UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

Filed by the Registrant  ☒                             Filed by a Party other than the Registrant  ☐

Check the appropriate box:

Vectren Corporation

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

PRELIMINARY PROXY MATERIALS—SUBJECT TO COMPLETION

DATED JUNE 15, 2018

MERGER PROPOSED—YOUR VOTE IS VERY IMPORTANT

To Shareholders of Vectren Corporation:

You are invited to attend a special meeting (the “special meeting”) of the shareholders of Vectren Corporation (“Vectren” or the “Company”), on [●], 2018 at [●] (Central Daylight Time). The special meeting will be held at our corporate offices located at One Vectren Square, 211 N.W. Riverside Drive, Evansville, Indiana 44708. We are pleased to enclose the proxy statement relating to the merger of a wholly owned subsidiary of CenterPoint Energy, Inc. into the Company.

If the merger is completed, the Company will become a wholly owned subsidiary of CenterPoint Energy, Inc. and for each share of our common stock held, our shareholders will be entitled to receive $72.00 in cash, without interest, as described in more detail in the enclosed proxy statement under the heading “The Merger Agreement—Effects of the Merger; Merger Consideration.” The consideration payable to our shareholders represents a premium of approximately 9.8 percent to the closing stock price of the Company on April 20, 2018, which was the last trading day before the proposed merger was announced.

We urge you to read the enclosed proxy statement, which includes information about the merger and the special meeting. For a discussion of the U.S. federal income tax consequences of the merger, see “The Proposed Merger—Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 41 of the proxy statement.

Whether or not you plan to attend the special meeting, please take the time to vote by following the instructions on your proxy card. The board of directors of the Company unanimously recommends a vote FOR all of the proposals described in the proxy statement.

Your vote is very important regardless of the number of shares you own. We cannot complete the merger unless holders of a majority of the outstanding shares of our common stock entitled to vote at the special meeting vote in favor of the proposal to approve the merger agreement and the transactions contemplated thereby, including the merger. The failure to vote will have the same effect as a vote against the proposal to approve the merger agreement and the transactions contemplated thereby, including the merger.

Sincerely,

Carl L. Chapman

Chairman, President, and Chief Executive Officer

This proxy statement is dated [●], 2018 and is first being mailed to our shareholders on or about [●], 2018.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the merger described in the proxy statement or determined if the proxy statement is accurate or adequate. Any representation to the contrary is a criminal offense.

NOTICE OF A SPECIAL MEETING OF SHAREHOLDERS

Our board of directors unanimously recommends that you vote FOR all of these proposals. Your attention is directed to the accompanying proxy statement for a discussion of the merger and the merger agreement, as well as the matters that will be considered at the special meeting.

Your vote is very important. The conditions to the merger include that our shareholders approve the Merger proposal. Approval of the Merger proposal requires approval by holders of a majority of all of the outstanding shares of our common stock entitled to vote at the special meeting. Approval of the non-binding Merger-Related Compensation proposal and any Special Meeting Adjournment proposal is not a condition to

completion of the merger. Approval of each of the non-binding Merger-Related Compensation proposal and any Special Meeting Adjournment proposal requires that votes cast by the holders of the outstanding shares of our common stock represented (in person or by proxy) at the special meeting and entitled to vote on the applicable proposal for approval must exceed votes cast against approval.

If your shares are held in “street name” by a broker, nominee, fiduciary or other custodian, follow the directions given by the broker, nominee, fiduciary or other custodian regarding how to instruct it to vote your shares.

Please submit your proxy by accessing the Internet, by telephone or by completing, signing, dating and returning your signed proxy card(s) as soon as possible, so that your shares may be represented at the special meeting. You may revoke your proxy at any time before the vote at the special meeting by following the procedures outlined in the accompanying proxy statement.

By order of the Board of Directors,

VECTREN CORPORATION

By: RONALD E. CHRISTIAN

Executive Vice President, Chief Legal and External

Affairs Officer and Corporate Secretary

Evansville, Indiana

            [●], 2018

TABLE OF CONTENTS

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QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETING

The following questions and answers are intended to briefly address some commonly asked questions regarding the special meeting and the merger. These questions and answers may not address all the questions that may be important to you as a shareholder. You should read the more detailed information contained elsewhere in this proxy statement, the annexes to this proxy statement, and the documents referred to or incorporated by reference in this proxy statement. You may obtain information incorporated by reference in this proxy statement without charge by following the instructions under “Where You Can Find More Information” on page 81.

Q1: Why am I receiving this document?

A: This document is being delivered to you because you are a shareholder of Vectren Corporation (the “Company”) and we are holding a special shareholders meeting in connection with the proposed merger of Pacer Merger Sub, Inc. (“Merger Sub”), a wholly-owned subsidiary of CenterPoint Energy, Inc. (“CenterPoint Energy”), with and into the Company, with the Company continuing as the surviving corporation and a wholly-owned subsidiary of CenterPoint Energy (the “merger”).

Company shareholders are being asked to consider and vote on the following matters at a special shareholders meeting:

The approval of the Merger proposal is a condition to completion of the merger, but neither approval of the Merger-Related Compensation proposal nor the approval of any Special Meeting Adjournment proposal is a condition to completion of the merger.

This document is serving as a proxy statement because it is being used by the Board to solicit proxies from our shareholders.

Q2: What do I need to do now?

A: After you carefully read this proxy statement, please respond by submitting your proxy by accessing the Internet, by telephone or by completing, signing, dating and returning your signed proxy card(s) in the enclosed prepaid return envelope(s), as soon as possible, so that your shares may be represented at the special meeting. In order to assure that your vote is recorded, please vote your shares by one of these methods even if you currently plan to attend the special meeting in person.

Q3: Why is my vote important?

A: If you do not submit your proxy by accessing the Internet or telephone or return your signed proxy card(s) by mail or vote in person at the special meeting, it will be more difficult for us to obtain the necessary

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quorum to hold the special meeting and to obtain the shareholder approval necessary for the completion of the merger. The presence, in person or by proxy, of holders of a majority of the outstanding shares entitled to vote at the special meeting constitutes a quorum for the transaction of business. If a quorum is not present at the special meeting, the shareholders will not be able to take action on any of the proposals at the meeting.

For the Merger proposal, a majority of the outstanding shares entitled to vote on such matter must approve such proposal; thus a failure to vote will have the same effect as a vote AGAINST the Merger proposal.

Your vote is very important. We cannot complete the merger unless our shareholders approve the Merger proposal.

Q4: As a shareholder, what will I receive in the merger?

A: If the merger is completed, you will be entitled to receive $72.00 in cash, without interest, for each share of Company common stock that you owned immediately prior to the effective time of the merger. In addition, while it is not part of the merger consideration, you will continue to be entitled to receive any dividends declared by us prior to the completion of the merger, including a “stub period” dividend with respect to the period between the last quarterly dividend paid by us and the effective time of the merger.

Q5: When do you expect the merger to be completed?

A: We seek to complete the merger as soon as reasonably practicable, subject to receipt of necessary or advisable regulatory approvals and shareholder approval of the Merger proposal by our shareholders (the “Company shareholder approval”). We expect the transaction to be completed no later than the first quarter of 2019. However, we cannot predict when regulatory review will be completed, whether regulatory or Company shareholder approval will be received or the potential terms and conditions of any regulatory approval that is received. In addition, the satisfaction of certain other conditions to the merger, some of which are outside of our control, could require the companies to complete the merger later than expected or not to complete it at all. For a discussion of the conditions to the completion of the merger and of the risks associated with obtaining regulatory approvals in connection with the merger, see “The Merger Agreement—Conditions to the Merger” beginning on page 66 and “The Proposed Merger—Regulatory Matters Relating to the Merger” beginning on page 43.

Q6: How will my proxy be voted?

A: If you vote by accessing the Internet, by telephone or by completing, signing, dating and returning your signed proxy card(s), your proxy will be voted in accordance with your instructions. If other matters are properly brought before the special meeting, or any adjournment of the special meeting, your proxy includes discretionary authority on the part of the individuals appointed to vote your shares to act on those matters according to their best judgment.

If you are a shareholder of record and submit your proxy but do not indicate how you want to vote, your shares will be voted FOR the Merger proposal, FOR the Merger-Related Compensation proposal and FOR any Special Meeting Adjournment proposal.

Q7: May I vote in person?

A: Yes. If you are a shareholder of record of our common stock as of [●], 2018, you may attend the special meeting and vote your shares in person. However, we highly recommend that you vote in advance by accessing the Internet, by telephone or by returning your signed proxy card(s) even if you plan to attend the special meeting.

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Q8: What are the votes required to approve the proposals?

A: The affirmative vote of the holders of a majority of all of the outstanding shares of our common stock entitled to vote at the special meeting is required to approve the Merger proposal.

Votes cast by the holders of the outstanding shares of our common stock represented (in person or by proxy) at the special meeting and entitled to vote on such proposal for approval must exceed votes cast against approval in order to approve the Merger-Related Compensation proposal. Because the vote on the Merger-Related Compensation proposal is advisory only, it will not be binding on us. Accordingly, if the Merger proposal is approved and the merger is completed, the compensation will be payable, subject only to the conditions applicable thereto, regardless of the outcome of the non-binding, advisory vote of our shareholders on the Merger-Related Compensation proposal.

Votes cast by the holders of the outstanding shares of our common stock represented (in person or by proxy) at the special meeting and entitled to vote on such proposal for approval must exceed votes cast against approval in order to approve any Special Meeting Adjournment proposal.

Q9: If I am a record holder of my shares, what happens if I abstain from voting or I don’t submit a proxy or attend the special meeting to vote in person?

A:

Q10: What if my shares are held in “street name”?

A: If some or all of your shares are held in “street name” by your broker, nominee, fiduciary or other custodian (for simplicity, referred to collectively as “broker”), you should receive instructions from your broker on how to vote your shares.

Under the listing requirements of the New York Stock Exchange (the “NYSE”), brokers who hold shares in street name for a beneficial owner of those shares typically have the authority to vote in their discretion on “routine” proposals when they have not received instructions from beneficial owners. However, brokers are not allowed to exercise their voting discretion with respect to the approval of matters that the NYSE determines to be “non-routine.” Accordingly, a “broker non-vote” occurs when the broker is not permitted to vote on an item without instruction from the beneficial owner of shares of common stock and the beneficial owner gives no instruction as to voting of the shares.

Under NYSE rules, your broker or bank does not have discretionary authority to vote your shares on any of the proposals described in this proxy statement. Therefore, if you do not instruct your broker on how to vote your shares:

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See “Information About the Special Meeting and Voting—Broker Non-Votes” beginning on page 12 for more detail on the impact of a broker non-vote.

As a result of the foregoing, please be sure to provide your broker with instructions on how to vote your shares as soon as possible. Please check the voting form used by your broker to see if it offers Internet or telephone submission of proxies.

Q11: Who will count the votes?

A: EQ Shareowner Services will serve as inspector of elections, count all of the proxies or ballots submitted and report the votes at the special meeting. Whether you vote your shares by accessing the Internet, telephone or mail, your vote will be received directly by EQ Shareowner Services.

Q12: What does it mean if I receive more than one set of materials?

A: This means you own shares that are registered under different names. For example, you may own some shares directly as a shareholder of record and other shares through a broker or you may own shares through more than one broker. In these situations, you may receive multiple sets of proxy materials. It is necessary for you to vote, sign and return all of the proxy cards or follow the instructions for any alternative voting procedure on each of the proxy cards you receive in order to vote all of the shares you own. Each proxy card you receive will come with its own prepaid return envelope; if you vote by mail, make sure you return each proxy card in the return envelope which accompanied that proxy card.

Q13: How do I vote if my shares are held in the Company 401(k) plan?

A: If your shares are held in the Vectren Corporation Retirement Savings Plan, the same voting instructions apply, and you will receive a set of proxy materials. Please follow the instructions on your proxy card.

Q14: Can I revoke my proxy and change my vote?

A: Yes. You have the right to revoke your proxy at any time prior to the time your shares are voted at the special meeting. If you are a shareholder of record, your proxy can be revoked in several ways:

However, if your shares are held in “street name”, you must check with your broker to determine how to revoke your proxy.

Q15: When and where is the special meeting?

A: The special meeting will take place on [●], 2018 at [●] [a.]/[p.]m. (Central Daylight Time), at Vectren Corporation, One Vectren Square, 211 N.W. Riverside Drive, Evansville, Indiana 47708.

Q16: What must I bring to attend the special meeting?

A: Shareholders whose shares are held in “street name” should bring with them a legal proxy or a recent brokerage statement or letter from the street name holder confirming their beneficial ownership of shares,

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together with a valid picture identification. If your shares are registered in your name on the books kept by our transfer agent or your shares are held as a 401(k) plan share, you should bring your proxy card. Attendance at the special meeting will be limited to shareholders of record as of the record date and one guest per shareholder, and to guests of the Company.

Q17: Should I send in my stock certificates now?

A: No. After the merger is completed, CenterPoint Energy will send former Company shareholders written instructions for exchanging their stock certificates for the merger consideration.

Q18: Who can answer any questions I may have about the special meeting or the merger?

A: Our shareholders may call D. F. King & Company (“D. F. King”), our proxy solicitor for the special meeting, toll-free at (877) 732-3619.

Q19: Will I have to pay taxes on the merger consideration I receive?

A: If you are a U.S. holder (as defined below in “Material U.S. Federal Income Tax Consequences of the Merger”), the receipt of cash in exchange for shares of Company common stock pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes. A U.S. holder of our common stock who receives cash in the merger generally will recognize gain or loss in an amount equal to the difference, if any, between (1) the amount of cash received and (2) such U.S. holder’s adjusted tax basis in the shares of our common stock exchanged therefor. Such gain or loss generally will constitute capital gain or loss and will constitute long-term capital gain or loss if the U.S. holder’s holding period for our common stock exchanged is more than one year as of the closing date of the merger. You should consult your own tax advisors regarding the particular tax consequences to you of the exchange of shares of our common stock for cash pursuant to the merger in light of your particular circumstances (including the application and effect of any federal, state, local, or foreign tax laws).

Q20: How does the Board recommend that I vote?

A: The Board unanimously recommends a vote FOR the Merger proposal, FOR the Merger-Related Compensation proposal and FOR any Special Meeting Adjournment proposal, if necessary or appropriate.

For a discussion of the factors that the Board considered in resolving to recommend that our shareholders vote to approve the Merger proposal and the Merger-Related Compensation proposal, please see the section of this proxy statement entitled “The Proposed Merger—Recommendation of the Company’s Board of Directors and its Reasons for the Merger” beginning on page 28.

Q21: What happens if I sell my shares of Company common stock before the special meeting?

A: The record date for the special meeting is earlier than the date of the special meeting. If you own shares of Company common stock on the record date, but transfer your shares after the record date but before the effective time of the merger, you will retain your right to vote such shares at the special meeting, but you will no longer have the right to receive the merger consideration with respect to such shares.

Q22: Am I entitled to exercise dissenters’ rights instead of receiving the merger consideration for my shares of Company common stock?

A: No. Under Indiana law, the Company’s shareholders are not entitled to dissenters’ rights in connection with the merger.

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Q23: What happens if the merger is not completed?

A: In the event that the Merger proposal does not receive the required approval from our shareholders, or if the merger is not completed for any other reason, our shareholders will not receive any payment for their shares of Company common stock in connection with the merger. Instead, we will remain an independent public company, the Company common stock will continue to be listed and traded on the NYSE, the Company common stock will continue to be registered under the Exchange Act and shareholders will continue to own their shares of Company common stock.

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement, and the documents incorporated by reference in this proxy statement, include forward-looking statements. A “safe harbor” for forward-looking statements is provided by the Private Securities Litigation Reform Act of 1995 (“Reform Act of 1995”). The Reform Act of 1995 was adopted to encourage such forward-looking statements without the threat of litigation, provided those statements are identified as forward-looking and are accompanied by meaningful cautionary statements identifying important factors that could cause the actual results to differ materially from those projected in the statement. Certain matters described in “The Proposed Merger – Forward-Looking Financial Information” are forward-looking statements as well as statements relating to the expected timetable for completing the merger, anticipated benefits of the merger, future opportunities for the surviving corporation, future financial performance and any other statements regarding our and CenterPoint Energy’s future expectations, beliefs, plans, objectives, financial conditions, assumptions or future events or performance. Such statements are based on management’s beliefs, as well as assumptions made by and information currently available to management. When used in this filing, the words “believe”, “anticipate”, “endeavor”, “estimate”, “expect”, “objective”, “projection”, “forecast”, “goal”, “likely”, and similar expressions are intended to identify forward-looking statements. In addition to any assumptions and other factors referred to specifically in connection with such forward-looking statements, factors that could cause our actual results to differ materially from those contemplated in any forward-looking statements include, among others, the following:

We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of changes in actual results, changes in assumptions, or other factors affecting such statements.

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THE COMPANIES

Vectren Corporation

The Company, an Indiana corporation, is an energy holding company headquartered in Evansville, Indiana. Our wholly owned subsidiary, VUHI, serves as the intermediate holding company for three public utilities: Indiana Gas, SIGECO, and VEDO. VUHI also has other assets that provide information technology and other services to the three utilities. VUHI’s consolidated operations are collectively referred to as the Utility Group. Both the Company and VUHI are holding companies as defined by the Energy Policy Act of 2005. The Company was incorporated under the laws of Indiana on June 10, 1999.

Indiana Gas provides energy delivery services to approximately 603,000 natural gas customers located in central and southern Indiana. SIGECO provides energy delivery services to approximately 146,000 electric customers and approximately 112,000 gas customers located near Evansville in southwestern Indiana. SIGECO also owns and operates electric generation assets to serve its electric customers and optimizes those assets in the wholesale power market. Indiana Gas and SIGECO generally do business as Vectren Energy Delivery of Indiana. VEDO provides energy delivery services to approximately 323,000 natural gas customers located near Dayton in west-central Ohio.

The Company, through Enterprises, is involved in nonutility activities in two primary business areas: Infrastructure Services and Energy Services. Infrastructure Services provides underground pipeline construction and repair services. Energy Services provides energy performance contracting and sustainable infrastructure, such as renewables, distributed generation, and combined heat and power projects. Enterprises also has other legacy businesses that have investments in energy-related opportunities and services and other investments. All of the above is collectively referred to as the Nonutility Group. Enterprises supports our regulated utilities by providing infrastructure services.

Our principal executive offices are located at One Vectren Square, 211 N.W. Riverside Drive, Evansville, Indiana 47708 and our telephone number is (812) 491-4000.

CenterPoint Energy, Inc.

CenterPoint Energy, a Texas corporation, is a public utility holding company. CenterPoint Energy’s operating subsidiaries own and operate electric transmission and distribution and natural gas distribution facilities, supply natural gas to commercial and industrial customers and electric and natural gas utilities and own interests in Enable.

CenterPoint Energy’s reportable business segments are Electric Transmission & Distribution, Natural Gas Distribution, Energy Services, Midstream Investments and Other Operations. CenterPoint Energy serves more than five million metered customers primarily in Arkansas, Louisiana, Minnesota, Mississippi, Oklahoma and Texas, with more than 8,000 employees. CenterPoint Energy and its predecessor company have been in business for more than 150 years.

The principal executive offices of CenterPoint Energy are located at 1111 Louisiana, Houston, Texas 77002, and its telephone number is (713) 207-1111.

Pacer Merger Sub, Inc.

Merger Sub is an Indiana corporation and wholly owned subsidiary of CenterPoint Energy. Pursuant to the merger agreement, subject to the satisfaction or waiver of certain conditions, Merger Sub will merge with and into the Company, with the Company continuing as the surviving corporation in the merger and a wholly owned subsidiary of CenterPoint Energy. Merger Sub has not carried on any activities to date, except for activities incidental to its incorporation and activities undertaken in connection with the merger.

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INFORMATION ABOUT THE SPECIAL MEETING AND VOTING

The information contained in this proxy statement is furnished in connection with the solicitation of the enclosed proxy by and on behalf of the Board. The proxy will be used at the special meeting of shareholders. We are first mailing this proxy statement and accompanying proxy card to our shareholders on or about [●], 2018.

Date, Time and Place

The special meeting will be held at our corporate headquarters located at One Vectren Square, 211 N.W. Riverside Drive, Evansville, Indiana, 47708, on [●], 2018, at [●] [a.]/[p.]m. (Central Daylight Time), and at any adjournment of the special meeting for the matters to be acted upon under its authority.

Matters to be Considered

As of this date, the only known business to be presented at the special meeting of shareholders is (1) a proposal to approve the Merger proposal, (2) a proposal to approve, by non-binding advisory resolution, the Merger-Related Compensation proposal, (3) a proposal to approve a Special Meeting Adjournment proposal, if necessary, and (4) to transact any other business as may properly come before the special meeting or any adjournments of the special meeting. The Board is not aware of any other matters to be presented at the special meeting other than those mentioned above and has not received notice from any shareholders requesting that other matters be considered. The enclosed proxy authorizes the proxy holders to vote on these matters and on all other matters that may properly come before the special meeting, and it is the intention of the proxy holders to take any such action utilizing their best judgment.

Record Date; Quorum Requirement; and Voting Rights

As of June 13, 2018, we had one class of capital stock outstanding, consisting of 83,080,695 shares of common stock without par value. The presence, either in person or represented by proxy, of the holders of a majority of the outstanding shares of our common stock entitled to vote at the special meeting will constitute a quorum at the special meeting. As a result, in order to have a quorum at the special meeting, 41,540,348 shares of our common stock must be represented by shareholders present, in person or represented by proxy, at the special meeting.

The holders of the outstanding shares of common stock are entitled to one vote for each share held of record on each matter presented to a vote at the special meeting. However, unless the holder personally appears and votes at the special meeting, shares for which no proxy is returned (whether registered in the name of the actual holder or in the name of a bank, broker or nominee) will not be voted. Only shareholders of record at the close of business on [●], 2018 will be entitled to vote at the special meeting or at any adjournment of the special meeting.

Voting in Person

Only shares held by those present at the special meeting, or for which proxies are returned, will be considered to be represented at the special meeting. For the purpose of determining a quorum, shares represented at the special meeting are counted without regard to whether they are abstentions or broker non-votes as to any particular item.

Revoking Proxies

A shareholder executing and delivering the enclosed proxy may revoke it by written notice delivered to the secretary of the Company, or in person at the special meeting, at any time before the authority granted by it is exercised.

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Required Vote

The affirmative vote of the holders of a majority of all of the outstanding shares of our common stock entitled to vote at the special meeting is required to approve the Merger proposal.

Votes cast by the holders of the outstanding shares of our common stock represented (in person or by proxy) at the special meeting and entitled to vote on such proposal for approval must exceed votes cast against approval in order to approve the Merger-Related Compensation proposal. Because the vote on the Merger-Related Compensation proposal is advisory only, it will not be binding on us. Accordingly, if the Merger proposal is approved and the merger is completed, the compensation will be payable, subject only to the conditions applicable thereto, regardless of the outcome of the non-binding, advisory vote of our shareholders.

Votes cast by the holders of the outstanding shares of our common stock represented (in person or by proxy) at the special meeting and entitled to vote on such proposal for approval must exceed votes cast against approval in order to approve a Special Meeting Adjournment proposal.

Broker Non-Votes

Under the listing requirements of the NYSE, brokers who hold shares in “street name” for a beneficial owner of those shares typically have the authority to vote in their discretion on “routine” proposals when they have not received instructions from beneficial owners. However, brokers are not allowed to exercise their voting discretion with respect to the approval of matters that the NYSE determines to be “non-routine.” Accordingly, a broker non-vote occurs when the broker is not permitted to vote on an item without instruction from the beneficial owner of shares of common stock and the beneficial owner gives no instruction as to voting of the shares.

Under NYSE rules, your broker does not have discretionary authority to vote your shares on any of the proposals. Therefore, if you are a Company shareholder and you do not instruct your broker on how to vote your shares, your broker may not vote your shares on any of the proposals.

Abstentions; Not Voting

For the Merger proposal, an abstention or a failure to vote (including a broker non-vote) will be counted as a vote against such proposal.

For the Merger-Related Compensation proposal and any Special Meeting Adjournment proposal, an abstention or a failure to vote (including a broker non-vote) will not be counted as a vote cast, and, therefore, will not be counted as votes either for or against such proposal.

No Dissenters Rights

Under Indiana law, our shareholders are not entitled to dissenters’ rights in connection with the merger.

Shares Beneficially Owned by Directors and Officers

Our directors and executive officers beneficially owned [●] shares of Company common stock on [●], 2018, the record date for the special meeting. These shares represented in total [●] percent of the total voting power of our voting securities outstanding and entitled to vote as of the record date. We currently expect that each of our directors and executive officers will vote their shares in favor of all the proposals to be voted on at the special meeting, although none of them has entered into any agreements obligating them to do so.

How Shares are Voted; Proxies

Shareholders of record may vote:

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If your shares are held by a bank, broker, or nominee, please review the voting options provided by them on your voter instruction form and act accordingly.

Whether or not you plan to attend the special meeting, your vote is important and you are urged to vote as soon as possible. You may revoke your proxy prior to or at the special meeting and vote in person if you wish. If your shares are held by a broker, bank, or nominee, it is important that they receive your voting instructions.

Other Business

We do not expect that any matter will be brought before the special meeting other than the Merger proposal, the Merger-Related Compensation proposal, and a Special Meeting Adjournment proposal. If, however, other matters are properly presented at the special meeting, the persons named as proxies will vote in accordance with their best judgment with respect to those matters.

Shares Held in Plans

If you are a participant in our automatic dividend reinvestment and stock purchase plan, your proxy card will represent the number of shares registered in your name and the number of shares credited to your plan account. For those shares held in this plan, your proxy card will serve as direction to the plan administrator as to how your account is to be voted.

