NOTICE & PROXY STATEMENTSCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
[_]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
[_] | Preliminary Proxy Statement | [_] | CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2)) |
[X] | Definitive Proxy Statement | | |
[_] | Definitive Additional Materials | | |
[_] | Soliciting Material Pursuant to Section
240.14a-11(c) or Section 240.14a-12 | | |
IPALCO ENTERPRISES, INC.
- ----------------------------------------------------------------------------
(NameEnterprises, Inc.
(Name of
Registrant Asas Specified In Its Charter) - ----------------------------------------------------------------------------
(Name
(Name of
Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
1) Title of each class of securities to which transaction applies:
- ----------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
- ----------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on
which the filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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[X] | No fee required. | |
[_] | Fee computed on table below per
Exchange Act Rules 14a-6(i)(4) and 0-11. | |
| | |
| (1) Title of each class of
securities to which transaction applies:
| |
| (2) Aggregate number of securities to which
transaction applies:
| |
| (3) | Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it was
determined): | |
|
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| (4) Proposed maximum aggregate
value of transaction:
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| (5) Total fee paid:
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[_] | Fee paid previously with
preliminary materials. | |
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[_] | Check box if any part of the fee
is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the
filing for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form or Schedule
and the date of its filing. | |
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Notes:
IPALCO
ENTERPRISES, INC.
One Monument
Circle
P. O. Box
1595
Indianapolis,
Indiana 46206-1595
NOTICE OF ANNUAL
MEETING OF SHAREHOLDERS
TO BE HELD APRIL
15, 1998
19, 2000
TO THE SHAREHOLDERS
OF
IPALCO ENTERPRISES,
INC.
NOTICE IS HEREBY GIVEN that the
The Annual Meeting of Shareholders of IPALCO Enterprises,
Inc. will be held at the office of the corporation, One Monument Circle,
Indianapolis, Indiana on Wednesday, April 15, 1998,19, 2000, at 11:00 A.M.
(Eastern Standard(Indianapolis Time), for the following purposes:
1. To elect four directors in Class III
| 1. | To elect five
directors in Class II to hold office for terms of three years each and
until their successors are duly elected and qualified; |
| 2. | To act upon one
shareholder proposal described in the attached Proxy Statement;
and |
| 3. | To transact such
other business as may properly come before the meeting or any adjournment
thereof. |
Shareholders of three years each and until their successors are
duly elected and qualified;
2. To adopt the IPALCO Enterprises, Inc. Long-Term Performance
and Restricted Stock Incentive Plan (As Amended and Restated
Effective January 1, 1998); and
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors fixedrecord at the close of business on
Wednesday, February 25, 1998 as the record date for determining the shareholdersMarch 1, 2000 are entitled to notice of and to vote at the Annual
Meeting and at any
adjournment thereof.
Meeting.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THIS
MEETING. Whether or not you expect to be present at the meeting, you are
urged to fill in, date and sign the enclosed proxy and return it immediately
in the accompanying postage guaranteed envelope.
By order of the Board of Directors.
| IPALCO
ENTERPRISES
, INC
. |
| By: BRYAN
G. TABLER
, Secretary |
Indianapolis,
Indiana
March 20,
2000
TABLE OF
CONTENTS
ANNUAL MEETING INFORMATION | | 1 |
Date, Time and Place of Annual
Meeting. | | 1 |
Solicitation of Proxies | | 1 |
Other Business | | 1 |
Shareholder Proposals for 2001 Annual
Meeting | | 2 |
|
| RELATIONSHIP WITH AUDITOR | | 2 |
|
| VOTING SECURITIES AND BENEFICIAL OWNERS | | 2 |
Beneficial Owners of 5% or More of Common
Stock | | 2 |
Common Stock Ownership of Directors,
Nominees and Executive Officers | | 3 |
Section 16(a) Beneficial Ownership Reporting
Compliance | | 3 |
|
| PROPOSAL 1ELECTION OF FIVE DIRECTORS | | 4 |
Nominees For Directors To Be Elected At The
2000 Annual Meeting | | 4 |
CLASS II | | 4 |
Current Directors Whose Terms Expire in 2001
(Class III) and 2002 (Class I) | | 5 |
CLASS III | | 5 |
CLASS I | | 5 |
|
| INFORMATION REGARDING THE BOARD OF DIRECTORS | | 6 |
Procedure To Propose Nominees For
Director | | 6 |
Number Of Board Meetings and
Attendance | | 6 |
Standing Committees of the Board | | 7 |
Compensation Committee Interlocks and
Insider Participation | | 8 |
Compensation of Directors | | 8 |
Certain Business Relationships | | 8 |
|
| PROPOSAL 2SHAREHOLDER PROPOSAL | | 9 |
|
| BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE
COMPENSATION | | 9 |
Compensation Policies Relating Generally to
Executive Officers | | 9 |
Base Salary | | 9 |
Annual Incentive Plan | | 10 |
Long-Term Performance and Restricted Stock
Incentive Plan | | 10 |
Stock Options | | 11 |
Basis for Chief Executive Officers
Compensation | | 11 |
Deductibility of Executive
Compensation | | 12 |
|
| COMPENSATION OF EXECUTIVE OFFICERS | | 13 |
Nature and Types of Compensation | | 13 |
Summary CompensationTable I | | 13 |
OptionSAR Grants in Last Fiscal Year
Table II | | 15 |
Option/SAR Exercises in Last Fiscal Year
Table III | | 16 |
Performance GraphTable IV | | 17 |
Performance Graph | | 18 |
Pension Plans | | 18 |
Pension Plan TableTable V | | 18 |
Employment Contracts and Termination of
Employment and Change-in-Control Arrangements. | | 19 |
IPALCO
ENTERPRISES, INC.
By: BRYAN G. TABLER, Secretary
One Monument
Circle, P. O. Box 1595
Indianapolis,
Indiana 46206-1595
PROXY
STATEMENT
For the Annual
Meeting of Shareholders
To Be Held April
19, 2000
(Mailed on or
about March 9, 1998
TABLE OF CONTENTS20, 2000)
ANNUAL MEETING INFORMATION. . . . . . . . . . . . . . . . . . . 1
INFORMATION
Date, Time and
Place of Annual Meeting . . . . . . . . . . . 1
Solicitation of Proxies. . . . . . . . . . . . . . . . . . . 1
Other Business . . . . . . . . . . . . . . . . . . . . . . . 2
Shareholder Proposals for 1999 Annual Meeting. . . . . . . . 2
RELATIONSHIP WITH AUDITOR . . . . . . . . . . . . . . . . . . . 2
VOTING SECURITIES AND BENEFICIAL OWNERS . . . . . . . . . . . . 2
Beneficial Owners of 5% or More of Common Stock. . . . . . . 3
Beneficial Ownership of Common Stock By Directors,
Nominees and Executive Officers. . . . . . . . . . . . . . . 3
PROPOSAL 1 - ELECTION OF FOUR DIRECTORS . . . . . . . . . . . . 5
Nominees For Directors To Be Elected At the 1998 Annual
Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . 5
CLASS III . . . . . . . . . . . . . . . . . . . . . . 5
Current Directors Whose Terms Expire in 1999 (Class I)
and in 2000 (Class II) . . . . . . . . . . . . . . . . . . . 6
CLASS I . . . . . . . . . . . . . . . . . . . . . . . 6
CLASS II. . . . . . . . . . . . . . . . . . . . . . . 7
INFORMATION REGARDING THE BOARD OF DIRECTORS. . . . . . . . . . 8
Procedure To Propose Nominees For Director . . . . . . . . . 8
Number Of Board Meetings and Attendance. . . . . . . . . . . 8
Committees of the Board. . . . . . . . . . . . . . . . . . . 8
Section 16(a) Beneficial Ownership Reporting Compliance. . . 9
Compensation Committee Interlocks and Insider Participation. 10
Compensation of Directors. . . . . . . . . . . . . . . . . . 10
Certain Business Relationships . . . . . . . . . . . . . . . 10
PROPOSAL 2 - APPROVING ADOPTION OF IPALCO ENTERPRISES, INC.
LONG-TERM PERFORMANCE AND RESTRICTED STOCK INCENTIVE PLAN
(As Amended and Restated Effective January 1, 1998) . . . . . . 11
Introduction . . . . . . . . . . . . . . . . . . . . . . . . 11
Summary of the Plan. . . . . . . . . . . . . . . . . . . . . 12
Federal Income Tax Consequences of Grants Under the Plan . . 15
Vote Required to Approve the Plan. . . . . . . . . . . . . . 15
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE
COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . 15
Compensation Policies Relating Generally to Executive
Officers . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Base Salary. . . . . . . . . . . . . . . . . . . . . . . . . 16
Annual Incentive Plan. . . . . . . . . . . . . . . . . . . . 17
Long-Term Performance and Restricted Stock Incentive Plan. . 17
Stock Options. . . . . . . . . . . . . . . . . . . . . . . . 18
Basis for Chief Executive Officer's Compensation . . . . . . 18
Deductibility of Executive Compensation. . . . . . . . . . . 19
COMPENSATION OF EXECUTIVE OFFICERS. . . . . . . . . . . . . . . 19
Nature and Types of Compensation . . . . . . . . . . . . . . 19
Subsidiary Incentive Plan. . . . . . . . . . . . . . . . . . 19
Summary Compensation - Table I . . . . . . . . . . . . . . . 20
Option/SAR Grants in Last Fiscal Year - Table II . . . . . . 21
Option/SAR Exercises in Last Fiscal Year - Table III . . . . 22
Performance Graph - Table IV . . . . . . . . . . . . . . . . 23
Performance Graph. . . . . . . . . . . . . . . . . . . . . . 24
Pension Plans. . . . . . . . . . . . . . . . . . . . . . . . 24
Pension Plan Table - Table V. . . . . . . . . . . . . 24
Employment Contracts and Termination of Employment and
Change-in-Control Arrangements . . . . . . . . . . . . . . . 25
Appendix A. . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
IPALCO ENTERPRISES, INC.
One Monument Circle * P. O. Box 1595
Indianapolis, Indiana 46206-1595
PROXY STATEMENT
For the Annual Meeting of Shareholders
To Be Held April 15, 1998
(Mailed on or about March 9, 1998)
ANNUAL MEETING INFORMATION
Date, Time and Place of Annual Meeting
The information set forth in this
This Proxy Statement is furnished in connection with the
solicitation of the enclosed proxy by and on behalf of the Board of
Directors of IPALCO Enterprises, Inc. ("IPALCO"(IPALCO) for useto be voted at
its Annual Meeting of Shareholders to be held April 15, 1998,19, 2000, at 11:00 A.M.
(EST)(Indianapolis Time) at the principal office of IPALCO, One Monument Circle,
Indianapolis, Indiana 46204, pursuant to the foregoing Notice of Annual Meeting, and at any adjournment of such
meeting.
Solicitation of
Proxies
The presence in person or by proxy of the holders of a
majority of the outstanding shares entitled to vote at the Annual Meeting is
necessary to constitute a quorum. Shares represented for any purpose are
deemed present for quorum purposes. If the enclosed form of proxy is
properly executed and returned in time for the meeting, the named proxies
will vote the shares represented by the proxy in accordance with the
instructions marked. Proxies returned unmarked will be voted in favor of the
proposed nominees for director and in favor ofagainst the IPALCO Enterprises, Inc. Long-Term Performance
and Restricted Stock Incentive Plan (the "1998 Restricted Stock Plan"). If
other matters are properly brought before the meeting, or any adjournment
thereof, theshareholder proposal. The
enclosed proxy gives discretionary authority to the persons named therein to
vote in accordance with their best judgment on such matters.any other matters brought
before the meeting. A shareholder executing and delivering the enclosed
proxy has the unconditional right to revoke it at any time before the authority granted
thereinit is
exercised.
Under Indiana law, the election of directors will be
determined by plurality vote at a meeting where a quorum is present. As a
result, the fourfive nominees who receive the greatest number of votes cast for
election as directors will be elected as directors of IPALCO. Broker
non-votes and withheld votes will not affect the outcome of the election of
directors.
Adoption of Proposal 2 requires
The shareholder proposal will be approved if the affirmative vote of a majority ofvotes
cast for the shares present in person or by proxy and entitled to vote at the Annual
Meeting. Abstentions will have the same effect as a voteproposal exceed those cast against the proposal. BrokerAbstentions
and broker non-votes will not be votedcounted either for or against the
proposal.
A broker non-vote occurs when a broker submits
a proxy that does not indicate a vote for a proposal because the broker has
not received instructions from the beneficial owner on how to vote on such
proposal and does not have discretionary authority to vote in the absence of
instructions.
IPALCO will not
be counted as entitled to vote.
Thispay all expenses in connection with the
solicitation of proxies is being made by IPALCO and the expenses
thereof will be borne by IPALCO.proxies. The principal solicitation is being made by mail.
However, additional solicitation may be made by telephone, telegraphtelefax or
personal contact by officers and other employees of IPALCO and its
subsidiaries, who will not be additionally compensated therefor.without additional compensation. IPALCO expects to reimburse
broker-dealers and others for reasonable expenses of forwarding proxy
materialmaterials to, and obtaining instructions from, beneficial
owners.
Other
Business
Management is not aware of any business to be presented at
the 19982000 Annual Meeting other than the election of fourfive directors and the
proposed
approval of the 1998 Restricted Stock Plan.shareholder proposal. The minutes of the Annual Meeting of Shareholders held
MayApril 21, 1997,1999, will be presented for approval at the 19982000 Annual Meeting;
however, such action is not intended to constitute approval or disapproval
of any matter referred to in such minutes.
Shareholder
Proposals for 19992001 Annual Meeting
If a shareholder intends to present a proposal at the
Annual Meeting of Shareholders to be held April 21, 1999,18, 2001, the proposal must
be received by the Corporate Secretary of IPALCO in writing by November 20, 2000 to be
considered for inclusion in IPALCO'snext years proxy statement. The proposal
must comply in all respects with the rules and regulations of the Securities
and Exchange Commission and the Bylaws of IPALCO. Under IPALCOs
Bylaws, other proposals which are not included in the proxy statement will
be considered untimely and formwill not be presented at that meeting unless they
are received by the Secretary of proxy notIPALCO in writing, no earlier than January
8, 2001 and no later than November 9, 1998.February 2, 2001.
RELATIONSHIP WITH AUDITOR
Deloitte && Touche LLP, with offices at Market Bank One
Center/Tower, 111 Monument Circle, Suite 3000, 10
West Market Street,2000, Indianapolis, Indiana, has
been the auditor of IPALCO since its inception. Upon the recommendation of
the Audit Committee, that firm was again appointed by IPALCO'sIPALCOs Board of
Directors to serve as auditor for IPALCO and its subsidiaries for the
current year. A representative of Deloitte && Touche LLP will be present
at the Annual Meeting of Shareholders
to be held April 15, 1998, and will be given the opportunity to make a statement
and to respond to appropriate questions from shareholders.
VOTING SECURITIES AND BENEFICIAL OWNERS
On December 31, 1997,1999, IPALCO had outstanding 44,649,84485,727,614
shares of common stock. Each share of common stock entitles its owner to one
(1) vote upon each matter to come before the meeting. Only shareholders of
record at the close of business on Wednesday, February 25, 1998,March 1, 2000, will be
entitled to vote at the meeting or at any adjournment thereof.
