SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2000
A. Full Title of the Plan and the Address of the Plan, if Different from that of
the Issuer named below:
Vectren Corporation Retirement Savings Plan
B. Name of issuer of the Securities Held Pursuant to the Plan and the Address of
its Principal Executive Officer:
Vectren Corporation
20 N.W. Fourth Street
Evansville, Indiana 47714
VECTREN CORPORATION
RETIREMENT SAVINGS PLAN
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE
WITH REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TABLE OF CONTENTS
Page
Report of Independent Public Accountants ...............................1
Statements of Net Assets Available for Benefits.........................2
Statements of Changes in Net Assets Available
for Benefits........................................................3
Notes to Financial Statements..........................................4-9
Schedule H - Schedule of Assets Held for Investment
Purposes .............................................................10
Signatures.............................................................11
Exhibit 23.............................................................12
Note: The accompanying financial statements have been prepared for the
purpose of filing with Form 5500. Supplemental schedules required by
the Department of Labor's rules and regulations for reporting and
disclosure under the Employee Retirement Income Security Act of 1974,
other than the schedule listed above, are omitted because of the
absence of the conditions under which they are required.
1
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Vectren Corporation
Investment Committee:
We have audited the accompanying statements of net assets available for benefits
of the VECTREN CORPORATION RETIREMENT SAVINGS PLAN as of December 31, 2000 and
1999, and the related statements of changes in net assets available for benefits
for the years then ended. These financial statements and the supplemental
schedule referred to below are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements and the
schedule based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 2000 and 1999, and the changes in net assets available for benefits
for the years then ended, in conformity with accounting principles generally
accepted in the United States.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
for investment purposes is presented for the purpose of additional analysis and
is not a required part of the basic financial statements but is supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The supplemental schedule has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
ARTHUR ANDERSEN LLP
Indianapolis, Indiana,
June 8, 2001.
2
VECTREN CORPORATION
RETIREMENT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 2000 AND 1999
2000 1999
----------- -----------
ASSETS:
Cash $ 115,475 $ -
Investments, at market value (Note 2)-
Vectren Corporation Common Stock Fund 35,564,177 -
Indiana Energy, Inc. Common Stock Fund - 25,585,771
Common trust fund 10,370,511 9,176,232
Mutual funds 43,099,318 37,328,943
Participants' loans 2,595,062 2,534,279
----------- -----------
Total investments 91,629,068 74,625,225
Receivables-
Employer contribution 129,400 27,042
Employee contributions 421,904 62,110
----------- -----------
Total receivables 551,304 89,152
----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $92,295,847 $74,714,377
=========== ===========
The accompanying notes to financial statements and schedule are an integral part
of these statements.
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VECTREN CORPORATION
RETIREMENT SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999
2000 1999
------------ ------------
ADDITIONS:
Investment income-
Interest income $ 206,123 $ 224,930
Dividend income 5,018,091 4,277,932
Net appreciation (depreciation) of
investments 6,936,002 (7,884,851)
Other income, net 60,909 86
------------ ------------
Total investment income (loss) 12,221,125 (3,381,903)
Contributions-
Employee 6,382,352 3,119,696
Employer 2,151,076 1,355,598
Transfer from 401(k) Plan for Salaried
Employees of Southern Indiana Gas
and Electric Company (Note 1) 6,479,727 -
Transfers from other plans (Note 1) 35,335 -
------------ ------------
Total contributions 15,048,490 4,475,294
DEDUCTIONS:
Distribution of benefits to participants (9,688,145) (5,846,262)
------------ ------------
Net increase (decrease) 17,581,470 (4,752,871)
NET ASSETS AVAILABLE FOR PLAN BENEFITS
Beginning of year 74,714,377 79,467,248
------------ ------------
End of year $ 92,295,847 $ 74,714,377
============ ============
The accompanying notes to financial statements and schedule are an integral part
of these statements.