Solicitation of Proxies

The Board solicits your proxy for use at the special meeting. Shares held in your name and represented by your proxy will be voted as you instruct if your proxy is duly executed and returned prior to the special meeting. Shares represented by proxies that are returned signed but without instructions for voting will be voted as recommended by the Board. Shares represented by proxies that are returned unsigned or improperly marked will be treated as abstentions for voting purposes. You may revoke your proxy at any time before it is exercised by written notice to the secretary of the Company received prior to the time of the special meeting or in person at the special meeting.

If you are a participant in our automatic dividend reinvestment and stock purchase plan, your proxy card will represent the number of shares registered in your name and the number of shares credited to your plan account. For those shares held in this plan, your proxy card will serve as direction to the plan administrator as to how your account is to be voted.

If your shares are held in a brokerage account, you may instruct your broker, bank, or other nominee to vote your shares by following instructions that the broker, bank, or nominee provides to you. Most brokers offer voting by mail, telephone, or via the Internet.

The cost of preparing, assembling, printing, and mailing this proxy statement, the enclosed proxy and any other material which may be furnished to shareholders in connection with the solicitation of proxies for the special meeting will be borne by us. We have retained D. F. King & Company to assist in soliciting proxies from shareholders, including brokers’ accounts, at an estimated fee of $20,000 plus reasonable out-of-pocket expenses. In addition, some of our officers and regular employees, who will receive no compensation in addition to their regular salaries for such solicitation, may solicit proxies by telephone, email, or personal visits. The cost of such

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additional solicitation, if any, will be borne by us. We expect to reimburse banks, brokerages, and other custodians of our stock for their reasonable charges and expenses in forwarding proxy materials to beneficial owners.

Adjournments

We are not currently aware of any other business to be acted upon at the special meeting. If, however, other matters are properly brought before the special meeting, or any adjourned meeting, your proxies include discretionary authority on the part of the individuals appointed to vote your shares to act on those matters according to their best judgment. Votes cast by the holders of the outstanding shares of our common stock represented (in person or by proxy) at the special meeting and entitled to vote on such proposal for approval must exceed votes cast against approval in order to approve a Special Meeting Adjournment proposal. If we adjourn the special meeting for 120 days or less and we do not set a new record date, we will announce prior to adjournment the date, time and location at which the special meeting will be reconvened. No other notice will be provided. If adjournment is for more than 120 days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each shareholder of record entitled to vote at the special meeting.

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THE PROPOSED MERGER

General

The Company and CenterPoint Energy agreed to the acquisition of the Company by CenterPoint Energy under the terms of the merger agreement that is described in this proxy statement. The Board is using this proxy statement to solicit proxies from the holders of Company common stock for use at the special meeting.

Merger Proposals

At the special meeting, holders of shares of Company common stock will be asked to vote on 1) a proposal to approve the merger agreement and the transactions contemplated thereby, including the merger (the “Merger proposal”), 2) a proposal to approve, by non-binding advisory resolution, the compensation of the NEOs that will or may become payable in connection with the merger (the “Merger-Related Compensation” proposal), 3) a proposal to approve any motion to adjourn the special meeting to a later date or dates, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to approve the merger agreement at the time of the special meeting (a “Special Meeting Adjournment” proposal), and 4) any other business as may properly come before the special meeting or any adjournments of the special meeting. The Board is not aware of any other matters to be presented at the special meeting other than those mentioned above and has not received notice from any shareholders requesting that other matters be considered.

The merger will not be completed unless our shareholders approve the Merger proposal.

Effects of the Merger; Merger Consideration

Under the terms of the merger agreement, Merger Sub will merge with and into the Company with the Company continuing as the surviving corporation in the merger and becoming a wholly owned subsidiary of CenterPoint Energy.

On and subject to the terms and conditions set forth in the merger agreement, at the effective time of the merger (the “effective time”), each share of Company common stock issued and outstanding immediately prior to the effective time will be canceled and converted into the right to receive the merger consideration. At the effective time, each stock unit payable in Company common stock or whose value is determined with reference to the value of Company common stock, whether vested or unvested, will be cancelled at the effective time with cash consideration paid therefor in accordance with the terms of the merger agreement.

Background of the Merger

The Board and senior management of the Company regularly review and evaluate the Company’s strategies as part of their ongoing efforts to provide long-term value to shareholders, taking into account economic, competitive, regulatory and other conditions, as well as historical and projected industry trends and developments. As part of this process, the Company regularly evaluates and revises its stand-alone strategic plan. Over the past several years, Company management has refined and focused the Company’s stand-alone strategic plan to focus on (i) continuing to execute gas infrastructure upgrade and replacement plans to further improve safety and reliability, (ii) modernizing its electric grid to improve safety and reliability and reduce the frequency and duration of outages, (iii) diversifying the Company’s generation portfolio to improve system optionality and efficiencies while reducing carbon emissions and (iv) continuing to grow the Company’s non-regulated businesses. Company management believes that the Company’s current strategic plan is capable of delivering 6% to 8% growth in the Company’s earnings per share over the next several years.    

As part of its ongoing strategic review, the Board and senior management of the Company also periodically consider and evaluate potential alternatives to the stand-alone plan that may enhance shareholder value and

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provide benefits to all Company stakeholders, including, from time to time, strategic transactions. Over the past several years, the Company considered several potential acquisitions and three potential “merger of equals” transactions. No definitive agreement was executed in connection with any of these potential transactions, either because the seller in the transaction did not find the Company’s proposed price acceptable or because discussions did not progress beyond a preliminary phase. In August of 2016 the Company entered into preliminary negotiations with another utility company (referred to as “Bidder A”) regarding a transaction in which Bidder A would have acquired the Company. Discussions regarding price were never concluded, but Bidder A initially proposed a price of $68.50 per share, comprised of a combination of cash and common stock of Bidder A. The trading price of the Company’s common stock during August of 2016 ranged from $48.80 to $51.90 per share. Negotiations with respect to this transaction ended when Bidder A determined that it was not prepared to proceed with a transaction at that time.

On August 22, 2017, an article appeared on the Bloomberg website indicating that the Company was considering strategic options including a potential sale after receiving takeover interest. Although the Company had not recently received any takeover interest and was not considering any specific takeover proposal at that time, the Company did not comment on the article consistent with its policy of not commenting on rumors regarding mergers and acquisitions. Immediately following publication of the article, the price of the Company’s common stock increased approximately 7.9%.

Company senior management also regularly reviews with the Board the potential long-term value that the Company’s shareholders might achieve as a result of the Company’s standalone strategic plan and compares those values to the values that might be achieved in a strategic transaction. the Company’s senior management was also aware that the utility industry in the United States has been in the process of consolidating. For example, at the time of the merger that created the Company in 2000, there were roughly 130 domestic energy companies. Considering announced transactions, there are now less than 50, and of those companies, based on market capitalization, 30 are larger than the Company. Of those 30 utilities that are larger than the Company, nearly 90% are more than twice the Company’s size. The Company’s senior management believed that its long-term strategic plan for continued growth allows the Company an opportunity to proactively select a partner with strong commitments to the Company’s stakeholders rather than be in a position where merger choices could be limited. The Company’s senior management also recognized that a larger, more competitive company can better take advantage of the significant opportunities in this time of rapid industry change in addition to bolstering the ability to attract and develop employees and achieve efficiencies in operations, which will ultimately benefit utility customers’ rates over time.

At the annual retreat of the Board on November 1 and 2, 2017, Company senior management advised the Board that, in light of valuations in recent transactions involving other regulated gas and electric companies, it might be a favorable time to determine whether any potential acquirer would align well with the Company’s company values and corporate citizenship and would be willing to pay a premium to the Company’s then current stock price in a strategic transaction. To make a more thorough evaluation of this possibility, management recommended that the Company seek assistance from a financial advisor, make a more detailed analysis of potential strategic options that might be available to the Company and report back to the Board.

During the fourth quarter of 2017, BofA Merrill Lynch assisted Company senior management in evaluating some of the strategic options that might be available to the Company. BofA Merrill Lynch was not formally retained at that time because the Board had not made a decision to initiate any discussions with potential counterparties regarding a potential strategic transaction.

The Board held a regularly scheduled meeting on December 20, 2017. Representatives of senior management, BofA Merrill Lynch and the Company’s regular outside transaction counsel, Baker Botts L.L.P. (“Baker Botts”), also were in attendance during parts of the meeting. At this Board meeting, Mr. Carl L. Chapman, the Company’s chief executive officer, and Ms. Susan Hardwick, the Company’s chief financial officer, made a presentation outlining certain strategic options potentially available to the Company other than

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pursuing its stand-alone strategic plan, including acquiring other companies, entering into a strategic merger and selling the Company in a change of control transaction. Mr. Chapman and Ms. Hardwick also discussed the current valuation of the Company’s common stock and the values that had been achieved in other recent strategic transactions in the utility industry.

Following Mr. Chapman and Ms. Hardwick’s presentation, representatives of BofA Merrill Lynch made a presentation to the Board that included an update regarding the utility sector generally, BofA Merrill Lynch’s view of the financial outlook for the utility sector, the range of strategic alternatives that might be available to the Company, a preliminary valuation analysis with respect to the Company, certain potential counterparties that might be interested in a strategic transaction with the Company, the ability of those counterparties to pay a premium price for the Company’s common stock and BofA Merrill Lynch’s recommended next steps if the Board were to decide to authorize management to contact other companies to determine if they might be interested in acquiring the Company at a premium to its current market price.

Following discussion among themselves and with management and BofA Merrill Lynch, the Board authorized Company management, with the assistance of BofA Merrill Lynch and other advisors to conduct a market assessment by contacting a limited number of potential counterparties to determine if they might have an interest in acquiring the Company at a premium to its then current market price. The Board also instructed Company management and BofA Merrill Lynch to communicate to any potential counterparty that the Board had a strong preference for a transaction in which a substantial portion of the consideration was cash, and that the Board would insist that any transaction also provide commitments to the Company’s customers, employees and the communities in which the Company operates.

On January 9, 2018, the Company executed an engagement letter retaining BofA Merrill Lynch as its financial advisor with respect to potential strategic alternatives. BofA Merrill Lynch was selected based on its experience in the utility industry generally, its experience in advising companies in strategic transactions and the preliminary work that BofA Merrill Lynch had performed for the Company during the fourth quarter of 2017. Prior to retaining BofA Merrill Lynch, the Company received from BofA Merrill Lynch information regarding BofA Merrill Lynch’s relationships, if any, with the companies that had been identified as potential counterparties to be contacted in connection with the market assessment.

From January 9, 2018 through January 18, 2018, pursuant to the direction of the Board, BofA Merrill Lynch contacted seven potential counterparties, including CenterPoint Energy and Bidder A, to determine if they might have an interest in considering a strategic transaction with the Company. Six of the parties contacted were other utility companies, and the seventh was a large investment fund focused on infrastructure investments. The seven companies contacted were selected by Company management in consultation with BofA Merrill Lynch from the list of potential counterparties discussed with the Board as the companies that, in the judgment of Company management, would be most interested in considering a strategic transaction with the Company, capable of paying a premium to the Company’s market price in such a transaction and capable of providing commitments to the Company’s customers, employees and the communities in which it operates. In its conversation with each of these companies, BofA Merrill Lynch indicated that the Company had not made any decision to pursue a transaction, but that it was interested in understanding whether the company would be interested in considering a transaction with the Company at a price in excess of the Company’s then current share price. BofA Merrill Lynch also indicated that, if the Company were to pursue a transaction, it would prefer a transaction in which a substantial portion of the consideration was cash and that would provide commitments for its customers, employees and the communities in which it operates in addition to Company shareholders.

Of the seven potential counterparties contacted by BofA Merrill Lynch, one indicated that it was not then in a position to pursue a strategic transaction while the other six indicated that they would be interested in considering a potential transaction. Although none of the six interested bidders indicated a price at which they would be willing to acquire the Company, all indicated that they would consider a price at a premium to the Company’s then current market price. Three of the six interested bidders, including CenterPoint Energy,

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indicated that they would be capable of paying 100% cash consideration in a transaction. The other three, including Bidder A, indicated that they would prefer to include a stock component in the consideration for a transaction.

On January 19, 2018, the Board held a special meeting to consider the results of BofA Merrill Lynch’s discussions with potential bidders. Company senior management and representatives of BofA Merrill Lynch and Baker Botts were present during parts of the meeting. The Board received a report from BofA Merrill Lynch about its conversations with potential counterparties. Company management also updated the Board about the Company’s stand-alone strategic plan and outlined management’s recommended next steps if the Board decided to proceed with discussions about a potential strategic transaction. Following extensive discussion, the Board authorized management, with assistance from BofA Merrill Lynch and its other advisors, to continue discussions with all six of the interested potential counterparties about a strategic transaction, and to request from each of them a non-binding indication of the terms and conditions on which they would consider acquiring the Company. Finally, the Board requested management, with advice from BofA Merrill Lynch, to contact one additional infrastructure investor to determine if it would have interest in considering a potential transaction.

Following this meeting, BofA Merrill Lynch contacted the six interested potential counterparties to inform them that the Board had decided to proceed with discussions about a potential transaction and that they would be provided with additional information about the Company following execution of a confidentiality and standstill agreement. All six parties were provided with a form of confidentiality and standstill agreement.

In addition, as directed by the Board, management in consultation with BofA Merrill Lynch, identified another large infrastructure investor that management believed was likely to have both the financial capability and interest in acquiring the Company and directed BofA Merrill Lynch to contact that investor. After considering the matter, this investor decided not to engage in discussions with the Company about a potential strategic transaction.

From January 26, 2018 to January 31, 2018, the Company entered into confidentiality and standstill agreements with five of the six counterparties that had indicated an interest in pursuing a transaction with the Company, including CenterPoint Energy and Bidder A. The terms of all five confidentiality and standstill agreements were substantially similar. The three counterparties other than CenterPoint Energy and Bidder A are referred to as Bidders B, C and D. The sixth counterparty informed BofA Merrill Lynch that it was not in a position to pursue a strategic transaction at that time and therefore declined to enter into a confidentiality and standstill agreement.

On January 26, 2018, BofA Merrill Lynch received a call from a utility company (referred to as Bidder E) that had not previously been contacted by BofA Merrill Lynch on behalf of the Company. During this call, Bidder E indicated that it had heard rumors that the Company might be considering a strategic transaction and stated that if such rumors were true, it would be interested in considering such a transaction. Bidder E later confirmed that it would be prepared to enter into a transaction at a 100% cash price in excess of the Company’s then current market price, and that it would be prepared to make commitments relating to the Company’s customers, employees and the communities in which the Company operates. Following these conversations, Bidder E was provided with a form of confidentiality and standstill agreement and on February 6, 2018, Bidder E executed the agreement with the Company. The form of this agreement was substantially similar to the agreements that had been entered into with other potential bidders.

From January 30, 2018 through February 9, 2018, Company senior management made presentations about the Company’s financial condition, operations and stand-alone strategic plan to each of CenterPoint Energy, and Bidders A, B, C, D and E. Each of CenterPoint Energy and Bidders A, B, C, D and E also were provided with the Company’s internal projections and certain other non-public information about the Company.

On January 31, 2018, Mr. Chapman met with Mr. Scott Prochazka, the President and Chief Executive Officer of CenterPoint Energy. Messrs. Chapman and Prochazka discussed the Company’s motivation for

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considering a potential strategic transaction at that time and concerns of Mr. Chapman about how a transaction could affect Company employees, customers, community involvement by Company employees, funding of the Vectren Foundation and the role of the Company in the communities in which it operates. Mr. Chapman also made suggestions about leadership functions that could be based in Indiana after the completion of a strategic transaction.

On February 8, 2018, BofA Merrill Lynch received an email from an infrastructure investor indicating that it had heard rumors that the Company might be considering a strategic transaction and inquiring as to whether it could participate in any process the Company might be conducting. In a subsequent call on February 9, 2018, although BofA Merrill Lynch did not confirm that the Company might be considering a potential transaction, BofA Merrill Lynch inquired as to the nature and level of the investor’s potential interest in the Company. The investor indicated that it would respond to BofA Merrill Lynch if it had any interest in pursuing a transaction. The investor did not contact BofA Merrill Lynch again.

On February 12, 2018, BofA Merrill Lynch received an unsolicited call from the chief executive officer of an electric utility company (referred to as “Bidder F”) indicating that if the Company was considering a strategic transaction, his company would be interested in pursuing such a transaction. Following this discussion, Bidder F was provided a form of confidentiality and standstill agreement. Over the following two weeks, BofA Merrill Lynch had several discussions with Bidder F about its interest in a potential transaction with the Company, during which Bidder F indicated that it would need to enter into a partnership with another investor in order to finance any transaction with the Company and that it was in discussions with one or more potential partners to this end.

On February 21, 2018, CenterPoint Energy, and Bidders A, B and D each submitted non-binding indications of interest with respect to a strategic transaction with the Company. CenterPoint Energy proposed an all cash transaction at a price of $70.00 per share. Bidder A proposed a price of $72.50 per share with up to 83% of the consideration in cash and the remainder in common stock of Bidder A. Bidder B indicated an all cash price range of $73.00 to $75.00, and Bidder D indicated a price range of $65.00 to $70.00 with the consideration being a combination of cash and stock, but did not specify the allocation between cash and stock. Bidder F did not submit a proposal but indicated that it hoped to be able to do so in a matter of days. Bidder F did not contact BofA Merrill Lynch again.

Also on February 21, 2018, representatives of Bidder C and Bidder E each separately informed BofA Merrill Lynch that, due to factors unrelated to the Company, they would no longer consider a potential transaction with the Company. The chief executive officers of Bidder C and Bidder E also each called Mr. Chapman to inform him that their respective companies would not be submitting a proposal.

On February 22, 2018, Mr. Chapman spoke to the chief executive officer of Bidder A. Bidder A’s CEO indicated that Bidder A was very interested in a transaction and prepared to move quickly. He also indicated that Bidder A would have to raise a significant amount of both debt and equity capital to complete the transaction and that they would be meeting with rating agencies the following week. Finally, he indicated that if Mr. Chapman wished to discuss any aspect of Bidder A’s proposal, he was available to discuss it. Mr. Chapman indicated that Bidder A’s proposal would be considered by the Board along with other proposals that the Company had received.

On February 23, 2018, Mr. Chapman spoke to the chief executive officer of Bidder D, who informed Mr. Chapman that Bidder D was very interested in a transaction with the Company and wanted to confirm that Mr. Chapman understood that, although common stock of Bidder D would have to be a significant component of the consideration in a transaction with Bidder D, a transaction with Bidder D likely would result in significant dividend accretion for the Company’s shareholders.

The Board met on February 24, 2018 with members of senior management and representatives from BofA Merrill Lynch, Baker Botts and Taft Stettinius & Hollister (referred to as “Taft”) present during parts of the

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meeting. Taft is the Board’s regular outside counsel on matters relating to matters of fiduciary duty under Indiana law. Representatives from Taft and Baker Botts discussed with the Board certain legal issues relating to the Company, the Board and Indiana law in the context of a potential strategic transaction. Senior management and representatives from BofA Merrill Lynch reviewed with the Board the work that had taken place since the Board’s last meeting, the terms and conditions of the preliminary indications of interest that had been received from four parties and potential next steps. Company management and BofA Merrill Lynch also informed the Board about the interest that had been expressed by Bidder F. Following discussion among the directors, the Board authorized Company management to continue discussions with the four bidders that had submitted proposals by granting them access to additional information about the Company and soliciting definitive proposals from each of them. The Board also authorized management to continue discussions with Bidder F on the same terms as the other bidders if Bidder F could submit a preliminary indication of interest promptly. As discussed above, Bidder F did not submit a proposal.

On February 26, 2018, representatives from BofA Merrill Lynch spoke with representatives of CenterPoint Energy, Bidder A, Bidder B and Bidder D to inform them that they would be permitted to continue in the next round of discussions concerning a potential strategic transaction with the Company.

On March 2, 2018, the Company opened an electronic data room containing information about the Company to assist the potential buyers in their evaluation of a potential transaction.

On March 7, 8 and 9, 2018, representatives of BofA Merrill Lynch spoke with representatives of CenterPoint Energy, Bidder A, Bidder B and Bidder D to discuss the timetable for preparing definitive bids for the Company.

From March 10, 2018 through March 22, 2018, Ms. Hardwick, other members of Company management and representatives from BofA Merrill Lynch held numerous calls with bidders, including CenterPoint Energy and Bidder A, to discuss various aspects of the Company’s financial condition and operations in connection with their diligence reviews of the Company.

On March 12, 2018, Ms. Hardwick received a call from a representative of Bidder D to discuss how Bidder D could improve its proposal to acquire the Company. The discussion focused on specific commitments that Bidder D might make with respect to the Company’s customers, employees and the communities in which the Company operates.

On March 14, 2018, Ms. Hardwick received a call from Mr. William Rogers, the Chief Financial Officer of CenterPoint Energy, to discuss CenterPoint Energy’s interest in the Company and ways in which CenterPoint Energy could improve its proposal. The discussion focused on the importance of the Company in the communities in which it operates and commitments that CenterPoint Energy could make with respect to Company employee protections, the location of leadership functions in the Company service territory and maintaining current levels of community involvement where the Company operates.

On March 15, 2018, BofA Merrill Lynch delivered to CenterPoint Energy, Bidder A, Bidder B and Bidder D a letter with instructions regarding the preparation and submission of definitive bids. That same day, a form of merger agreement was provided to each of the bidders. Such form of merger agreement contemplated, among other things, an all-cash transaction and a three-year protection period following the closing during which Company non-union employees would not be terminated or have their compensation reduced. The draft merger agreement did not include any closing condition with respect to review of the transaction or approval of any items related to the transaction by the Indiana Utility Regulatory Commission (the “IURC”) and the Public Utilities Commission of Ohio (the “PUCO”) because approval of those regulators would not be required for the transaction. The draft also did not make specific proposals regarding commitments with respect to the location of the Company’s headquarters and community involvement, diversity, employee volunteerism, corporate responsibility and other similar matters. Instead, the draft requested that each bidder make proposals with respect

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to those matters. The draft also contemplated that all outstanding unvested performance-based equity awards would be cashed out at closing using values based on the greater of target and actual performance. The draft also did not make any proposal with respect to any Company director being appointed to the board of directors of the acquirer following the closing. In its draft, the Company proposed that the Board would have a so-called “fiduciary out” that would permit the Board to terminate the merger agreement if it received an alternative proposal that was superior to the transaction reflected in the merger agreement. The Company also proposed two termination fees, one payable by the Company in the event that the Board exercised its fiduciary out or in certain other circumstances, and the other payable by the acquirer in the event the agreement were to be terminated in certain circumstances. The Company proposed that its termination fee be 2% of the equity value of the transaction and that the acquirer’s fee be 6% of the equity value of the transaction.

Also on March 15, 2018, Mr. Chapman received a telephone call from the CEO of Bidder A who informed Mr. Chapman that Bidder A continued to be very interested in a transaction with the Company, that Bidder A had met with rating agencies and that the meetings had gone well, that Bidder A was in the process of arranging financing for the transaction and that Bidder A would like to include a partner in the transaction for up to 20% of the equity, but would not make its proposal contingent on having an agreement with a partner. The CEO of Bidder A also indicated to Mr. Chapman that there would be a role for some of the officers of the Company (although there was no discussion of a role for Mr. Chapman) with Bidder A following a transaction.    

On March 30, 2018, Mr. Prochazka called Mr. Chapman to update him on the status of CenterPoint Energy’s diligence review of the Company and to discuss some of the commitments that CenterPoint Energy was prepared to offer for employees and the communities in which the Company operates in connection with a transaction. In his conversation with Mr. Prochazka, Mr. Chapman emphasized that commitments to employees and local communities would be very important factors for the Board when considering proposals. Mr. Prochazka understood Mr. Chapman’s concerns and agreed with him that addressing these matters effectively would be critical to the success of a combined company.

On April 2, 2018, Bidder D’s financial advisor informed BofA Merrill Lynch that Bidder D would not be making a bid for the Company.

On April 3, 2018, Mr. Chapman received a call from the CEO of Bidder D informing him that Bidder D would not be submitting a proposal.

On April 6, 2018, CenterPoint Energy and Bidder A each submitted final offers to acquire the Company. Bidder A offered to acquire the Company for $70.50 per share with a consideration mix of 83% cash and 17% common stock of Bidder A. The common stock portion of the consideration included in Bidder A’s proposal was subject to a collar of plus or minus 5.0% based on fluctuations in the price of Bidder A’s common stock between the date a merger agreement was signed and closing. CenterPoint Energy proposed acquiring the Company for $70.00 per share, all cash. Each of CenterPoint Energy and Bidder A also submitted a revised form of merger agreement with their respective proposals. Bidder B did not submit a final offer.

In its markup of the merger agreement, CenterPoint Energy proposed a two-year protection period for Company non-union employees (excluding officers) during which the employees’ compensation and severance benefits would not be reduced, but during which layoffs would be permitted. CenterPoint Energy also proposed that any non-officer employees terminated without cause during the two-year protection period would receive severance plus their base salary and certain other benefits for the remainder of the protection period. CenterPoint Energy’s proposed form of merger agreement also proposed that unvested outstanding performance-based equity awards be cashed out at target valuation upon closing. CenterPoint Energy also proposed that its obligation to close the transaction be subject to receiving orders from the IURC and the PUCO approving the transaction, and that such orders not contain any term or condition that would result in a material adverse effect on the Company or CenterPoint Energy (referred to as a “Burdensome Condition”). CenterPoint Energy also proposed that it would establish the headquarters for the companies’ combined gas operations in Evansville for a minimum of

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three years after closing, maintain the headquarters of Indiana electric operations in Evansville, retain key operational activities in support of the utilities in Evansville and provide other assurances with respect to community involvement and employee volunteerism. CenterPoint Energy proposed a termination fee for the Company equal to 1.5% of the equity value of the transaction and a termination fee for CenterPoint Energy equal to 3% of the equity value of the transaction.