Beneficial Owners
of 5% or More of Common Stock
On December 31, 1999, the following beneficial owners held
more than 5% of IPALCOs voting securities:
On December 31, 1997, the following beneficial owners held
more than 5%Title of
IPALCO's voting securities:
- -----------------------------------------------------------------------------------
Class | | Name and Address
of
Beneficial Owner | | Amount and Nature
of Beneficial
Ownership | | Percent
Title
of Class Beneficial Owner Beneficial Ownership of Class
- -----------------------------------------------------------------------------------
|
---|
|
Common
Stock Employees' | | Employees
Thrift Plan 4,687,611 shares 10.15% of Indianapolis Power && Light
Company
c/o Merrill Lynch Trust Company of America, Trustee
265 Davidson Avenue, 4th Floor
Somerset, NJ 08873
_________________________________
| | 9,261,179 shares
(1) | | 10.80 | % |
|
| Common
Stock | | FMR Corp.
82 Devonshire Street
Boston, MA 02109 | | 5,897,040 shares
(2) | | 6.88 | % |
(1) | Trustee under a
continuing agreement, has discretion to vote shares as to which no voting
instructions are received.
- ----------------------------------------------------------------------------- |
Beneficial Ownership of Common Stock By Directors, Nominees and Executive
Officers
On December 31, 1997,(2) | Information based
on Schedule 13G filed by FMR Corp. FMR Corp. has the following named directors, nomineessole power to dispose
or to direct the disposition of these shares, and executive officersthe sole power to vote
1,247,400 of IPALCO and its subsidiaries, individually and as a
group, beneficially owned equity securitiesthese shares. |
COMMON
STOCK
OWNERSHIP OF
DIRECTORS, NOMINEES AND
EXECUTIVE
OFFICERS
Directors,
Nominees
And
Executive Officers | | Shares
Beneficially
Owned | | Shares held
in Thrift
Plan | | Options
Exercisable
Within 60
Days | | Shares Held
By or With
Spouse,
Children or
Parents, In
Trust or By
Corporation | | Total | | % of IPALCO as follows:
- -------------------------------------------------------------------------------------------------------
Name of Amount and Nature Percent
Title of Class Beneficial Owner of Beneficial Ownership of Class
- -------------------------------------------------------------------------------------------------------
Common Stock Shares
Outstanding
(1) |
---|
|
Joseph D. Barnette,
Jr. 19,000 shares | | 10,500 | | | | 30,000 | | 9,500 | | 50,000 | | | |
|
Robert A.
Borns 48,968 shares | | 21,760 | | | | 30,000 | | 49,599 | | 101,359 | | | |
|
John R.
Brehm 148,317 shares | | 39,466 | | 30,942 | | | | | | 70,408 | | | |
|
Daniel R.
Coats | | | | | | | | 435 | | 435 | | | |
|
Mitchell E.
Daniels, Jr. 21,300 shares | | | | | | 54,000 | | 1,000 | | 55,000 | | | |
|
Rexford C.
Early 14,686 shares | | 12,097 | | | | 30,000 | | 2,000 | | 44,097 | | | |
|
Otto N. Frenzel
III 34,200 shares | | 1,800 | | | | 54,000 | | 24,600 | | 80,400 | | | |
|
Max L.
Gibson 14,100 shares
Earl B. Herr, Jr. 16,903 shares
| | 10,200 | | | | 30,000 | | | | 40,200 | | | |
|
Joseph A.
Gustin | | 10,500 | | 3,664 | | 90,000 | | 2,285 | | 106,449 | | | |
|
John R.
Hodowal 498,759 shares 1.08%
| | 166,618 | | 66,497 | | 115,000 | | | | 348,115 | | | |
|
Ramon L.
Humke 301,235 shares
Sam H. Jones 21,360 shares | | 214,774 | | 19,504 | | 382,254 | | | | 616,532 | | | |
|
Andre B. Lacy
40,884 shares (2) | | 36,214 | | | | 54,000 | | | | 90,214 | | | |
|
L. Ben
Lytle 15,765 shares
| | 2,817 | | | | 42,000 | | | | 44,817 | | | |
|
Michael S.
Maurer 14,119 shares
| | 1,044 | | | | 36,000 | | | | 37,044 | | | |
|
Andrew J. Paine,
Jr. | | 340 shares | | | | 12,000 | | 340 | | 12,680 | | | |
|
Sallie W.
Rowland 22,273 shares | | 2,361 | | | | 54,000 | | 315 | | 56,676 | | | |
|
Thomas H. Sams
26,082 shares , (3) | | 1,224 | | | | 36,000 | | 10,500 | | 47,724 | | | |
|
Bryan G.
Tabler 60,731 shares ,
Gerald D. Waltz 118,557 shares | | 49,872 | | 4,382 | | 70,000 | | 813 | | 125,067 | | | |
|
Other Executive
Officers 507,905 shares , 1.09%
| | 93,202 | | 133,183 | | 548,000 | | 3,637 | | 778,022 | | | |
|
All 27 directors, nominees,Directors
and executive officers, as
a group 1,945,484 shares (3), (4) 4.21%
- ------------------------------
Except as otherwise noted below, each person named in the table has
sole voting and investment power with respect to all shares of common
stock listed as owned by such person. Shares beneficially owned
include shares that may be acquired pursuant to exercise of
outstanding options that are exercisable within 60 days as follows:
Mr. Barnette-12,000; Mr. Borns-15,000; Mr. Brehm-127,500;
Mr. Daniels-21,000; Mr. Early-9,000; Mr. Frenzel-21,000;
Mr. Gibson-9,000; Dr. Herr-15,000; Mr. Hodowal-430,000;
Mr. Humke-230,000; Mr. Jones-21,000; Mr. Lacy-21,000;
Mr. Lytle-15,000; Mr. Maurer-12,000; Mrs. Rowland-21,000;
Mr. Sams-21,000; Mr. Tabler-45,000; Mr. Waltz-56,839; other
executive officers-429,552; directors and executive officers
as a group-1,531,891.
Officers | | 674,789 | | 258,172 | | 1,667,254 | | 105,024 | | 2,705,239 | | 3.16 | % |
(1) | Percentages less
than 1% of total common stock outstanding are not indicated. |
(2) | Includes 47,870 shares owned by or with family members sharing their
home and shares held in trust or other arrangements with family
members.
Includes vested and contingent interests in shares of common stock
held by the Trustee in the Thrift Plan (stated in whole shares) of:
Mr. Brehm-14,165; Mr. Hodowal-30,894; Mr. Humke-8,361;
Mr. Tabler-1,368; Mr. Waltz-37,822; other executive officers-60,474;
and all executive officers as a group-153,084.
Includes 12,00024,000
shares owned by LDI, Ltd. and 2,700 shares owned by
the Lacy Foundation of which Mr. Lacy is a partner, and a director,
respectively, and 6001,200 shares
representing his vested interest in a self-employment retirement plan,
totaling 15,30025,200 shares, 11,70018,000 shares of which he disclaims beneficial
ownership. |
(3) | Mr. Sams disclaims
beneficial ownership of 1,5004,500 shares of the total shares shown opposite
his name. |
Section 16(a)
Beneficial Ownership Reporting Compliance
Under the federal securities laws, IPALCOs
directors, certain officers, and 10% shareholders are required to report to
the Securities and Exchange Commission, by specific due dates, transactions
and holdings in IPALCOs stock. A Form 4 for L. Ben Lytle reporting a
purchase of 725 shares on July 30, 1999 was inadvertently not filed. This
oversight was corrected upon discovery by the filing of a Form
5.
PROPOSAL 1 - ELECTION OF FOURFIVE DIRECTORS
At a meeting held January 27, 1998, the
The Executive Committee of IPALCO'sIPALCOs Board of
Directors nominated fourfive directors to stand for election as Class IIIII
directors of IPALCO at its Annual MeetingMeeting. Under IPALCOs Articles of
Shareholders to be
held April 15, 1998,Incorporation, the Board is divided into three classes with approximately
one-third of the directors standing for terms of three yearselection each and until their successors
are duly elected and qualified.year for a three-year
term.
Proxies representing shares held on the record date which
are returned duly executed, will be voted, unless otherwise specified, in
favor of the fourfive nominees for the Board of Directors named below in Class
III.II. All such nominees are members of IPALCO'sIPALCOs present Board of
Directors and all nominees have consented to serve if elected. However, if
any nominee becomes unavailable to serve, the persons named as proxies may
exercise their discretion to vote for a substitute nominee.
The nominees for directors in Class III,II, the current
directors in Class IIII and Class II,I, as assigned by the Board of Directors,
and the names, ages (as of April 15, 1998)19, 2000), business experience and
directorships of such nominees and directors are as follows:
Nominees For
Directors To Be Elected At The 19982000 Annual Meeting:
CLASS
II
Joseph D.
Barnette, Jr., 60, Chairman of Bank One, Indiana, NA, since March, 1997.
Prior to that, Mr. Barnette was Chairman and Chief Executive Officer of Bank
One, Indianapolis, NA (October, 1994-March, 1997), Chairman and Chief
Executive Officer (January, 1993-December, 1998), and President and Chief
Executive Officer (July, 1990-January, 1993) of Banc One Indiana
Corporation, and President and Chief Executive Officer of Bank One,
Indianapolis, NA (January, 1990-October, 1994). He is a director of IPL and
Meridian Insurance Group, Inc. He has been a director of IPALCO since
January, 1993.
Max L. Gibson,
59, President of Majax Corporation (waste consulting firm), Terre Haute,
Indiana, for the past five years. For more than five years prior to his
consulting work, Mr. Gibson was President of Victory Services Corporation
(waste disposal), Terre Haute, Indiana. He is a director of IPL; First
Financial Corporation; Terre Haute First National Bank; and First State
Bank, Brazil, Indiana. He has been a director of IPALCO since August,
1993.
Ramon L. Humke,
67, Vice Chairman of IPALCO and President and Chief Operating Officer of
IPL. Prior to February, 1990 when he assumed his present position with IPL,
Mr. Humke was President and Chief Executive Officer of Ameritech Services
and Senior Vice President of Ameritech Bell Group (September, 1989-February,
1990) and President and Chief Executive Officer of Indiana Bell Telephone
Company (October, 1983-September, 1989). He is a director of IPL; LDI
Management, Inc.; Chairman of the Board of Monument Advisors, LLC; and is
Chairman of the Boards of Meridian Mutual Insurance Company and Meridian
Insurance Group, Inc. He has been a director of IPALCO since February,
1990.
Andrew J. Paine,
Jr., 62, Retired. Prior to his retirement in October, 1998, Mr. Paine
was President and Chief Executive Officer of NBD Bank, NA, and Executive
Vice President of First Chicago NBD Corporation. In his position with NBD
Bank, NA, he directed the operation of all NBD banks in Indiana. In 1981,
Mr. Paine was named Vice Chairman of Indiana National Bank, and was elected
Executive Vice President of NBD Bancorp after it acquired INB in 1992. Mr.
Paine was named Chief Executive Officer of NBD Indiana, Inc. in June, 1994,
and Executive Vice President of First Chicago NBD Corporation in 1995. He is
a director of IPL; Indianapolis Life Insurance Company; and Bankers Life
Insurance Company of New York. He has been a director of IPALCO since May,
1997.
Sallie W.
Rowland, 67, Chairman of Rowland Design, Inc. (an architectural,
interiors and graphic design firm), Indianapolis, Indiana and Chairman and
Chief Executive Officer of Rowland Design of Kentucky, Inc., Louisville,
Kentucky, positions she has held for more than 5 years. Mrs. Rowland serves
on various community boards including the Indianapolis Chamber of Commerce,
Central Indiana Corporate Partnership and Indianapolis Convention and
Visitors Association. She is a director of IPL; Meridian Insurance Group,
Inc.; and Meridian Mutual Insurance Company. She has been a director of
IPALCO since April, 1988.
Current Directors
Whose Terms Expire in 2001 (Class III) and in 2002 (Class
I):
CLASS
III
Robert A. Borns,
62,64, Chairman of Borns Management Corporation (real estate owners and
managers), Indianapolis, Indiana since 1961, and Chairman of Correctional
Management Company L.L.C. since 1996. Mr. Borns serves on numerous boards,
including the Board of Trustees of Indianapolis Museum of Art,Art; Indianapolis
Symphony Orchestra,Orchestra; Indiana University FoundationFoundation; and St. Vincent Hospital
Advisory Board. He is also a director of IPL,IPL; Standard Management
Corporation,Corporation; and of Artistic Media Partners. He has been a director of IPALCO
since April, 1987 (excluding the period March 15 to August 23,
1993).
Otto N. Frenzel
III, 67,69, Chairman, Executive Committee, National City Bank of Indiana,
Indianapolis, Indiana. Mr. Frenzel has held his present position since
January, 1996. For more than 3 years prior to that time, Mr. Frenzel was
Chairman of the Board of National City Bank, Indiana. Prior to May, 1992,
Mr. Frenzel was Chairman of the Board of Merchants National Bank && Trust
Company of Indianapolis and Chairman of the Board of Merchants National
Corporation. He is a director of IPL, National City Corporation,IPL; American United Life Insurance
Company, Indiana Energy, Inc., Indiana
Gas Company, Inc.,Company; and Baldwin && Lyons, Inc. He has been a director of IPALCO
since September, 1983.
Andre B. Lacy,
58,60, General Partner and Chief Executive of LDI, Ltd. (an industrial and
investment limited partnership), Chairman of the Board, Chief Executive
Officer and President of LDI Management, Inc.,; the managing general partner
of LDI, Ltd.,; and Chairman and Chief Executive Officer of all subsidiaries
and divisions thereof. He has held his present positions for more than 5
years. He is a director of IPL, Tredegar Industries, Inc., Albemarle
Corporation,IPL; FinishMaster, Inc.,; Herff Jones,Jones; Patterson
Dental Co.,; and The National Bank of Indianapolis. He has been a director of
IPALCO since April, 1985.
L. Ben Lytle,
51, President and Chief Executive Officer,53, Chairman, Anthem Insurance Companies, Inc. (insurance and financial
services), Indianapolis, Indiana. He retired as President and Chief
Executive Officer on October 22, 1999, positions he had held since 1989. He
served as Chairman from March, 1994 to March, 1996, and
has held the remaining positions for more than five years.was re-elected Chairman
in November, 1997. He is a director of IPL, Bank One, Indiana, NA,IPL; Duke Realty Investments, Inc.;
Central Newspapers, Inc.; All Scripts, Inc.; CID Ventures; and Anthem
Insurance Companies, Inc. and its subsidiaries. He has been a director of
IPALCO since April, 1992.
Current Directors Whose Terms Expire
CLASS
I
Daniel R. Coats,
56, Special Counsel, Verner, Liipfert, Bernhard, McPherson and Hand
since February 1, 1999. Senator Coats represented the State of Indiana in
1999 (Class I)the U.S. Senate from 1988 to 1998, and represented Indianas Fourth
District in 2000
(Class II):
CLASS I
the U.S. House of Representatives from 1981 to 1988. Senator
Coats currently serves as National Board President of Big Brothers Big
Sisters of America, an organization he has been associated with since 1972.
He is also a board member of the International Republican Institute and the
Wheaton College Board of Visitors.
Mitchell E.
Daniels, Jr., 49, 51, Senior Vice President, Corporate Strategy and Policy,
Eli Lilly and Company, (pharmaceuticals manufacturer). During the period
April 1, 1993 to January 6, 1996, Mr. Daniels was President, North American
Pharmaceutical Operations of Eli Lilly and Company. Prior to that time, he
was Vice President, Corporate Affairs of Eli Lilly and Company and President
and Chief Executive Officer of Hudson Institute, Inc. (March, 1987 to
August, 1990). He is a director of IPL and NBD Bank, NA and has been a director of IPALCO
since November, 1989.
Rexford C. Early,
63,65, President of Carlisle Insurance Agency, Inc., Indianapolis, Indiana,
a position he has held for more than five years. Mr. Early was Chairman of
the Indiana Republican Party from March, 1991 to March, 1993. He is a
trustee of the Indianapolis Foundation and currently servesserved as its Chairman.Chairman in 1998,
and he is a trustee of the English Foundation. He is a director of IPL and
has been a director of IPALCO since August, 1993.
