accordingly.
11. Other Plans. The Grantee acknowledges that any income derived from the
sale of the Shares will not affect the Grantee's participation in, or
benefits under, any other benefit plan maintained by Vectren.
12. Notices. All notices by the Grantee or his or her assigns to Vectren
shall be addressed to Vectren Corporation, P.O. Box 209, 20 N.W.
Fourth Street, Evansville, Indiana 47702, Attention: Corporate
Secretary, or such other address as Vectren may, from time to time,
specify.
IN WITNESS WHEREOF, Vectren, by its duly authorized officer, and the
Grantee have executed this Agreement as of the 1st day of January, 2005.
VECTREN CORPORATION
By: ___________________________________________
Its: Duly Authorized Signatory on behalf of the
Compensation and Benefits Committee
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, Grantee