In its mark-up of the merger agreement, Bidder A proposed a two-year protection period with respect to overall salary and benefits but not against layoffs for employees, that performance-based equity awards granted after January 1, 2018 be converted into time-based restricted stock units based on the greater of target or actual performance and that all other awards be cashed out at the greater of target or actual performance. Bidder A’s proposed form of merger agreement also provided that Bidder A would have to obtain approval from its shareholders before Bidder A would be required to proceed with the merger. Bidder A proposed a termination fee of 3% of the equity value of the transaction to be payable by the Company if the Company terminated the merger agreement to accept another acquisition proposal and 4% of the equity value of the transaction to be payable by Bidder A in the event of a regulatory failure. Bidder A also proposed that certain of the Company’s expenses be reimbursed if Bidder A’s shareholders did not approve the transaction. Bidder A also proposed that it would maintain gas and electric joint operating headquarters in Evansville and maintain the Company’s historic programs regarding diversity, human equity and safety. Bidder A also proposed to give two former Company directors seats on Bidder A’s board of directors following the closing. Bidder A did not propose any closing condition relating to approval of the transaction or any related items by the IURC or the PUCO.

On April 7, 2018, the Board met to consider the proposals that had been received from CenterPoint Energy and Bidder A. Senior management of the Company and representatives from BofA Merrill Lynch and Baker Botts were present during parts of the meeting. Senior management and representatives of BofA Merrill Lynch reviewed in detail the proposals that had been received from CenterPoint Energy and Bidder A. Representatives of BofA Merrill Lynch also reviewed with the Board BofA Merrill Lynch’s financial analysis of the proposals, certain valuation information relating to the Company and financial information about CenterPoint Energy and Bidder A. Mr. Ronald Christian, executive vice president and chief legal and external affairs officer of the Company, and a representative from Baker Botts also reviewed with the Board the changes to the merger agreement that had been proposed by each of CenterPoint Energy and Bidder A. After reviewing the proposals and the other information presented at the meeting, the members of the Board instructed management to continue negotiations with each of CenterPoint Energy and Bidder A. They also indicated to management that they were not prepared to move forward with a transaction at less than $72.00 per share and that they had a strong preference for a transaction in which as much of the consideration as possible was cash.

On April 9, 2018, representatives from BofA Merrill Lynch spoke with both Mr. Rogers and representatives of Bidder A. The BofA Merrill Lynch representatives advised each bidder that the Board was not prepared to enter into a transaction at the proposed price, that more than one bid had been received, that the bids were extremely close in terms of value and that there was no clear leader based on value and proposed contract terms. In addition, the BofA Merrill Lynch representatives advised Bidder A that the Company wanted to conduct a due diligence review of Bidder A in light of the stock component of Bidder A’s proposal. The BofA Merrill Lynch representatives also explained that each bidder would be given an opportunity to improve the terms of its proposal, including by increasing its price and by submitting a revised form of merger agreement.    

On April 10, 2018, Baker Botts sent revised drafts of the merger agreement to each of CenterPoint Energy and Bidder A. In the revised draft sent to CenterPoint Energy, the Company counter-proposed that all performance-based equity awards be cashed out at the greater of target and actual performance and that the termination fees be set at 2% of transaction equity value for the Company’s fee and 4% for CenterPoint Energy. The Company also rejected CenterPoint Energy’s proposed closing condition relating to approvals by the IURC and PUCO because the approval of those regulatory commissions is not required to close the merger. Finally, the Company proposed that CenterPoint Energy appoint at least one former Company director to CenterPoint Energy’s board of directors upon closing of the merger.

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In the revised draft sent to Bidder A, the Company counter-proposed that the collar on Bidder A’s stock price be widened to 10% and that the termination fees be 2% of the transaction equity value payable by the Company, 4% of equity value payable by Bidder A in the event of a regulatory failure and 1.5% of equity value payable by Bidder A in the event that Bidder A’s shareholders did not approve the transaction.

On April 11, 2018, Mr. Chapman met with Mr. Prochazka to discuss how CenterPoint Energy might improve the terms of its bid. Mr. Chapman indicated that he did not think the Board would approve a transaction at the price CenterPoint Energy had proposed and that CenterPoint Energy should raise the price of its offer. Mr. Prochazka responded that he might be able to improve some of the terms of CenterPoint Energy’s offer, including price, if some of the other open issues were resolved to the satisfaction of CenterPoint Energy. Among other things, Mr. Prochazka indicated that he did not want CenterPoint Energy to be required to close the transaction until the IURC and PUCO had issued orders relating to the transaction. Mr. Prochazka also reiterated that CenterPoint Energy would locate the headquarters of the combined company’s gas operations in Evansville for a minimum of three years following the closing, would maintain the Indiana electric operations headquarters in Evansville and that it was committed to maintaining and in some cases increasing the level of community involvement by the Company and its employees following the closing. Mr. Prochazka also told Mr. Chapman that CenterPoint Energy objected to some of the proposed provisions relating to employee compensation and commitments in the merger agreement. Mr. Chapman indicated that compensation matters relating to himself and the other senior officers of the Company would be addressed by the Compensation Committee of the Board. Mr. Chapman also indicated to Mr. Prochazka that he thought it would be appropriate for CenterPoint Energy to appoint a Company director to CenterPoint Energy’s board of directors following the closing. Mr. Chapman also told Mr. Prochazka that he would not accept such a position if it were offered to him so that the representative would have to be another member of the Board. Mr. Prochazka indicated that he did not agree that a Company director should be appointed to the CenterPoint Energy’s board of directors following the closing.

Also on April 11, 2018, the Company received a revised draft of Bidder A’s proposed form of merger agreement from Bidder A’s counsel. In this draft, Bidder A proposed a 7.5% collar on its stock price and reiterated its proposal that two Company directors be appointed to Bidder A’s board of directors upon closing of the merger. Bidder A also accepted the 2.5% termination fee payable by the Company and the 4% fee payable by Bidder A in the event of a regulatory failure, but reverted to its proposed expense reimbursement if Bidder A shareholders did not approve the transaction.

On April 12, 2018, Mr. Chapman called Mr. Prochazka to discuss the open issues with respect to CenterPoint Energy’s proposal. Mr. Prochazka suggested that representatives from their respective management teams and outside law firms discuss the issues by telephone to try to resolve them. Later that day, representatives of the Company, Bidder A, Baker Botts and Bidder A’s counsel held a telephone conference to discuss the revised draft merger agreement that had been received from Bidder A the day before. The discussion focused on the key differences between the drafts that had been exchanged by the parties as described above.

That same day, Bidder A sent the Company a letter indicating that it was prepared to increase the price of its proposal to $71.00 per share. The consideration mix was unchanged. Bidder A did not propose any additional changes to the form of merger agreement it had submitted on April 11, 2018.

Also on April 12, 2018, Mr. Chapman met with the CEO of Bidder A to discuss how Bidder A might improve the terms of its offer. Mr. Chapman indicated that he did not think the Board would approve a transaction at the price Bidder A had proposed. The CEO of Bidder A indicated that he would discuss the possibility of an additional price increase with Bidder A’s board of directors. The CEO of Bidder A also explained that he thought there would be roles for some of the Company senior officers in the combined company after the merger, although there was no discussion of any role for Mr. Chapman after the merger. They also discussed some of the remaining open items in the merger agreement, including employee commitments and the level of dividends that Company shareholders would receive on the stock portion of the consideration following the merger. Mr. Chapman also updated the CEO of Bidder A on the reverse due diligence process and requested that certain information be provided to the Company team as soon as possible.

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On April 13, 2018, CenterPoint Energy sent the Company a list of open issues in the draft merger agreement that the Company had sent to CenterPoint Energy on April 10, 2018. The key open issues identified in the issues list included CenterPoint Energy’s request for a closing condition that would permit CenterPoint Energy not to proceed with the merger in the event that any regulatory order issued in connection with the transaction would be reasonably likely to result in a Burdensome Condition, employee compensation commitments, treatment of outstanding performance-based equity awards, whether any Company directors would serve on the CenterPoint Energy board following the closing, interim operating restrictions and termination fees.

Also, on April 13, 2018, the Board held a telephonic meeting to receive an update regarding the status of negotiations with CenterPoint Energy and Bidder A. Senior management of the Company and representatives from BofA Merrill Lynch, Baker Botts and Taft were present during parts of the meeting. The representatives from Baker Botts and Taft met with the independent directors in executive session and reviewed with them certain legal matters relating to the potential transactions the Board was considering. Management and BofA Merrill Lynch updated the Board on the status of negotiations with CenterPoint Energy and Bidder A, including the diligence that was being conducted on Bidder A. Mr. Chapman reported to the Board on his separate conversations with the CEOs of CenterPoint Energy and Bidder A. After these presentations and further discussion among the directors, the Board instructed management to continue negotiations with both bidders. The Directors also reiterated their view that they were not prepared to enter into a transaction at a price of less than $72.00 per share.

On April 14, 2018, Ms. Hardwick spoke with representatives of Bidder A by telephone to discuss Bidder A’s financial forecast and other matters related to the Company’s diligence review of Bidder A.

On April 14 and 15, 2018, representatives of BofA Merrill Lynch spoke with CenterPoint Energy and Bidder A. BofA Merrill Lynch requested that each bidder present its “best and final” proposal by April 16, 2018 and indicated that the Company intended to select a preferred bidder based on the revised proposals.

On April 15, 2018, Mr. Prochazka called Mr. Chapman to discuss the final issues that would be addressed in CenterPoint Energy’s revised offer. The issues of particular concern to Mr. Prochazka were the mechanism proposed by the Company for the enforcement of CenterPoint Energy’s post-closing merger commitments, board representation by former Company directors on CenterPoint Energy’s board of directors following the merger, the Company’s ability to grant retention bonuses to certain non-officer employees of the Company prior to closing of the merger without CenterPoint Energy’s consent and the valuation of restricted stock units upon consummation of the merger. Mr. Prochazka indicated that CenterPoint Energy would reflect its position on these issues in its revised offer that would be submitted the next day. Mr. Chapman explained to Mr. Prochazka that he would not participate in any discussions about equity awards and that he would defer to the Compensation Committee of the Board on that issue.

On April 16, 2018, CenterPoint Energy and Bidder A submitted revised offers to acquire the Company. Bidder A continued to offer $71.00 per share, with 83% of the consideration in cash and 17% in common stock of Bidder A. The stock portion of the consideration was subject to a 7.5% collar based on fluctuation in the price of Bidder A’s common stock between the date a merger agreement was signed and closing. CenterPoint Energy increased its offer to $71.50 per share, with the consideration being all cash. CenterPoint Energy submitted a revised draft of the merger agreement with its revised bid. In this draft, CenterPoint Energy proposed revised terms with respect to compensation and equity awards for Company officers and employees, and the interim operational restrictions on the Company’s ability to incur debt and make capital expenditures beyond certain levels. CenterPoint Energy also proposed that it would not be required to complete the merger if any regulatory order issued in connection with the merger would impose a Burdensome Condition on either the Company or CenterPoint Energy (assuming for these purposes that CenterPoint Energy is a company the same size as the Company), although it would have to pay a termination fee in the event that it did not complete the merger because a Burdensome Condition had been imposed. CenterPoint Energy proposed termination fees of 2.5% of equity value for the Company and 3.5% of equity value for CenterPoint Energy.

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On April 18, 2018, Baker Botts sent to CenterPoint Energy and its counsel a revised draft of the merger agreement. The primary open issues in this draft related to interim operational restrictions, financing covenants and termination fees.

Also on April 18, 2018, a representative of BofA Merrill Lynch spoke to Mr. Rogers by telephone. At the direction of Company management, the BofA Merrill Lynch representative informed Mr. Rogers that the Company would like to move forward on a transaction with CenterPoint Energy, provided that acceptable price and other terms could be negotiated. The BofA Merrill Lynch representative indicated that the terms of the merger agreement proposed by CenterPoint Energy were not as favorable as those proposed by Bidder A. He also indicated that the Company would like CenterPoint Energy to consider increasing the price of its proposal to at least $72.00 per share because of the guidance the Board had given Company management with respect to the minimum price the Board would be willing to accept. Mr. Rogers indicated that CenterPoint Energy would be prepared to increase its price to $72.00 per share if the Company would agree to modify certain provisions in the merger agreement, including those relating to funding of certain employee incentive programs and compliance with certain covenants, including limits on maximum debt outstanding as of closing and capital expenditures prior to closing. Following this conversation, Mr. Prochazka called Mr. Chapman to discuss the outstanding provisions of the merger agreement as described in the previous sentence.

Also on April 18, 2018, BofA Merrill Lynch provided to Company management, which in turn promptly provided this to the Board, an updated version of its material relationships disclosure memorandum. Prior versions of this disclosure memorandum, dated January 9, 2018 and February 23, 2018, had been previously presented to the Board. The disclosure memorandum included certain information concerning BofA Merrill Lynch’s material relationships with CenterPoint Energy and Bidder A and noted, among other things, that (i) certain senior members of the BofA Merrill Lynch financial advisory deal team working with the Company are also members of the coverage team for CenterPoint Energy, including the relationship manager of the CenterPoint Energy coverage team, and (ii) certain members of the financial advisory team working with the Company have provided advisory services to CenterPoint Energy unrelated to the Company from time to time, but ceased providing such services prior to BofA Merrill Lynch being engaged by the Company. Also on April 18, 2018, a representative from BofA Merrill Lynch spoke with the chief executive officer of Bidder A to inform him that the Board had instructed management to move forward with another bidder, which, although not identified to Bidder A, was CenterPoint Energy.

On April 19, 2018 and April 20, 2018, Ms. Hardwick spoke to Mr. Rogers regarding the terms of the interim operations covenant relating to total indebtedness and the Company’s ability to pay retention bonuses to non-officer employees during the period between execution of the merger agreement and closing.

On April 20, 2018, the Compensation Committee of the Board met to consider the provisions of the merger agreement relating to compensation of Company officers and employees. Members of Company senior management, representatives of the Compensation Committee’s independent compensation consultant, Korn Ferry Hay Group, and representatives of Baker Botts were present during parts of the meeting. Among other things, the committee discussed the primary terms and conditions of the proposed merger agreement, including the amount proposed by CenterPoint Energy to be paid per share for the company’s common stock, the proposed treatment of outstanding stock units (time based, measured performance units and unmeasured performance units) under the company’s At-Risk Compensation Plan, as well as other compensation matters addressed in the proposed merger agreement. Following discussion, the committee approved the terms of the merger agreement as they related to compensation of Company officers and employees.

Also on April 20, 2018, CenterPoint Energy’s counsel sent Baker Botts and the Company a revised draft of the merger agreement. The primary open issues in this draft related to the interim operating covenants that would be applicable to the Company during the period between execution of the merger agreement and closing of the transaction and termination fees.

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On April 21, 2018, Mr. Prochazka called Mr. Chapman to discuss the remaining open issues in the merger agreement. Following this discussion and after additional discussions among the Company’s and CenterPoint Energy’s counsel, Baker Botts provided to CenterPoint Energy and its counsel a revised form of merger agreement that reflected the resolution of all open items in the merger agreement. This draft provided that performance-based equity awards would be cashed out at the greater of target and actual performance, other than 2019 grants, if any were issued, which would be cashed out on a pro-rated basis based on target performance, that CenterPoint Energy would not have to proceed with the merger if any regulatory order issued in connection with the merger resulted in a Burdensome Condition (although it might have to pay a termination fee depending upon the circumstances) and that the termination fees would be 2.5% of equity value for the Company and 3.5% of equity value for CenterPoint Energy.

Later that day, the Board met at a special meeting to consider the final terms of the offer from CenterPoint Energy. Members of Company senior management and representatives from BofA Merrill Lynch, Baker Botts and Taft were present during parts of the meeting. Mr. Chapman and other members of Company senior management reviewed with the Board the final terms of the transaction that had been negotiated with CenterPoint Energy, including the price of $72.00 per share in cash and the protections and commitments for employees, customers and the local communities in which the Company operates. Those stakeholder commitments outlined with the Board included the following:

Following the presentation by Company management, BofA Merrill Lynch reviewed the financial aspects of the transaction and provided the Board with an update of its valuation analysis with respect to the Company. The representatives from Baker Botts and Taft reviewed with the Board certain legal matters relating to the proposed transaction. Mr. Christian and a representative from Baker Botts reviewed with the Board the final terms of the merger agreement, a copy of which had been provided to the Board in advance of the meeting. BofA Merrill Lynch then delivered to the Board an oral opinion, which was confirmed by delivery of a written opinion dated April 21, 2018, to the effect that, as of that date and based on and subject to various assumptions and limitations described in its opinion, the merger consideration to be received by holders of Company common stock was fair, from a financial point of view, to such holders.

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Following receipt of BofA Merrill Lynch’s fairness opinion and further discussion, the Board unanimously adopted resolutions (i) determining that it is in the best interests of the Company and its shareholders for the Company to enter into the merger agreement, (ii) adopting the merger agreement and approving the Company’s execution, delivery and performance of the merger agreement and the consummation of the transactions contemplated by the merger agreement, and (iii) resolving to recommend that the shareholders of the Company approve the merger agreement and directing that the merger agreement be submitted to the Company’s shareholders for approval at a duly held meeting of the Company’s shareholders for such purpose.

Following the meeting, on April 21, 2018, the merger agreement was executed and, on April 23, 2018, the transaction was publicly announced.

Recommendation of Company’s Board of Directors and its Reasons for the Merger

The Board has reviewed and considered the terms of the merger and the merger agreement and has unanimously determined that the merger is advisable and in the best interests of the Company and our shareholders and unanimously recommends that our shareholders vote FOR the Merger proposal. The Board also unanimously recommends that our shareholders vote FOR the Merger-Related Compensation proposal and FOR any Special Meeting Adjournment proposal.

In reaching its decision to recommend that our shareholders approve the Merger proposal and the Merger-Related Compensation proposal, the Board consulted with our management, as well as BofA Merrill Lynch, our financial advisor in connection with the merger, Baker Botts L.L.P., our outside counsel in connection with the merger, and Taft Stettinius & Hollister LLP, our outside counsel, and considered various other factors, both positive and negative. The following discussion of the information and factors considered by the Board is not intended to be exhaustive and may not include all of the factors considered by the Board. In view of the wide variety of factors considered by the Board in connection with its evaluation of the merger, the Board did not consider it practical to, nor did it attempt to, quantify, rank or otherwise assign relative weights to the specific factors that it considered in reaching its decision. In considering the factors described below, individual members of the Board may have given different weight to different factors. The Board considered this information as a whole and considered overall the information and factors to be favorable to, and in support of, its determinations and recommendations. The material information and factors pertaining to the strategic rationale for the merger considered by the Board were as follows:

Impact of the Merger on Customers. The Board evaluated the expected impact of the merger on our customers, including the fact that the surviving corporation will serve approximately 4.5 million natural gas customers in eight states and the potential for long-term cost savings based on the increased potential for cost reductions of the combined companies following the merger.

Impact of the Merger on Communities. The Board considered the expected impact of the merger on the communities we serve and the benefits that the merger will likely generate for these communities from the greater strength of the combined company as compared to the Company on a stand-alone basis. In particular, the Board considered the following:

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Impact of the Merger on Employees. The Board evaluated the expected impact of the merger on our employees and considered that the merger agreement provides that for a period of two years following the effective time, CenterPoint Energy agrees to provide each Company employee (excluding union employees) with certain protections, including (1) the same or better employment responsibilities in the same location or within 50 miles of the same location as held by the Company employee immediately prior to the effective time of the merger, unless such change in responsibilities or location is consented to by the Company employee, (2) a base salary or wage rate and short-term incentive compensation target opportunities that are no less favorable, in the aggregate, than that provided to the Company employee immediately prior to the effective time of the merger and (3) employee benefits that are substantially comparable, in the aggregate, to those provided to the Company employee immediately prior to the effective time of the merger. CenterPoint Energy retained the right to terminate Company employees at any time, but if a Company employee’s employment is terminated without “cause” or for “good reason” within two years following the effective time, as more fully described in the section entitled “The Merger Agreement—Employee Matters,” CenterPoint Energy must provide certain severance benefits to such terminated Company employees.

Financial Considerations. The Board considered our business plan and historical and projected financial performance, and the expected financial impact of the merger on us. The Board also considered the risks of remaining as a standalone public company, including any risks of execution on our business plan and achieving such financial projections, general macroeconomic challenges and market risks. The Board considered the fact that the merger consideration is to be paid entirely in cash, which provides certainty of value and that, as a result, Company shareholders will not be exposed to the risks and uncertainties relating to the Company’s financial performance and future value if the merger is completed.

Share Price. The Board considered our historical stock prices, including that the merger consideration represented a premium of approximately 9.8 percent to the closing stock price of Company common stock on April 20, 2018, the last trading day prior to the date that the Company and CenterPoint signed the merger agreement. The closing stock price of the Company common stock on August 21, 2017, which was the last trading day prior to media reports regarding takeover interest in the Company, was $61.31 per share. The merger consideration represents a 17.4 percent premium to such closing price. If adjusted for industry peer performance between August 21, 2017 and April 20, 2018, the merger consideration represents a 28.4 percent premium over such adjusted price of $56.07 per share.

Recommendation of Management. The Board took into account the recommendation of our management in favor of the merger.

Opinion of Financial Advisor. The Board considered the opinion of BofA Merrill Lynch, dated April 21, 2018, to the Board as to the fairness, from a financial point of view and as of the date of the opinion, to the holders of Company common stock of the merger consideration to be received by such holders, as more fully described below in the section entitled “Opinion of the Company’s Financial Advisor” beginning on page 32.

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Strategic Alternatives. The Board considered the trends and competitive developments in the industry and the range of strategic alternatives available to us, including the prospects for the Company continuing to operate as a stand-alone entity, or the possibility and feasibility of pursuing a business combination with another industry participant. The Board conducted a thorough review of a potential sale of the Company, including conducting a competitive sale process in which CenterPoint Energy emerged as the bidder offering the highest per-share consideration, as illustrated by, without limitation the following factors:

The Board determined that these alternatives, including continuing to operate as a stand-alone entity, were less favorable to the Company and its shareholders than the proposed merger.

Terms of the Merger Agreement. The Board reviewed and considered the terms of the merger agreement, including the representations and warranties of each party, the conditions to each party’s obligation to complete the merger, our right to consider and engage in negotiations regarding potentially superior proposals, the Board’s right to withdraw or otherwise change its recommendation to our shareholders in favor of the proposals related to the merger agreement, the rights of each party to terminate the merger agreement and the obligations of each party to pay a termination fee under certain circumstances. See “The Merger Agreement” beginning on page 52 for a detailed discussion of the terms and conditions of the merger agreement.

Likelihood of Completion of the Merger. The Board considered the likelihood that the merger will be completed on a timely basis, including the likelihood that the merger will receive all necessary regulatory approvals without unacceptable conditions and that all conditions to consummation of the merger will be satisfied. To that end, the Board further considered the potential length of the regulatory approvals process and that the merger agreement provides that, subject to certain exceptions, it may not be terminated until April 21, 2019, which may be extended for an additional six months under specified circumstances. The Board also considered the absence of a financing condition in the merger agreement and the facts that CenterPoint Energy has entered into the commitment letter pursuant to which, subject to the terms and conditions set forth therein, the commitment parties have committed to provide a 364-day senior unsecured bridge term loan facility in an aggregate principal amount of up to $5.0 billion, to fund a portion of the merger consideration (See “The Merger Agreement – Financing and Financing Cooperation”). The Board further considered that the commitment letter provides that, to the extent the end date in the merger agreement is extended to a date that is on or prior to October 21, 2019, the outside date for the commitment letter will also be extended to that date.

Continued Payment of Dividend. The Board considered the merger agreement provision permitting us to continue to pay quarterly cash dividends at the current payment rate of $0.45 for quarterly dividends declared before October 31, 2018 and at the increased payment rate of $0.48 for quarterly dividends declared on or after October 31, 2018, and to pay a “stub” dividend in respect of the quarter in which the merger is completed.

The Board also considered potential risks associated with the merger, including the following:

No Future Participation. The Board considered that our shareholders will have no ongoing equity participation in the Company following the merger, and that such shareholders will therefore cease to participate

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in the future earnings or growth that we may achieve, or to benefit from increases, if any, in the value of the Company common stock as a result of the merger.

Regulatory Approvals. The Board considered the regulatory approvals that are required in connection with the merger and the risk that governmental authorities and third parties may seek to impose unfavorable terms or conditions on the required approvals or that those approvals may not be obtained at all.

Shareholder Approval and Related Termination Fee. The Board considered the approvals of our shareholders being sought in connection with the merger, and the fact that if the merger agreement is terminated due to a failure of a majority of our shareholders voting at the special meeting to approval the Merger proposal, we may under certain circumstances be required to pay a termination fee to CenterPoint Energy of $150 million.

Alternative Proposals. The Board considered the risk that, although we have the right under certain limited circumstances to consider and participate in negotiations with respect to unsolicited proposals for alternative transactions, the merger agreement contains provisions relating to the potential payment of a termination fee of $150 million in connection with an alternative transaction, which may have the effect of discouraging such proposals. In addition, the Board considered that the merger agreement includes other customary restrictions on our ability to solicit offers for alternative proposals or engage in discussions regarding such proposals, subject to exceptions, or to terminate the merger agreement to enter into an agreement with respect to an alternative transaction, any of which could have the effect of discouraging such proposals from being made or pursued, even if potentially more favorable to our shareholders than the merger.