John R. Hodowal,
53,55, Chairman of the Board and President of IPALCO and Chairman of the
Board and Chief Executive Officer of IPL. Except for the Chairmanship of IPL
which he assumed in February, 1990, Mr. Hodowal has held his current
positions since May, 1989. For some years prior to that time, he was Vice
President and Treasurer of IPALCO and Executive Vice President of IPL. He is
a director of IPL,
Bank One, Indiana, NA and Anthem Insurance Companies, Inc.IPL. He has been a director of IPALCO since April,
1984.
Michael S. Maurer,
55,57, Chairman of the Board of The National Bank of Indianapolis since
December, 1993. Mr. Maurer is Chairman of the Board of MyStar Communications
Corporation (radio station operations), a position he has held for more than
five years; and Chairman of the Board of IBJ Corporation (newspaper
publisher) since December, 1990. Mr. MaurerHe is Chair, United Waya director of Central Indiana.
HeIPL and has been a
director of IPL and IPALCO since January, 1993.
Thomas H. Sams,
56,58, President and Chief Executive Officer, Waldemar Industries, Inc. (an
investment holding company), Indianapolis, Indiana, and an officer of
various subsidiary and affiliated corporations thereof. Mr. Sams has held
these positions since 1966. He is a director of IPL NBD Bank, NA, and Meridian Insurance
Group, Inc. He has been a director of IPALCO since April, 1987.
CLASS II
Joseph D. Barnette, Jr., 58, Chairman and Chief Executive Officer of Bank
One, Indiana, NA since March, 1997 and Chairman and Chief Executive
Officer of Banc One Indiana Corporation (a bank holding company)
since January, 1993. Prior to that, Mr. Barnette was Chairman and
Chief Executive Officer of Bank One, Indianapolis, NA (October,
1994 - March, 1997), President and Chief Executive Officer of Banc
One Indiana Corporation (July, 1990 - January, 1993), and President
and Chief Executive Officer of Bank One, Indianapolis, NA (January,
1990 - October, 1994). He is a director of IPL and Meridian
Insurance Group, Inc. He has been a director of IPALCO since January,
1993.
Max L. Gibson, 57, President of Majax Corporation (waste consulting firm),
Terre Haute, Indiana for the past five years. For more than five
years prior to his consulting work, Mr. Gibson was President of
Victory Services Corporation (waste disposal), Terre Haute, Indiana.
He is a director of IPL, First Financial Corporation, Terre Haute
First National Bank and First State Bank, Brazil, Indiana. He has
been a director of IPALCO since August, 1993.
Ramon L. Humke, 65, Vice Chairman of IPALCO and President and Chief Operating
Officer of IPL. Prior to February, 1990 when he assumed his present
position with IPL, Mr. Humke was President and Chief Executive
Officer of Ameritech Services and Senior Vice President of Ameritech
Bell Group (September, 1989 - February, 1990) and President and
Chief Executive Officer of Indiana Bell Telephone Company (October,
1983 - September, 1989). He is a director of IPL, NBD Bank, NA,
LDI Management, Inc. and is Chairman of the Boards of Meridian Mutual
Insurance Company and Meridian Insurance Group, Inc. He has been a
director of IPALCO since February, 1990.
Andrew J. Paine, Jr., 60, President and Chief Executive Officer of NBD Bank,
NA and Executive Vice President of First Chicago NBD Corporation.
In his position with NBD Bank, NA he directs the operation of all
NBD banks in Indiana. In 1981, Mr. Paine was named Vice Chairman of
Indiana National Bank, and was elected Executive Vice President of
NBD Bancorp after it acquired INB in 1992. Mr. Paine was named Chief
Executive Officer of NBD Indiana, Inc. in June, 1994, and Executive
Vice President of First Chicago NBD Corporation in 1995. He is a
director of IPL, Indianapolis Life Insurance Company and Bankers
Life Insurance Company of New York. He has been a director of
IPALCO since May, 1997.
Sallie W. Rowland, 65, Chairman and Chief Executive Officer of Rowland
Design, Inc. (an architectural, interiors and graphic design firm),
Indianapolis, Indiana, positions she has held for more than 5 years.
Mrs. Rowland serves on various community boards including The
Indianapolis Chamber of Commerce and Indianapolis Project. She is a
director of IPL, NBD Bank, NA, Meridian Insurance Group, Inc. and
Meridian Mutual Insurance Company. She has been a director
of IPALCO since April, 1988.
INFORMATION REGARDING THE BOARD OF DIRECTORS
Procedure To
Propose Nominees For Director
IPALCO will accept timely notice by shareholders of
proposed nominees for directors. Any such notice must be received by the
Corporate Secretary of IPALCO not less than 60 days nor more than 90 days
prior to the date of each annual meeting. Such shareholder'sshareholders notice
shall set forth (a) as to each proposed nominee for director (i) the name,
age, business address and residence address of such nominee, (ii) the
principal occupation or employment of such nominee, (iii) the class and/or
series and number of shares that are beneficially owned by such nominee on
the date of such shareholder notice and (iv) any other information relating
to such nominee that is required to be disclosed pursuant to Regulation 14A
under the Securities Exchange Act of 1934, as amended, and (b) as to the
shareholder giving the notice (i) the name and address, as they appear on
IPALCO'sIPALCOs books, of such shareholder and any shareholders known to be
supporting such nominee and (ii) the class and/or series and number of
shares beneficially owned by such shareholder and by any shareholders known
to be supporting such nominee on the date of such shareholder notice. The
Board of Directors may reject any nomination for director not made in
accordance with the foregoing provisions.
Number of Board
Meetings and Attendance
During 1997,1999, the Board of Directors of IPALCO held 117
meetings and committees of the Board held a total of 2017 meetings. Each
director attended more than 85%75% of the aggregate of Board meetings and
assigned committee meetings except for Mr. Robert A. BornsAndre B. Lacy, who attended more than
70%, and
Mr. L. Ben Lytle who attended more than 71%. All directors, on average, attended over 91%89% of the Board meetings and
assigned committee meetings held in 1997.
Committees of the Board
The Board of Directors of IPALCO has four standing committees, the
Executive Committee, the Audit Committee, the Compensation Committee, and the
Committee on Strategies. The Board does not have a nominating committee as
such, but the Executive Committee performs the functions of such committee.
It reviews, among other things, the qualifications and suitability of
candidates to stand for election to IPALCO's Board of Directors and makes
specific recommendations with respect thereto. In addition, the Executive
Committee considers and recommends the declaration of dividends and acts on
matters when the full Board is not in session. The Executive Committee held
six meetings in 1997. Currently, Mr. John R. Hodowal is Chairman and Messrs.
Robert A. Borns, Otto N. Frenzel III, Earl B. Herr, Jr., Ramon L. Humke, and
Sam H. Jones are members. The Audit Committee recommends the appointment of
the auditor for the ensuing year for IPALCO and its subsidiaries, reviews
the scope of the audit, examines the auditor's reports, makes appropriate
recommendations to the Board of Directors as a result of such review and
examination, and inquires into the effectiveness of the financial and
accounting functions and controls. The Audit Committee first approves all
non-audit services and gives appropriate consideration to the effect, if any,
such services may have on the independence of the auditor, except that
management advisory and tax services which do not exceed $50,000 per project
or $150,000 in the aggregate per calendar year may be approved by the
Chairman of the Board without such Committee's consent. The Audit Committee
held four meetings in 1997. Currently, Mrs. Sallie W. Rowland is Chairman and
its members are Messrs. Sam H. Jones, Andre B. Lacy, and Andrew J. Paine, Jr.
The Compensation Committee reviews current and proposed compensation
levels of all officers of IPALCO and its subsidiaries, obtains advice of
independent consultants, and makes specific recommendations as to the
compensation each officer should receive on an annual basis. It also reviews
and makes recommendations with respect to other forms of compensation for
such officers, including supplemental pension benefits, bonuses, stock
options and restricted stock. (See "Board Compensation Committee Report on
Executive Compensation" below.) The Compensation Committee held seven
meetings in 1997. Currently, Mr. Otto N. Frenzel III is Chairman and Messrs.
Robert A. Borns, Rexford C. Early, Earl B. Herr, Jr., and Thomas H. Sams are
members.
The Committee on Strategies considers and makes recommendations with
respect to issues and processes involving dynamic planning, matters affecting
the allocation of corporate resources among regulated and non-regulated
subsidiaries, and other components of overall corporate strategy. The
Committee on Strategies held three meetings in 1997. Currently, Mr. Joseph D.
Barnette, Jr. is Chairman and Messrs. Mitchell E. Daniels, Jr., Max L.
Gibson, L. Ben Lytle, and Michael S. Maurer are members.
Section 16(a) Beneficial Ownership Reporting Compliance
Under the federal securities laws, IPALCO's directors, certain
officers, and 10% shareholders are required to report to the Securities and
Exchange Commission, by specific due dates, transactions and holdings in
IPALCO's stock. All reports were made on a timely basis in 1997.
1999.
STANDING
COMMITTEES OF THE BOARD
Board
Member | | Board | | Audit | | Compensation | | Executive | | Strategies |
---|
|
Joseph D. Barnette,
Jr. | | 3 | | | | | | | | | | | | 3 | * |
|
Robert A.
Borns | | 3 | | | | | | 3 | | | 3 | | | | |
|
Daniel R.
Coats | | 3 | | | | | | | | | | | | 3 | |
|
Mitchell E.
Daniels, Jr. | | 3 | | | | | | | | | | | | 3 | |
|
Rexford C.
Early | | 3 | | | | | | 3 | | | | | | | |
|
Otto N. Frenzel
III | | 3 | | | | | | 3 | * | | 3 | | | | |
|
Max L.
Gibson | | 3 | | | | | | 3 | | | | | | 3 | |
|
John R.
Hodowal | | 3 | * | | | | | | | | 3 | * | | | |
|
Ramon L.
Humke | | 3 | | | | | | | | | 3 | | | | |
|
Andre B.
Lacy | | 3 | | | 3 | | | | | | 3 | | | | |
|
L. Ben
Lytle | | 3 | | | | | | | | | | | | 3 | |
|
Michael S.
Maurer | | 3 | | | 3 | | | | | | | | | 3 | |
|
Andrew J. Paine,
Jr. | | 3 | | | 3 | | | | | | | | | | |
|
Sallie W.
Rowland | | 3 | | | 3 | * | | | | | | | | | |
|
Thomas H.
Sams | | 3 | | | | | | 3 | | | 3 | | | | |
|
| | | | | | | | | | | | | | | |
|
Meetings held in
1999 | | 7 | | | 3 | | | 4 | | | 7 | | | 3 | |
Audit: | | Examines and
inquires into the effectiveness of auditing, accounting, financial
reporting and
internal control functions. Recommends the appointment of the auditor,
reviews the scope of the
audit, reviews the auditors report and makes appropriate
recommendations to the Board after such
review. All members are non-employee directors. |
|
| Compensation: | | Monitors management
compensation and benefit programs, obtains advice of independent
consultants, and makes specific recommendations on compensation of Executive
Officers of
IPALCO and its subsidiaries. Administers IPALCOs bonus, stock option,
restricted stock and
pension plans and makes specific recommendations regarding awards under
those plans. All
members are non-employee directors. |
|
| Executive: | | May act on behalf
of the Board when the full Board is not is session. Performs the functions
of a
nominating committee. It reviews the qualifications of candidates to stand
for election to the Board
of Directors and makes specific recommendations with respect thereto. In
addition, the Executive
Committee considers and recommends the declaration of dividends. |
Strategies: | | Considers and makes
recommendations with respect to issues and processes involving dynamic
planning, matters affecting the allocation of corporate resources among
regulated and non-
regulated subsidiaries, and other components of overall corporate
strategy. |
Compensation
Committee Interlocks and Insider Participation
Mr. Frenzel is Chairman, and Messrs. Borns, Early, HerrGibson
and Sams are the members of the Compensation Committee. IPALCO'sIPALCOs Vice
Chairman, Mr. Ramon L. Humke, is a member of the Compensation Committee of
the Board of Directors of LDI Management, Inc. Mr. Andre B. Lacy is Chairman
of the Board, Chief Executive Officer and President of LDI Management, Inc.
and is also a director of IPALCO.
Compensation of
Directors
Non-employee
Employee directors receive no compensation other than
their normal salary for serving on the Board or its committees. Non-employee
directors receive the following fees for their service on the
Board:
Annual Retainer
Fees: | | |
|
Board of Directors | | $10,000 |
Executive Committee | | 15,000 |
AuditCompensation
Strategies Committees | | 4,000 |
| Meeting
Fees: | | |
|
Board of Directors | | $
1,000 |
Executive Committee | | 0 |
AuditCompensation
Strategies Committees | | 1,000 |
The Chairperson of IPALCO are paidthe Audit Committee, Compensation
Committee and Committee on Strategies each receives an annualadditional fee of
$8,500 plus $500 for each meeting attended; however, directors$1,500 annually. Directors of IPALCO and its subsidiaries are limited to two
annual fees. Non-employee
members of the Executive Committee of the Board are paid annual fees of
$10,000, but no meeting fees. Members of the Audit Committee, Compensation
Committee and the Committee on Strategies of the Board, all of whom are
non-employee directors, are paid annual fees of $4,000 plus $500 for each
meeting attended. The Chairman of each of the latter three committees
receives an additional fee of $1,500 annually. Members of the Executive and Audit Committees of both IPALCO
and IPL are limited to one annual fee.
Directors who are also officers
Outside directors receive an annual grant of options to
purchase 6,000 shares of IPALCO common stock on May 1 of each year, if they
have served as a director for the prior 12 months. The options become
exercisable six months after the date of grant. The exercise price of these
options is equal to the fair market value of IPALCOs common stock on
the date of grant. The options expire after ten years.
Directors may elect to defer part or oneall of its subsidiaries receive
no director fees.
their annual
retainer, attendance or committee fees under a non-qualified, unfunded
deferred compensation plan. Deferred amounts earn interest equal to IPL
s cost of capital as determined by the Indiana Utility Regulatory
Commission in IPLs last general retail electric rate order, unless
otherwise determined by the Compensation Committee.
Certain Business
Relationships
During 1997,1999, companies associated with Anthem Insurance
Companies, Inc. ("Anthem"(Anthem) administered health care programs for
IPALCO and its subsidiaries under contracts that involve payments to Anthem
aggregating approximately $17$17.5 million. Mr. L. Ben Lytle is President and Chief Executive
Officer of Anthem.
IPALCO subsidiaries Indianapolis Power & Light Company ("IPL") and
Mid-America Capital Resources, Inc. ("Mid-America") each maintained a line
of credit during 1997 with National City Bank, Indiana ("NCB") of which
Mr. Otto N. Frenzel III is Chairman of the
Executive Committee. During
1997, the maximum principal amount outstanding at any time on IPL's $30
million lineBoard of credit with NCB was approximately $16.5 million, and IPL
had an outstanding balance with NCB as of December 31, 1997 of $13.7 million.
Mid-America's $7.5 million line of credit with NCB had a maximum principal
amount of $2.5 million outstanding at any time, and a principal balance of
$2.5 million outstanding as of December 31, 1997.
IPL maintained a long-term revolving credit facility during 1997 with
Bank One, Indianapolis, NA, ("Bank One") of which Mr. Joseph D. Barnette,
Jr., is Chairman and Chief Executive Officer. IPL did not utilize the credit
facility during 1997. Mid-America maintained a $7.5 million line of credit
with Bank One during 1997 and had a maximum principal amount of $2.5 million
outstanding at any time, and an outstanding principal balance of $2.5 million
as of December 31, 1997.