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VECTREN CORPORATION
RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF THE PLAN
a. General
The Vectren Corporation Retirement Savings Plan (the Plan), formerly the Indiana
Energy, Inc. Retirement Savings Plan is a defined contribution plan subject to
the provisions of the Employee Retirement Income Security Act of 1974 (ERISA) as
amended. The Plan's sponsor is Vectren Corporation (the Company). The Plan The
Company serves as the plan administrator. An Investment Committee (Plan
Committee) has been appointed by the Board of Directors of the Company to
administer the Plan. Further details of the Plan are provided in the Summary
Plan Description which has been distributed to all plan participants.
On March 31, 2000, Indiana Energy, Inc. (Indiana Energy) and SIGCORP, Inc.
completed a merger to form a new holding company named Vectren Corporation
(Vectren). As provided for in the merger agreement, Indiana Energy shareholders
received one share of Vectren common stock for each share of Indiana Energy held
at the March 31, 2000 closing date. SIGCORP, Inc. shareholders received 1.333
shares of Vectren common stock for each share of SIGCORP, Inc. held at the March
31, 2000 closing date.
As a result of the merger, shares of Indiana Energy held by the Plan in the
Indiana Energy, Inc. Common Stock Fund were converted on a one for one basis
into shares of Vectren. As a result of the merger, the Indiana Energy, Inc.
Investment Committee was renamed the Vectren Corporation Investment Committee.
On April 1, 2000, the Plan was renamed the Vectren Corporation Retirement
Savings Plan. On July 1, 2000, the Plan was restated and amended to merge the
following plans: the 401(k) Plan for Salaried Employees of Southern Indiana Gas
and Electric Company, the SIGCORP, Inc. 401(k) Profit Sharing Plan, and the
SIGECO Advanced Communication, Inc. Non-Standardized 401(k) Profit Sharing Plan.
The Plan was restated again on October 1, 2000 to allow Southern Indiana Gas and
Electric Company Bargaining Unit Employees and Vectren Energy Delivery of Ohio,
Inc. employees to participate in the Plan.
The following companies have elected to participate in the Plan through approval
by their respective Board of Directors: Vectren Corporation, Indiana Gas
Company, Inc., IGC Energy, Inc., IEI Investments, Inc., IEI Services, LLC, IEI
Financial Services, LLC, Southern Indiana Gas and Electric Company, SIGECO
Advanced Communication, Inc., Vectren Energy Delivery of Ohio, Inc., and Vectren
Utility Holdings, Inc.
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b. Participation
Effective January 1, 1999, participation in the Plan is limited to those
employees not covered by a collective bargaining agreement who have completed
at least one hour of service and are expected to complete 1,000 hours of
service during their first 12 months of employment. Employees that are not
expected to meet the 1,000 hours of service threshold are eligible to
participate after completing one year of service. Employees covered by a
collective bargaining agreement become eligible to participate upon the
completion of 1,000 hours of service or are employed for six months, whichever
occurs first. Each participant's account is adjusted daily for contributions,
withdrawals, distributions, income earned, changes in the value of trust
fund assets and expenses directly related to investment transactions.
c. Contributions and Vesting
Plan participants may elect to contribute from 1% to 19%, in whole percentages,
of their eligible compensation. All participants' contributions are fully
vested. The Company matches 100% of the first 6% of eligible compensation
contributed by non-bargaining unit employees who were Indiana Energy employees
prior to March 31, 2000. The Company matches 50% of the first 6% of eligible
compensation contributed by non-bargaining unit employees who were not employed
by Indiana Energy or its subsidiaries prior to March 31, 2000. Effective July 1,
2000, the Company will additionally contribute an amount equal to 3% of
non-bargaining unit employees compensation for employees who were not employed
by Indiana Energy prior to March 31, 2000.
The Company matches 50% of the first 4% of eligible compensation contributed by
bargaining unit employees. The Company's matching contribution for bargaining
unit employees covered under the Utility Workers Union of America, Local 175
(UWUA) agreement is limited to $1,000 per year. Additionally, the Company will
contribute an annual contribution for employees covered under the UWUA of $900,
which increases annually as defined in the Plan document. Employees covered by a
collective bargaining unit agreement may additionally contribute 100% of any
payout under the Performance Incentive Plan and any guaranteed annual payment
earned by the employee, although no employer matching contribution will be made
on these contributions.
Contributions are subject to maximum limitations as defined in the Internal
Revenue Code (the Code) and are invested in 5% increments in the Vectren
Corporation Common Stock Fund, one common trust fund and seven mutual funds, as
directed by participants.