Additional Interests of Executive Officers and Directors. The Board considered that certain of our executive officers and directors may have interests with respect to the merger in addition to their interests as shareholders of the Company. See “Additional Interests of the Company’s Directors and Executive Officers in the Merger” beginning on page 48 for further information.

Interim Operations. The Board considered the terms of the merger agreement that place restrictions on the conduct of our businesses prior to completion of the merger, generally requiring us to conduct our business in the ordinary course in all material respects and prohibiting us from taking specified actions, which may delay or prevent us from undertaking business opportunities that may arise prior to completion of the merger and the resultant risk if the merger is not consummated.

Transaction Costs. The Board took into account the substantial transaction costs to be incurred in connection with the merger, including in connection with the pursuit of the required regulatory approvals and in connection with potential litigation that may arise in connection with the merger. The Board also considered the significant costs involved in connection with negotiating the merger agreement and completing the merger, the substantial management time and effort required to close the merger and the related disruption to our day-to-day operations during the interim period between execution of the merger agreement and the closing of the merger and the resultant risk if the merger is not consummated.

U.S. Federal Income Tax Impacts. The Board considered that the receipt of cash in exchange for shares of Company common stock pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes for many of our shareholders.

The Board believes that, overall, the potential benefits of the merger to our shareholders outweigh the risks and uncertainties of the merger and the Board unanimously recommends that shareholders vote FOR approval of the Merger proposal.

The foregoing discussion of factors considered by the Board is not intended to be exhaustive but includes the material factors considered by the Board. In light of the variety of factors considered in connection with its evaluation of the merger, the Board did not find it practicable to, and did not, quantify or otherwise assign

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relative weights to the specific factors considered in reaching its determinations and recommendations. Moreover, each member of the Board applied his or her own personal business judgment to the process and may have given different weight to different factors. The Board did not undertake to make any specific determination as to whether any factor, or any particular aspect of any factor, supported or did not support its ultimate determination. The Board based its recommendation on the totality of the information presented.

Opinion of the Company’s Financial Advisor

We have retained BofA Merrill Lynch to act as our financial advisor in connection with the merger. BofA Merrill Lynch is an internationally recognized investment banking firm which is regularly engaged in the valuation of businesses and securities in connection with mergers and acquisitions, negotiated underwritings, secondary distributions of listed and unlisted securities, private placements and valuations for corporate and other purposes. We selected BofA Merrill Lynch to act as our financial advisor in connection with the merger on the basis of BofA Merrill Lynch’s experience in transactions similar to the merger, its reputation in the investment community and its familiarity with us and our business.

On April 21, 2018, at a meeting of the Board held to evaluate the merger, BofA Merrill Lynch delivered to the Board an oral opinion, which was confirmed by delivery of a written opinion dated April 21, 2018, to the effect that, as of the date of the opinion and based on and subject to various assumptions and limitations described in its opinion, the merger consideration to be received by holders of Company common stock was fair, from a financial point of view, to such holders.

The full text of BofA Merrill Lynch’s written opinion to the Board, which describes, among other things, the assumptions made, procedures followed, factors considered and limitations on the review undertaken, is attached as Annex B to this proxy statement and is incorporated by reference herein in its entirety. The following summary of BofA Merrill Lynch’s opinion is qualified in its entirety by reference to the full text of the opinion. BofA Merrill Lynch delivered its opinion to the Board for the benefit and use of the Board (in its capacity as such) in connection with and for purposes of its evaluation of the merger consideration from a financial point of view. BofA Merrill Lynch’s opinion does not address any other aspect of the merger and no opinion or view was expressed as to the relative merits of the merger in comparison to other strategies or transactions that might be available to us or in which we might engage or as to our underlying business decision to proceed with or effect the merger. BofA Merrill Lynch’s opinion does not address any other aspect of the merger and does not constitute a recommendation to any shareholder as to how to vote or act in connection with the proposed merger or any other matter.

In connection with rendering its opinion, BofA Merrill Lynch, among other things:

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In arriving at its opinion, BofA Merrill Lynch assumed and relied upon, without independent verification, the accuracy and completeness of the financial and other information and data publicly available or provided to or otherwise reviewed by or discussed with it and relied upon the assurances of the management of the Company that they were not aware of any facts or circumstances that would make such information or data inaccurate or misleading in any material respect. With respect to our management forecasts, BofA Merrill Lynch was advised by us, and assumed that they were reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of the management of the Company as to the future financial performance of the Company. BofA Merrill Lynch relied, at our direction, upon the assessments of the management of the Company as to the potential impact of market, governmental and regulatory trends and developments relating to or affecting us and our business. BofA Merrill Lynch did not make and was not provided with any independent evaluation or appraisal of the assets or liabilities (contingent or otherwise) of the Company, nor did it make any physical inspection of our properties or assets. BofA Merrill Lynch did not evaluate the solvency or fair value of the Company or CenterPoint Energy under any state, federal or other laws relating to bankruptcy, insolvency or similar matters. BofA Merrill Lynch assumed, at the direction of the Company, that the merger would be consummated in accordance with its terms, without waiver, modification or amendment of any material term, condition or agreement. BofA Merrill Lynch also assumed, at the direction of the Company, that the final executed merger agreement would not differ in any material respect from the Draft Agreement reviewed by it.

BofA Merrill Lynch expressed no view or opinion as to any terms or other aspects or implications of the merger (other than the merger consideration to the extent expressly specified in its opinion), including, without limitation, the form or structure of the merger, any related transactions or any other agreement, arrangement or understanding entered into in connection with or related to the merger or otherwise. BofA Merrill Lynch’s opinion was limited to the fairness, from a financial point of view, of the merger consideration to be received by the holders of Company common stock and no opinion or view was expressed with respect to any consideration received in connection with the merger by the holders of any other class of securities, creditors or other constituencies of any party. In addition, no opinion or view was expressed with respect to the fairness (financial or otherwise) of the amount, nature or any other aspect of any compensation to any of the officers, directors or employees of any party to the merger, or class of such persons, relative to the merger consideration or otherwise. Furthermore, no opinion or view was expressed as to the relative merits of the merger in comparison to other strategies or transactions that might be available to us or in which we might engage or as to our underlying business decision to proceed with or effect the merger. BofA Merrill Lynch also did not express any view or opinion with respect to, and BofA Merrill Lynch relied, at the direction of the Company, upon the assessments of our representatives regarding, legal, regulatory, accounting, tax and similar matters relating to us or the merger, as to which matters BofA Merrill Lynch understood that we obtained such advice as it deemed necessary from qualified professionals. In addition, BofA Merrill Lynch expressed no opinion or recommendation as to how any shareholder should vote or act in connection with the merger or any other matter.

BofA Merrill Lynch’s opinion was necessarily based on financial, economic, monetary, market and other conditions and circumstances as in effect on, and the information made available to BofA Merrill Lynch as of, the date of its opinion. It should be understood that subsequent developments may affect its opinion, and BofA Merrill Lynch does not have any obligation to update, revise or reaffirm its opinion. The issuance of BofA Merrill Lynch’s opinion was approved by a fairness opinion review committee of BofA Merrill Lynch. Except as described in this summary, we imposed no other limitations on the investigations made or procedures followed by BofA Merrill Lynch in rendering its opinion.

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The discussion set forth below in the section entitled “Summary of Material Financial Analyses” represents a brief summary of the material financial analyses presented by BofA Merrill Lynch to the Board in connection with its opinion. The financial analyses summarized below include information presented in tabular format. In order to fully understand the financial analyses performed by BofA Merrill Lynch, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses performed by BofA Merrill Lynch. Considering the data set forth in the tables below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of the financial analyses performed by BofA Merrill Lynch.

Summary of Material Financial Analyses.

Selected Publicly Traded Companies Analysis. BofA Merrill Lynch reviewed publicly available financial and stock market information for the Company, the following six publicly traded companies in the gas utility sector, the following six publicly traded companies in the electric utility sector and the following six publicly traded companies in the non-regulated (engineering and construction) sector:

Gas Utility Sector

Electric Utility Sector

Non-Regulated Sector

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BofA Merrill Lynch reviewed, among other things, per share equity values, based on closing stock prices on April 19, 2018, of the selected publicly traded companies in the gas utility, electric utility and non-regulated sectors as a multiple of calendar years 2018 and 2019 estimated earnings per share, commonly referred to as EPS. The overall low to high calendar year 2018 estimated EPS multiples observed for these companies were (i) 17.0x to 26.9x (with an average of 21.3x and a median of 21.5x) for the companies in the gas utility sector, (ii) 15.8x to 21.4x (with an average of 18.9x and a median of 18.9x) for the companies in the electric utility sector and (iii) 13.6x to 18.7x (with an average of 16.6x and a median of 16.6x) for the companies in the non-regulated sector. The overall low to high calendar year 2019 estimated EPS multiples observed for these companies were (i) 17.9x to 24.5x (with an average of 20.2x and a median of 19.8x) for the companies in the gas utility sector, (ii) 15.6x to 20.4x (with an average of 17.7x and a median of 17.5x) for the companies in the electric utility sector and (iii) 11.8x to 17.1x (with an average of 14.2x and a median of 14.6x) for the companies in the non-regulated sector.

BofA Merrill Lynch also reviewed enterprise values of the selected publicly traded companies, calculated as the equity values based on closing stock prices on April 19, 2018 plus debt and less cash, as a multiple of calendar years 2018 and 2019 estimated earnings before interest, taxes, depreciation and amortization, commonly referred to as EBITDA. The overall low to high calendar year 2018 EBITDA multiples observed for these companies were (i) 9.2x to 12.8x (with an average of 11.5x and a median of 11.9x) for the companies in the gas utility sector, (ii) 8.4x to 13.4x (with an average of 10.8x and a median of 10.8x) for the companies in the electric utility sector and (iii) 6.9x to 9.9x (with an average of 8.1x and a median of 7.8x) for the companies in the non-regulated sector. The overall low to high calendar year 2019 EBITDA multiples observed for these companies were (i) 8.6x to 15.2x (with an average of 11.3x and a median of 10.9x) for the companies in the gas utility sector, (ii) 7.9x to 11.7x (with an average of 9.9x and a median of 10.0x) for the companies in the electric utility sector and (iii) 6.4x to 9.2x (with an average of 7.3x and a median of 7.0x) for the companies in the non-regulated sector.

BofA Merrill Lynch then applied, for each Company business segment, calendar year 2018 and 2019 estimated EPS multiples of (i) 20.5x to 22.5x and 19.0x to 21.0x, respectively, derived from the selected publicly traded companies in the gas utility sector to the calendar year 2018 and 2019 estimated EPS for our gas utility business, (ii) 18.0x to 20.0x and 16.5x to 18.5x, respectively, derived from the selected publicly traded companies in the electric utility sector to the calendar year 2018 and 2019 estimated EPS for our electric utility business, and (iii) 15.5x to 17.5x and 13.5x to 15.5x, respectively, derived from the selected publicly traded companies in the non-regulated sector to calendar year 2018 and 2019 estimated EPS for our non-regulated business. BofA Merrill Lynch applied, for each Company business segment, similar calendar year 2018 and 2019 estimated EBITDA multiples of (i) 11.5x to 12.5x and 10.5x to 11.5x, respectively, derived from the selected publicly traded companies in the gas utility sector to the calendar year 2018 and 2019 estimated EBITDA for our gas utility business, (ii) 10.5x to 11.5x and 9.5x to 10.5x, respectively, derived from the selected publicly traded companies in the electric utility sector to the calendar year 2018 and 2019 estimated EBITDA for our electric utility business, and (iii) 7.5x to 8.5x and 6.5x to 7.5x, respectively, derived from the selected publicly traded companies in the non-regulated sector to the calendar year 2018 and 2019 estimated EBITDA for our non-regulated business. Estimated financial data of the selected publicly traded companies were based on publicly available research analysts’ estimates, and estimated financial data of the Company were based on our management forecasts. This analysis indicated the following approximate implied per share equity value reference ranges for the Company, rounded to the nearest $0.25, as compared to the merger consideration:

No company used in this analysis is identical or directly comparable to us. Accordingly, an evaluation of the results of this analysis is not entirely mathematical. Rather, this analysis involves complex considerations and judgments concerning differences in financial and operating characteristics and other factors that could affect the public trading or other values of the companies to which the Company was compared.

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Selected Precedent Transactions Analysis. BofA Merrill Lynch reviewed, to the extent publicly available, financial information relating to the following five selected transactions involving companies in the gas utility sector, the following fourteen selected transactions involving companies in the electric utility sector and the following seven selected transactions involving companies in the non-regulated sector:

Electric Utility Precedent Transactions

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BofA Merrill Lynch reviewed transaction values, calculated as the enterprise value implied for the target company based on the consideration payable in the selected transaction, as a multiple of the target company’s (i) one-year forward and two-year forward estimated EPS, with respect to the gas utility selected transactions and electric utility selected transactions and (ii) latest twelve months’ EBITDA, with respect to the non-regulated precedent transactions.

The overall low to high multiples of the target companies’ one-year forward and two-year forward estimated EPS for the selected transactions were (i) 19.2x to 30.2x (with an average of 25.3x and a median of 24.8x, in each case excluding the Dominion Resources, Inc./Questar Corporation transaction, for which the transaction value could not be adjusted for master limited partnership eligible assets) and 18.7x to 28.5x (with an average of 26.4x and a median of 26.4x, in each case excluding the Dominion Resources, Inc./Questar Corporation transaction, for which the transaction value could not be adjusted for master limited partnership eligible assets), respectively, in the case of the gas utility selected transactions and (ii) 18.1x to 26.4x (with an average of 22.0x and a median of 22.0x) and 17.4x to 24.1x (with an average of 20.8x and a median of 20.8x), respectively, in the case of the electric utility selected transactions. The overall low to high multiples of the target companies’ latest twelve months’ EBITDA were 2.5x to 9.5x (with an average of 6.4x and a median of 7.0x) in the non-regulated selected transactions.

BofA Merrill Lynch then applied (i) one-year forward and two-year forward EPS multiples of 24.0x to 26.0x and 23.0x to 25.0x, respectively, derived from the gas utility selected transactions to the calendar year 2018 and 2019 estimated EPS for our gas utility business, (ii) one-year forward and two-year forward EPS multiples of 23.0x to 25.0x and 20.0x to 22.0x, respectively, derived from the electric utility selected transactions to the calendar year 2018 and 2019 estimated EPS for our electric utility business, and (iii) one-year forward and two-year forward EBITDA multiples of 7.0x to 9.0x and 6.0x to 8.0x, respectively, derived from the non-regulated selected transactions to the calendar year 2018 and 2019 estimated EBITDA for our non-regulated business. Estimated financial data of the selected transactions were based on publicly available information. Estimated financial data of the Company were based on our management forecasts. This analysis indicated the following approximate implied per share equity value reference ranges for the Company, rounded to the nearest $0.25, as compared to the merger consideration:

No company, business or transaction used in this analysis is identical or directly comparable to us or the merger. Accordingly, an evaluation of the results of this analysis is not entirely mathematical. Rather, this analysis involves complex considerations and judgments concerning differences in financial and operating characteristics and other factors that could affect the acquisition or other values of the companies, business segments or transactions to which the Company and the merger were compared.

Discounted Cash Flow Analysis. BofA Merrill Lynch performed a discounted cash flow sum-of-the-parts analysis of the Company to calculate the estimated present value of the standalone unlevered, after-tax free cash flows that the Company was forecasted to generate during our fiscal years 2018 through 2027 based on our management forecasts. BofA Merrill Lynch calculated terminal values for each Company business segment by applying terminal forward multiples of (i) 17.5x to 19.5x to our fiscal year 2027 estimated EPS for our gas utility business, (ii) 15.3x to 17.3x to our fiscal year 2027 estimated EPS for our electric utility business and (iii) 8.0x to 9.0x to our fiscal year 2027 estimated EBITDA for our non-regulated business. The cash flows and terminal values for each business segment were then discounted to present value as of December 31, 2017 using discount rates ranging from (i) 5.0% to 5.8% for our gas utility business, (ii) 4.7% to 5.4% for our electric utility business and (iii) 7.8% to 9.6% for our non-regulated business, based on estimates of each business segment’s weighted average cost of capital. From the resulting enterprise values for each business segment, BofA Merrill Lynch deducted net debt as of December 31, 2017 to derive equity values for each business segment. Ranges of total

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equity values were then determined by combining the low endpoints of the equity value ranges for the respective business segments to comprise the low endpoint, and combining the high endpoints of the equity value ranges for such business segments to comprise the high endpoint. This analysis indicated the following approximate implied per share equity value reference ranges for the Company, rounded to the nearest $0.25, as compared to the merger consideration:

Other Factors.

Other. BofA Merrill Lynch also noted certain additional factors that were not considered part of BofA Merrill Lynch’s material financial analyses with respect to its opinion but were referenced for informational purposes, including, among other things, the following:

Miscellaneous.

As noted above, the discussion set forth above in the section entitled “Summary of Material Financial Analyses” is a summary of the material financial analyses presented by BofA Merrill Lynch to the Board in connection with its opinion and is not a comprehensive description of all analyses undertaken or factors considered by BofA Merrill Lynch in connection with its opinion. The preparation of a financial opinion is a complex analytical process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances and, therefore, a financial opinion is not readily susceptible to partial analysis or summary description. BofA Merrill Lynch believes that its analyses summarized above must be considered as a whole. BofA Merrill Lynch further believes that selecting portions of its analyses and the factors considered or focusing on information presented in tabular format, without considering all analyses and factors or the narrative description of the analyses, could create a misleading or incomplete view of the processes underlying BofA Merrill Lynch’s analyses and opinion. The fact that any specific analysis has been referred to in the summary above is not meant to indicate that such analysis was given greater weight than any other analysis referred to in the summary.

In performing its analyses, BofA Merrill Lynch considered industry performance, general business and economic conditions and other matters, many of which are beyond the control of the Company and CenterPoint Energy. The estimates of the future performance of the Company and CenterPoint Energy in or underlying BofA Merrill Lynch’s analyses are not necessarily indicative of actual values or actual future results, which may be significantly more or less favorable than those estimates or those suggested by BofA Merrill Lynch’s analyses. These analyses were prepared solely as part of BofA Merrill Lynch’s analysis of the fairness, from a financial point of view, to the holders of the Company common stock of the merger consideration to be received by such holders and were provided to the Board in connection with the delivery of BofA Merrill Lynch’s opinion. The analyses do not purport to be appraisals or to reflect the prices at which a company might actually be sold or the prices at which any securities have traded or may trade at any time in the future. Accordingly, the estimates used in, and the ranges of valuations resulting from, any particular analysis described above are inherently subject to

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substantial uncertainty and should not be taken to be BofA Merrill Lynch’s view of the actual values of the Company or CenterPoint Energy.

The type and amount of consideration payable in the merger was determined through negotiations between the Company and CenterPoint Energy, rather than by any financial advisor, and was approved by the Board. The decision to enter into the merger agreement was solely that of the Board. As described above, BofA Merrill Lynch’s opinion and analyses were only one of many factors considered by the Board in its evaluation of the proposed merger and should not be viewed as determinative of the views of the Board or management with respect to the merger or the merger consideration.

We have agreed to pay BofA Merrill Lynch for its services in connection with the merger an aggregate fee estimated to be approximately $32.3 million, $1 million of which was payable upon the delivery of BofA Merrill Lynch’s opinion, approximately $3.23 million of which was payable upon execution of the merger agreement, approximately $6.46 million of which is payable upon receipt of the Company shareholder approval and the remaining portion of which is contingent upon consummation of the merger. We have also agreed to reimburse BofA Merrill Lynch for its expenses incurred in connection with BofA Merrill Lynch’s engagement and to indemnify BofA Merrill Lynch, any controlling person of BofA Merrill Lynch and each of their respective directors, officers, employees, agents and affiliates against specified liabilities, including liabilities under the federal securities laws.

BofA Merrill Lynch and its affiliates comprise a full service securities firm and commercial bank engaged in securities, commodities and derivatives trading, foreign exchange and other brokerage activities, and principal investing as well as providing investment, corporate and private banking, asset and investment management, financing and financial advisory services and other commercial services and products to a wide range of companies, governments and individuals. In the ordinary course of their businesses, BofA Merrill Lynch and its affiliates may invest on a principal basis or on behalf of customers or manage funds that invest, make or hold long or short positions, finance positions or trade or otherwise effect transactions in equity, debt or other securities or financial instruments (including derivatives, bank loans or other obligations) of the Company, CenterPoint Energy and certain of their respective affiliates.

BofA Merrill Lynch and its affiliates in the past have provided, currently are providing, and in the future may provide investment banking, commercial banking and other financial services to us and have received or in the future may receive compensation for the rendering of these services, including (i) having acted or acting as administrative agent, co-lead arranger and joint bookrunner for, and as a lender (including a swing line and letter of credit lender) under, certain credit facilities of our affiliates, (ii) having acted as placement agent in a debt offering undertaken by an affiliate of ours, (iii) having provided or providing certain commodity and derivatives trading services to us and certain of our affiliates, and (iv) having provided or providing certain treasury and trade management services and products to us and certain of our affiliates. From April 1, 2016 through March 31, 2018, BofA Merrill Lynch and its affiliates derived aggregate revenues from us and our affiliates of approximately $5 million for investment and corporate banking services.

In addition, BofA Merrill Lynch and its affiliates in the past have provided, currently are providing, and in the future may provide investment banking, commercial banking and other financial services to CenterPoint Energy and have received or in the future may receive compensation for the rendering of these services, including (i) having acted or acting as co-lead arranger and joint bookrunner for, and as a lender (including in some instances as letter of credit lender) under, certain credit facilities of CenterPoint Energy and certain of its affiliates, (ii) having acted as joint bookrunner on several debt offerings undertaken by affiliates of CenterPoint Energy, and (iii) having provided or providing certain treasury and trade management services and products to CenterPoint Energy and certain of its affiliates. From April 1, 2016 through March 31, 2018, BofA Merrill Lynch and its affiliates derived aggregate revenues from CenterPoint Energy and its affiliates, including Enable Midstream LP, of approximately $10 million for investment and corporate banking services.

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Forward-Looking Financial Information

The Company does not as a matter of course make public forward-looking financial information as to future revenues, earnings, or other results, other than providing estimated ranges of expected earnings and earnings growth as disclosed in regular press releases and investor materials. However, for internal purposes and in connection with the process leading to the execution of the merger agreement, the management of the Company prepared certain projections of future financial and operating performance of the Company for the years 2018 through 2027. These projections are included in this proxy statement because we provided such projections to our financial advisor and to CenterPoint Energy in connection with the merger agreement discussions. The following forward-looking financial information was not prepared with a view toward public disclosure or with a view toward complying with the guidelines established by the American Institute of Certified Public Accountants with respect to forward-looking financial information, but, in the view of the management of the Company, was prepared on a reasonable basis, reflected the best then-currently available estimates and judgments at the time of its preparation, and presented at the time of its preparation, to the best of management’s knowledge and belief, the expected course of action and the expected future financial performance of the Company. However, this information is not fact and should not be relied upon as being necessarily indicative of future results, and readers of this proxy statement are cautioned not to place undue reliance on the forward-looking financial information.

Neither our independent auditors, nor any other independent accountants, have compiled, examined, or performed any procedures with respect to the forward-looking financial information contained herein, nor have they expressed any opinion or any other form of assurance on such forward-looking financial information or its achievability, and assume no responsibility for, and disclaim any association with, the forward-looking financial information.

The following table sets forth a summary of the forward-looking information we provided to CenterPoint Energy and our financial advisor in connection with the process leading to the execution of the merger agreement.

The forward-looking financial information is based on various assumptions, including, but not limited to, the following principal assumptions:

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The estimates and assumptions underlying the forward-looking financial information are inherently uncertain and, though considered reasonable by the management of the Company as of the date of the preparation of such forward-looking financial information, are subject to a wide variety of significant business, economic, regulatory and competitive risks and uncertainties that could cause actual results to differ materially from those contained in the forward-looking financial information, including, among other things, the matters described in the section entitled “Cautionary Statement Regarding Forward-Looking Statements” beginning on page 10 of this proxy statement. Accordingly, there can be no assurance that the forward-looking results are indicative of the future performance of the Company, or that actual results will not differ materially from those presented in the forward-looking financial information. Inclusion of the forward-looking financial information in this proxy statement should not be regarded as a representation by any person that the results contained in the forward-looking financial information will be achieved.

The forward-looking financial information does not take into account any circumstances or events occurring after the date it was prepared, including the announcement of the merger. We have not updated or otherwise revised, and do not intend to update or otherwise revise the forward-looking financial information to reflect circumstances existing since the preparation of such information or to reflect the occurrence of unanticipated events, including in the event that any or all of the underlying assumptions are shown to be in error. Furthermore, we do not intend to update or revise the forward-looking financial information in this proxy statement to reflect changes in general economic or industry conditions.

The information concerning forward-looking financial information provided by us is not included in this proxy statement in order to induce any shareholder to vote in favor of the proposals at the special meeting or to acquire securities of the Company.

Accounting Treatment

The merger will be accounted for following the acquisition method of accounting under Accounting Standards Codification Topic 805, Business Combinations.

