Exhibit 10.20

 

DIRECTORS’ COMPENSATION

 

The Corporate Governance Committee of the Board of Directors discharges the
Board’s responsibilities relating to compensation of directors.  Compensation of
directors is reviewed by the Corporate Governance Committee annually at its
April meeting and is approved by the Board.  No compensation is paid to employee
directors for their service as directors.

 

The Corporate Governance Committee has engaged Towers, Perrin, Forster &
Crosby, Inc. (“Towers Perrin”), an external human resources consulting firm, to
conduct an annual review of the total compensation for outside directors. 
Specifically, retainer fees, meeting fees, stock-based long-term incentives and
insurance were evaluated using, as the competitive benchmark, levels of total
compensation paid to directors of 30 energy companies (consisting of Vectren
Corp. and the 29 companies constituting the Long Term Peer Group (as defined
under the caption “Peer Groups Define Competitive Levels of Performance” under
“Executive Compensation”)), and 20 general industry companies of comparable
revenue and equity capitalization size (consisting of Toll Brothers Inc., 
Sovereign Bancorp Inc., Teleflex Inc., Harsco Inc., Airgas Inc., Analog Devices
Inc., Pep Boys-Manny Moe & Jack (The), Bausch & Lomb Inc., FMC Corp., Cabot
Corp., Hercules Inc., Ann Taylor Stores Corp., Iron Mountain Inc.,  Dow Jones
and Co. Inc., Ametek Inc., Carpenter Technology Corp., Erie Indemnity Company,
Covance Inc., Tektronix Inc., and Reynolds and Reynolds Co.).  Set forth below
is a description of the 2007 compensation of the company’s non-employee
directors.

 

CASH COMPENSATION

 

·                  An annual cash retainer of $30,000 is paid on a quarterly
basis.

·                  The cash meeting fee is $1,500 for each Board and committee
meeting attended in person.  If a director participates in a meeting by
telephone, the meeting fee is $750.  An additional $500 is paid to each
committee chair ($1,500 for the Audit Committee Chair) for each meeting of his
or her committee that the chair attends.

 

EQUITY-BASED COMPENSATION

 

·                  In 2003, the company began granting to each director stock
units that vested upon award and that are payable on a deferred basis under the
directors’ deferred compensation plans.  In 2007, a grant of 1,730 deferred
stock units was awarded to each non-employee director.  The deferred stock units
are awarded by the Board annually at the April Board meeting upon the
recommendation of the Corporate Governance Committee.  Each deferred stock unit
is equal in value to one share of company common stock, but does not have voting
rights.  Dividends are credited quarterly in the form of additional stock
units.  The value of the stock units will be paid in cash on the earlier of the
director’s death or termination of service as a director.

·                  The non-employee directors are subject to stock ownership
guidelines which require them to hold shares (or share equivalents, including
deferred stock units) with a value equal to at least two times the annual cash
retainer.  Under the guidelines, directors have up to two years to acquire a
sufficient number of shares (or share equivalents, including deferred stock
units) to meet this requirement. 

 

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All of the company’s non-employee directors meet this share ownership
requirement.

 

DEFERRED COMPENSATION

 

·                  The company has a deferred compensation plan for non-employee
directors.  In addition to the automatic deferral of stock units awarded,
non-employee directors may elect to defer up to 100% of their annual retainer
and fees into the 2005 Directors’ Deferred Compensation Plan and receive an
investment return on the deferred funds as if the funds were invested in company
stock or permitted mutual funds.  Prior to the deferral, plan participants must
irrevocably elect to receive the deferred funds either in a lump sum or in equal
installments.  Distributions commence following termination of service as a
director.  The directors’ deferred compensation accounts are unsecured
obligations of the company.  The company has taken steps to provide that the
2005 Directors’ Deferred Compensation Plan is operated in compliance with
Section 409A of the Code and intends to meet documentary requirements by the
relevant compliance deadline. Ms. Jeremiah, Mr. Miles and Mr. Whalen deferred
fees under the plan in 2007, and they and other directors have participated in
prior years.  The pre-existing Directors’ Deferred Compensation Plan continues
to operate for the sole purpose of administering amounts vested under the plan
on or prior to December 31, 2004.

 

Other

 

·                  To further the company’s support for charitable giving, all
directors are eligible to participate in the Matching Gifts Program of the
Equitable Resources Foundation, Inc. (the “Equitable Foundation”) on the same
terms as company employees.  Under this program, the Equitable Foundation will
match gifts of at least $100 made by the director to eligible charities, up to
an aggregate total of $10,000 in any calendar year.

·                  Non-employee directors who joined the Board prior to May 25,
1999 may designate a civic, charitable or educational organization as
beneficiary of a $500,000 gift funded by a life insurance policy purchased by
Equitable Resources.  The directors do not receive any financial benefit from
this program because the charitable deductions accrue solely to the company.

·                  The company reimburses directors for their travel and related
expenses in connection with attending Board meetings and Board-related
activities.  The company also provides non-employee directors with $20,000 of
life insurance and $250,000 of travel accident insurance while traveling on
business for the company.

 

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