Non-bargaining unit employees who were not employees of Indiana Energy prior to
March 31, 2000 vest over 5 years of service in 20% increments in employer
matching contributions. These employees vest in discretionary employer
contributions after 5 years of service. All other employees, including
bargaining unit employees and non-bargaining unit employees who were employed by
Indiana Energy prior to March 31, 2000 are fully vested in all employer
contributions after 5 years of service.
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d. Distributions
Upon termination, retirement, or disability, a participant has the option to
receive a lump sum distribution or periodic installments over a period not to
exceed 10 years, unless benefits are less than $5,000. If benefits are less than
$5,000, the participant is required to receive a lump sum distribution. If a
lump sum distribution is received, the participant may defer immediate taxation
by rolling over the amount into a qualified plan or an individual retirement
account (IRA). Also, if a lump sum distribution is received, the participant or
beneficiary may elect to receive investments in the Vectren Corporation Common
Stock Fund in whole shares with fractional shares paid in cash.
Upon death of a participant, the beneficiary will continue to receive benefits
if the participant had already began receiving benefit payments. If the
participant had not began receiving benefit payments, the beneficiary will
receive a lump sum distribution of the participant's account balance within 5
years of the participant's death unless an election was made to distribute the
participant's account balance in equal installments over a period not greater
than 10 years to the beneficiary. If the beneficiary is the participant's
spouse, an election can be made not to begin distributions before the
participant would have reached age 70-1/2.
e. Forfeited Accounts
At December 31, 2000 and 1999, forfeited nonvested accounts totaled
approximately $60,182 and $87,300, respectively. These accounts will be used to
reduce future employer contributions. Also, employer contributions were reduced
by approximately $28,471 and $32,000 from forfeited, nonvested accounts in 2000
and 1999, respectively.
f. Withdrawals While Employed
Subject to the terms of the Plan, once an employee reaches age 59-1/2 and has
completed 5 years of service, the employee can withdraw the partial or full
value of his account at any time without penalty.
Prior to age 59-1/2, an employee can withdraw employee contributions and
employer matching and discretionary contributions if the employee satisfies
certain hardship requirements as defined in the Plan. The distribution can be
the amount necessary to satisfy the immediate financial need of the participant
and is only available after the participant has obtained all other distributions
and loans available under the Plan.
g. Participant Loans
The Plan allows eligible participants to borrow up to 50% of the vested amount
of their account balance up to $50,000 with a minimum borrowing of $1,000. Each
loan shall bear interest at a rate determined by the Plan Committee and is
collateralized by the participant's remaining balance in his/her account. The
term of the loan is mutually agreed upon by the Plan Committee and the
participant. The loan repayment period shall not exceed 5 years, except in
instances where the loan proceeds were used to acquire the principal residence
of the participant. Each participant for whom a loan is approved will be charged
a $50 fee which is deducted from the
7
participant's account. These fees are classified as Other income, net on the
Statements of Changes in Net Assets Available for Benefits.
A participant may have no more than one active loan outstanding. Loan payments,
both principal and interest, shall be reapplied to the participant's account and
reinvested in the applicable fund based on the participant's current election.
At December 31, 2000 and 1999, there were 361 and 302 participant loans
outstanding, respectively.
h. Party-in-Interest Transactions
Certain Plan investments are shares of mutual funds managed by T. Rowe Price
(the Trustee). Therefore, these transactions qualify as party-in-interest
transactions. Investment management fees paid by the Plan for investment
management services amounted to $5,000 and $4,000 for the year ended December
31, 2000 and 1999, respectively, and are included in Other income, net in the
accompanying Statements of Changes in Net Assets Available for Benefits.