Material U.S. Federal Income Tax Consequences of the Merger

The following is a discussion of the material U.S. federal income tax consequences of the merger to holders of Company common stock whose shares are exchanged for cash pursuant to the merger. This discussion is based on the provisions of the Internal Revenue Code of 1986, as amended (the “Code”), applicable U.S. Treasury regulations (“Treasury Regulations”), judicial authorities, and administrative interpretations, each as in effect as of the date of this proxy statement. These authorities are subject to change, possibly on a retroactive basis, and any such change could affect the accuracy of the statements and conclusions set forth in this discussion. We cannot assure you that the Internal Revenue Service (the “IRS”) will not challenge one or more of the tax consequences described in this discussion or that a court would not sustain such challenge.

This discussion applies only to holders of shares of Company common stock who hold such shares as a “capital asset” within the meaning of Section 1221 of the Code (generally, property held for investment). Further, this discussion does not purport to consider all aspects of U.S. federal income taxation that may be relevant to a holder in light of such holder’s particular circumstances, or that may apply to a holder that is subject to special treatment under the U.S. federal income tax laws (including, for example, insurance companies, dealers or brokers in securities or foreign currencies, traders in securities who elect the mark-to-market method of accounting, holders that have a functional currency other than the U.S. dollar, tax-exempt organizations, cooperatives, banks and certain other financial institutions, mutual funds, certain expatriates, partnerships, S corporations, or other pass-through entities or investors in partnerships or such other entities, holders who hold shares of Company common stock as part of a straddle, constructive sale, or conversion transaction, holders who will hold, directly or indirectly, an equity interest in the surviving corporation, and holders who acquired their

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shares of Company common stock through the exercise of employee stock options or other compensation arrangements). Moreover, this discussion does not address the tax consequences of the merger arising under any applicable state, local, or foreign tax laws or the application of other U.S. federal taxes, such as the federal estate tax, the federal gift tax, the “Medicare” tax on certain net investment income, or the alternative minimum tax.

If a partnership (including for this purpose any entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds shares of Company common stock, the tax treatment of a partner in such partnership will generally depend on the status of the partners and the activities of the partnership. If you are a partner of a partnership holding shares of Company common stock, you should consult your tax advisor.

For purposes of this discussion, the term “U.S. holder” means a beneficial owner of Company common stock that is for U.S. federal income tax purposes:

For purposes of this discussion, a “non-U.S. holder” is a beneficial owner of Company common stock, other than a partnership or other entity taxable as a partnership for U.S. federal income tax purposes, that is not a U.S. holder.

Holders of Company common stock are urged to consult their own tax advisors regarding the application of the U.S. federal tax laws to their particular situation and the applicability and effect of state, local or foreign tax laws and tax treaties.

Consequences to U.S. Holders. The receipt of cash by U.S. holders in exchange for shares of Company common stock pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes. In general, a U.S. holder who receives cash in exchange for shares of Company common stock pursuant to the merger will recognize gain or loss in an amount equal to the difference, if any, between (1) the amount of cash received and (2) the U.S. holder’s adjusted tax basis in such shares of Company common stock.

Any such gain or loss recognized by a U.S. holder upon the exchange of shares of Company common stock pursuant to the merger generally will be capital gain or loss and will be long-term capital gain or loss if the U.S. holder’s holding period in its shares of Company common stock is more than one year on the closing date of the merger. Long-term capital gains of non-corporate U.S. holders generally are eligible for preferential U.S. federal income tax rates. The deductibility of capital losses is subject to limitations. If a U.S. holder acquired different blocks of Company common stock at different times and different prices, such U.S. holder must determine its adjusted tax basis and holding period separately with respect to each block of Company common stock.

Consequences to Non-U.S. Holders. Subject to the discussion below in “—Information Reporting and Backup Withholding,” a non-U.S. holder who receives cash in exchange for its shares of Company common stock in the merger generally will not be subject to U.S. federal income tax on gain recognized on such exchange unless:

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A non-U.S. holder described in the first bullet above generally will be subject to U.S. federal income tax in the same manner as a U.S. holder with respect to the receipt of cash in exchange for Company common stock in the merger. A non-U.S. holder that is a corporation may also be subject to an additional “branch profits tax” at a rate of 30% (or such lower rate as may be specified by an applicable treaty) on its effectively connected earnings and profits for the taxable year, subject to certain adjustments.

Gain recognized with respect to shares of Company common stock surrendered in the merger by a non-U.S. holder who is described in the second bullet above generally will be subject to U.S. federal income tax at a 30% rate (or such lower rate as may be specified by an applicable treaty), but may be offset by certain U.S. source capital losses, if any, of the non-U.S. holder.

With respect to the third bullet above, the non-U.S. holder’s Company common stock will not be treated as a USRPI unless we are or have been a “United States real property holding corporation,” as defined in the Code (a “USRPHC”), at any time during the five year period ending on the date of the merger or the non-U.S. holder’s holding period, whichever period is shorter. We have not made a determination as to whether we have been or will become a USRPHC at any time during the five-year period ending on the date of the merger. However, even if we were treated as a USRPHC at any time during the applicable period, the non-U.S. holder’s Company common stock will not be treated as a USRPI unless (1) our Company common stock was not regularly traded on an established securities market (within the meaning of Section 1.897-9T(d) of the Treasury Regulations) prior to the merger, or (2) such holder owned, actually or constructively, more than five percent of our Company common stock during the applicable period described above. If a non-U.S. holder’s Company common stock constitutes a USRPI, such non-U.S. holder will be subject to U.S. federal income tax on the gain recognized in the merger on a net basis in the same manner as a U.S. holder.

Information Reporting and Backup Withholding. Payments made in exchange for shares of Company common stock pursuant to the merger may be subject, under certain circumstances, to information reporting and backup withholding (currently at a rate of 24%). To avoid backup withholding, a U.S. holder that does not otherwise establish an exemption should complete and return IRS Form W-9, certifying that such U.S. holder is a U.S. person, the taxpayer identification number provided is correct, and such U.S. holder is not subject to backup withholding. In general, a non-U.S. holder will not be subject to backup withholding with respect to cash payments to the non-U.S. holder pursuant to the merger if the non-U.S. holder has provided an IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable (or an IRS Form W-8ECI if the non-U.S. holder’s gain is effectively connected with the conduct of a U.S. trade or business).

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be refunded or credited against a holder’s U.S. federal income tax liability, if any, provided that such holder furnishes the required information to the IRS in a timely manner.

This summary of the material U.S. federal income tax consequences is for general information purposes only and is not tax advice. Holders of Company common stock should consult their own tax advisors regarding the application of the U.S. federal tax laws to their particular situation and the applicability and effect of state, local or foreign tax laws and tax treaties.

Regulatory Matters Relating to the Merger

To complete the merger, the Company and CenterPoint Energy need to obtain approvals, orders, clearances or consents from, or make filings with, a number of public utility, antitrust and other regulatory authorities. The

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material regulatory approvals, consents and filings are described below (collectively, the “required governmental approvals”). It is a condition to completion of the merger that all required approvals, orders, clearances and consents be obtained on terms and conditions that do not result in a material adverse effect on the Company and its subsidiaries or CenterPoint Energy and its subsidiaries (referred to as a “Burdensome Condition”). For purposes of determining whether any term or condition has a Burdensome Condition on CenterPoint Energy and its subsidiaries, CenterPoint Energy and its subsidiaries, taken as a whole both before and after giving effect to the merger, are deemed to be a consolidated group of entities of the size and scale of the Company and its subsidiaries.

The required governmental approvals, described in greater detail below, include: (1) the filing of notification and report forms with the DOJ and the FTC under the HSR Act, and expiration or early termination of any applicable waiting periods under the HSR Act, (2) authorization by FERC under Section 203 of the FPA and (3) authorization of the FCC to transfer or update control of our pertinent FCC Registration Numbers and a Notification of Consummation indicating the merger has closed (the foregoing items (1)-(3) are collectively referred to as “Required Statutory Approvals”). “Final orders” under the terms of the merger agreement means a judgment by the relevant governmental entity that (A) has not been reversed, stayed, enjoined, set aside, annulled or suspended and is in full force and effect, (B) with respect to which, if applicable, any mandatory waiting period prescribed by law before the merger may be consummated has expired or been terminated, and (C) as to which all conditions to the consummation of the merger prescribed by law have been satisfied.

Although the approval of the Indiana Utility Regulatory Commission (the “IURC”) and the Public Utilities Commission of Ohio (the “PUCO”) is not required under Indiana or Ohio law, it is a condition to completion of the merger that we obtain a final order of each of the IURC and the PUCO approving, denying or dismissing the matters addressed in an application relating to money pool agreements, corporate services agreements and related cost allocations, other affiliate agreements, affiliate guidelines and related matters, the maintenance of books and records outside of the state of Indiana and other ancillary matters related to the merger (referred to as the “Required State Approvals”). The IURC or PUCO also could open investigations into the effect of the merger and related transactions on the regulated utilities subject to their respective jurisdiction. In the event such investigations are initiated, conditions could be imposed on us or our subsidiaries and in the event such terms and conditions constituted a Burdensome Condition, CenterPoint Energy would not be obligated to proceed with the merger (although CenterPoint Energy could be obligated to pay a termination fee if the merger agreement were terminated following the issuance of one or more regulatory orders containing terms and conditions that constitute a Burdensome Condition, depending on the circumstances at the time of such termination; see The Merger Agreement—Termination; Termination Fees; Expenses—Termination).

Subject to the terms and conditions of the merger agreement, each of the Company and CenterPoint Energy shall use its reasonable best efforts to take, or cause to be taken, all actions, and do, or cause to be done, and assist and cooperate with the other party in doing, all things necessary to cause the conditions to the closing of the merger to be satisfied as promptly as reasonably practicable or to effect the closing of the merger as promptly as reasonably practicable, including:

Under the terms of the merger agreement, the Company and CenterPoint Energy have agreed to cooperate with each other in determining whether any action or filing is required in connection with the merger and in

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seeking any such actions, consents, approvals or waivers or making any such filings. The Company and CenterPoint Energy have also agreed to provide to each other all information required for any application or other filing under any applicable law in connection with the transactions contemplated by the merger agreement. CenterPoint Energy has agreed to have primary responsibility for, and to take the lead in, scheduling and conducting any meeting with any governmental entity, coordinating and making any applications and filings with, and resolving any investigation or other inquiry of, any agency or other governmental entity, obtaining required governmental approvals, any required consents, permits or other approvals from governmental entities as necessary, proper or advisable to consummate the merger, and CenterPoint Energy shall consult with us in advance of taking any such action. However, notwithstanding the foregoing obligations, CenterPoint Energy will not be obligated to, and we will not be permitted (without the prior written consent of CenterPoint Energy) to, undertake any efforts or take any action that, individually or in the aggregate, would result in, or would reasonably be expected to result in, a Burdensome Condition, as defined in the merger agreement and described above.

While the Company and CenterPoint Energy each believe that they will receive the required governmental approvals and other clearances for the transaction, there can be no assurance that all of these approvals will be obtained or, if obtained, that these approvals will not contain terms or conditions that could reasonably be expected to result in a Burdensome Condition. Based on the current status of the required governmental approval process, the parties are working, assuming all other conditions to completion of the merger are satisfied, to complete the merger no later than the first quarter of 2019. However, the closing of the merger may not occur until after the first quarter of 2019, if at all.

We intend to submit the Merger proposal, along with other proposals, to our shareholders at a special meeting as noted above in “Information About the Special Meeting and Voting” beginning on page 12. It is possible that a governmental agency will not have approved the merger by the date of such special meeting, which could delay or prevent completion of the merger for a significant period of time after our shareholders have approved the proposals relating to the merger. Any delay in the completion of the merger could diminish the anticipated benefits of the merger or result in additional transaction costs, loss of revenue or other effects associated with uncertainty surrounding the transaction. In addition, it is possible that, among other things, a governmental agency could condition its required governmental approval of the merger upon the Company and CenterPoint Energy entering into an agreement to divest a portion of their combined businesses or assets or could restrict the operations of the combined businesses in accordance with specified business conduct rules. See “Cautionary Statement Regarding Forward-Looking Information” beginning on page 10. A governmental agency also could impose significant additional costs on the business of the surviving corporation, including requiring the surviving corporation to share a disproportionate amount of the expected or achieved synergies of the merger with utility customers in a future rate case. Acceptance of any such conditions could diminish the benefits of the merger to the surviving corporation and result in additional costs, loss of revenue or other effects. Alternatively, rejection of such conditions could result in the Company and CenterPoint Energy litigating with a governmental entity, which could delay the merger or cause the merger to be abandoned.

No additional shareholder approval is expected to be required for any decision by us after the special meeting is held relating to any terms and conditions necessary to resolve any regulatory objections to the merger and, possibly, to proceed with consummation of the merger.

As more fully described in “The Merger Agreement—Termination; Termination Fees; Expenses” beginning on page 68, the merger agreement may be terminated by us or CenterPoint Energy if the merger is not consummated by 5:00 p.m. New York City time on April 21, 2019; provided, however, that if the conditions to closing relating to required governmental approvals have not been satisfied, but all other conditions to closing have been satisfied or waived (or are capable of being satisfied at closing), then such date may be extended by either party to October 21, 2019. A party may not terminate the merger agreement as set forth above if that party’s failure to fulfill its obligations under the merger agreement has caused or resulted in the failure to consummate the merger.

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Antitrust and HSR Act Matters

The FTC and the DOJ frequently scrutinize the legality under the antitrust laws of transactions such as the merger. The HSR Act, and the rules and regulations promulgated thereunder, provide that certain transactions, including the merger, may not be consummated until required information and materials have been filed with the DOJ and the FTC and the applicable waiting period has expired or been terminated. We and CenterPoint Energy are in the process of preparing the Pre-merger Notification and Report Forms to be filed with the DOJ and the FTC in connection with the merger. The HSR Act requires the parties to observe a 30 calendar-day waiting period after the submission of their HSR filings before consummating the merger, unless the waiting period is terminated early by the DOJ and FTC, or, alternatively, is extended if the DOJ or the FTC issues a Request for Additional Information and Documentary Material to us and CenterPoint Energy. If the parties do not complete the merger within 12 months after the expiration or early termination of the HSR Act waiting period, we and CenterPoint Energy will need to submit new Pre-merger Notification and Report Forms to the DOJ and the FTC and wait for the expiration or early termination of a new HSR Act waiting period before the parties could complete the merger.

At any time before or after the merger, the DOJ or the FTC could take such action under antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the merger or seeking divestiture of substantial assets of the Company, CenterPoint Energy or their subsidiaries. Private parties and state attorneys general may also bring an action under antitrust laws under certain circumstances. Based upon an examination of information available relating to the businesses in which the companies are engaged, we and CenterPoint Energy believe that the merger will receive the necessary clearance under the HSR Act. However, there can be no assurance that a challenge to the merger on antitrust grounds will not be made or, if such a challenge is made, of the result of such challenge.

Federal Energy Regulatory Commission

We have a public utility subsidiary subject to the jurisdiction of the FERC under Part II of the FPA. In addition, for purposes of the FPA, we are a holding company in a holding company system that includes a transmitting utility and an electric utility. CenterPoint Energy, for purposes of the FPA, is a holding company in a holding company system that includes a transmitting utility and an electric utility company. Section 203 of the FPA requires prior FERC authorization for, among other things, any direct or indirect merger or consolidation of such holding companies. In addition, Section 203 of the FPA requires prior FERC authorization for any direct or indirect merger or consolidation of a public utility’s facilities with those of any other person. Consequently, the merger requires prior authorization by the FERC pursuant to Section 203 of the FPA.

The FERC must authorize the merger if it finds that the merger is consistent with the public interest and will not result in the cross-subsidization of a non-utility associate company or the pledge or encumbrance of utility assets for the benefit of an associate company (unless it finds that such cross-subsidization or pledge or encumbrance will be consistent with the public interest). The FERC has further stated that, in analyzing a merger or transaction under Section 203 of the FPA, it will evaluate the impact of the proposed merger on:

The FERC will review these factors to determine whether the merger is consistent with the public interest. If the FERC finds that the merger would adversely affect competition in wholesale electric power markets, rates for electric transmission or the wholesale sale of electric energy, or regulation, or that the merger would result in cross-subsidization or pledges or encumbrances that are not consistent with the public interest, it may, pursuant to the FPA, condition its approval in such a manner as necessary to mitigate such adverse effects, or it may decline to approve the merger. The FERC is required to rule on a merger application not later than 180 days from

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the date on which the completed application is filed. The FERC may, however, for good cause, issue an order extending the time for consideration of the merger application by an additional 180 days. If the FERC does not issue an order within the statutory deadline, then the transaction is deemed to be approved. We expect that the FERC will approve the merger within the initial 180-day review period. However, there is no guarantee that the FERC will approve the merger, not extend the time period for its review, or not impose conditions on its approval.

Federal Communications Commission

Pursuant to FCC regulations implementing provisions of the Communications Act of 1934, as amended, an entity holding private radio licenses for internal communications purposes generally must obtain the prior approval of the FCC before the direct or indirect transfer of control or assignment of those licenses. We hold certain FCC licenses for private internal communications and, thus, must obtain prior FCC consent to update or transfer control of those licenses. The parties anticipate that they will be able to obtain the required FCC approvals.

Required State Approvals

Indiana Utility Regulatory Commission. Approval of the merger by the IURC is not required for the consummation of the merger; however, it is a condition to completion of the merger that we obtain a final order of the IURC approving, denying or dismissing the matters addressed in an application relating to money pool agreements, corporate services agreements and related cost allocations, other affiliate agreements, affiliate guidelines and related matters, the maintenance of books and records outside of the state of Indiana and other ancillary matters related to the merger. In addition, the IURC could open an investigation into the effect of the merger and related transactions on the regulated utilities subject to its jurisdiction. If such an investigation were pending, it would not necessarily delay closing of the merger if the IURC had issued a final order approving, denying or dismissing the matters referred to in the preceding sentence.

Public Utilities Commission of Ohio. Approval of the merger by the PUCO is not required for the consummation of the merger; however, it is a condition to completion of the merger that we obtain a final order of the PUCO approving, denying or dismissing the matters addressed in an application relating to money pool agreements, corporate services agreements and related cost allocations, other affiliate agreements, affiliate guidelines and related matters and other ancillary matters related to the merger. In addition, the PUCO could open an investigation into the effect of the merger and related transactions on the regulated utilities subject to its jurisdiction. If such an investigation were pending, it would not necessarily delay closing of the merger if the PUCO had issued a final order approving, denying or dismissing the matters referred to in this paragraph and such final order did not impose a Burdensome Condition.

No Dissenters’ Rights

Our shareholders are not entitled to dissenters’ rights in connection with the merger.

Delisting and Deregistration of Company’s Stock

If the merger is completed, our common stock will be delisted from the NYSE and deregistered under the Exchange Act.

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ADDITIONAL INTERESTS OF COMPANY’S DIRECTORS

AND EXECUTIVE OFFICERS IN THE MERGER

Leadership of the Surviving Corporation

Upon completion of the merger, Scott M. Prochazka, President and Chief Executive Officer of CenterPoint Energy, will be President and Chief Executive Officer of the surviving corporation. Carl L. Chapman, Chairman, President and Chief Executive Officer of the Company as of the date of the merger agreement, will remain in his current role with the Company until the closing of the merger.

As of the effective time of the merger, the directors of Merger Sub as of immediately prior to the effective time shall be the directors of the surviving corporation in the merger and the officers of the Company as of immediately prior to the effective time shall be the officers of the surviving corporation in the merger, in each case until their successors have been duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the articles of incorporation and bylaws of the surviving corporation. The current sole director of Merger Sub is Scott M. Prochazka.

Additional Interests of the Company’s Directors and Executive Officers in the Merger

Executive Officers. Our current named executive officers for purposes of the discussion below are: Carl L. Chapman, Chairman, President & Chief Executive Officer; M. Susan Hardwick, Executive Vice President and Chief Financial Officer; Eric J. Schach, Executive Vice President and Chief Operations Officer; and Ronald E. Christian, Executive Vice President, Chief Legal and External Affairs Officer and Corporate Secretary (the “NEOs”).

Assumptions. The potential payments in the narrative and tables below are, unless otherwise noted, based on the following assumptions:

The amounts set forth in the narrative and tables below are estimates of amounts that would be payable to the NEOs based on multiple assumptions that may or may not actually occur, including the assumptions described above. Some of the assumptions are based on information not currently available and, as a result, the actual amounts received by an NEO may differ materially from the amounts shown in the following table.

Equity Awards. As of the effective time, all vested and unvested equity awards held by our executive officers and directors, other than the May 2018 or 2019 stock units, will be accelerated, as applicable, and cashed out as described under “The Merger Agreement—Treatment of Company Equity Awards.” The May 2018 or 2019 stock units will be treated as described under “The Merger Agreement—Treatment of Company Equity Awards” The estimated value of the accelerated vesting of equity awards held by the NEOs is quantified in the table below under “Potential Change in Control Payments to NEOs.” The estimated value of the benefits that our non-employee directors would receive in respect of their stock unit awards in connection with the merger is $1,139,040 in the aggregate.

Fiscal Year Bonus. With respect to annual cash bonuses payable to the NEOs for the fiscal year in which the effective time occurs, as soon as practicable following the effective time, each NEO will be paid a pro-rated

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annual cash bonus for such fiscal year in an amount determined based on the target annual cash bonus payable with such amount prorated based on the portion of such fiscal year completed as of the effective time. The estimated value of these cash bonuses to the NEOs is quantified in the table below under “Potential Change in Control Payments to NEOs.”

Change in Control Agreements. We maintain change in control agreements with the NEOs. Severance benefits are payable under the change in control agreements only if the NEO’s employment is terminated by us (or our successor) other than for cause, death or disability, or the NEO resigns employment for good reason (as defined in the applicable agreements), in each case within two years following a change in control. The consummation of the merger will meet the definition of a change in control under the change in control agreements.

The definitions of the terms “cause” and “good reason” are central to an understanding of the potential payments to the continuing NEOs pursuant to their change in control agreements. Below is a summary of those definitions; however, the full definitions may be found in documents filed with the SEC and listed as material contracts in the exhibits to our Annual Report on Form 10-K filed with the SEC.

Cause: No severance is payable if the NEO’s employment is terminated for cause. In general, we have “cause” to terminate the NEO if the executive has engaged in any of the specific activities listed in the applicable agreement, including intentional gross misconduct by the NEO damaging in a material way to us, commission of fraud, and public acts of dishonesty or conviction of a felony, and with respect to the change in control agreement, a material breach of the change in control agreement that the NEO has not cured after reasonable notice and an opportunity to cure.

Good Reason: “Good reason” for the purpose of the change in control agreements generally includes a demotion, assignment of any duties or responsibilities inconsistent with the executive’s status, position or responsibilities, removal from any positions or failure to reappoint or reelect to any positions; a reduction in base salary; failure to increase base salary within 12 months of the last increase in base salary in an amount reasonably comparable to our other executives; the relocation of the principal executive offices by more than 50 miles; reduction in total direct compensation opportunity; failure to continue any incentive, bonus or other compensation plan in which the executive participated prior to the change in control, unless there is a substitute or alternative plan available; our failure to permit the NEO’s continued participation in the plan or material reduction in the NEO’s participation in the plan; failure to provide aggregate benefits reasonably comparable to our other executives; failure to obtain a satisfactory agreement from any successor to assume and agree to perform the change in control agreement; or our request that the NEO participate in an unlawful act or take any action constituting a breach of the NEO’s professional standard of conduct.

Under the change in control agreements, if, during the period beginning on the consummation of the change in control and continuing for two years thereafter, an NEO’s employment is terminated by us (or our successor) other than for cause, death or disability, or the NEO resigns employment for good reason, then we (or our successor) will provide the NEO with the following benefits: (i) accrued obligations (including accrued and unpaid base salary, vacation and unreimbursed expenses); (ii) a lump sum termination payment based upon a multiple of base salary plus target annual incentive, which multiple is three for Mr. Chapman and two for all other NEOs; and (iii) the continuation of medical, prescription, dental, and other welfare benefit plans for three years for Mr. Chapman and two years for all other NEOs. No payments under the change in control agreement will be made to the NEOs upon a change in control unless their employment also terminates under the conditions described above. If an NEO is a party to a change of control agreement that provides severance benefits following a change in control, then that NEO’s participation in the severance plan will automatically terminate upon the occurrence of such change in control and no benefits will be paid to that NEO from the severance plan. The change in control agreements do not have an excise tax gross-up feature. However, the change in control agreements provide that if the payments and benefits under the agreement, together with other payments and benefits the NEOs may have the right to receive on account of a change in control, would exceed the maximum

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limit imposed on the total of such payments and benefits by Section 280G of the Code (without triggering the excise tax imposed under Section 4999 of the Code), then the NEO will receive whichever of the following is more favorable to such NEO on a net after-tax basis: (i) the payments and benefits reduced to the extent necessary so that none of the payments or benefits is subject to the excise tax; or (ii) the full amount of the payments and benefits, which is subject to the excise tax, with such NEO being responsible for paying any excise tax imposed (modified Section 280G cutback provision). In the event that clause (ii) of the preceding sentence applies, the Company will be denied a tax deduction with respect to any excess parachute payments paid to such NEO. Additionally, Section 162(m) of the Code may limit the deductibility for compensation paid to each of our NEOs to $1,000,000 per year.

Nonqualified Deferred Compensation Plans. We maintain two unfunded nonqualified deferred compensation plans. The first plan is frozen, meaning that participants can no longer defer amounts under that plan but will continue to be paid benefits from that plan pursuant to its terms. The second plan is active, meaning that employees may continue to defer amounts under the plan and receive distributions from the active plan pursuant to its terms.