An unutilized credit line and an unutilized long-term revolving
credit facility were also maintained by IPL with First Chicago NBD ("NBD"),
of which Mr. Andrew J. Paine, Jr., is an executive officer. Mr. Ramon L.
Humke is a director of NBD Bank, NA. IPALCO subsidiary Mid-America
maintained a $30 million line of credit with participating banks including
NCB and Bank One, had a maximum principal amount outstanding of $10 million,
and a principal balance of $10 million outstanding as of December 31, 1997.
IPALCO entered into a Credit Agreement with Bank One, Indiana, NA,
NCB, and The First National Bank of Chicago on April 4, 1997 for the purpose
of borrowing $401 million. The proceeds of the loan were used for the
repurchase of 12,539,428 of the outstanding shares of IPALCO Enterprises,
Inc. common stock pursuant to the terms of the tender offer announced by
IPALCO on February 25, 1997. The outstanding balance on December 31, 1997
was $323 million.Anthem.
IPL engaged Rowland Design, Inc. for architectural and
design services for certain improvements to the corporate offices located at
One Monument Circle. During 1997,1999, IPL paid fees of approximately $97,000$95,800
under such agreements. Mrs. Sallie W. Rowland is Chairman and CEO of Rowland Design,
Inc.
PROPOSAL 2 -- APPROVING ADOPTION OFSHAREHOLDER PROPOSAL
A shareholder has notified IPALCO ENTERPRISES, INC.
LONG-TERM PERFORMANCE AND RESTRICTED STOCK INCENTIVE PLAN
(As Amendedthat he intends to
present the proposal set forth below at this years annual meeting. The
Board has recommended a vote against this proposal for broader policy
reasons as set forth following the proposal. The name, address and Restated Effective January 1, 1998)
Introduction
At its meeting held January 27, 1998,share
holdings of the Boardshareholder proponent will be supplied upon oral or written
request to IPALCO.
RESOLVED: That the pay and remunerations of Directors approvedall
officers, C.E.O., and board members pay increases be limited to not more
than 2% above the IPALCO Enterprises, Inc. Long-Term Performance and Restricted Stock
Incentive Plan (As Amended and Restated Effective January 1, 1998) (the
"Plan"). The Plan is a performance based incentive compensation and
restricted stock plan for officers and other key executive employees of
IPALCO and its subsidiaries. The Plan was originally adopted in 1995 and
approved bylowest paid hourly employee or 2% above the shareholdersC.P.I. at the
Annual Meeting held April 19, 1995, and
was amendedend of the year in 1998 to make changes inwhich the peer group and in the performance
measures applicable in determining the amount of incentive compensation.
If the Plan performance goals are met, participants will earn IPALCO common
stock (the "Stock"). pay is given.
The Board of Directors believes that restricted Stock
grants have beenrecommends a vote AGAINST this
proposal.
Setting the compensation and will continue to be a significant benefit to IPALCO and
its subsidiaries in attracting and retaining key executive employees and in
providing a long range incentive to workincentives for the continued successofficers
and the Chief Executive Officer is the key responsibility of these
companies. The Plan is set forth in Appendix A tothe
Compensation Committee of the Board of Directors. As discussed on pages 9
through 12 of this Proxy Statement to
which reference is made for a full and complete statement of its terms and
conditions. A summary ofin the principal features of the Plan follows. (See
also "Compensation of Executive Officers" and "BoardBoard Compensation Committee
Report on Executive Compensation" below.)
Summary of the Plan
Administration. The Plan is administered byCompensation, the Compensation Committee considers,
along with consultation with its outside advisor, four basic components in
establishing the compensation program. These four components include base
salary, a performance based annual incentive plan, a long-term performance
and restricted stock incentive plan and a stock option plan. There is a
strong and direct link between IPALCO performance and officer compensation,
with a signficiant portion of IPALCO'stotal compensation being dependent upon
measurable performance objectives.
The fees paid the members of the Board of Directors which is made up of five
disinterested outside directors (the "Committee"). The Committee has sole
authority to (a) select Plan participants, (b) determineare
established after reviewing the number of
shares of Stock covered by each grant, (c) establish the appropriate
performance goals, and (d) makes rules, regulations and other necessary
determinations in the course of administering the Plan.
Eligibility. Officers and other key employees who are materially
responsible for, and contribute to, strategic and long-term growth of IPALCO
and its subsidiaries are eligible to participate in the Plan.
Stock Subject to Plan. One Million Five Hundred Thousand shares of
Stock (representing 3.35% of currently outstanding shares) are reserved for
restricted Stock grants during the expected duration of the Plan. Forfeited
Stock may again become available for additional Stock grants.
(a) The first grants were made as of January 1, 1995. Additional
grants were made as of January 1, 1996 and 1997 to new Plan participants.
The next grants were made as of January 27, 1998, subject to shareholder
approval at the April 15, 1998 Annual Meeting and on each January 1
thereafter.
(b) The Committee will establish targets for the participants
expressed as a number of shares for each $1,000 of annual compensationfees paid to a participant. The targeted numberother comparable electric
utility industry boards through the use of shares for the 1998 grants range
from 50 shares per $1,000 of compensation to 20 shares per $1,000 of
compensation. The initial grant made at the beginning of the measuring
period is based on the average annual salary in effect on the first calendar
day of the measuring period for each participant. However, the number of
shares awarded will be adjusted as soon as practicable after the end of the
program based on the actual base salary paid to the participant. The Plan
does contain a maximum number of shares which may be allocated to any
participant during a measuring period which is the lesser of:
(1) the number determined by dividing the participant's
annualized base salary in effect on the first day
of the performance measuring period by 4, or
(2) the number determined by dividing the participant's
actual annual base salary paid to the participant
during the entire measuring period by 5.
(c) The 1998 grants are conditioned upon the approval of the
Amended and Restated Plan by the shareholders of IPALCO.
Restrictions and Lifting of Restrictions. The Stock awarded is
subject to financial performance restrictions and employment restrictions,
which restrictions are described below:
(a) The financial performance restrictions relate to the performance
of IPALCO versus companies included as part of the S&P 500 Index during the
three-year measuring period. The performance measure utilized by the Plan is
Total Return to Shareholders (as defined in the Plan). At the end of the
three-year measuring period, IPALCO's performance is compared with the
performance of the companies included as part of the S&P 500 Index as to
this measure. Depending on IPALCO's performance, the Stock award for the
measuring period for the 1998 grant is adjusted upward to a maximum of
400% of the initial grant or downward to no shares being issued. If shares
of Stock are forfeited, the shares will become eligible for subsequent
grants under the Plan.
(b) After the performance restrictions are lifted, the shares are
still subject to continuing employment restrictions which lapse in 1/3
increments beginning on the July 1 following the end of the measuring period
or such earlier day after the measuring period as established by the
Committee, with the other 1/3 increments lapsing on the first business day
of each of the two calendar years following the calendar year during which
the restrictions on the first 1/3 increment are lifted. If the participant's
employment is terminated before the lifting of the employment restrictions,
the shares that are still restricted are forfeited. At such time that the
continuing employment restrictions are lifted as to each 1/3 increment,
the participant will be permitted to elect to receive cash of up to 50% of
the value of the non-restricted shares, based on their fair market value.
(c) If during the period in which the shares of Stock are subject to
financial performance and employment restrictions, a participant dies or
becomes disabled, employment restrictions will no longer be applicable. If a
participant becomes disabled or dies during a performance period, the number
of shares awarded will be proportionately reduced to reflect the portion of
the measuring period during which the participant was not an active
participant in the Plan, and the reduced number of shares will not be
subject to the financial adjustments at the end of the measuring period.
If a participant's employment terminates on or after reaching early or
normal retirement requirements, the Committee has the discretion to lift
all or a portion of the employment restrictions at its sole discretion.
(d) If there is a change in control of IPALCO, the employment
restrictions will immediately lapse. Upon the change in control, the
measuring period will be deemed terminated as of the date of the change in
control and financial performance of IPALCO shall be measured against
the performance of the companies included as part of the S&P 500 Index based
on the abbreviated measuring period, and the Committee shall effect the
financial adjustments as soon as practicable thereafter.
No Employment Rights. No right to continue in the employ of IPALCO
or its subsidiaries is conferred by the Plan.
Adjustment of Shares. Upon a reorganization, recapitalization,
stock split, stock dividend, combination of shares, exchange of shares,
merger or consolidation, liquidation or other similar corporate change after
the Plan becomes effective, the Committee shall make appropriate adjustments
in share grants, as to which adjustments in the number and kind of shares,
the Committee's determination is conclusive.
Tax Withholding. Whenever the Stock is issued or transferred under
the Plan, IPALCO has the right to withhold federal, state or local tax as
dictated by applicable requirements or to require payments sufficient to
satisfy such requirements.
Amendment. IPALCO's Board of Directors may amend the Plan. However,
shareholder approval is required (a) to increase the number of shares
reserved for issuance; or (b) to modify materially the class of eligible
participants.
Termination. IPALCO's Board of Directors may terminate the Plan at
any time, but awards theretofore granted will not be affected.
NEW PLAN BENEFITS
- --------------------------------------------------------------------------------------------
IPALCO ENTERPRISES, INC.
LONG-TERM PERFORMANCE AND
RESTRICTED STOCK INCENTIVE PLAN
(As Amended and Restated Effective January 1, 1998)
- --------------------------------------------------------------------------------------------
Number of Shares
Name and Position Dollar Value of Restricted Stock
- --------------------------------------------------------------------------------------------
John R. Hodowal $1,114,305 26,750
Chairman of the Board
and President
Ramon L. Humke $ 942,473 22,625
Vice Chairman
John R. Brehm $ 402,733 9,668
Vice President and Treasurer
Bryan G. Tabler $ 235,983 5,665
Vice President, Secretary and
General Counsel
Gerald D. Waltz $ 223,402 5,363
Senior Vice President, Electric
Delivery of IPL
Other Executive Officers as a Group $1,070,982 25,710
Non-Executive Officer Employee Group $ 704,407 16,910
-------
Total $4,694,285 112,691
These shares of restricted stock were issued on January 27, 1998,
subject to shareholder approval at the Annual Meeting held April 15,
1998. The dollar value is based on the average of the high and low
price for IPALCO's Common Stock on the date of issuance, without
regard to the restrictions.
Federal Income Tax Consequences of Grants Under the Plan
At the time on which the restrictions lapse (both the financial
performance and employment restrictions), the fair market value of the
non-restricted shares will be ordinary income to a participant and
deductible by IPALCO and its subsidiaries for federal income taxes as long
as withholding requirements are met. However, a participant may accelerate
the tax recognition of a restricted share grant by making an election under
Section 83(b) of the Internal Revenue Code of 1986 (the "Code") within
thirty days from the date of grant. In such case, the deduction available to
IPALCO or a subsidiary is also accelerated as long as withholding
requirements are met. Since the Plan is intended to be a performance-based
plan, the value of benefits should therefore be exempt from the
deductibility limitations of Section 162(m) of the Code.
Vote Required to Approve the Plan
Adoption of Proposal 2 requires the affirmative vote of a majority of
the shares present in person or by proxy and entitled to vote at the Annual
Meeting. Abstentions will have the same effect as a vote against the
proposal. Broker non-votes will not be voted for or against the proposal and
will not be counted as entitled to vote.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 2.outside
consultant.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE
COMPENSATION
Compensation
Policies Relating Generally to Executive Officers
The Compensation Committee ("Committee"(Committee) of the
Board of Directors ("Board"(Board), in consultation with its outside
advisor, establishes the compensation policies of IPALCO Enterprises, Inc.
and its subsidiaries ("IPALCO"(IPALCO) with regard to all officers. The
Committee recommends to the Board the adoption or amendment of compensation
plans for officers, including the named executive officers. On authority of
the full Board, the Committee administers all such plans, including
establishing officers'officers base salary levels, reviewing and approving
performance measures and goals for both annual and long-term incentive
plans, and approving incentive awards.
The Committee is made up of five non-employee directors
whose philosophy is to attract, retain, and motivate a high quality
management team by providing a strong and direct link between IPALCO
performance and officer compensation, with a significant portion of total
compensation being dependent upon measurable performance objectives. The
compensation program for named executive officers and other selected
officers had four basic components in 1997:1999: base salary, a performance-based
annual incentive plan, a long-term performance and restricted stock
incentive plan, and a stock option plan. It is the policy of the Committee
that the compensation program should directly link executive and shareholder
interests.
Base
Salary
During 19971999 the Committee thoroughly reviewed base salary
of officers, including the named executive officers, in light of IPALCO'sIPALCO
s transformation from a more traditional utility to a more general
industry company following the leveraged recapitalization, dividend reduction and
stock buy back in April, 1997.company. The Committee agreed to continue its
practicefollowing the base salary
structure prepared in 1998 by the outside consultant based on general
industry S & P 500 and S & P Mid-Cap 400 companies with comparable
market value to IPALCO. The base salary structure was designed for the
three-year period 1998 through 2000, uses six broadbanded pay ranges with
band
assignment made based on the external market and internal role within IPALCO,
and provides the ability to pay base salaries within a 40th to 75th
percentile range. Another component of tyingthe base salary structure is the
departure from annual salary increases to perhaps, and in most cases,
increases once every three years. Exception to base salary increases once
every three years would be new officers paid below median or officers
performing at a greater percentage of total compensation to IPALCO's
performance. As such, notruly exceptional level. No named executive officer received
a 19971999 base salary increase.
The Committee targeted 1997established 1999 base salaries for officers,
including the named executive officers, atbetween the 40th to 75th percentile
for similar positions within comparably performing utilities,comparable market value S & P 500 and where such positions are also
found inS
& P Mid-Cap 400 general industry at a level approximately one-half the difference
between the utility industry and general industry medians.companies. The Committee
considered the analysis which was provided by the outside advisor that IPALCO
salaries are at the 75th percentile range of comparable utilities and below
those of general industry. The Committee also considered
both company and individual performance in approving the range of 1999 base
salary increases, if any, and if the salaryincrease was for each officer, including the named executive officers.a one-year or two-year
period.
In 1997 nineteen1999 seventeen officers, including all named executive
officers, received the same base salary as in 19961998 while elevenfive officers
received a base salary increases. Totalincrease covering the next two-year period. The total
1999 officers base salary increases for allsalaries were 2.5% greater than the total 1998 officers
averaged 2.1%.base salaries.
The comparative compensation data for electric utilitiesutility
industry competitors used by the Committee werewas derived from companies with comparable revenues as reported inan executive
compensation database maintained by the outside consultant and the annual
Edison Electric Institute Executive Compensation Survey. Data for general
industry werewas drawn from fivethree national executive compensation surveys
provided by the outside consultant and from an analysis prepared by the
outside consultant on comparable executive position compensation within the
S&P & P 500 and S & P Mid-Cap 400 MidCap general industry companies.
companies with
market values of between $1.5 billion and $3.0 billion (202 companies met
this criteria).
Annual Incentive
Plan
The IPALCO Annual Incentive Plan is a performance-based
plan which measures company performance in four equally weighted criteria:
Net Income, Customer Satisfaction, Productivity, and Budget Compliance.
Target awards are set approximately halfway betweenat comparable market value general industry and utility medians.
Participants in the Plan are approved in advance of the plan year by the
Committee. All participants, including the named executive officers, are
measured against performance goals which are established by the Committee
and announced at the beginning of the year. Goals are set at Threshold,
Target, and Maximum levels, with Threshold performance required for any
award in each criteria;criterion; however, if the Threshold goal for Net Income is
not met, no payout is made regardless of the performance in any other
criteria. Each performance level is assigned an award value, with
interpolation for performance between levels. For named executive officers,
performance at Threshold, Target, and Maximum levels respectively warrants a
payout of 10%, 22.5%, and 35% of base salary. Factors ranging from .75 to
2.53.0 are applied to the award percentage based upon the participant'sparticipants
position.