Additionally, the Company performs certain services at no cost to the Plan and
pays certain trustee fees and recordkeeping costs for the benefit of the Plan.
i. Plan Termination
While it has not expressed any intention to do so, the Company has the right to
terminate the Plan subject to the provisions of ERISA. Upon partial or total
termination of the Plan, the participants' accounts shall become fully vested
and nonforfeitable.
j. Voting Rights of Vectren Corporation Common Stock Fund Participants
-------------------------------------------------------------------
Each participant who has an account balance in the Vectren Corporation Common
Stock Fund is entitled to direct the Trustee as to the manner of voting at each
meeting of shareholders for all shares of Vectren Corporation common stock
(including fractional shares), represented by the value of the participant's
interest in the Vectren Corporation Common Stock Fund.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Basis of Accounting
Account records maintained by the Trustee are on the cash basis. The
accompanying financial statements have been prepared on an accrual basis.
b. Investments
Investments are stated at current market value as determined by the Trustee
using quoted market prices (see Schedule H). Participant loans are valued at
cost which approximates market prices. Investment transactions are reported on
the trade date. All investment transactions are participant directed.
8
The following presents investments that represent 5% or more of the Plan's net
assets at December 31.
2000 1999
----------- -----------
Vectren Corporation Common Stock Fund $35,564,177 $ -
Indiana Energy, Inc. Common Stock Fund - 25,585,771
T. Rowe Price-
Stable Value Common Trust Fund 10,370,511 9,176,232
Equity Income Fund 13,521,053 13,539,000
Balanced Fund 9,344,933 8,808,720
New Horizons Fund - 4,176,322
Equity Index 500 Fund 5,957,565 6,659,535
Franklin Small Cap Growth Fund 5,632,059 -
Janus Fund 6,374,907 -
During 2000 and 1999, the Plan's investments (including realized and unrealized
gains and losses on investments) appreciated (depreciated) in value by
$6,936,002 and $(7,884,851), respectively, as follows:
2000 1999
------------ ------------
Mutual funds and common trust fund $ (2,416,202) $ 1,904,647
Indiana Energy, Inc. Common Stock Fund (1,400,549) (9,789,498)
Vectren Corporation Common Stock Fund 10,752,753 -
------------ ------------
$ 6,936,002 $ (7,884,851)
============ ============
The Plan provides for various investment options in investment securities.
Investment securities are exposed to various risks, such as interest rate and
market volatility risks. Due to the level of risk associated with investment
securities, it is at least reasonably possible that changes in the values of
investment securities will occur in the near term and that such changes could
materially affect the amounts reported in the Statement of Net Assets Available
for Benefits.
c. Distributions
Distributions to withdrawing participants are recorded when paid.
d. Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of net assets available for
benefits and changes therein. Actual results could differ from those estimates.
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3. TAX STATUS
The Company has made certain amendments to the Plan since receiving its last
determination letter, dated August 5, 1999, in which the Internal Revenue
Service (IRS) stated that the Plan, as then designed, was in compliance with the
applicable requirements of the Internal Revenue Code (IRC). In the opinion of
the Plan Committee, the Plan is currently designed and continues to operate in a
manner that qualifies it under IRC Section 401(a) and, therefore, is exempt from
income taxes under the provisions of IRC Section 501(a). Accordingly, no
provision for Federal income taxes has been made.
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SCHEDULE H
VECTREN CORPORATION
RETIREMENT SAVINGS PLAN
SCHEDULE H, PART IV, LINE 4i -
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 2000
EIN (35-2086905)
Market Value
------------
INVESTMENTS:
*Vectren Corporation Common Stock Fund $35,564,177
*T. Rowe Price-
Stable Value Common Trust Fund 10,370,511
Equity Income Fund 13,521,053
Balanced Fund 9,344,933
International Stock Fund 2,037,755
Equity Index 500 Fund 5,957,565
Franklin Small Cap Growth fund 5,632,059
Janus Fund 6,374,907
PIMCO Total Return Fund 231,046
Participants' loans, interest ranging
from 7.0% to 10.0% 2,595,062
-----------
$91,629,068
===========
* As disclosed in Note 1, represents parties-in-interest to the Plan.
Pursuant to the requirements of the Securities Exchange Act of 1934, the Vectren
Corporation Investment Committee has duly caused this annual report to be signed
on its behalf by the undersigned, thereunto duly authorized.
VECTREN CORPORATION
RETIREMENT SAVINGS PLAN
Dated June 28, 2001
/s/ Timothy L. Burke_______________________
---------------------------------------------
Timothy L. Burke, Vice President and Treasurer