Each NEO is eligible to participate in our deferred compensation plans. The active plan allows an NEO to receive restoration contributions to restore benefits with respect to our 401(k) plan that are limited by the Code. At present, an NEO may defer base salaries, annual incentives, and long-term incentives upon lapse of restrictions into the active deferred compensation plan. Each participant may elect to receive deferred compensation at a pre-selected date or, under the active plan, upon a change in control, and in any event, the participant will receive that participant’s deferred compensation on retirement (in a lump sum or, if properly elected, in annual installments over five, ten, or 15 years), on non-retirement termination (in a lump sum or, if properly elected, in installments over five years), on disability (in a lump sum), and on death (in a lump sum). Under the frozen plan, participants may choose between different payment methods (i.e. lump sum or installments) following a retirement at any time following a change in control. Finally, most distributions from the active plan payable due to the participant’s separation from service will be delayed six months, as required by Section 409A of the Code. Under the active plan each executive officer and certain nonemployee directors elected to have their deferred compensation payable in a lump sum upon a change in control. All distributions from these plans are paid in cash. The Company also maintains an unfunded supplemental executive retirement plan in which Messrs. Chapman and Christian are the only active participants. Pursuant to the merger agreement, immediately prior to, or as of, the merger, we will fund the trusts underlying these plans and an independent third party will be appointed to administer the trusts. Nonemployee directors are also eligible to participate in the nonqualified deferred compensation plans. The estimated value of the account balances of the Company’s nonemployee directors under the active plan that will be accelerated and paid upon a change in control is $7,274,594 in the aggregate. Additionally, a nonemployee director has elected to receive the value of his or her account balance under the frozen plan in a lump sum upon a termination at any time following a change in control and the value of such account balance is $1,435,127.

Potential Change in Control Payments to Named Executive Officers

The table below sets forth for each of the NEOs estimates of the amounts of compensation that are based on or otherwise relate to the merger. Certain amounts will or may become payable on a qualifying termination of employment following the merger (i.e., on a “double-trigger” basis). Certain other benefits will become payable upon the occurrence of the closing of the merger (i.e., on a “single-trigger” basis).

The amounts shown are, unless otherwise noted, calculated based on the assumptions described under “Assumptions” above and noted in the footnotes below, which may or may not actually occur. Some of the assumptions are based on information not currently available and, as a result, the actual amounts received by each NEO may differ materially from the amounts shown in the following table. Additionally, the amounts described below are subject to a potential reduction under the modified Section 280G cutback provision as

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described under “Additional Interests of the Company’s Directors and Executive Officers in the Merger —Change in Control Agreements” and footnote 6 below.

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THE MERGER AGREEMENT

This section of the proxy statement describes the material provisions of the merger agreement but does not purport to describe all of the terms of the merger agreement. The following summary is qualified in its entirety by reference to the complete text of the merger agreement, which is attached as Annex A to this proxy statement and incorporated into this proxy statement by reference. We encourage you to read carefully the merger agreement in its entirety, as the rights and obligations of the parties thereto are governed by the express terms of the merger agreement and not by this summary or any other information contained in this proxy statement.

Explanatory Note Regarding the Merger Agreement

The following summary of the merger agreement, and the copy of the merger agreement attached as Annex A to this proxy statement, are intended to provide information regarding the terms of the merger agreement and are not intended to provide any factual information about us or to modify or supplement any factual disclosures about us in our public reports filed with the SEC. In particular, the merger agreement and the related summary are not intended to be, and should not be relied upon as, disclosures regarding any facts and circumstances relating to us. The merger agreement contains representations and warranties by and covenants of the Company, CenterPoint Energy and Merger Sub, and they were made only for purposes of that agreement and as of specified dates. The representations, warranties and covenants in the merger agreement were made solely for the benefit of the parties to the merger agreement, may be subject to limitations, qualifications and other particulars agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the merger agreement instead of establishing these matters as facts or being made for other purposes, and may be subject to contractual standards of materiality or material adverse effect applicable to the contracting parties that generally differ from those applicable to investors. In addition, information concerning the subject matter of the representations, warranties and covenants may change after the date of the merger agreement, which subsequent information may or may not be fully reflected in our public disclosures and reports filed with the SEC. The representations, warranties and covenants in the merger agreement and any descriptions thereof should be read in conjunction with the disclosures in our periodic and current reports, proxy statements and other documents filed with the SEC. See the section entitled “Where You Can Find More Information.”

Additional information about the Company may be found elsewhere in this proxy statement and our other public filings. See the section entitled “Where You Can Find More Information.”

The Merger

The merger agreement provides for the merger of Merger Sub with and into the Company, with the Company to continue as the surviving corporation and a wholly-owned subsidiary of CenterPoint Energy.

Completion and Effectiveness of the Merger

Unless the parties agree to an earlier date, we and CenterPoint Energy will complete the merger no later than the date that is the third business day after all of the conditions to completion of the merger contained in the merger agreement, which are described in the section entitled “The Merger Agreement—Conditions to the Merger” of this proxy statement, are satisfied or waived (to the extent permitted by law), including the Company shareholder approval (the “closing” and such date, the “closing date”). The merger will become effective upon the filing of the articles of merger with the Secretary of State of the State of Indiana (the “effective time”).

Effects of the Merger; Merger Consideration

Common Stock

Except as described below, subject to the terms and conditions of the merger agreement, at the effective time of the merger, each share of our common stock issued and outstanding immediately prior to the effective

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time (other than shares owned by us as treasury stock, shares owned by a wholly-owned subsidiary of the Company or shares owned directly or indirectly by CenterPoint Energy or Merger Sub) will be converted into the right to receive $72.00 in cash, without interest.

The merger consideration will be appropriately and equitably adjusted to reflect fully the effect of any reclassification, recapitalization, stock split or combination, subdivision, exchange or readjustment of shares with respect to our common stock or any stock dividend or stock distribution with respect to our common stock (or securities convertible into or exercisable for shares of our common stock), in each case, having a record date after the date of the merger agreement and prior to the effective time of the merger.

Treasury Shares; Shares Owned by CenterPoint Energy

At the effective time of the merger, each share of our common stock (1) held as a treasury share by the Company, (2) owned of record by any subsidiary of ours, or (3) owned of record by CenterPoint Energy, Merger Sub or any of their respective wholly-owned subsidiaries will, in each case, be canceled and cease to exist, and no consideration will be delivered in exchange for those shares.

Treatment of Company Equity Awards

Each stock unit of the Company subject to time-based vesting under our stock plan that is unvested and outstanding immediately prior to the effective time of the merger (other than the stock units granted in May 2018 or the 2019 fiscal year, as described below) will vest in full and be cancelled and in exchange therefor, former holders of our stock units will be entitled to receive a cash payment in an amount equal to the cash consideration payable pursuant to the merger plus the amount of any unpaid dividend equivalents associated with such stock units as of the effective time of the merger, less withholding with respect to applicable taxes. Such cash payment will be made within five business days after the closing date.

Each performance unit of the Company subject to performance-based vesting under our stock plan for which the applicable performance period has ended prior to the effective time of the merger that is outstanding and unpaid prior to the effective time (“unpaid performance units”) will be cancelled and in exchange therefor, former holders of our unpaid performance units will be entitled to receive a cash payment in an amount equal to the cash consideration payable pursuant to the merger, with the number of vested unpaid performance units of the Company as of the effective time of the merger to equal the number determined in accordance with the performance criteria and adjusted for dividends as provided in the applicable award agreement, less withholding with respect to applicable taxes.

Each performance unit of the Company subject to performance-based vesting under our stock plan, other than unpaid performance units or any performance units that may be granted in the 2019 fiscal year, that is outstanding and unvested immediately prior to the effective time of the merger will vest in full and be cancelled and in exchange therefor, the former holders of such performance units will be entitled to receive a cash payment in an amount equal to the cash consideration payable pursuant to the merger, with the number of vested performance units as of the effective time of the merger to equal the greater of the target award and the number determined in accordance with the performance criteria provided in the applicable award agreement as if the performance period ended on the last business day immediately preceding the closing date and adjusted for dividends as provided in the applicable award agreement, less withholding with respect to applicable taxes. Such cash payment will be made within five business days after the closing date.

Following the date of the merger agreement, we amended our stock plan to provide that each outstanding May 2018 or 2019 stock unit will be cancelled upon the consummation of the merger and in exchange therefor, the holders of such May 2018 or 2019 stock units will be entitled to receive a cash payment in an amount equal to the cash consideration payable pursuant to the merger, with the number of vested May 2018 or 2019 stock units to be based on the target award pro-rated based upon the closing date and adjusted for dividends as

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provided in the applicable award agreement (with any unvested portion cancelled), less withholding with respect to applicable taxes. Such cash payment will be made within five business days after the closing date. The May 2018 stock units will be prorated based on the number of days between the grant date and the closing date divided by 365 (but in no event can that fraction be greater than one). The 2019 stock units will be prorated based on the number of days between the grant date and the closing date divided by 1095.

Immediately prior to the effective time of the merger, each contractual right to receive the value of a share of our common stock under our nonqualified deferred compensation plan that is outstanding immediately prior to the effective time of the merger will be cancelled and in exchange therefor, the holders of such contractual rights will be entitled to receive a cash payment in an amount equal to the cash consideration payable pursuant to the merger, less withholding with respect to applicable taxes. Such cash payment will be made on the date that it would otherwise occur under our applicable benefit plan or applicable election form under our benefit plan.

After the effective time of the merger, our stock plan will be terminated and no further stock units, performance units or other rights with respect to shares of our common stock will be granted pursuant to such plan.

Lost, Stolen and Destroyed Certificates

If a stock certificate of we are lost, stolen or destroyed, the holder of such certificate must deliver an affidavit of that fact prior to receiving any merger consideration and, if required by CenterPoint Energy, may also be required to provide a bond (in such reasonable and customary amount as CenterPoint Energy may direct) prior to receiving any merger consideration (including any dividends or distributions to which such holder is entitled).

Representations and Warranties

The merger agreement contains general representations and warranties made by each of CenterPoint Energy and Merger Sub on the one hand, and the Company on the other, regarding aspects of their respective businesses, financial condition and structure, as well as other facts pertinent to the merger. These representations and warranties are subject to materiality, knowledge and other similar qualifications in many respects and expire at the effective time of the merger. The representations and warranties of each of CenterPoint Energy, Merger Sub and the Company have been made solely for the benefit of the other parties to the merger agreement. In addition, those representations and warranties may be intended not as statements of actual fact, but rather as a way of allocating risk between the parties, may have been modified by the disclosure schedules attached to the merger agreement, are subject to the materiality standard described in the merger agreement, which may differ from what may be viewed as material by you, and were made only as of the date of the merger agreement and the closing date of the merger or another date as is specified in the merger agreement. Information concerning the subject matter of these representations or warranties may have changed since the date of the merger agreement. CenterPoint Energy and the Company will provide additional disclosure in their public reports to the extent that they are aware of the existence of any material facts that are required to be disclosed under federal securities laws and that might otherwise contradict the terms and information contained in the merger agreement and will update such disclosure as required by federal securities laws.

We made a number of representations and warranties to CenterPoint Energy and Merger Sub in the merger agreement, including representations and warranties relating to the following matters:

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CenterPoint Energy and Merger Sub each made a number of representations and warranties to us in the merger agreement, including representations and warranties relating to the following subject matters:

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Some of the representations and warranties in the merger agreement are qualified by materiality qualifications or a “material adverse effect” qualification, as discussed below.

Under the terms of the merger agreement, a material adverse effect on CenterPoint Energy means any fact, circumstance, effect, change, event or development that has or would reasonably be expected to have a material and adverse effect on the ability of CenterPoint Energy or Merger Sub to consummate, or that would reasonably be expected to prevent or materially impede, interfere with or delay CenterPoint Energy or Merger Sub’s consummation of, the transactions contemplated by the merger agreement. Further, under the terms of the merger agreement, a material adverse effect on the Company means any fact, circumstance, effect, change, event or development that has or would reasonably be expected to have a material and adverse effect on the business, properties, financial condition or results of operations of the Company and its subsidiaries, taken as a whole, as the case may be. However, no such fact, circumstance, effect, change, event or development will constitute a material adverse effect on the Company and its subsidiaries, as the case may be, to the extent it results from:

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The following events are also excluded in determining whether a material adverse effect on the Company and its subsidiaries has occurred, but will be taken into account to the extent such matters disproportionately affect the Company and its subsidiaries as compared to other entities engaged in the relevant business in the geographic area affected by such event:

The Company’s Conduct of Business Before Completion of the Merger

Pursuant to the terms of the merger agreement, we have agreed, until the effective time of the merger and except as required or contemplated by the merger agreement, as consented to in writing by CenterPoint Energy or as otherwise required by applicable law or the regulations of the NYSE, to and to cause our subsidiaries to:

In addition, we agreed that, until the effective time of the merger, except as required or contemplated by the merger agreement, as consented to in writing by CenterPoint Energy, as otherwise required by applicable law or regulations of the NYSE or for those items listed in our disclosure letter that have been excepted from the interim operating covenants, we will not (and will not permit our subsidiaries to):

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Notwithstanding the foregoing, we may, and may cause our subsidiaries to, take reasonable actions in compliance with applicable laws with respect to any operational emergencies, equipment failures, outages, or immediate threats to the health or safety of natural persons, provided, that, (1) we will provide CenterPoint Energy with notice of such action taken as soon as reasonably practicable thereafter and (2) such actions will be made, taking all of the relevant circumstances into account, in accordance with the practices approved by a significant portion of the electric generating, or gas or electric transmission or distribution industries, as applicable. In addition, until the consummation of the merger, we will exercise complete control and supervision over our operations and those of our subsidiaries, in each case in compliance with the terms of the merger agreement.

Company is Prohibited from Soliciting Other Offers; Superior Proposal

Under the terms of the merger agreement, subject to certain exceptions described below, we have agreed that we will not, will cause our affiliates not to and will use our reasonable best efforts to cause our representatives not to, either directly or indirectly:

A Company takeover proposal is any offer or proposal concerning:

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Notwithstanding the foregoing, at any time prior to obtaining approval of the Merger proposal by the affirmative vote of the holders of a majority of all of the outstanding shares of Company common stock entitled to vote at the special meeting (the “Company shareholder approval”), in response to a bona fide written Company takeover proposal that did not result from a material breach of our non-solicitation obligations and which the Board determines in good faith (after consultation with its financial advisor and outside legal counsel) to be, or to be reasonably likely to lead to, a Company superior proposal (as defined below), we may (1) furnish information with respect to us and our subsidiaries to the person making such Company takeover proposal and its representatives (provided that all such information has previously been provided to CenterPoint Energy or is provided to CenterPoint Energy prior to or concurrently with the provision of such information to such person) pursuant to a customary confidentiality agreement that does not restrict us from complying with our obligations under the merger agreement, and (2) participate in discussions or negotiations with the person making such Company takeover proposal (and its representatives) regarding such Company takeover proposal.

Additionally, we are obligated to provide oral and written notice promptly (and in any event no later than the later of 24 hours or 5:00 p.m. New York City time on the next business day) to CenterPoint Energy of any Company takeover proposal, the material terms and conditions of any such Company takeover proposal and the identity of the person making any such Company takeover proposal. In addition, we are obligated to keep CenterPoint Energy reasonably informed in all material respects on a reasonably current basis (and in any event no later than the later of 24 hours or 5:00 p.m. New York City time on the next business day) of the material terms and status (including any change to such terms) of any Company takeover proposal.

As defined under the merger agreement, a Company superior proposal means a bona fide written Company takeover proposal (with all of the references to 20 percent in the definition of Company takeover proposal described above adjusted to increase the percentages referenced therein to 50.1 percent) that the Board determines in good faith (after consultation with its financial advisors and outside counsel), taking into account all legal, financial, regulatory, timing and other aspects of the proposal, the identity of the person making the proposal and any financing required for such proposal, the ability of the person making such proposal to obtain such required financing and the level of certainty with respect to such required financing, and such other factors that are deemed relevant by the Board, that such proposal is more favorable to the holders of our common stock than the transactions contemplated by the merger agreement, after taking into account any revisions to the terms of the merger agreement that are committed to in writing by CenterPoint Energy.

Obligation of the Board with Respect to Its Recommendation

In the merger agreement, the Board has agreed not to (1) withdraw, change, qualify, withhold, or modify in any manner adverse to CenterPoint Energy, or propose publicly to withdraw, change, qualify, withhold or modify in any manner adverse to CenterPoint Energy, its recommendation that our shareholders should approve the Merger proposal, (2) adopt, approve or recommend, or propose to adopt, approve or recommend, any other Company takeover proposal, (3) fail to include in the proxy statement its recommendation that our shareholders approve the Merger proposal and (4) take any formal action or make any recommendation or public statement in connection with a tender offer or exchange offer (except for a recommendation against such offer or certain customary communications as contemplated by SEC rules issued under the Exchange Act).

However, at any time prior to obtaining the Company shareholder approval, the Board may make a change of recommendation (1) upon the occurrence of an intervening event, change or other development that (A) was

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unknown to the Board as of the date of the merger agreement (or, if known, the magnitude or material consequences of which were not known to or understood by the Board), (B) becomes known to or understood by the Board prior to obtaining Company shareholder approval and (C) has or would reasonably be expected to have a material beneficial effect on the Company and its subsidiaries, taken as a whole, or (2) upon receipt of a Company superior proposal that did not result from a material breach of our non-solicitation obligation, in each case, if all of the following conditions are met:

In the event that (1) the change of recommendation by the Board was proposed to have been made in response to another Company takeover proposal and (2) CenterPoint Energy has committed in writing to any changes to the terms of the merger agreement, and subsequent to such commitment a material revision or amendment is made to the Company takeover proposal that had led to such change of recommendation, the Board must again comply with the foregoing conditions, except that the negotiation period will be reduced to two business days.

Nothing contained in the merger agreement prohibits us from (1) complying with Rule 14d-9 and Rule 14e-2 under the Exchange Act or (2) making any disclosure to its shareholders if the Board determines in good faith (after consultation with its outside legal counsel) that the failure to make such disclosure would be inconsistent with its obligations under applicable law.

Reasonable Best Efforts to Complete the Merger

Under the terms of the merger agreement, each of CenterPoint Energy and the Company has agreed to use its reasonable best efforts to take, or cause to be taken, all actions, and do, or cause to be done, and assist and cooperate with the other parties in doing, all things necessary to cause the conditions to the merger to be satisfied and the transactions contemplated by the merger agreement to be effected as promptly as reasonably practicable, including:

Under the terms of the merger agreement, CenterPoint Energy is prohibited from, and must cause its affiliates to refrain from, taking any action, including acquiring any asset, property, business or person (by way of merger, consolidation, share exchange, investment, other business combination, asset, stock or equity purchase, or otherwise), that could reasonably be expected to materially increase the risk of not obtaining or making any consent or filing required for the consummation of the merger. In addition, CenterPoint Energy is required to use its reasonable best efforts to avoid or eliminate each and every impediment that may be asserted by any governmental entity so as to enable the merger to be consummated as soon as reasonably possible.

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The Company and CenterPoint Energy have agreed to cooperate with each other in determining whether any action or filing is required in connection with the merger and in seeking any such actions, consents, approvals or waivers or making any such filings. Under the terms of the merger agreement, CenterPoint Energy has primary responsibility for scheduling and conducting any meeting with any governmental entity, coordinating and making any applications and filings with, and resolving any investigation or other inquiry of, any agency or other governmental entity, and for obtaining all required approvals, consents, permits and other approvals and confirmations from any governmental entity necessary, proper or advisable to consummate the merger; provided that, CenterPoint Energy has agreed to consult with us reasonably in advance of taking any such action. CenterPoint Energy will promptly notify us and we will notify CenterPoint Energy of any notice or other communication from any person alleging that such person’s consent is or may be required in connection with the merger.

However, notwithstanding the foregoing obligations, CenterPoint Energy will not be obligated to, and we will not be permitted (without the prior written consent of CenterPoint Energy) to, undertake any efforts or take any action that, individually or in the aggregate, would result in, or would reasonably be expected to result in, a material adverse effect on the financial condition, assets, liabilities, businesses or results of operations of the Company and its subsidiaries, taken as a whole, or CenterPoint Energy and its subsidiaries, taken as a whole; provided, that for this purpose CenterPoint Energy and its subsidiaries, after giving effect to the merger will be deemed a consolidated group of entities of the size and scale of a hypothetical company that is one hundred percent of the size of the Company and its subsidiaries taken as a whole at the date of the merger agreement.

Access to Information

Under the terms of the merger agreement, we agree to, and will cause our subsidiaries to, afford CenterPoint Energy and its representatives reasonable access (at CenterPoint Energy’s sole cost and expense) during normal business hours and upon reasonable advance notice, to our material properties, books, contracts, commitments, personnel and records. In addition, we will, and will cause our subsidiaries to, make available promptly to CenterPoint Energy to the extent not publicly available, a copy of each material filing made by it, during the period from the date of the merger agreement until the earlier of the effective time of the merger or the termination of the merger agreement, pursuant to the requirements of securities laws or filed with or sent to the SEC, the IURC, the PUCO or any other governmental entity. Notwithstanding the obligations described above, we are not required to afford such access or furnish information to the extent that it believes that doing so would result in the loss of attorney-client privilege, violate confidentiality obligations or is otherwise commercially sensitive (as determined in our reasonable discretion).

CenterPoint Energy and the Company are required to comply, and cause their respective subsidiaries and representatives to comply, with their respective obligations under the confidentiality agreement executed by CenterPoint Energy and the Company dated as of January 29, 2018, as amended.

Director and Officer Indemnification and Insurance

Under the terms of the merger agreement, following the effective time of the merger, CenterPoint Energy has agreed that all rights to indemnification, advancement of expenses and exculpation from liabilities for acts or omissions occurring at or prior to the effective time of the merger existing at the time of execution of the merger agreement in favor of our current or former directors, officers or employees and our subsidiaries as provided in our applicable indemnity documentation and any indemnification or other similar contracts of the Company or any of its subsidiaries, in each case, as in effect on the date of the merger agreement, will continue in full force and effect in accordance with their terms and CenterPoint Energy will cause the surviving corporation and our subsidiaries to perform their respective obligations thereunder. In addition, the surviving corporation has agreed that it will indemnify and hold harmless each individual who is, as of the date of the merger agreement, or who becomes prior to the effective time of the merger, a director, officer or employee of the Company or any of its subsidiaries or who was serving as of the date of the merger agreement, or who began serving prior to the effective time of the merger, at the request of the Company or any of its subsidiaries as a director, officer or employee of another person.

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CenterPoint Energy has also agreed to advance expenses incurred in the defense of any claim or investigation related thereto; provided that (1) any person seeking advancement of expenses will first provide an undertaking to CenterPoint Energy, if and only to the extent required by applicable law or the surviving corporation’s organizational documents, to repay such advances if it is ultimately determined by final adjudication that such person is not entitled to indemnification and (2) the surviving corporation will cooperate in good faith in the defense of any such matter.

Under the terms of the merger agreement, for a period of six years from the effective time of the merger, the surviving corporation will either maintain in effect the current policies of directors’ and officers’ liability insurance and fiduciary liability insurance maintained by us or our subsidiaries or provide substitute policies for the Company and our current and former directors and officers who are currently covered by the directors’ and officers’ and fiduciary liability insurance coverage currently maintained by us, in either case, in amounts not less than the existing coverage and having other terms not materially less favorable to the insured persons than the directors’ and officers’ liability insurance and fiduciary liability insurance coverage currently maintained by us with respect to claims arising from facts or events that occurred on or before the effective time of the merger. If the surviving corporation is unable to purchase such policy, it must obtain as much comparable insurance as possible for the years within such six-year period in respect of each policy year within such period. However, the surviving corporation will not be required to pay annual premiums in excess of 300 percent of the last annual premium paid by us for such policies.

Employee Matters

Under the terms of the merger agreement, CenterPoint Energy has agreed, and will cause the surviving corporation to, for two years following the effective time of the merger, provide each Company employee (as defined below) with (1) the same or better employment responsibilities in the same location or within 50 miles of the same location as held by the Company employee immediately prior to the effective time of the merger, unless such change in responsibilities or location is consented to by the Company employee, (2) a base salary or wage rate and short-term incentive compensation target opportunities that are no less favorable, in the aggregate, than that provided to the Company employee immediately prior to the effective time of the merger, and (3) employee benefits that are substantially comparable, in the aggregate, to those provided to the Company employee immediately prior to the effective time of the merger. However, these protections will not alter the at-will employment relationship of CenterPoint Energy and each Company employee.

For two years following the effective time of the merger, CenterPoint Energy will, and will cause the surviving corporation to, provide each eligible Company employee who experiences a termination of employment by the surviving corporation without “cause”, or if applicable, by the Company employee for “good reason” (as each such term is defined under the applicable severance arrangement) severance benefits that are no less than the sum of (1) those applicable to eligible Company employees pursuant to either (A) our general severance benefit guidelines, (B) our severance plan for executive officers, as in effect immediately prior to the effective time of the merger or (C) an individual written agreement that provides for severance payments during the two years following the effective time of the merger and (2) continuation of base salary or wages for the balance of the two years following the effective time of the merger and continued payment of employer premiums for health benefits that an eligible Company employee elects to continue pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended; provided, that, the terms of this sentence shall not apply to the officers of the Company or officers of VUHI or subsidiaries of VUHI with an employment, change of control, severance or similar agreement (whether or not such agreement would be triggered by the transaction contemplated by the merger agreement).

However, a Company employee will be eligible for severance benefits as described above only if (1) such Company employee does not leave voluntarily other than for “good reason”, if applicable, (including voluntary resignation or retirement) or, is not discharged due to misconduct, including, but not limited to, a violation of employment policies of CenterPoint Energy or the surviving corporation and (2) the Company employee

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executes and does not revoke a release and waiver of all claims in favor of CenterPoint Energy, the surviving corporation and their affiliates. In addition, CenterPoint Energy or the surviving corporation may terminate the employment of any Company employee at any time, with or without cause.