The Plan permits the reduction or elimination of an award
should an individual participant'sparticipants performance be below expectations.
No awards were reduced in 1997.1999.
For 1997,1999, the Company met the Maximum performance goals in
allthree of the four performance measures: Net Income, Customer Satisfaction
Productivity and Productivity. Budget Compliance.
Compliance performance was between Target and
Maximum level.
Long-Term
Performance and Restricted Stock Incentive Plan
The performance-based restricted stock plan is designed to
focus the attention of prospective participants on long-term company
objectives and performance. Participation is subject to Committee approval
and is limited to key employees (including non-officers) who contribute on a
continuing basis to the strategic and long-term growth of the
Company.
Program II (1998-2000) of the Plan measures Company
performance in Total Return to Shareholders compared to companies comprising
the S & P 500 Index on January 1, 1998. Target awards are set
approximately at comparable market value general industry medians.
Conditional restricted stock grants (reflecting the March 18, 1999 stock
split), at target levels ranging from 40 shares per $1,000 of base
compensation to 100 shares per $1,000 of base compensation, are awarded at
the beginning of each three-year performance period. Final awards will be 0
400% of the initial awards based upon IPALCOs ranking in Total
Return to Shareholders among the S & P 500 companies over the
performance period, with one-third of the shares to be paid during each of
the fourth (2001), fifth (2002), and sixth (2003) years after the beginning
of the performance period. The performance period for Program II will end
December 31, 2000. On December 31, 1998, the end of the first year in the
three-year performance period, IPALCO ranked in the top quartile, 99th among
the S & P 500 companies. On December 31, 1999, the end of the second
year in the three-year performance period, IPALCO ranked 387 among the S
& P 500 companies.
Program I (1995-1997) of the Plan measured Company
performance in Total Return to Shareholders and in Cost Effective Service
(net income as a percentage of utility revenues) compared with the
performance of a Peer Group of 15 comparable utilities. Criteria for
selection of peer companies included revenue size and sources,
market-to-book ratio, fuel source, and dividend yield, among other criteria.
Target awards arewere set approximately halfway between general industry and
utility medians. Conditional restricted stock grants, at Target levels
ranging from 10% to 35% of base salary, arewere awarded at the beginning of eachthe
three-year performance period. Final awards arewere based upon IPALCO'sIPALCOs
ranking within the Peer Group over the performance period, with one-third of
the shares to be vestedpaid during each of the fourth (1998), fifth (1999), and sixth
(2000) years after the beginning of the performance period. The performance
period for Program 1I ended December 31, 1997 and in January, 1998
the Committee reviewed Program 1 performance with IPALCO ranked 1st in Total
Return to Shareholders and 1st in Cost Effective Service.
Performance in Total Return to Shareholders and Cost Effective
Service continues also to be measured over the four-year performance periods
specified in the original Long-Term Incentive Plan for those programs begun
prior to 1995. In the final Program 6 (replaced by the performance based
restricted stock plan discussed above), for the years 1993-1996, IPALCO
ranked first among peers in Cost Effective Service and fourth among peers in
Total Return to Shareholders.
Using the schedule specified in the Plan for the level of
performance achieved under Program I, and an IPALCO Common Stock market
value on December 31, 1998 of $27.59, adjusted for the March 18, 1999 stock
split, the named executive officers received incentive payments for the
second Program I payout totaling $331,336.34$2,339,173 in 1997.
1999.
Stock
Options
The Compensation Committee strongly believes management is
in a position to exert the greatest influence on those strategic decisions
which affect IPALCO'sIPALCOs long-term financial success and the creation of
shareholder value. Thus, the Compensation Committee has maintained a posture
that particularly senior officers, including the named executive officers,
should have a portion of their long-term incentive compensation tied
directly to the stock price performance. As reported in IPALCO's 1997 proxy statement in March, 1997,Consistent with the Compensation
Committee assessed the competitivenesss three-year grant program (last initiated in early 1997), on
December 30, 1999, one named executive officer was granted 115,000 stock
options at an exercise price of IPALCO's total
compensation (base salary + annual incentive + long-term incentives) relative
to the electric utility industry$16.63 per share, vesting immediately and,
general industry, focusing expressly on the relative value of IPALCO's long-term incentive levels (performance based
restricted stock plan described above + stock options). Based upon the
Compensation Committee's desire to maintain long-term incentive compensation
opportunities at competitive levels, officers, including theJanuary 3, 2000, all named executive officers were granted a total of
1,130,000 stock options on March 25, 1997, in varying amounts
at thean exercise price of $31.375$16.41 per share, vesting
immediately. In addition, under the three-year grant program, the
Compensation Committee, on January 3, 2000, granted a total of 825,000 stock
options at an exercise price of $16.41 per share, vesting immediately, to
eleven officers and eight non-officers.
Basis for Chief
Executive Officer'sOfficers Compensation
The Chief Executive Officer's ("CEO"Officers (CEO)
compensation continues to be directly and explicitly linked to IPALCO
performance with consideration given to the Committee'sCommittees assessment of
his individual performance. The Committee thoroughly reviews the CEO'sCEOs
performance, including strategic direction, leadership and management team
development, as well as overall company performance. The Committee'sCommittees
review is both subjective and objective. IPALCO performance data used in the
incentive plans plus other financial, operations, service, and
administrative data are considered.
The Committee closely followed IPALCO's performance during the three-year
period 1995-1997 and calendar year 1997 compared to the S&P 500 Index and
the S&P Electric Companies Index. IPALCO substantially outperformed both
of these market measurements in 1997 and during the three-year period
1995-1997.
Total 19971999 compensation for the CEO (including base
salary, Annual Incentive Plan payment, and Long-Term Incentive payment, and stock associated with the
Long-Term Performance and Restricted Stock Incentive Plan and stock options),
is shown in Tables I and II. His total compensation was slightly
above the median of
comparable electric utility industry CEOs,CEOs but was below the median of
CEO compensation in comparable market value and high-performing general
industry companies.
At Target performance, under the current compensation
program, approximately 56%58% of the CEO'sCEOs total direct compensation is
variable and at risk. During 1997,1999, approximately 53%71% of the CEO'sCEOs
actual total direct compensation was at risk.
Deductibility of
Executive Compensation
Section 162(m) of the Internal Revenue Code will not
permit a public corporation to deduct, for federal income tax purposes,
annual compensation in excess of $1 million paid to certain top executives,
unless that compensation qualifies as "performance based"performance based
compensation. This limitation will have insignificant impact on IPALCO with
respect to executive compensation paid in 1997.1999. The Committee continues to
review this issue with the present intent to limit Section 162(m) where
appropriate to ensure the continued deductibility of its executive
compensation.
The Compensation Committee of the
Board of Directors of IPALCO Enterprises, Inc.
Otto N. Frenzel III, Chairman
Robert A. Borns
Rexford C. Early
Earl B. Herr, Jr.
| The Compensation
Committee of the |
| Board of
Directors of IPALCO Enterprises, Inc. |
| Otto N. Frenzel
III, Chairman |
COMPENSATION OF EXECUTIVE OFFICERS
Nature and Types
of Compensation
The three tables that follow on succeeding pages disclose all plan and
non-plan compensation awarded to, earned by, or paid to the Chairman of the
Board and President of IPALCO, who is its chief executive officer ("CEO"(CEO
) and to the four named executive officers other than the CEO who are
the most highly compensated key policy-making executive officers of IPALCO
and its subsidiaries. The tables include a Summary Compensation Table
(Table I)(Table I), a table showing Option/SAR Grants in Last Fiscal Year
(Table II)(Table II), and an Aggregated Option/SAR Exercises In Last Fiscal
Year and Fiscal Year-End Option/SAR Values Table (Table III)(Table III). No
table is presented for Long-Term Incentive Plans since the issuance of
restricted stock under the Long-Term Performance and Restricted Stock
Incentive Plan is included in the Summary Compensation Table (Table I)(Table
I).
Subsidiary Incentive Plan
In early 1995, the Board of Directors of Mid-America Capital
Resources, Inc. ("Mid-America"), a wholly owned subsidiary of IPALCO,
approved the implementation of an incentive compensation plan that will
provide for payment of incentive compensation in the year 2000 or later
to key employees of Mid-America, its subsidiaries, and certain executive
employees of IPALCO if certain objective performance measures are met.
SUMMARY
COMPENSATION TABLE
TABLE
I
SUMMARY COMPENSATION TABLE
| | | | Long-Term
Compensation
-------------------------------------------
| |
|
---|
Name and
Principal Position
| | Annual
Compensation
| | Awards
| | Awards
| | Payouts
--------------------------------------------------------------------------------
Other Securities
Annual Restricted Underlying
| | All Other
Compen-
Stock Options/ LTIP Compen-
Name and
sation(6)
($)
|
---|
| Year
| | Salary
sation Awards SARs Payouts sation
Principal Position Year ($) Bonus
($) (1)
| | Bonus
($)
| | Other
Annual
Compen-
sation(2)
($)
| | Restricted
Stock
Awards(3)
($)
| | Securities
Underlying
Options/
SARs(4)
(#)
| | LTIP
Payouts
(5) ($) ($)
- --------------------- ---- -------- --------- ---------- ---------- ----------- ----------- ----------
|
---|
John R.
Hodowal 1995 $476,012 $206,425 | | 1997 | | $532,958 | | $468,125 | | $ 43,721 $491,790 -0-
70,087 | | - 0 - | | 500,000 | | $ 75,488 127,550 | | $ 8,310
5,831 |
Chairman &&
President; 1996 515,125 272,370 229,775 -0- -0- 111,333 6,000
| | 1998 | | 637,897 | | 677,250 | | 1,693,360 | | $1,586,497 | | - 0 - | | 757,607 | | 6,400 |
Chairman && CEO
of IPL 1997 532,958 468,125 70,087 -0- 250,000 127,550 5,831
| | 1999 | | 698,972 | | 715,617 | | 1,736,412 | | - 0 - | | 115,000 | | 997,670 | | 6,400 |
|
| Ramon L.
Humke 1995 $394,591 $171,120 | | 1997 | | $450,778 | | $395,937 | | $ 157,606 $407,700 -0-
236,242 | | - 0 - | | 250,000 | | $ 62,975 106,147 | | $ 8,310
5,831 |
Vice
Chairman; 1996 432,812 228,935 200,277 -0- -0- 92,296 6,000
| | 1998 | | 480,990 | | 508,375 | | 841,754 | | $1,348,452 | | - 0 - | | 635,481 | | 6,400 |
President && COO
of IPL 1997 450,778 395,937 236,242 -0- 125,000 106,147 5,831
| | 1999 | | 499,269 | | 513,617 | | 259,104 | | - 0 - | | - 0 - | | 836,846 | | 6,400 |
|
| John R.
Brehm 1995 $225,315 | | 1997 | | $240,781 | | $ 89,513
84,595 | | $ 6,301 $133,050 -0-
7,512 | | - 0 - | | 150,000 | | $ 24,228
39,858 | | $ 8,310
5,630 |
Vice President
1996 236,394 83,253 7,788 -0- -0- 34,996 6,698
&& Treasurer; | | 1998 | | 277,859 | | 147,297 | | 36,288 | | $
518,399 | | - 0 - | | 199,492 | | 6,757 |
SVP, 1997 240,781 84,595 7,512 -0- 75,000 39,858 5,630
Finance & of
IPL | | 1999 | | 299,561 | | 153,563 | | 56,951 | | - 0 - | | - 0 - | | 262,704 | | 6,397 |
|
| Bryan G.
Tabler | | 1997 | | $225,742 | | $
79,310 | | $
20,053 | | - 0 - | | 90,000 | | $
21,197 | | $5,081 |
Vice President,
Secretary & | | 1998 | | 234,268 | | 82,437 | | 58,294 | | $
346,525 | | - 0 - | | 183,733 | | 5,714 |
General Counsel;
SVP,
Secretary and General
Counsel of IPL | | 1999 | | 239,656 | | 82,287 | | 22,604 | | - 0 - | | - 0 - | | 241,953 | | 6,397 |
|
| Joseph A.
Gustin | | 1997 | | $209,206 | | $
42,000 | | $
11,390 | | - 0 - | | 90,000 | | $
33,768 | | - 0 - |
Vice
President, | | 1998 | | 209,206 | | 55,125 | | 4,576 | | $
216,234 | | - 0 - | | - 0 - | | - 0 - |
Information
Services of IPL
Bryan G. Tabler 1995 $202,931 $ 58,650 $ 14,471 $121,350 -0- -0- $ 5,589
Vice President, 1996 218,184 76,907 17,077 -0- -0- $ 10,652 6,119
Secretary & General 1997 225,742 79,310 20,053 -0- 45,000 21,197 5,081
Counse; SVP, Secretary
and General Counsel
of IPL
Gerald D. Waltz 1995 $201,930 $ 58,353 $ 11,178 $121,530 -0- $ 24,228 $ 8,310
SVP, Electric 1996 209,792 73,885 12,355 -0- -0- 32,972 6,000
Delivery of IPL 1997 213,678 75,075 12,000 -0- 45,000 36,584 5,831
| | 1999 | | 209,696 | | 70,301 | | 25,166 | | - ------------------------------
0 - | | - 0 - | | - 0 - | | - 0 - |
FOOTNOTES TO
SUMMARY COMPENSATION TABLE
(1) | The named executive
officers did not receive a base salary increase from 19961998 to 1997.1999. Salary
increases, if applicable take effect in May. 1996The 1998 figures reflect 4
monthsmonths pay at 1995the 1997 base salary rates and 8 monthsmonths pay at
1996the 1998 base salary rates , while 19971999 figures reflect 12 monthsmonths pay
at the 19961998 base salary rates. |
(2) | Represents taxes
paid by IPALCO and/or IPL on accrued interest and contributions of
principal under the Funded Supplemental Retirement Plan (See "Pension Plans"Pension
Plans). Includes $10,227$17,783, $38,751 and $17,783$14,683 earned in above market
interest on deferred compensation for Mr. Humke in 19961997, 1998, and 1997,1999,
respectively. Includes $6,754 earned in above market interest on deferred
compensation for Mr. Hodowal in 1999. |
(3) | Restricted common
stock awards pursuant to the IPALCO Enterprises, Inc. Long-Term
Performance and Restricted Stock Incentive Plan (the Restricted
Stock Plan) are valued at the closing market price as of the date of
grant.the award. Dividends on the restricted common stock are payable to the
named officers. Amounts shown for 1998 represent shares awarded in
January, 1998 under the 1995-1997 performance period (Cycle 1) as a result
of IPALCOs performance during that period and to reflect actual
salary during that period, and shares awarded in January, 1998 for the
1998-2000 performance period (Cycle 2) as follows: |
| | Cycle
1
| | Cycle
2
|
---|
John R.
Hodowal | | 11,566
shares | | $
484,731 | | 26,750
shares | | $1,101,766 |
Ramon L.
Humke | | 9,940
shares | | $
416,585 | | 22,625
shares | | $
931,867 |
John R.
Brehm | | 2,868
shares | | $
120,198 | | 9,668
shares | | $
398,201 |
Bryan G.
Tabler | | 2,701
shares | | $
113,198 | | 5,665
shares | | $
233,327 |
Joseph A.