Further, the merger agreement provides that, subject to certain exceptions, CenterPoint Energy will or will cause the surviving corporation to, for the fiscal year in which the effective time of the merger occurs and with respect to annual cash bonuses payable under our stock plan or incentive plan as soon as practicable following the effective time of the merger pay each Company employee a pro-rated annual cash bonus for such fiscal year in an amount determined based on the target annual cash bonus payable under our stock plan or incentive plan, with such pro-rated amount based on the portion of such fiscal year completed as of the effective time of the merger. In addition, for the portion of such fiscal year following the effective time of the merger, each Company employee who is paid a pro-rated bonus as described above will be eligible for a pro-rated annual cash bonus with an annualized target value no less favorable than the target annual cash bonus that such Company employee was eligible for immediately prior to the effective time of the merger, subject to performance criteria determined by CenterPoint Energy and the surviving corporation.

Promptly following the effective time of the merger, CenterPoint Energy has agreed that it will issue a replacement award, on terms and conditions that it determines, to each Company employee (1) who received May 2018 or 2019 stock units pursuant to the terms of the merger agreement, a portion of which is cancelled upon the consummation of the merger pursuant to the terms of such grant, (2) who remains an employee of the surviving corporation or a subsidiary of the Company after the effective time of the merger and (3) is equity-eligible (as determined by CenterPoint Energy in accordance with its policies).

With respect to all employee benefit plans of CenterPoint Energy, the surviving corporation or any of their subsidiaries, including any “employee benefit plan” (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended) (including any vacation, paid time-off and severance plans), the merger agreement provides that each Company employee’s service with us or any of our subsidiaries (as well as service with any predecessor employer of ours or any such subsidiary of ours, to the extent service with the predecessor employer was recognized by us or such subsidiary of ours and is accurately reflected within a Company employee’s records) will be treated as service with CenterPoint Energy, the surviving corporation or any of their subsidiaries for all purposes, including determining eligibility to participate, level of benefits, vesting and benefit accruals, except (1) to the extent that such service was not recognized under our corresponding benefit plan immediately prior to the effective time of the merger, (2) for purposes of any defined benefit plan accruals or (3) to the extent that such recognition would result in any duplication of benefits for the same period of service.

Under the terms of the merger agreement, a Company employee means each individual who is employed by us or one of our subsidiaries immediately prior to the effective time of the merger and who remains employed thereafter by the surviving corporation, CenterPoint Energy or any of their subsidiaries, so long as such employee is not covered by any union contract.

Financing and Financing Cooperation

The merger is not conditioned upon receipt of financing by CenterPoint Energy or Merger Sub.

CenterPoint Energy has agreed to use its reasonable best efforts to, and to use its reasonable best efforts to cause its affiliates to, as promptly as possible, consummate and obtain financing, including maintaining and complying with all of its obligations under that certain commitment letter and that certain fee letter, each as entered into among CenterPoint Energy, Goldman Sachs Bank USA and Morgan Stanley Senior Funding, Inc. CenterPoint Energy has agreed to keep us reasonably informed on a current and timely basis of the status of CenterPoint Energy’s efforts to obtain the financing and to satisfy the conditions thereof, including advising and updating us, in a reasonable level of detail, with respect to status, proposed closing date and material terms of the definitive documentation related to the financing, and to give us prompt written notice of any material breach, default, termination or repudiation by any party to the commitment letter or the fee letter.

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We will use our reasonable best efforts to, and will cause our subsidiaries to, and will use our reasonable best efforts to cause our and our subsidiaries’ representatives to, cooperate with CenterPoint Energy in connection with the arrangement of the financing as reasonably requested by CenterPoint Energy. Under the terms of the merger agreement, we have no obligation to incur any costs, fees or liabilities with respect to the financing prior to the effective time of the merger. CenterPoint Energy has agreed to reimburse us for all reasonable and documented out-of-pocket costs incurred by us or any of our subsidiaries or any of our representatives or our subsidiaries in connection with our cooperation related to the financing and to indemnify and hold harmless the Company, and its subsidiaries and each of their respective officers, directors, employees, agents, representatives, successors and assigns from and against all damages, fees, costs and expenses suffered or incurred by them arising out of such cooperation or the financing and any information used in connection therewith, other than those costs, fees or liabilities resulting from our gross negligence, fraud or willful misconduct, that of our subsidiaries or any of our or their respective officers, directors, employees, agents, representatives, successors and assigns.

Post-Merger Management and Activities

Under the merger agreement, CenterPoint Energy has agreed that, subject to the occurrence of the effective time of the merger, it will:

Conditions to the Merger

Conditions to Each Party’s Obligations. Each party’s obligation to complete the merger is subject to the satisfaction or waiver of the following conditions:

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Conditions to CenterPoint Energy’s and Merger Sub’s Obligations. The obligation of CenterPoint Energy and Merger Sub to complete the merger is subject to the satisfaction or waiver of the following additional conditions:

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Conditions to the Company’s Obligations. Our obligation to complete the merger is subject to the satisfaction or waiver of the following further conditions:

Each of CenterPoint Energy, Merger Sub and the Company may, to the extent permitted by applicable law, waive the conditions to the performance of its respective obligations under the merger agreement and complete the merger even though one or more of these conditions have not been met. We cannot give any assurance that all of the conditions of the merger will be either satisfied or waived or that the merger will occur.

Termination; Termination Fees; Expenses

Termination

The merger agreement may be terminated by either the Company or CenterPoint Energy in accordance with its terms at any time prior to the effective time of the merger, whether before or after the Company shareholder approval:

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The merger agreement may be terminated in accordance with its terms by CenterPoint Energy as follows:

The merger agreement may be terminated in accordance with its terms by us as follows:

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Termination Fees

Under the terms of the merger agreement, CenterPoint Energy must pay us a termination fee in cash equal to $210 million in the event that:

Under the terms of the merger agreement, we must pay CenterPoint Energy a termination fee equal to $150 million in the event that:

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Expenses

Except as described in the merger agreement, each party will bear its own expenses in connection with the merger.

Miscellaneous

Specific Performance

The parties are entitled to an injunction, specific performance or other equitable relief to prevent breaches of the merger agreement and to enforce specifically the terms and provisions of the merger agreement by petition to the courts of the State of Indiana located in Marion County, or, if applicable, the U.S. District Court for the Southern District of Indiana, and such remedy is in addition to any other remedy to which the parties are entitled at law or in equity. The parties have agreed that each party will be entitled to seek specific performance to prevent or cure breaches of the merger agreement and enforce specifically the terms of the merger agreement, including the obligation to effect the consummation of the merger.

Amendment

The merger agreement may be amended, at any time before or after receipt of the Company shareholder approval, by CenterPoint Energy, the Company and Merger Sub; provided, however, that (1) after adoption of the merger agreement by our shareholders, amendments that by law require further shareholder approval or authorization may be made only with such further approval or authorization of our shareholders, (2) the merger agreement may not be amended after the effective time of the merger, (3) no amendment may require the approval of CenterPoint Energy’s shareholders or our shareholders, except as provided above, and (4) no amendment or waiver to any provision of the merger agreement of which the financing parties are expressly made third-party beneficiaries may be effective without the written consent of such financing parties. The merger agreement may not be amended except by an instrument in writing signed on behalf of each of the parties.

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POST-MERGER GOVERNANCE AND MANAGEMENT

This section of this proxy statement describes the material governance and management arrangements that will apply to us upon completion of the merger.

Corporate Offices

Upon completion of the merger, the surviving corporation in the merger will establish a combined gas headquarters and maintain Indiana electric operations in Evansville, Indiana.

Governance Matters

Upon completion of the merger, CenterPoint Energy will:

See “Additional Interest of the Company’s Directors and Executive Officers in the Merger” on page 48 for information on the surviving corporation’s board of directors and executive officers.

Dividends

We declared a dividend for the three months ended March 31, 2018 of $0.45 per share of common stock, reflecting an annualized dividend of $1.80 per share. We declared quarterly dividends of $0.42 per share of common stock for each of the first three quarters of 2017 and declared a quarterly dividend of $0.45 per share of common stock for the last quarter of 2017.

Under the terms of the merger agreement, we have agreed not to declare dividends, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property or any combination thereof) in respect of, any of its capital stock, other equity interests or voting securities, except for (1) quarterly cash dividends payable by us in respect of shares of Company common stock on a schedule consistent with our past practices at the current payment rate of $0.45 for quarterly dividends declared before October 31, 2018 and at the increased payment rate of $0.48 for quarterly dividends declared on or after October 31, 2018, (2) dividend

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equivalents accrued or payable by us in respect of Company stock units payable in shares of Company common stock or whose value is determined with reference to the value of shares of Company common stock granted under the Company stock plan, (3) dividends and distributions by a direct or indirect Company subsidiary to us or a wholly-owned subsidiary of ours and (4) a “stub period” dividend to holders of record of Company common stock as of immediately prior to the effective time of the merger equal to the product of (x) the number of days from the record date for payment of the last quarterly dividend paid by us prior to the effective time of the merger, multiplied by (y) a daily dividend rate determined by dividing the amount of the last quarterly dividend prior to the effective time of the merger by ninety-one.

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MARKET PRICE OF THE COMPANY’S COMMON STOCK

Our common stock is traded on the NYSE under the symbol “VVC.”

The following table sets forth, during the periods indicated, the high and low sales prices of our common stock as reported on the NYSE, and the cash dividends declared per share for the periods indicated:

The closing price of the Company common stock on April 20, 2018, which was the last trading day prior to the announcement of the proposed merger between the Company and CenterPoint Energy, was $65.55 per share. The closing price of the Company common stock on August 21, 2017, which was the last trading day prior to media reports regarding takeover interest in the Company, was $61.31 per share. The merger consideration represents a 17.4 percent premium to such closing price. If adjusted for industry peer performance between August 21, 2017 and April 20, 2018, the merger consideration represents a 28.4 percent premium over such adjusted price of $56.07 per share. On June 14, 2018, the most recent practicable date before the filing of this proxy statement, the closing price for the Company common stock was $70.78 per share. You are encouraged to obtain current market quotations for the Company common stock prior to making any decision with respect to the merger.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth the number of shares of Company common stock beneficially owned by directors, NEOs, and all directors and NEOs as a group, as of May 31, 2018. Except as otherwise indicated, each individual has sole voting and investment power with respect to the shares listed below.

According to information filed with the SEC, the following shareholders were beneficial owners of more than 5 percent of Company common stock as of May 31, 2018:

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HOUSEHOLDING

As allowed under SEC rules, we are delivering only one copy of this proxy statement to multiple shareholders sharing an address unless it has received contrary instructions from one or more of the shareholders. Each such registered shareholder will continue to receive a separate proxy card. Upon written or oral request, we will promptly deliver a separate copy of this proxy statement to any shareholder at a shared address to which a single copy of the document was delivered. If you are a shareholder and would like to request an additional copy of this proxy statement now or with respect to future mailings (or to request to receive only one copy of this proxy statement if you are currently receiving multiple copies), please contact the Shareholder Services Department by telephone at (800) 227-8625, by e-mail at investors@vectren.com or by mail at One Vectren Square, 211 N.W. Riverside Drive, Evansville, Indiana 47708.

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FUTURE SHAREHOLDER PROPOSALS

If the merger is completed, we will have no public shareholders and there will be no public participation in any future meetings of shareholders of Vectren Corporation. However, if the merger is not completed by the end date (or any extension thereof), our shareholders would continue to be entitled to attend and participate in our shareholders’ meetings and we will hold a 2019 annual meeting of shareholders, in which case we will provide notice of or otherwise publicly disclose the date on which such 2019 annual meeting will be held. If the 2019 annual meeting is held, shareholder proposals will be eligible for consideration for inclusion in the proxy statement and form of proxy for our 2019 annual meeting of shareholders in accordance with Rule 14a-8 under the Exchange Act and our By-Laws, as described below.

Under Rule 14a-8 promulgated pursuant to the Exchange Act, our shareholders may present proper proposals for inclusion in our proxy statement and for consideration at the 2019 annual meeting of its shareholders by submitting their proposals to us in a timely manner. In order to be so included for the 2019 annual meeting, shareholder proposals must be received at our principal office, One Vectren Square, 211 N.W. Riverside Drive, Evansville, Indiana 47708, Attention: Corporate Secretary, no later than November 22, 2018, and must otherwise comply with the requirements of Rule 14a-8.

If a shareholder desires to bring business before the 2019 annual meeting which is not the subject of a proposal timely submitted for inclusion in the proxy statement, the shareholder must follow procedures outlined in our By-Laws. A copy of these procedures is available upon request from the corporate secretary at the address referenced above. One of the procedural requirements in the By-Laws is timely notice in writing of the business the shareholder proposes to bring before the meeting, even if such matter is already the subject of any notice to the shareholders or public disclosure from the Board. To be timely, a shareholder’s notice must be delivered to, or mailed and received at, our principal office not later than the close of business on the 90th day nor earlier than the 120th day prior to the first anniversary date of the annual meeting of the shareholders for the preceding year; provided, however, that if the annual meeting is not scheduled to be held within a period that commences 30 days before such anniversary date and ends 30 days after such anniversary date, such shareholder notice shall be given by the later of: a) the close of business on the 90th day prior to the actual date of shareholder meeting, or b) the close of business on the tenth day following the day on which the notice of the annual meeting is first publicly announced or disclosed. The shareholder’s notice must set forth (i) a brief description of the matter to be brought before the annual meeting, (ii) the name and address as they appear on the corporate records of the shareholder proposing the business, (iii) the number of shares of capital stock of the Company owned by the shareholder beneficially and of record together with a representation that the shareholder will notify us in writing of the class and number of such shares owned beneficially and of record for the meeting promptly following the later of the record date or the date notice of the record date is first publicly disclosed, c) a description of any agreement, arrangement or understanding with respect to such proposal between or among the shareholder and any of its affiliates or associates, and any others (including their names) acting in concert with any of the foregoing together with a representation that the shareholder will notify us in writing of any such agreement, arrangement or understanding in effect as of the record date for the meeting promptly following the later of the record date or the date notice of the record date is first publicly disclosed, d) a description of any agreement, arrangement or understanding (including any derivative or short positions, profit interests, options, hedging transactions, and borrowed or loaned shares) that has been entered into as of the date of the shareholder’s notice by, or on behalf of, the shareholder or any of its affiliates or associates, the effect or intent of which is to mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of, the shareholder or any of its affiliates or associates with respect to shares of stock of the Company, together with a representation that the shareholder will notify us in writing of any such agreement, arrangement or understanding in effect as of the record date for the meeting promptly following the later of the record date or the date notice of the record date is first publicly disclosed, e) a representation that the shareholder is a holder of record of shares of the Company entitled to vote at the meeting and intends to appear in person or by proxy at the meeting to present the proposal contained in the notice, f) a representation whether the shareholder intends to deliver a proxy statement and/or form of proxy to holders of at least the percentage of our outstanding capital stock required to approve the

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proposal and/or otherwise to solicit proxies from shareholders in support of such proposal, and (g) any other information relating to such shareholder and beneficial owner, if any, on whose behalf the proposal is being made, required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for the proposal and pursuant to and in accordance with Section 14(a) of the Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder.

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OTHER MATTERS

As of the date of this proxy statement, we do not expect a vote to be taken on any matters at the special meeting other than as described in this proxy statement. A properly executed proxy gives the persons named as proxies on the proxy card authority to vote in their discretion with respect to any other matters that properly come before the special meeting.

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WHERE YOU CAN FIND MORE INFORMATION

We file annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy any reports, statements or other information that we file at the SEC’s Public Reference Room located at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at (800) SEC-0330 for further information on the Public Reference Room. Our SEC filings also are available to the public from commercial document retrieval services and at the Internet website maintained by the SEC at www.sec.gov.

The SEC allows us to “incorporate by reference” information into this proxy statement, which 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 deemed to be part of this proxy statement, except for any information superseded by information in, or incorporated by reference in, this proxy statement. This proxy statement incorporates by reference the documents listed below that we have previously filed with the SEC (other than, in each case, documents or information deemed to have been furnished and not filed in connection with SEC rules). These documents contain important information about the Company and its financial position.

The following Vectren Corporation filings with the SEC are incorporated by reference:

We are also incorporating by reference additional documents that we file with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act between the date of this proxy statement and the date of the special meeting. We also incorporate by reference the merger agreement attached to this proxy statement as Annex A and the Opinion of Merrill Lynch, Pierce, Fenner & Smith Incorporated attached to this proxy statement as Annex B.

If you are a shareholder, we may have sent you some of the documents incorporated by reference, but you can obtain any of them through us or the SEC. Documents incorporated by reference are available from us without charge, excluding all exhibits unless we have specifically incorporated by reference an exhibit in this proxy statement. Shareholders may obtain documents incorporated by reference into this proxy statement by requesting them in writing or by telephone at the following addresses and telephone number:

Vectren Corporation

One Vectren Square

211 N.W. Riverside Drive

Evansville, IN 47708

Investor Relations

vvcir@vectren.com

(800) 227-8625

If you would like to request documents from us, please do so by [●], 2018, in order to receive them before the special meeting.

You also can get more information by visiting our web site at www.vectren.com. Web site materials are not part of this proxy statement.

You should rely only on the information contained or incorporated by reference into this proxy statement to vote on the proposals to the shareholders in connection with the merger, as the case may be. We have not authorized anyone to provide you with information that is different from what is contained in this proxy statement. This proxy statement is dated [●], 2018. You should not assume that the information contained in this proxy statement is accurate as of any date other than such date, and the mailing of this proxy statement to shareholders shall not create any implication to the contrary.

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Annex A

AGREEMENT AND PLAN OF MERGER

by and among

VECTREN CORPORATION,

CENTERPOINT ENERGY, INC.

and

PACER MERGER SUB, INC.

Dated as of April 21, 2018

TABLE OF CONTENTS

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Exhibit A – Definitions

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AGREEMENT AND PLAN OF MERGER

This AGREEMENT AND PLAN OF MERGER (this “Agreement”), dated as of April 21, 2018, is by and among VECTREN CORPORATION, an Indiana corporation (the “Company”), CENTERPOINT ENERGY, INC., a Texas corporation (the “Parent”), and PACER MERGER SUB, INC., an Indiana corporation and wholly owned subsidiary of Parent (“Merger Sub” and, together with the Company and Parent, the “Parties”).

RECITALS

WHEREAS, the Parties intend that, upon the terms and subject to the conditions set forth herein, at the Effective Time, Merger Sub will merge with and into the Company, with the Company surviving such merger (the “Merger”) in accordance with the Indiana Business Corporation Law (the “IBCL”);

WHEREAS, the board of directors of the Company (the “Company Board”) has (a) determined that it is in the best interests of the Company and its shareholders, and has declared it advisable, for the Company to enter into this Agreement and to consummate the transactions contemplated hereby, including the Merger, (b) adopted and approved this Agreement and approved the Company’s execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, including the Merger, upon the terms and subject to the conditions set forth herein, in accordance with the IBCL, and (c) resolved to recommend the approval of the transactions contemplated hereby, including the Merger, to the Company’s shareholders and directed that this Agreement be submitted to the Company’s shareholders for approval at a duly held meeting of such shareholders for such purpose in accordance with the IBCL;

WHEREAS, the board of directors of Parent (the “Parent Board”) has (a) determined that it is in the best interests of Parent and its shareholders, and has declared it advisable, for Parent to enter into this Agreement and to consummate the transactions contemplated hereby and (b) adopted and approved this Agreement and approved Parent’s execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby upon the terms and subject to the conditions set forth herein, in accordance with the Texas Business Organizations Code (the “TBOC”);

WHEREAS, the board of directors of Merger Sub has (a) determined that it is in the best interests of Merger Sub, and has declared it advisable, for Merger Sub to enter into this Agreement and to consummate the transactions contemplated hereby, including the Merger, (b) adopted and approved this Agreement and approved Merger Sub’s execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, including the Merger, upon the terms and subject to the conditions set forth herein, in accordance with the IBCL, and (c) resolved to recommend the approval of the transactions contemplated hereby, including the Merger, to Parent, as the sole shareholder of Merger Sub, and directed that this Agreement be submitted to Parent for approval in accordance with the IBCL;

WHEREAS, Parent has approved this Agreement and the transactions contemplated hereby by written consent in its capacity as the sole shareholder of Merger Sub; and

WHEREAS, the Company, Parent and Merger Sub desire to make certain representations, warranties, covenants and agreements specified herein in connection with this Agreement.

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NOW, THEREFORE, in consideration of the foregoing and the representations, warranties, covenants and agreements set forth herein, and subject to the conditions set forth herein, and each intending to be legally bound hereby, the Parties agree as follows:

ARTICLE I

THE MERGER

SECTION 1.01 The Merger. At the Effective Time, upon the terms and subject to the conditions set forth herein, and in accordance with the relevant provisions of the IBCL, Merger Sub shall be merged with and into the Company, and the separate corporate existence of Merger Sub shall thereupon cease. The Company shall continue its existence under the Laws of the State of Indiana as the surviving corporation in the Merger (sometimes referred to herein as the “Surviving Corporation”) and a wholly owned subsidiary of Parent.

SECTION 1.02 The Effective Time. Subject to the provisions of this Agreement, as soon as practicable on the Closing Date, the Company shall deliver to the Secretary of State of the State of Indiana articles of merger with respect to the Merger, in such form as is required by, and executed in accordance with, the relevant provisions of the IBCL (the “Articles of Merger”). The Merger shall become effective at the time the Articles of Merger are duly accepted for filing by the Secretary of State of the State of Indiana in accordance with the IBCL or at such later time as is permissible in accordance with the IBCL and, as the Parties may mutually agree, as specified in the Articles of Merger (the time the Merger becomes effective, the “Effective Time”).

SECTION 1.03 The Closing. Unless this Agreement has been terminated in accordance with Section 8.01, the consummation of the Merger (the “Closing”) shall take place at the offices of Baker Botts L.L.P., 30 Rockefeller Plaza, New York, New York 10112 at 10:00 a.m. New York City time on a date to be mutually agreed to by the Parties, which date shall be no later than the third Business Day after the satisfaction or waiver (to the extent such waiver is permitted by Law) of the conditions to the Closing set forth in Article VII (except for those conditions to the Closing that by their terms are to be satisfied at the Closing but subject to the satisfaction or waiver of such conditions), unless another time, date or place is mutually agreed to in writing by the Parties. The date on which the Closing occurs is referred to herein as the “Closing Date.”

SECTION 1.04 Effects of the Merger. The Merger shall have the effects specified herein and in the applicable provisions of the IBCL. Without limiting the foregoing, from and after the Effective Time, the Surviving Corporation shall possess all of the properties, rights, privileges, powers and franchises of the Company and Merger Sub, and all of the claims, obligations, liabilities, debts and duties of the Company and Merger Sub shall become the claims, obligations, liabilities, debts and duties of the Surviving Corporation.

SECTION 1.05 Surviving Corporation Organizational Documents. As of the Effective Time, the articles of incorporation of the Surviving Corporation shall be amended and restated to be the same as the articles of incorporation of Merger Sub, as in effect immediately prior to the Effective Time, until thereafter amended as provided therein and in accordance with applicable Law, except that the name of the Surviving Corporation shall be “Vectren Corporation”. As of the Effective Time, the bylaws of the Surviving Corporation shall be amended and restated to be the same as the bylaws of Merger Sub, as in effect immediately prior to the Effective Time, until thereafter amended as provided therein and in accordance with applicable Law, except that the name of the Surviving Corporation shall be “Vectren Corporation”.

SECTION 1.06 Surviving Corporation Directors and Officers. As of the Effective Time, (a) the directors of Merger Sub as of immediately prior to the Effective Time shall be the directors of the Surviving Corporation and (b) the officers of the Company as of immediately prior to the Effective Time shall be the officers of the Surviving Corporation, in each case until their successors have been duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the articles of incorporation and bylaws of the Surviving Corporation.

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SECTION 1.07 Plan of Merger. This Article I and Article II and, solely to the extent necessary under the IBCL, the other provisions of this Agreement shall constitute a “plan of merger” for purposes of the IBCL. Subject to the terms and conditions of this Agreement, the Parties agree to cooperate and to take all reasonable actions prior to the Effective Time, including executing all requisite documentation, as may be reasonably necessary to effect the Merger in accordance with the terms and conditions hereof.

ARTICLE II

MERGER CONSIDERATION; EXCHANGE OF CERTIFICATES AND BOOK-ENTRY SHARES

SECTION 2.01 Merger Consideration.

At the Effective Time, by virtue of the Merger and without any action on the part of the holder thereof:

(a) Conversion of Company Common Stock. Subject to Sections 2.03 and 2.04, and except as otherwise provided by paragraphs (b), (c) and (d) of this Section 2.01, each share of common stock, no par value, of the Company (“Company Common Stock”) issued and outstanding immediately prior to the Effective Time, other than the Treasury Shares to be cancelled in accordance with Section 2.01(c), shall automatically be converted into, and shall thereafter represent solely, the right to receive cash in the amount of $72.00, without interest (the “Merger Consideration”).

(b) Equitable Adjustment. If at any time during the period between the date of this Agreement and the Effective Time, any change in the outstanding shares of capital stock of the Company (or any other securities convertible therefor or exchangeable thereto) shall occur as a result of any reclassification, recapitalization, stock split (including a reverse stock split), combination, subdivision, exchange or readjustment of shares, or any stock dividend or stock distribution with a record date during such period, or any similar event, in each case, other than pursuant to the transactions contemplated by this Agreement, the Merger Consideration and any other similarly dependent items shall be equitably adjusted to provide to the holders of Company Common Stock the same economic effect as contemplated by this Agreement prior to such action; provided, however, that nothing in this Section 2.01(b) shall be deemed to permit or authorize the Company to effect any such change that is not otherwise specifically authorized or permitted by this Agreement.