Gustin | | 0
shares | | 0
| | 5,250
shares | | $
216,234 |
|
The total shares awarded under Cycle 1 vest in one-third increments
in the years 1998, 1999 and 2000 and are paid out in cash or stock, at the
election of the named officer. Under the terms of the Restricted Stock
Plan, no additional shares will be awarded to the named officers before
2001. Upon completion of the performance period for Cycle 2, the total
shares to be awarded will be 0-400% of the award listed. This total will
vest in one-third increments in the years 2001, 2002, and 2003 and is paid
out in cash or stock, at the election of the named officer. | |
Restricted common stock holdings and the valuevalues thereof based on
the closing price of the common stock at year end of $17.0625 are as
follows: Mr. | |
John R.
Hodowal - 24,589 | | 89,656
shares ($1,031,201);
Mr. | | $1,529,756 | | | | |
Ramon L.
Humke - 20,385 | | 75,574
shares ($854,896); Mr. | | $1,289,481 | | | | |
John R.
Brehm - 6,652 | | 28,856
shares
($278,968); Mr. | | $
492,356 | | | | |
Bryan G.
Tabler - 6,067 | | 20,098
shares ($254,435); and Mr. Waltz -
6,076 | | $
342,922 | | | | |
Joseph A.
Gustin | | 10,500
shares ($254,812). Dividends on the restricted common stock
are payable to the named officers. Shares awarded in 1995 represent
a cumulative 3-year award for years 1995, 1996, and 1997. Under the
terms of the Plan, no additional shares will be awarded to the named
officers before 1998.
| | $
179,156 | | | | |
(4) | No options have
stock appreciation rights. The 1997 stock option award figures have been
adjusted to reflect the 2-for-1 common stock split issued in March,
1999. |
(5) | Payouts shown for
1997 were made pursuant to the 1990 Long-Term Incentive Plan (the
"LTIP Plan"LTIP Plan). The LTIP Plan was replaced by the IPALCO
Enterprises, Inc. Long-Term Performance and Restricted
Stock
Incentive Plan and no additional payments will be made under the LTIP Plan.
Payouts shown for 1998 and 1999 were made pursuant to the Restricted
Stock Plan. |
(6) | Represents
contributions made by IPL to the Trustee of the Employees'Employees Thrift
Plan. TABLE I |
OPTION/SAR
GRANTS IN LAST FISCAL YEAR
OPTION/SAR GRANTS IN LAST FISCAL YEAR
| | Individual
Grants
| | Potential
Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation Individual Grants forFor
Option Term
------------------------------------------------------------- -----------------------
|
---|
| Name | | Number of
Securities
Underlying
Options/SARs
Granted
(#)(1) | | % of Total
Number of
Options/
Securities SARs
Underlying
Granted to
Employees In
Fiscal Year | | Exercise
Options/ Employees
or Base
Expira-
SARs in Fiscal Price tion
Name Granted (#) Year
Price(2)
($/Sh) | | Expiration
Date | | 5%($)(3) | | 10%($)
- ---------------------------------------------------------------------------------------------------------------------
(3) |
---|
|
John R.
Hodowal 250,000 23.4 $31.375 03/25/07 $4,932,892 $12,500,918
Ramon L. Humke 125,000 11.7 $31.375 03/25/07 $2,466,446 | | 115,000 | | 100 | % | | $ 6,250,459
John R. Brehm 75,000 7.0 $31.375 03/25/07 $1,479,868 16.63 | | 12/30/09 | | $ 3,750,275
Bryan G. Tabler 45,000 4.2 $31.375 03/25/07 1,202,729 | | $ 887,921 $ 2,250,165
Gerald D. Waltz 45,000 4.2 $31.375 03/25/07 $ 887,921 $ 2,250,165
_________________________
3,187 underlying securities out of the amount shown for each officer
relate to incentive stock options, the balance relate to
non-qualified stock options. 3,047,952 |
(1) | All options are
exercisable immediately; however, incentive stock options expire one day before
the expiration date shown.immediately. None of the stock options contain stock
appreciation rights. |
(2) | Equal to market
price on grant date. |
(3) | These values are
not a prediction of what IPALCO believes the market value of its common
stock will be in the next 10 years. IPALCO does not know and cannot
determine whether its common stock will increase (or decrease) in value
over that period. The values shown in these columns are merely assumed
values required by, and calculated in accordance with, Securities and
Exchange Commission Rules.
TABLE II
|
TABLE
II
AGGREGATED
OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL
YEAR-END OPTION/SAR VALUES
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
Name | | Shares
Acquired
On
Exercise (#) | | Value
Realized ($) | | Number of
Securities
Underlying
Unexercised
Options/SARs
at
FY-End(#) | | Value of
Underlying
Unexercised
Unexercised
In-the-Money
Options/
Option/SARs
at Options/SARs
FY-End(#) FY-End ($
FY-End($)*
Shares Acquired |
---|
| | | Exercisable/
Unexercisable | | Exercisable/
Name On Exercise (#) Value Realized ($)
Unexercisable Unexercisable
- ----------------- --------------- ------------------ ------------- -------------
|
---|
|
John R.
Hodowal | | -0- | | -0- 430,000 | | 115,000 | (e) $5,686,076
| | $
49,738 |
| | | | | | -0- | (u) | | -0- |
|
Ramon L.
Humke | | -0- | | -0- 230,000 | | 382,254 | (e) $3,101,513
| | $943,300 |
| | | | | | -0- | (u) | | -0- |
|
John R.
Brehm | | 120,000 | | $1,089,750 | | -0- | (e) | | -0- 127,500 (e) $1,682,788
|
| | | | | | -0- | (u) | | -0- |
|
Bryan G.
Tabler | | -0- | | -0- 45,000 | | 70,000 | (e) | | $ 475,312
96,075 |
| | | | | | -0- | (u) | | -0-
Gerald D. Waltz 43,481 $462,401 56,839 (e) |
|
Joseph A.
Gustin | | 8,104 | | $ 671,919
123,502 | | 90,000 | (e) | | $123,525 |
| | | | | | -0- | (u) | | -0-
- ----------------------
(e) Exercisable.
(u) Unexercisable.
* Based upon year-end closing market price of $41.9375 per share of common stock.
TABLE III |
*Based upon year-end closing market price of $17.0625
per share of common stock.
TABLE
III
CUMULATIVE TOTAL
RETURN ASSUMING DIVIDEND REINVESTMENT
| | 1994 | | 1995 | | 1996 | | 1997 | | 1998 | | 1999 |
---|
|
IPALCO | | 100 | | 135.28 | | 153.28 | | 242.92 | | 328.61 | | 208.49 |
|
S&P
500 | | 100 | | 137.58 | | 169.17 | | 225.60 | | 290.08 | | 351.12 |
|
S&P 500 ELEC
COMPANIES | | 100 | | 131.09 | | 130.88 | | 165.23 | | 190.80 | | 153.84 |
Source: Standard
and Poors Compustat Services, Inc.
TABLE
IV
Performance
Graph
The Performance Graph on this page, (Table IV plots the total
cumulative return that shareholders of IPALCO received (solid line) during
the period December 31, 1992 through December 31, 1997, compared with the
total cumulative return to shareholders of companies comprising the
Standards and Poor's 500 Index (dotted line) and the Standard &
Poor's Electric Companies Index (dash/dotted line). The Graph shows the
cumulative total return assuming dividend reinvestment and based upon an
initial investment of $100. The vertical portion of the Graph indicates the
dollar value ranging from $90.00 to $260.00, and the horizontal portion of
the Graph is the year, beginning in 1992 and continuing through December 31,
1997.
The points on the Performance Graph are as follows:
[solid line] IPALCO [dotted line] S & P 500 [dash/dotted line] S & P
Electric
Companies
CUMULATIVE TOTAL RETURN ASSUMING DIVIDEND REINVESTMENT
1992 1993 1994 1995 1996 1997
IPALCO 100 104.16 94.42 127.74 144.72 229.37
S & P 500 100 110.08 111.53 153.45 188.68 251.63
S & P ELEC COMPANIES 100 112.60 97.89 128.32 128.11 161.74
Source: Standard and Poor's Compustat Services, Inc.
TABLE IV
Performance Graph
The Performance Graph (Table IV)) on the preceding
page plots the total cumulative return that shareholders of IPALCO
received (solid line) during the period from December 31, 19921994 through
December 31, 1997,1999, compared with the total cumulative return to
shareholders of companies comprising the Standard and Poor'sS & P 500 Index (dotted(dash line)
and the Standard & Poor'sS&P Electric Companies Index (dash/dotted(bold dash line). The Graph reflects IPALCO's
superior return as compared to the electric utility industry and is one of
the bases for the Chief Executive Officer's compensation disclosed in the
Compensation Committee Report set forth in this Proxy Statement.
Pension
Plans
Table V below illustrates the combined annual
retirement benefits computed on a straight-life annuity basis that are
payable under the Base Retirement Plan and the Funded Supplemental
Retirement Plan (assuming continuous employment to age 65) to named
executive officers having the remuneration and years of service
shown.
PENSION PLAN
TABLE (1)
- --------------------------------------------------------------------
PENSION PLAN TABLE Remuneration | | Years of
Service |
---|
|
| | 15 | | 20 | | 25 | | 30 | | 35
- --------------------------------------------------------------------
$125,000 |
---|
|
$125,000 | | $
81,250 75,000 | | $
81,250 75,000 | | $
81,250 75,000 | | $
81,250 75,000 | | $
81,250 75,000 |
150,000 97,500 97,500 97,500 97,500 97,500 | | 90,000 | | 90,000 | | 90,000 | | 90,000 | | 90,000 |
175,000 113,750 113,750 113,750 113,750 113,750 | | 105,000 | | 105,000 | | 105,000 | | 105,000 | | 105,000 |
200,000 130,000 130,000 130,000 130,000 130,000 | | 120,000 | | 120,000 | | 120,000 | | 120,000 | | 120,000 |
225,000 146,250 146,250 146,250 146,250 146,250 | | 135,000 | | 135,000 | | 135,000 | | 135,000 | | 135,000 |
250,000 162,500 162,500 162,500 162,500 162,500 | | 150,000 | | 150,000 | | 150,000 | | 150,000 | | 150,000 |
300,000 195,000 195,000 195,000 195,000 195,000 | | 180,000 | | 180,000 | | 180,000 | | 180,000 | | 180,000 |
400,000 260,000 260,000 260,000 260,000 260,000 | | 240,000 | | 240,000 | | 240,000 | | 240,000 | | 240,000 |
450,000 292,500 292,500 292,500 292,500 292,500 | | 270,000 | | 270,000 | | 270,000 | | 270,000 | | 270,000 |
500,000 325,000 325,000 325,000 325,000 325,000
___________________________________
| | 300,000 | | 300,000 | | 300,000 | | 300,000 | | 300,000 |
600,000 | | 360,000 | | 360,000 | | 360,000 | | 360,000 | | 360,000 |
700,000 | | 420,000 | | 420,000 | | 420,000 | | 420,000 | | 420,000 |
| (1) | This table takes
into account the latest Internal Revenue Code Section 415 benefit
limitations and Internal Revenue Code Section 401(a)(17) compensation
limitation applicable to the Base Retirement Plan. Benefits for both
the Base Retirement Plan portion and Funded Supplemental Retirement
Plan portion of the combined amounts have been shown without adjustment
for income taxes.
TABLE V
- -----------------------------------------------------------------------------
|
IPL's Employees'
TABLE
V
IPLs Employees Retirement Plan (the
"BaseBase Retirement Plan"Plan) covers all permanent employees with one
(1) year of service but excludes directors unless they are also officers.
It provides fixed benefits at normal retirement age based upon
compensation and length of service, the costs of which are computed
actuarially. The remuneration covered by the Plan includes "Salary"Salary
but excludes "Bonus"Bonus and "OtherOther Compensation,"
annual or otherwise, as those terms are used in the Summary Compensation
Table (Table
I)(Table I). Benefits are calculated on the basis of the
highest average annual salary in any 60 consecutive months of employment.
Years of service for Pension Plan purposes of named executive officers
are as follows: Mr. Hodowal - 29,31, Mr. Humke - 8,10, Mr. Brehm
- 22,24, Mr. Tabler - 3,Gustin28, and Mr. Waltz - 37.Tabler5.
The Funded Supplemental Retirement Plan referred to
above is applicable to all senior officers, including the named executive
officers, and, at reduced benefits, to all other officers of IPALCO and
IPL. In addition to the Base Retirement Plan and Funded Supplemental
Retirement Plan benefits described above, the Funded Supplemental
Retirement Plan also provides Mr. Hodowal with a straight-life annuity of
$130,000 per year commencing at age 65,
which benefit is reduced in accordance with the other applicable provisions
set forth in the Plan for early retirement. Contributions and accrued
interest creditedcredit during 19971999 to the accounts of Messrs. Hodowal, Humke,
Brehm, TablerGustin and WaltzTabler amounted to $46,676, $208,285, $5,895, $22,176$2,173,000, $307,071, $71,548,
$31,616 and $7,842,$28,398, respectively (in addition to the federal, state and
local income tax payments reflected in Table I above).
Contributions are based on actuarial assessments of benefits projected to
accrue to such officers under the Funded Supplemental Retirement Plan
upon termination of employment at normal retirement age and at current
salary levels.
Employment
Contracts and Termination of Employment and Change-in-Control
Arrangements
IPALCO has an employment contract with Mr. Hodowal
which provides for an indefinite term that is convertible into a fixed
3-year term upon notice. IPLIPALCO has an employment contract with Mr. Humke
which provides for an indefinite term that is convertible into a 3-yearfixed
1-year term expiring on December 31, 1999.upon notice. Such contracts terminate upon death, total
disability or retirement. Should they be terminated without "cause"cause
or resign for "good reason"good reason (as those terms are defined
in the contract--seecontractsee below), theythe executives would continue to receive
their Salary, as that term is used in Table I above, for up to 3 years
thereafter for Mr. Hodowal, and for up to 1 year thereafter for Mr.
Humke, less any severance payments received from other
agreements.
All officers of IPALCO and its subsidiaries have
Termination Benefits Agreements, dated on or after January 1, 1993. These
Agreements provide for payment of severance benefits equal to 299.99% of
the last 5 years'years average compensation (as defined in Sectionsection 280G
of the Internal Revenue Code) payable by IPALCO and its subsidiaries
which was includable in the gross income of the officer,officers, if IPALCO
undergoes an "acquisitionacquisition of control"control while the agreement is in
effect and if, within 3 years after an acquisition of control, any such
officer is terminated without "cause"cause or resigns for "goodgood
reason," as those terms are therein defined (see below).
The term "without 'cause'"without cause is defined in the
employment contracts and Termination Benefits Agreements discussed above
to mean in the absence of fraud, dishonesty, theft of corporate assets or
other gross misconduct, as set out in a good faith determination of the
Board of Directors. The term "resignresign for 'good reason'"good reason
is defined in the same agreements to mean generally, and subject
to lengthy qualifications and amplification, demotion; assignment of
duties inconsistent with the officer'sofficers status, position or
responsibilities; reduction in base salary or failure to grant annual
increases commensurate with increases of otherthe officers; relocation of the
headquarters of IPALCO or IPL to a location outside Greater Indianapolis;
or termination of the executive'sexecutives participation in, or the existence
of, an incentive compensation, insurance or pension program. The term
"acquisitionacquisition of control"control in such contracts means, generally and
subject to lengthy amplification and qualifications therein, acquisition
by any person, entity, or group of 20% or more of the combined voting
power of the outstanding securities of IPALCO entitled to vote in the
election of directors, excluding acquisitionsacquisition by or from IPALCO or any
acquisition by any employee benefit plan of IPALCO or IPL; change in
majority membership of the Board of Directors other than by normal
succession; certain reorganizations, mergers or consolidations resulting
in control of the reorganized, merged, or consolidated entity by persons
not previously in control of IPALCO; approval by the shareholders of
complete liquidation or dissolution of IPALCO, or of a sale of all or
substantially all of its assets to an entity not controlled by directors
and holders of voting securities who were directors and holders of voting
securities of IPALCO prior to the transaction.