(c) Treasury Shares. All Treasury Shares shall be canceled automatically and retired at the Effective Time, and no consideration shall be issued in exchange therefor.

(d) Outstanding Parent Common Stock. Each share of common stock, par value $0.01, of Parent (“Parent Common Stock”) issued and outstanding immediately prior to the Effective Time shall remain issued and outstanding and unaffected by the Merger.

(e) Outstanding Common Stock of Merger Sub. Each share of common stock of Merger Sub issued and outstanding immediately prior to the Effective Time shall be converted into one share of common stock of the Surviving Corporation and shall constitute the only outstanding shares of capital stock of the Surviving Corporation.

SECTION 2.02 Rights as Shareholders; Share Transfers.

At the Effective Time, holders of shares of Company Common Stock shall cease to be, and shall have no rights as, shareholders of the Company, other than (a) to receive any dividend or other distribution with respect to such shares of Company Common Stock with a record date occurring prior to the Effective Time and (b) to receive the consideration provided under this Article II.

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SECTION 2.03 Exchange and Payment Procedures.

(a) Exchange Agent.

(i) Prior to the Closing Date, Parent shall appoint a bank or trust company to act as paying and exchange agent reasonably acceptable to the Company (the “Exchange Agent”) for the purpose of exchanging shares of Company Common Stock for the Merger Consideration in accordance with Section 2.01(a). At or prior to the Effective Time, Parent shall deposit or cause to be deposited with the Exchange Agent, an aggregate amount of cash sufficient to deliver the aggregate amount of the Merger Consideration. All such cash shall hereinafter be referred to as the “Exchange Fund.”

(ii) Prior to the Effective Time, Parent and the Company shall cooperate to establish procedures with the Exchange Agent and the Depository Trust Company (“DTC”) with the objective that (x) if the Effective Time occurs at or prior to 11:30 a.m. (New York City time) on the Closing Date, out of available funds in the Exchange Fund, the Exchange Agent will transmit to DTC or its nominee on the Closing Date the Merger Consideration in respect of each share of Company Common Stock held of record by DTC or such nominee immediately prior to the Effective Time (such aggregate cash amount, the “DTC Cash Payment”) and (y) if the Effective Time occurs after 11:30 a.m. (New York City time) on the Closing Date, the Exchange Agent will transmit to DTC or its nominee on the first Business Day after the Closing Date the DTC Cash Payment.

(b) Payment Procedures.

(i) Promptly after the Effective Time (but no later than three (3) Business Days after the Effective Time), the Exchange Agent will mail to each holder of record of a certificate representing outstanding shares of Company Common Stock immediately prior to the Effective Time (a “Certificate”) and to each holder of uncertificated shares of Company Common Stock represented by book entry immediately prior to the Effective Time (“Book-Entry Shares”), in each case, whose shares were converted into the right to receive the Merger Consideration pursuant to Section 2.01(a):

(1) a letter of transmittal, which shall specify that delivery shall be effected, and that risk of loss and title to Certificates or Book-Entry Shares held by such holder will pass, only upon proper delivery of such Certificates or Book-Entry Shares to the Exchange Agent in accordance with the procedures set forth in the letter of transmittal and which shall be in form and substance reasonably satisfactory to Parent and the Company, and

(2) instructions for use in effecting the surrender of such Certificates or Book-Entry Shares in exchange for the Merger Consideration with respect to such shares.

(ii) Upon surrender to, and acceptance in accordance with Section 2.03(b)(iii) by, the Exchange Agent of a Certificate or Book-Entry Share together with the letter of transmittal, if applicable, duly completed and validly executed in accordance with the instructions thereto, the holder thereof will be entitled to the Merger Consideration payable in respect of the number of shares of Company Common Stock formerly represented by such Certificate or Book-Entry Share surrendered under this Agreement.

(iii) The Exchange Agent will accept Certificates or Book-Entry Shares upon compliance with such reasonable terms and conditions as the Exchange Agent may impose to effect an orderly exchange of the Certificates and Book-Entry Shares in accordance with customary exchange practices.

(iv) From and after the Effective Time, no further transfers may be made on the records of the Company or its transfer agent of Certificates or Book-Entry Shares, and if any Certificate or Book-Entry Share is presented to the Company for transfer, such Certificate or Book-Entry Share shall be canceled against delivery of the Merger Consideration payable in respect of the shares of Company Common Stock represented by such Certificate or Book-Entry Share.

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(v) If any Merger Consideration is to be remitted to a name other than that in which a Certificate or Book-Entry Share is registered, no Merger Consideration may be paid in exchange for such surrendered Certificate or Book-Entry Share unless:

(1) either (A) the Certificate so surrendered is properly endorsed, with signature guaranteed, or otherwise in proper form for transfer or (B) the Book-Entry Share is properly transferred; and

(2) the Person requesting such payment shall (A) pay any transfer or other Taxes required by reason of the payment to a Person other than the registered holder of the Certificate or Book-Entry Share or (B) establish to the satisfaction of the Exchange Agent that such Taxes have been paid or are not payable.

(vi) At any time after the Effective Time until surrendered as contemplated by this Section 2.03, each Certificate or Book-Entry Share shall be deemed to represent only the right to receive upon such surrender the Merger Consideration payable in respect of the shares of Company Common Stock represented by such Certificate or Book-Entry Share as contemplated by Section 2.01(a). No interest will be paid or accrued for the benefit of holders of Certificates or Book-Entry Shares on the Merger Consideration payable in respect of the shares of Company Common Stock represented by Certificates or Book-Entry Shares.

(c) No Further Ownership Rights in Company Common Stock.

(i) At the Effective Time, each holder of a Certificate, and each holder of Book-Entry Shares, will cease to have any rights with respect to such shares of Company Common Stock, except, to the extent provided by Section 2.02, for the right to receive the Merger Consideration payable in respect of the shares of Company Common Stock formerly represented by such Certificate or Book-Entry Shares upon surrender of such Certificate or Book-Entry Share in accordance with Section 2.03(b);

(ii) The Merger Consideration paid upon the surrender or exchange of Certificates or Book-Entry Shares in accordance with this Section 2.03 will be deemed to have been paid in full satisfaction of all rights pertaining to the shares of Company Common Stock formerly represented by such Certificates or Book-Entry Shares.

(d) Termination of Exchange Fund. The Exchange Agent will deliver to the Surviving Corporation, upon the Surviving Corporation’s demand, any portion of the Exchange Fund (including any interest and other income received by the Exchange Agent in respect of all such funds) which remains undistributed to the former holders of Certificates or Book-Entry Shares upon expiration of the period ending one (1) year after the Effective Time. Thereafter, any former holder of Certificates or Book-Entry Shares prior to the Merger who has not complied with this Section 2.03 prior to such time, may look only to the Surviving Corporation for payment of his, her or its claim for Merger Consideration to which such holder may be entitled.

(e) No Liability. None of Parent, the Company, the Exchange Agent or the Surviving Corporation shall be liable to any former holder of shares of Company Common Stock for any payment of the Merger Consideration delivered to a public official if required by any applicable abandoned property, escheat or similar Law. Any portion of the Exchange Fund remaining unclaimed by holders of shares of Company Common Stock as of a date that is immediately prior to such time as such amounts would otherwise escheat to or become property of any Governmental Entity will, to the extent not prohibited by applicable Law, become the property of Parent, free and clear of all of any claims or interest of any Person previously entitled thereto.

(f) Withholding Taxes. Each of Parent, the Surviving Corporation and the Exchange Agent shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement to any holder of Certificates, Book-Entry Shares, Company Stock Units, Company Other Performance Units or Company Unpaid Performance Units such amounts for Taxes as may be required to be deducted and withheld with respect to the making of such payment under applicable Tax Law. Amounts so deducted and

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withheld shall be promptly paid over to the appropriate taxing authority, and shall be treated for all purposes under this Agreement as having been paid to the holder of Certificates, Book-Entry Shares, Company Stock Units, Company Other Performance Units or Company Unpaid Performance Units, as applicable, in respect of which such deduction or withholding was made. Parent, the Surviving Corporation or the Exchange Agent, as relevant, shall reasonably cooperate in good faith to establish or obtain any exemption from or reduction in the amount of any withholding that otherwise would be required.

(g) Waiver. The Surviving Corporation may from time to time, in the case of one or more Persons, waive one or more of the rights provided to it in this Article II to withhold certain payments, deliveries and distributions; and no such waiver shall constitute a waiver of its rights thereafter to withhold any such payment, delivery or distribution in the case of any Person.

(h) Lost, Stolen or Destroyed Certificates. If any Certificate formerly representing shares of Company Common Stock has been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificate to be lost, stolen or destroyed and, if required by Parent, the posting by such Person of a bond, in such reasonable and customary amount as Parent may direct, as indemnity against any claim that may be made against it with respect to such Certificate, the Exchange Agent shall deliver and pay, in exchange for such lost, stolen or destroyed certificate, the Merger Consideration payable in respect thereof pursuant to this Agreement.

(i) Investment of Exchange Fund. The Exchange Agent shall invest any cash in the Exchange Fund if and as directed by Parent; provided, that such investment shall be in obligations of, or guaranteed by, the United States of America, in commercial paper obligations of issuers organized under the Law of a state of the United States of America, rated A-1 or P-1 or better by Moody’s Investors Service, Inc. or Standard & Poor’s Ratings Service, respectively, or in certificates of deposit, bank repurchase agreements or bankers’ acceptances of commercial banks with capital exceeding $10,000,000,000, or in mutual funds investing in such assets. Any interest and other income resulting from such investments shall be paid to, and be the property of, Parent. No investment losses resulting from the Exchange Fund shall diminish the rights of any of the Company’s shareholders to receive the Merger Consideration or any other payment as provided herein. To the extent there are losses with respect to such investments or the Exchange Fund diminishes for any other reason below the level required to make prompt cash payment of the aggregate funds required to be paid pursuant to the terms hereof, Parent shall reasonably promptly replace or restore the cash in the Exchange Fund so as to ensure that the Exchange Fund is at all times maintained at a level sufficient to make such cash payments.

SECTION 2.04 Equity Awards. At or prior to the Effective Time, the Company shall take such actions as are necessary (including obtaining any resolutions of the Company Board or, if appropriate, any committee thereof administering the Company Stock Plan and, if necessary or appropriate, amending the terms of the Company Stock Plan) to effect the following:

(a) Company Stock Units. Immediately prior to the Effective Time, each Company Stock Unit that is outstanding and unvested immediately prior to the Effective Time shall be cancelled as of the Effective Time and converted into a vested right to receive cash in an amount equal to (i) the Merger Consideration, plus (ii) the amount of any unpaid dividend equivalents associated with such Company Stock Unit as of the Effective Time, subject to any withholding Taxes required by Law to be withheld in accordance with Section 2.03(f). In each case, payment with respect to any Company Stock Units shall be made within five (5) Business Days after the Closing Date.

(b) Company Unpaid Performance Units. Prior to the Effective Time, with respect to each Company Unpaid Performance Unit that is outstanding the Company shall pay to the holder thereof cash in an amount equal to the Merger Consideration, with the number of vested Company Unpaid Performance Units to be the number determined in accordance with the performance criteria and adjusted for dividends as otherwise provided in the applicable award agreement, subject to any withholding Taxes required by Law to be withheld in accordance with Section 2.03(f). Upon such payment, all such Company Unpaid Performance Units will be cancelled.

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(c) Company Other Performance Units. Immediately prior to the Effective Time, each Company Other Performance Unit that is outstanding and unvested immediately prior to the Effective Time shall be cancelled as of the Effective Time and converted into a vested right to receive cash in an amount equal to the Merger Consideration, with the number of vested Company Other Performance Units to be the greater of (A) the number determined in accordance with the performance criteria and adjusted for dividends as otherwise provided in the applicable award agreement and as if the performance period ended as of the last Business Day immediately preceding the Closing Date and (B) the target award and adjusted for dividends as provided in the applicable award agreement, subject to any withholding Taxes required by Law to be withheld in accordance with Section 2.03(f). In each case, payment with respect to any Company Other Performance Units shall be made within five (5) Business Days after the Closing Date.

(d) Treatment of 2018 Stock Units and 2019 Stock Units. Notwithstanding the provisions of this Section 2.04, as soon as practicable following the date of this Agreement, but in all events prior to the grant of the 2018 Stock Units, the Company shall amend the Company Stock Plan to provide that, notwithstanding any other provision of the Company Stock Plan to the contrary, each 2018 Stock Unit and each 2019 Stock Unit shall be cancelled as of the Effective Time and converted into a vested right to receive cash in an amount equal to the Merger Consideration, with the number of vested 2018 Stock Units and 2019 Stock Units to be based on the target award pro-rated based upon the Closing Date (with any unvested portion to be automatically cancelled) and adjusted for dividends as provided in the applicable award agreement, subject to any withholding Taxes required by Law to be withheld in accordance with Section 2.03(f). In each case, payment with respect to any 2018 Stock Units and 2019 Stock Units shall be made within five (5) Business Days after the Closing Date.

(e) Termination of Company Stock Plan. After the Effective Time, the Company Stock Plan shall be terminated and no further Company Stock Units, Company Other Performance Units or Company Unpaid Performance Units shall be granted thereunder.

(f) Other Equity-Based Rights. Immediately prior to the Effective Time, each Other Equity-Based Right that is outstanding immediately prior to the Effective Time, shall, without any action on the part of the holder thereof, be cancelled as of the Effective Time and converted into a vested right to receive the Merger Consideration, subject to any withholding Taxes required by Law to be withheld in accordance with Section 2.03(f), such that as of the Effective Time, no Other Equity-Based Rights shall be outstanding. In each case, payment with respect to any Other Equity-Based Rights shall occur on the date that it would otherwise occur under the applicable Company Benefit Plan or applicable election form under such Company Benefit Plan.

SECTION 2.05 No Dissenters Rights. The Parties acknowledge and agree that the holders of shares of Company Common Stock are not entitled to any dissenters’ rights of appraisal under Chapter 44 of the IBCL.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

Except (a) as set forth in the Company Reports publicly available and filed with or furnished to the SEC at least one (1) Business Day prior to the date of this Agreement (excluding any disclosures of factors or risks contained or references therein under the captions “Risk Factors” or “Forward-Looking Statements” and any other statements that are predictive, cautionary or forward-looking in nature) or (b) subject to Section 9.04(k), as set forth in the corresponding section of the disclosure letter delivered by the Company to Parent concurrently with the execution and delivery by the Company of this Agreement (the “Company Disclosure Letter”), the Company represents and warrants to Parent and Merger Sub as follows:

SECTION 3.01 Organization, Standing and Power. Each of the Company and the Subsidiaries of the Company (the “Company Subsidiaries”) is duly organized, validly existing and in active status or good standing,

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as applicable, under the laws of the jurisdiction in which it is organized (in the case of active status or good standing, to the extent such jurisdiction recognizes such concept), except, in the case of the Company Subsidiaries, where the failure to be so organized, existing or in active status or good standing, as applicable, has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. Each of the Company and the Company Subsidiaries has all requisite entity power and authority to enable it to own, operate, lease or otherwise hold its properties and assets and to conduct its businesses as presently conducted, except where the failure to have such power or authority would not have or would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. Each of the Company and the Company Subsidiaries is duly qualified or licensed to do business in each jurisdiction where the nature of its business or the ownership, operation or leasing of its properties make such qualification necessary, except in any such jurisdiction where the failure to be so qualified or licensed would not have or would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. The Company has made available to Parent true and complete copies of the amended and restated articles of incorporation of the Company in effect as of the date of this Agreement (the “Company Articles”) and the bylaws of the Company in effect as of the date of this Agreement (the “Company Bylaws”).

SECTION 3.02 Company Subsidiaries. All the outstanding shares of capital stock, voting securities of, and other equity interests in, each Company Subsidiary have been validly issued and are fully paid and nonassessable and are owned by the Company, by another Company Subsidiary or by the Company and another Company Subsidiary, free and clear of (a) all pledges, liens, charges, mortgages, encumbrances and security interests of any kind or nature whatsoever (collectively, “Liens”) and (b) any other restriction (including any restriction on the right to vote, sell or otherwise dispose of such capital stock, voting securities or other equity interests), except, in the case of the foregoing clauses (a) and (b), as imposed by this Agreement, the Organizational Documents of the Company Subsidiaries or applicable securities Laws. Section 3.02 of the Company Disclosure Letter sets forth, as of the date of this Agreement, a true and complete list of the Company Subsidiaries. The Company has made available to Parent true and complete copies of the articles of incorporation and bylaws (or equivalent Organizational Documents) of each Company Subsidiary in effect as of the date of this Agreement. Neither the Company nor any Company Subsidiary owns any shares of capital stock or voting securities of, or other equity interests in, any Person other than the Company Subsidiaries.

SECTION 3.03 Capital Structure.

(a) The authorized capital stock of the Company consists of 500,000,000 shares of which 480,000,000 shares is Company Common Stock without par value and 20,000,000 shares is preferred stock without par value (the “Preferred Stock”). At the close of business on April 20, 2018 (the “Capitalization Reference Date”), (i) 83,080,695 shares of Company Common Stock were issued and outstanding, (ii) no shares of Preferred Stock were issued and outstanding, (iii) no shares of Company Common Stock were held by the Company in its treasury, (iv) Company Stock Units with respect to an aggregate of 29,061 shares of Company Common Stock were issued and outstanding (v) Company Other Performance Units with respect to an aggregate of 535,994 shares of Company Common Stock based on achievement of applicable performance criteria at target level were issued and outstanding and (vi) Company Unpaid Performance Units with respect to an aggregate of 0 shares of Company Common Stock based on achievement of applicable performance criteria at actual results were issued and outstanding. At the close of business on the Capitalization Reference Date, an aggregate of 3,259,309 shares of Company Common Stock were available for issuance pursuant to the Company Stock Plan. Except as set forth above, at the close of business on the Capitalization Reference Date, there are no shares of capital stock, or other equity or voting securities or equity or voting interests of the Company issued, reserved for issuance or outstanding. From the close of business on the Capitalization Reference Date to the date of this Agreement, there have been no issuances by the Company of any shares of capital stock, or other equity or equity-based or voting securities or equity or voting interests, and from the close of business on the Capitalization Reference Date to the date of this Agreement, the Company has not entered into a Contract to grant, or otherwise committed to grant any such awards or other equity or equity-based awards that may be settled in or are otherwise based on the value of the Company Common Stock.

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(b) Section 3.03(b) of the Company Disclosure Letter sets forth, as of the Capitalization Reference Date, a complete and correct list of all outstanding Company Stock Units, Company Unpaid Performance Units and Company Other Performance Units, including the holder, date of grant, exercise price (if applicable), vesting schedule, performance period and number of shares of Company Common Stock (based on target performance) or performance units (including the target dollar value per unit) subject thereto.

(c) Except for the Company Stock Plan, the Vectren Corporation Retirement Savings Plan and the Company’s dividend reinvestment and stock purchase plan (the “Company DRIP”), no plan, program or other arrangement provides for the issuance of Equity Securities.

(d) All outstanding shares of Company Common Stock are, and all shares of Company Common Stock that may be issued upon the settlement of Company Stock Units, Company Other Performance Units and Company Unpaid Performance Units will be, when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to, or issued in violation of, any preemptive or similar right. Except as set forth in this Section 3.03 or as set forth in Section 3.03 of the Company Disclosure Letter, there are not issued, reserved for issuance or outstanding, and there are not any outstanding obligations of the Company or any Company Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, (i) any capital stock of the Company or any Company Subsidiary or any securities of the Company or any Company Subsidiary convertible into or exchangeable or exercisable for shares of capital stock or voting securities of, or other equity interests in, the Company or any Company Subsidiary or (ii) any warrants, calls, options, rights, “phantom” equity rights, equity appreciation rights, profit participation rights, equity-based performance units, commitments, Contracts, arrangements or undertakings of any kind, or other rights to acquire from the Company or any Company Subsidiary, or any other obligation of the Company or any Company Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, any capital stock or voting securities of, or other equity interests in, the Company or any Company Subsidiary, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, the Company or any Company Voting Debt, or any interests based on the value of equity interests in the Company (the foregoing clauses (i) and (ii), collectively, “Equity Securities”). Except pursuant to the Company Stock Plan, there are not any outstanding obligations of the Company or any Company Subsidiary to repurchase, redeem or otherwise acquire any Equity Securities. There is no outstanding Indebtedness of the Company having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which shareholders of the Company may vote (“Company Voting Debt”). No Company Subsidiary owns any shares of Company Common Stock. There are no proxies, voting trusts or other agreements or understandings to which either the Company or any of the Company Subsidiaries is a party or is bound with respect to the voting or registration of any capital stock or voting securities of, or other equity interests in, the Company or any of the Company Subsidiaries.

SECTION 3.04 Authority; Execution and Delivery; Enforceability. The Company has all requisite corporate power and authority to execute and deliver this Agreement, to perform its covenants and agreements hereunder and to consummate the transactions contemplated hereby, including the Merger, subject, in the case of the Merger, to the receipt of the Company Shareholder Approval. The Company Board has adopted resolutions, at a meeting duly called at which a quorum of directors of the Company was present, (a) determining that it is in the best interests of the Company and its shareholders, and declaring it advisable, for the Company to enter into this Agreement, (b) adopting this Agreement and approving the Company’s execution, delivery and performance of this Agreement and the consummation of the transactions contemplated thereby and (c) resolving to recommend that the Company’s shareholders approve this Agreement (the “Company Board Recommendation”) and directing that this Agreement be submitted to the Company’s shareholders for approval at a duly held meeting of such shareholders for such purpose (the “Company Shareholders Meeting”). Such resolutions have not been amended or withdrawn as of the date of this Agreement. Except for (i) the approval of this Agreement by the affirmative vote of the holders of a majority of all of the outstanding shares of Company Common Stock entitled to vote at the Company Shareholders Meeting (the “Company Shareholder Approval”) and (ii) the filing of the Articles of Merger as required by the IBCL, no other vote or corporate proceedings on the part of the Company or its shareholders are necessary to authorize, adopt or approve this Agreement or to consummate the

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transactions contemplated hereby, including the Merger. The Company has duly executed and delivered this Agreement and, assuming the due authorization, execution and delivery by Parent and Merger Sub, this Agreement constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, subject in all respects to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other Laws relating to or affecting creditors’ rights generally and general equitable principles (whether considered in a proceeding in equity or at law) (the “Bankruptcy and Equity Exceptions”).

SECTION 3.05 No Conflicts; Consents.

(a) The execution and delivery by the Company of this Agreement does not, and the performance by the Company of its covenants and agreements hereunder and the consummation of the transactions contemplated hereby, including the Merger, will not, (i) subject to obtaining the Company Shareholder Approval, conflict with, or result in any violation of any provision of, the Company Articles, the Company Bylaws or the Organizational Documents of any Company Subsidiary, (ii) subject to obtaining the Consents set forth in Section 3.05(a)(ii) of the Company Disclosure Letter (the “Company Required Consents”), conflict with, result in any violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to the loss of a benefit under, or result in the creation of a Lien upon any of the respective properties or assets of the Company or any Company Subsidiary pursuant to, any Contract to which the Company or any Company Subsidiary is a party or by which any of their respective properties or assets are bound or any Permit applicable to the business of the Company and the Company Subsidiaries or (iii) subject to obtaining the Company Shareholder Approval and the Consents referred to in Section 3.05(b) and making the Filings referred to in Section 3.05(b), conflict with, or result in any violation of any provision of, any Judgment or Law, in each case, applicable to the Company or any Company Subsidiary or their respective properties or assets, except for, in the case of the foregoing clauses (ii) and (iii), any matter that would not have or would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect and would not prevent or materially impede, interfere with or delay the consummation of the transactions contemplated hereby, including the Merger.

(b) No consent, waiver or Permit (“Consent”) of or from, or registration, declaration, notice, submission or filing (“Filing”) made to or with, any Governmental Entity is required to be obtained or made by the Company, any Company Subsidiary or any other Affiliate of the Company in connection with the Company’s execution and delivery of this Agreement or its performance of its covenants and agreements hereunder or the consummation of the transactions contemplated hereby, including the Merger, except for the following:

(i) (A) the filing with the Securities and Exchange Commission (the “SEC”), in preliminary and definitive form, of the Proxy Statement and (B) the filing with the SEC of such reports under, and such other compliance with, the Securities Exchange Act of 1934, as amended (together with the rules and regulations of the SEC promulgated thereunder, the “Exchange Act”), or the Securities Act of 1933, as amended (together with the rules and regulations of the SEC promulgated thereunder, the “Securities Act”), in each case as may be required in connection with this Agreement or the Merger;

(ii) compliance with, Filings under and the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder (the “HSR Act”);

(iii) the filing of the Articles of Merger with the Secretary of State of the State of Indiana;

(iv) (A) the Filing with, and the Consent of, the Federal Energy Regulatory Commission (the “FERC”) under Section 203 of the Federal Power Act (the “FPA”), (B) the Filings with, and the Consents of, the Governmental Entities set forth in Section 3.05(b)(iv) of the Company Disclosure Letter and (C) the other Filings and Consents set forth in Section 3.05(b)(iv) of the Company Disclosure Letter (the Consents and Filings set forth in Section 3.05(b)(ii) and this Section 3.05(b)(iv), collectively, the “Company Required Statutory Approvals”);