A Benefit Protection Fund and Trust Agreement ("Fund"(
Fund) is also in effect to pay litigation expenses in the
event it becomes necessary for any officer to enforce the employment
contracts and Termination Benefits Agreements above described. The Fund
is held in trust by National City Bank Indianapolis,of Indiana, and at December 31,
1997,1999, the sum of $945,439$1,027,364.50 was reserved in trust for such
expenses.
By order of the Board of Directors.
IPALCO ENTERPRISES, INC.
By: BRYAN G. TABLER, Secretary
| By: Bryan G.
Tabler, Secretary |
Indianapolis,
Indiana
March 9, 1998
Appendix A
IPALCO ENTERPRISES, INC.
LONG-TERM PERFORMANCE AND
RESTRICTED STOCK INCENTIVE PLAN
As Amended and Restated Effective January 1, 1998)
Pursuant to Section 22 of the IPALCO Enterprises, Inc. Long-
Term Performance and Restricted Stock Incentive Plan (the "Plan"), IPALCO
Enterprises, Inc. ("IPALCO") amends the Plan, effective as of January 1, 1998,
to provide, in its entirety, as follows:
SECTION 1
PURPOSE
The purpose of the amended Plan (as such term is described below) is
to provide an incentive to selected key executives of the Company (as such
term is described below), by providing an opportunity to earn long-term
incentive compensation, based upon the attainment of Company performance
goals. In addition, the restricted stock component of the Plan is intended
to provide the key executives with a means of acquiring or increasing a
proprietary interest in IPALCO so that they shall have an increased incentive
to work toward the attainment of the long term growth and profit objectives
of IPALCO and its affiliated companies. Specifically, the Plan is designed
to:
A. Link, directly and indirectly, executive and
shareholder interests.
B. Attract and retain individuals of outstanding ability.
C. Encourage key Company officers to render superior
performance.
SECTION 2
DEFINITIONS
The terms defined in this Section 2 shall, for purposes of this Plan,
have the meanings herein specified, unless the context expressly or by
necessary implication otherwise requires:
A. Acquisition of Control: An "Acquisition of Control"
means:
(1) The acquisition by any individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of
the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) (a "Person") of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act)
of twenty percent (20%) or more of either (A) the then
outstanding shares of common stock of IPALCO (the
"Outstanding IPALCO Common Stock") or (B) the combined
voting power of the then outstanding voting securities of
IPALCO entitled to vote generally in the election of
directors (the "Outstanding IPALCO Voting Securities");
provided, however, that the following acquisitions shall not
constitute an Acquisition of Control: (i) any acquisition
directly from IPALCO (excluding an acquisition by virtue of
the exercise of a conversion privilege), (ii) any
acquisition by IPALCO, (iii) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by
IPALCO, IPL or any corporation controlled by IPALCO or (iv)
any acquisition by any corporation pursuant to a
reorganization, merger or consolidation, if, following such
reorganization, merger or consolidation, the conditions
described in clauses (A), (B) and (C) of subsection (3) of
this Section 2.A. are satisfied;
(2) Individuals who, as of the date hereof,
constitute the Board of Directors of IPALCO (the "Incumbent
Board") cease for any reason to constitute at least a
majority of the Board of Directors of IPALCO; provided,
however, that any individual becoming a director subsequent
to the date hereof whose election, or nomination for election
by IPALCO's shareholders, was approved by a vote of at least
a majority of the directors then comprising the Incumbent
Board shall be considered as though such individual were a
member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of
office occurs as a result of either an actual or threatened
election contest (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) or other
actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board of Directors;
or
(3) Approval by the shareholders of IPALCO of a
reorganization, merger or consolidation, in each case,
unless, following such reorganization, merger or
consolidation, (A) more than sixty percent (60%) of,
respectively, the then outstanding shares of common stock of
the corporation resulting from such reorganization, merger
or consolidation and the combined voting power of the then
outstanding voting securities of such corporation entitled
to vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were
the beneficial owners, respectively, of the Outstanding
IPALCO Common Stock and Outstanding IPALCO Voting Securities
immediately prior to such reorganization, merger or
consolidation in substantially the same proportions as their
ownership, immediately prior to such reorganization, merger
or consolidation, of the Outstanding IPALCO Stock and
Outstanding IPALCO Voting Securities, as the case may be,
(B) no Person (excluding IPALCO, any employee benefit plan
or related trust of IPALCO, IPL or such corporation
resulting from such reorganization, merger or consolidation
and any Person beneficially owning, immediately prior to
such reorganization, merger or consolidation, directly or
indirectly, twenty percent (20%) or more of the Outstanding
IPALCO Common Stock or Outstanding IPALCO Voting Securities,
as the case may be) beneficially owns, directly or
indirectly, twenty percent (20%) or more of, respectively,
the then outstanding shares of common stock of the
corporation resulting from such reorganization, merger or
consolidation or the combined voting power of the then
outstanding voting securities of such corporation entitled
to vote generally in the election of directors and (C) at
least a majority of the members of the board of directors of
the corporation resulting from such reorganization, merger
or consolidation were members of the Incumbent Board at the
time of the execution of the initial agreement providing for
such reorganization, merger or consolidation;
(4) Approval by the shareholders of IPALCO of (A) a
complete liquidation or dissolution of IPALCO or (B) the
sale or other disposition of all or substantially all of the
assets of IPALCO, other than to a corporation, with respect
to which following such sale or other disposition (i) more
than sixty percent (60%) of, respectively, the then
outstanding shares of common stock of such corporation and
the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned,
directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners,
respectively, of the Outstanding IPALCO Common Stock and
Outstanding IPALCO Voting Securities immediately prior to
such sale or other disposition in substantially the same
proportion as their ownership, immediately prior to such
sale or other disposition, of the Outstanding IPALCO Common
Stock and Outstanding IPALCO Voting Securities, as the case
may be, (ii) no Person (excluding IPALCO and any employee
benefit plan or related trust of IPALCO, IPL or such
corporation and any Person beneficially owning, immediately
prior to such sale or other disposition, directly or
indirectly, twenty percent (20%) or more of the Outstanding
IPALCO Common Stock or Outstanding IPALCO Voting Securities,
as the case may be) beneficially owns, directly or
indirectly, twenty percent (20%) or more of, respectively,
the then outstanding shares of common stock of such
corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled
to vote generally in the election of directors and (iii) at
least a majority of the members of the board of directors of
such corporation were members of the Incumbent Board at the
time of the execution of the initial agreement or action of
the Board of Directors providing for such sale or other
disposition of assets of IPALCO; or
(5) The closing, as defined in the documents
relating to, or as evidenced by a certificate of any state or
federal governmental authority in connection with, a
transaction approval of which by the shareholders of IPALCO
would constitute an "acquisition of control" under subsection
(3) or (4) of this Section 2.A. of this Plan.
Notwithstanding anything contained in this Plan to the contrary, if a
Participant's employment is terminated before an "Acquisition of Control" as
defined in this subsection (A) and the Participant reasonably demonstrates
that such termination (i) was at the request of a third party who has
indicated an intention or taken steps reasonably calculated to effect an
Acquisition of Control and who effectuates an "Acquisition of Control" or
(ii) otherwise occurred in connection with, or in anticipation of, an
Acquisition of Control which actually occurs, then for all purposes of this
Plan, the date of an Acquisition of Control with respect to such Participant
shall mean the date immediately prior to the date of such termination of the
Participant's employment.
B. Administrative Guidelines: The guidelines established for each
Program used to administer this Plan as now in effect or as modified from
time to time by the Committee.
C. Base Salary: The aggregate base salary paid to a Participant in
a Fiscal Year.
D. Board of Directors: The Board of Directors of IPALCO.
E. Committee: The Compensation Committee of the Board of Directors.
F. Company: IPALCO and its subsidiaries, or successors.
G. Cost Effective Service: The three (3) year average, as
applicable, of net income of the Company as a percentage of the sum of the
Company's total operating revenues and other income. The Company's net
income, total operating revenues and other income shall be as reported in the
Company's Uniform Statistical Report; provided, however, that the total
operating revenues and other income shall include gross IPL revenues but,
with respect to the non-utility businesses, shall only include their net
income. Cost Effective Service shall cease to be a Performance Measure
effective January 1, 1998.
H. Fiscal Year: The calendar year.
I. IPALCO: IPALCO Enterprises, Inc. or its successor.
J. IPL: Indianapolis Power & Light Company or its successor.
K. Market Price: For a Fiscal Year, the prices of a company's
common stock on the New York Stock Exchange, or other appropriate exchange,
if the company's common stock is not traded on the New York Stock Exchange,
as published in The Wall Street Journal, at the close of trading on the last
trading date in such Fiscal Year.
L. Participant: The employees of the Company designated by the
Committee to receive an award under the Plan. The employees eligible for
designation include officers of the Company and other employees who the
Committee expect to contribute to the strategic growth of the Company.
M. Peer Group: The entities included as part of the S&P 500 Index.
N. Performance Incentive Award: The incentive award amount for a
Performance Period established by the Committee and expressed as a number of
Shares determined in relation to a Participant's average annual Base Salary
for the entire three (3) year period or, if lesser, the portion of such
three (3) year period that he was employed; provided, however, that for
purposes of making the Share grants at the beginning of each Performance
Period, the Share grants shall be based on the Participant's rate of base
compensation in effect on the first (1st) calendar day of the Performance
Period; provided, further, that the number of Shares awarded shall be
increased or decreased as soon as practicable after the end of the
Performance Period to reflect the actual annual Base Salary paid to the
Participant in such Performance Period. The maximum number of Shares
(including any additional Shares awarded in accordance with Section 16
based on Performance Period Performance Measure results) shall not exceed
the lesser of:
(1) the annualized Base Salary of a Participant in effect
on the first (1st) calendar day of the Performance Period divided by
four (4), or
(2) the average annual Base Salary of the Participant
during the Performance Period divided by five (5);
provided, however, that in applying these share limits, dividends paid on
restricted Shares shall be disregarded. Notwithstanding anything contained in
this Paragraph to the contrary, the Committee may establish the Performance
Incentive Awards for various groups of Participants by job title or officer
class. To the extent the Committee establishes Performance Incentive Awards
by job title or officer groups and a Participant's job title or officer
group provides for a lower or higher number of Shares as the Participant's
Performance Incentive Award, the Participant's Performance Incentive Award
shall be automatically adjusted at the end of the Performance Period to
reflect the different number of Shares applicable for such new job title
or officer class based on the number of full calendar months remaining in the
Performance Period at the effective date on which such Participant's job
title or officer class is modified. For example, if a Participant's job
title is changed to a title which results in an increase of the number of
Shares to be included as the Participant's Performance Incentive Award from
twenty (20) to twenty-five (25) Shares with eighteen (18) full calendar
months remaining in the Performance Period at the time of the change, the
Participant shall have the number of Shares included as his Performance
Incentive Award adjusted at the end of the Performance Period to twenty-two
and one-half (22 1/2)20,
2000
| | IPALCO ENTERPRISES, INC.
Instructions To Thrift Plan Trustee For
Annual Meeting Of Shareholders -- April 19, 2000 TO THE EMPLOYEE PENSION
COMMITTEE: I understand that in accordance
with Section 305.90 of the Thrift Plan, I may instruct the voting of the number of shares
shown on this form. Will you please direct the Trustee to execute a
proxy empowering the persons appointed therein to vote as
follows: The Board of Directors recommends a
vote FOR proposal No. 1.
1. Election of Five Nominees For Director,
namely: Joseph D. Barnette, Jr., Max L.
Gibson, Ramon L. Humke,
Andrew J. Paine, Jr., Sallie W. Rowland
Vote For All Nominees
Withhold Vote from All Nominees
Vote For All Nominees, Except
Nominees written below: |
Please complete
2000 Instruction
Card at right. Then
date, sign, detach it
from this form at
perforations, fold it,
and return immediately
in accompanying
interoffice envelope. | (DETACH
HERE) | The Board of Directors recommends a
vote AGAINST proposal No. 2. 2. Shareholder proposal regarding Executive
Compensation.
For Against
Abstain
(FOLD HERE - DO NOT TEAR)The Trustee will execute the proxy as above
directed, or, if no choice is indicated, the proxy will be voted by the
Trustee in its discretion. This instruction Card confers discretionary authority
to vote on currently unknown matters properly presented to the
meeting. Receipt of the Notice of Annual Meeting and Proxy
Statement dated March 20, 2000, and the 1999 Annual Report is hereby
acknowledged. |
| | Your signature must be exactly
as your name appears below. | } | Dated
, 2000. __________________________ (SIGNATURE) |
. O. Performance Incentive Award Schedule: The schedule, attached
hereto as Appendix A, containing the ranking of Total Return to Shareholders
versus the Peer Group, and a percent of the Performance Incentive Award for
each of the levels of achievement listed.
P. Performance Measures: The measures used in determining the
amount of any Program Incentive Payment. Effective January 1, 1998, Total
Return to Shareholders shall be the only Performance Measure.
Q. Performance Period: A period of three (3) consecutive Fiscal
Years, commencing on the first (1st) day of the first (1st) Fiscal Year of a
Program, over which the Performance Measures are to be taken. A new
Performance Period shall begin on January 1, 2001 and January 1, 2004.
Performance Periods shall not overlap.
R. Period of Restriction: The period during which the transfer of
shares are restricted pursuant to the Plan.
S. Plan: This Long-Term Performance and Restricted Stock Incentive
Plan, as now in effect and as amended from time to time.
T. President: The President of IPALCO.
U. Program: One (1) Performance Period with its respective
Performance Incentive Awards, Performance Incentive Award Schedule, and
Participants.
V. Shares: Shares of common stock of IPALCO.
W. Total Return to Shareholders: The average return on investment
to shareholders from stock price appreciation and dividends paid during each
Fiscal Year of the Performance Period.
SECTION 3
ADMINISTRATION
The Plan shall be administered by the Committee. No member of the
Committee shall be eligible, at any time when he or she is such a member or
within one (1) year prior to his or her appointment to the Committee, to be
granted Shares under the Plan; provided, however, that notwithstanding the
preceding clause of this sentence, a member of the Committee shall not be
precluded from participating in, the IPALCO Enterprises, Inc. 1991 Directors'
Stock Option Plan. The decision of a majority of the members of the Committee
shall constitute the decision of the Committee, and the Committee may act
either at a meeting at which a majority of its members are present or by a
written consent signed by all of its members. The Committee may appoint
individuals to act on its behalf in the administration of the Plan; provided,
however, that except as otherwise provided by the Plan, the Committee shall
have the sole, final and conclusive authority to administer, construe and
interpret the Plan.
SECTION 4
NUMBER OF SHARES SUBJECT TO THE PLAN
The total number of Shares that may be granted under the Plan may not
exceed One Million and Five Hundred Thousand (1,500,000) Shares subject to
adjustment as provided in Section 6 hereof. Those Shares may consist, in
whole or in part, of authorized but unissued Shares or Shares reacquired
by IPALCO, including Shares purchased in the open market, not reserved for
any other purpose; provided, however, that the Shares granted hereunder shall
be authorized and unissued unless the Committee, in its sole discretion,
takes action to utilize open market Shares.
SECTION 5
UNUSED SHARES
In the event any Shares subject to grants made under the Plan are
forfeited pursuant to Section 16 hereof, such forfeited Shares shall again
become available for issuance under the Plan.
SECTION 6
ADJUSTMENTS IN CAPITALIZATION
In the event of any change in the outstanding Shares by reason of a
stock dividend, stock split, recapitalization, merger, consolidation,
combination, stock rights plan or exchange of shares or other similar
corporate change, the aggregate number of Shares issuable under the Plan
shall be appropriately adjusted by the Committee, whose determination
shall be conclusive. In such event, the Committee shall also have discretion
to make appropriate adjustments in the number and type of shares subject to
restricted Share grants then outstanding under the Plan pursuant to the terms
of such grants or otherwise.
SECTION 7
PARTICIPATION
A. Prior to the commencement of each Fiscal Year, Participants
shall be recommended by the President and approved by the Committee.
Participants are to be those key employees who, in the opinion of the
Committee, are in a position to make a significant contribution to the
long-term success of the Company. Participants for each Program shall
be notified of their participation prior to the beginning of the first (1st)
Fiscal Year of a Program. Participation in one (1) Program does not
guarantee participation in subsequent Programs.
B. The Committee, in its sole discretion, may select additional
Participants to participate in the final one (1) or two (2) Fiscal Years of
a Program. The Committee approval shall include the establishment of the
Performance Incentive Award for any new Participant. If a Participant
is added during a Program, the first (1st) Fiscal Year of his participation
shall be substituted for the first (1st) Fiscal Year of the Performance
Period for purposes of determining the number of Shares awarded under
Section 9.
C. The Committee, in its sole discretion, may discontinue the
participation of a Participant for the final one (1) or two (2) Fiscal Years
of a Program. If a Participant's participation is discontinued during a
Program, he shall forfeit, as soon as practicable after the effective date of
his participation termination, two-thirds (2/3) of the Shares granted to him
for such Program if his participation is discontinued for the final two (2)
Fiscal Years of the Program or one-third (1/3) of the Shares granted to him
for such Program if his participation is discontinued for the final Fiscal
Year of the Program. At the end of a Program, the reduced share grant shall
be adjusted in accordance with Section 16.
SECTION 8
PERFORMANCE INCENTIVE AWARD GRANTS
A. Each Program shall be subject to the limitations and terms
provided in the Plan. A new Program shall commence on the third (3rd)
annual anniversary date of the preceding Program. These Programs shall be
of three (3) year duration.
B. The Committee shall determine for each Participant his
Performance Incentive Award for each Program. Only one (1) grant shall be
made to each Participant during each Program. Participants shall generally
be notified of their individual Performance Incentive Award before the
beginning of each Program.
SECTION 9
GRANT OF SHARES
Concurrently with the beginning of each Performance Period and
subject to the limits established by Section 2.N., the Committee shall cause
the Secretary of IPALCO to issue to each Participant a number of restricted
Shares based on the Participant's Performance Incentive Award for such
Performance Period. Notwithstanding anything contained herein to the
contrary, the Share grants for the Performance Period beginning on January 1,
1998 are conditioned upon the amended and restated Plan being approved by
IPALCO's shareholders in accordance with Section 28 hereof. At the end of
each Performance Period, the Share grants shall be adjusted, upward or
downward, based on the Participant's actual Base Salary and, if applicable,
change in job title or officer class.
SECTION 10
ESTABLISHMENT OF PERFORMANCE MEASURES
A. The Performance Measure to be used is IPALCO's ranking
versus the Peer Group on Total Return to Shareholders.
B. A Performance Incentive Award Schedule shall contain
various levels of performance and corresponding Performance
Incentive Award values.
C. If the Company disposes of a significant part of the
business of IPL, or acquires through purchase, merger, or
otherwise the capital assets of any other company, the Committee may,
in its sole and absolute discretion, adjust the Total Return to
Shareholder targets of a Performance Incentive Award Schedule for a
Performance Period so as to reflect the financial impact of the
acquisition or disposition.
SECTION 11
DETERMINATION OF PERFORMANCE RESULTS
A. Upon the completion of a Performance Period, the Shares
awarded for each Participant shall be adjusted based upon the
Performance Incentive Award Schedule.
B. For each Performance Period, the Total Return to
Shareholders of IPALCO shall be compared with the Total Return to
Shareholders of the members of the Peer Group. Total Return to
Shareholders for IPALCO and each member of the Peer Group shall be
measured by the following formula (with appropriate adjustments for
changes in capital structure due to stock dividends, stock splits,
recapitalization, mergers, or other events having significant
distorting effect on IPALCO or on any member of the Peer Group):
1. For each Fiscal Year of the Performance Period:
(a) Subtract the Market Price of each
company's common stock for the prior Fiscal Year
from the Market Price of the company's common stock
for the current Fiscal Year.
(b) Add to the result obtained in Step
(a) the amount of all cash dividends paid by the
company with respect to its common stock during the
current Fiscal Year.
(c) Divide the result obtained in Step
(b) by the Market Price of the company's common
stock for the prior Fiscal Year.
2. The calculated values from Step 1 for the Fiscal
Years in the Performance Period shall then be converted to
an annual average for the Performance Period.
IPALCO's ranking shall be determined by its performance ranking
versus the Peer Group.
SECTION 12
RESTRICTIONS ON TRANSFERABILITY
Until the lifting of the restrictions on the Shares granted
hereunder, no Shares granted under the Plan may be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated, otherwise than by
will or by the laws of descent and distribution until the termination of the
applicable Period of Restriction.
SECTION 13
CERTIFICATE LEGEND
Each certificate representing restricted Shares granted pursuant to
this Plan shall bear the following legend:
"The sale or other transfer of the shares represented by
this certificate, whether voluntary, involuntary, or by
operation of law, is subject to certain restrictions on
transfer set forth in the IPALCO Enterprises, Inc. Long-Term
Performance and Restricted Stock Plan and rules of
administration adopted pursuant to such Plan. A copy of the
Restricted Stock Plan and the rules of such Plan may be
obtained from the Secretary of IPALCO Enterprises, Inc."
Once the restricted Shares are released from the restrictions, the
Participant shall be entitled to have the legend required by this Section 13
removed from such Share certificate(s).
SECTION 14
VOTING RIGHTS
During the Period of Restriction, Participants holding restricted
Shares granted hereunder may exercise full voting rights with respect to
those Shares.
SECTION 15
DIVIDENDS AND OTHER DISTRIBUTIONS
During the Period of Restriction, Participants holding restricted
Shares granted hereunder shall be entitled to receive all dividends and other
distributions paid with respect to those Shares while they are so held. If
any such dividends or distributions are paid in Shares, such Shares shall be
subject to the same restrictions on transferability as the restricted Shares
with respect to which they were paid.
SECTION 16
LIFTING OF RESTRICTIONS
The restricted Share grants under the Plan shall be subject to
restrictions as to transferability and shall also be subject to forfeiture
provisions. The lifting of the transferability restrictions and the
forfeitability provisions shall be dependent on the Performance Measures
during each Performance Period and on the continued employment of the
Participant during the Period of Restriction.
As soon as practicable after the end of a Performance Period, the
Committee shall determine the adjustments, if any, that are required to be
made to the Share grants for the Performance Period based on actual results
of IPALCO under the Performance Measures for such Performance Period. This
evaluation shall be completed no later than the July 1 immediately following
the end of the Performance Period or such earlier date established by the
Committee after it completes the required grant adjustments for the
Performance Period (the July 1 or earlier date established by the Committee
shall for each Performance Period be referred to as the "Initial Vesting
Date"). After the adjustments are made in the Share grants consistent with
the Performance Incentive Award Schedule for the Performance Period and
after effectuating the adjustments described above rounding up or down any
fractional share to the nearest whole share, the restrictions on the Shares
held by a Participant at the end of the Performance Period (after adjusted
as described above) shall be lifted on one-third (1/3) of the Shares as
of the Initial Vesting Date for the Performance Period and shall be lifted in
additional one-third (1/3) increments on the first business day of each of
the next two calendar years immediately following the Initial Vesting Date
for the Performance Period; provided, however, that except as provided in
Section 17, 18 or 19 hereof:
(1) the restriction shall be lifted on an Initial Vesting
Date or, if applicable for the other one-third (1/3) increments, the
first business day in January only if the Participant is still
employed by the Company on such date, and
(2) if a Participant ceases to be employed by the Company
before the restrictions lapse on the Shares held by him, the Shares
still subject to restrictions shall be immediately forfeited.
Notwithstanding anything contained in this Plan to the contrary, the
Committee shall have the complete discretion to delay the lifting of the
restrictions on Shares under this Plan (including restrictions that lapse
under Sections 17 and 18) for a Participant to the extent it determines such
delay is necessary to avoid the non-deductibility of the awards under Section
162(m) of the Internal Revenue Code of 1986, as amended; provided, however,
that any decision to delay the lifting of the restrictions shall be required
to be made and communicated to the affected Participant in writing before the
beginning of the calendar year during which the restrictions would have been
lifted but for the delay.
SECTION 17
EFFECT OF PARTICIPANT'S RETIREMENT
Except as provided in the next paragraph, for Performance Periods
beginning before January 1, 1998 and notwithstanding anything contained in
Section 16 hereof to the contrary, if a Participant attains age 65 before his
employment with the Company is terminated and before the end of a Performance
Period but after completing at least one (1) full Fiscal Year of employment
during such Performance Period, the remaining restrictions on any Shares
attributable to such Performance Period held by the Participant (after the
number of Shares are adjusted pursuant to the Performance Measure adjustments
described in Section 16 and Base Salary adjustment described in Section 2.N.
and Section 9 hereof are completed for such Performance Period) shall lapse
on the last calendar day of such Performance Period; provided, however, that
if a Participant's employment with the Company is terminated, voluntarily or
involuntarily, before his completion of at least two (2) Fiscal Years of
employment, the Participant shall only be entitled to two-thirds (2/3) of the
restricted Shares granted to him for such Performance Period (after the
Performance Measure adjustments described in Section 16 and Base Salary
adjustment described in Section 2.N. and Section 9 hereof are completed for
such Performance Period), rounding up or down any fractional Share to the
nearest whole Share, and the remaining one-third (1/3) of the Shares shall be
forfeited as soon as practicable after the end of the Performance Period.
Notwithstanding anything contained in Section 16 hereof to the
contrary but only to the extent expressly approved by the Committee, the
provisions contained in the preceding paragraph of this Section 17 shall also
apply, in whole or in part, with respect to a Participant whose employment is
terminated after meeting the requirements for early or normal retirement
under the Employees' Retirement Plan of Indianapolis Power & Light Company
(or any successor plan) to the extent the Committee waives the continued
employment requirements; provided, however, that under no circumstances
shall the waiver affect the Performance Measures adjustments provided in
Section 11; provided, further, that until such time, if ever, that the
Committee waives the restrictions, the retired Participant shall cease to
have voting or dividend rights with respect to the restricted Shares.
SECTION 18
EFFECT OF TERMINATION OF EMPLOYMENT DUE TO
DEATH OR DISABILITY
Notwithstanding anything contained in Section 16 hereof to the
contrary, if a Participant's employment with the Company is terminated by
reason of his death or total and permanent disability (as such term is
defined in the Employees' Retirement Plan of Indianapolis Power & Light
Company or in any successor retirement plan thereto) that occurs after the
end of the Performance Period but before the restrictions lapse on the Shares
granted for such Performance Period, the remaining restrictions on any Shares
attributable to such Performance Period held by the Participant (after the
Performance Measure adjustments described in Section 16 hereof are completed
for such Performance Period) shall immediately lapse on the date of his death
or total and permanent disability, whichever is applicable.
Notwithstanding anything contained in Section 16 hereof to the
contrary, if a Participant's employment with the Company is terminated by
reason of his death or total and permanent disability that occurs before the
end of the Performance Period, the Participant shall be entitled to a pro
rata number of Shares (as determined below) granted to him at the beginning
of the Performance Period (as adjusted for Performance Periods to reflect the
actual Base Salary paid to such Participant during the Performance Period
that he was employed), no further adjustments shall be effected with respect
to such Shares, and such Shares shall be fully vested and transferable by
such Participant or, if deceased, his legal representative. The number of
Shares that the disabled or deceased Participant is entitled shall be
determined by multiplying the number of Shares granted to the Participant at
the beginning of the Performance Period or, if later, at the date as of which
his participation in the Performance Period commenced (as adjusted to reflect
the actual Base Salary paid to such Participant during the Performance
Period) by a fraction, the numerator of which is the number of full calendar
months of the Performance Period during which he was a Participant and
employed by the Company and the denominator of which is thirty-six (36) or,
if the Participant became a Participant after the beginning of a Performance
Period, the number of months remaining in the Performance Period beginning
with the month during which his participation commenced.
SECTION 19
ACQUISITION OF CONTROL
In the event that there is an Acquisition of Control and
notwithstanding anything contained in Section 16 to the contrary, the
lifting of the restrictions based on continued employment on the restricted
Shares held by a Participant who was employed by the Company immediately
preceding the date of the Acquisition of Control shall immediately occur.
In addition, the Performance Period during which the Acquisition of Control
occurs shall be deemed terminated at the date of the Acquisition of Control,
IPALCO performance for such Performance Period shall be measured as of the
date of the Acquisition of Control, and the Committee shall effect the
adjustments required by Section 16 as soon as practicable after the
Acquisition of Control. The restrictions on all Shares provided to the
Participants after completing the adjustments described above shall be
lifted immediately.
SECTION 20
ELECTIVE SALE OF SHARES
Participants shall also be permitted to cash-in up to fifty percent
(50%) of the Shares (after the adjustments required by Section 16 are
completed) that cease to be subject to the continued employment requirements
under Section 16 (the "Eligible Shares") by following the procedures
established by the Committee.
SECTION 21
NO EMPLOYMENT CONTRACT
The Plan is not and is not intended to be an employment contract with
respect to any of the Participants, and IPALCO's and IPL's rights to continue
or to terminate the employment relationship of any Participant shall not be
affected by the Plan.
SECTION 22
AMENDMENT AND TERMINATION
The Board may at any time amend, modify, alter, or terminate the
Plan; provided, however, that without the approval of the IPALCO
shareholders:
(a) the number of Shares which may be reserved for issuance
under the Plan may not be increased except as provided in
Section 6 hereof; and
(b) the class of employees to whom grants may be granted
under the Plan shall not be modified materially;
provided, further, that except for the modifications expressly permitted by
the last paragraph of Section 16 hereof, any amendment, modification,
alteration or termination to the Plan which increases the restrictions as
to transferability or forfeitability of any restricted Shares granted
hereunder to a Participant, including any Performance Measure adjustments
which occur at the end of a Performance Period, shall not become effective
until the first (1st) Performance Period following the Performance Period
during which such amendment, modification, alteration or termination to the
Plan is adopted without the written consent of the majority of the
Participants adversely affected by the change.
SECTION 23
INDEMNIFICATION
Each person who is or shall have been a member of the Board of
Directors or the Committee shall be indemnified and held harmless by IPALCO
against and from any loss, cost, liability, or expense that may be imposed
upon or reasonably incurred by him in connection with or resulting from any
claim, action, suit, or proceeding to which he may be a party or in which he
may be involved by reason of any action taken or failure to act under the
Plan and against and from any and all amounts paid by him in settlement
thereof with IPALCO's approval, or paid by him in satisfaction of a
judgment in any such action, suit or proceeding against him, provided he
shall give IPALCO an opportunity, at its own expense, to handle and defend
the same before he undertakes to handle and defend it on his behalf. The
foregoing right of indemnification shall not be exclusive of any other rights
of indemnification to which such persons may be entitled under the IPALCO
Articles of Incorporation or Code of By-Laws, as a matter of law, or
otherwise, or any power that IPALCO may have to indemnify them or hold them
harmless.
SECTION 24
GOVERNING LAW
The Plan, and all grants and other documents delivered hereunder,
shall be construed in accordance with and governed by the laws of Indiana.
SECTION 25
EXPENSES OF PLAN
The expenses of administering the Plan shall be borne by IPALCO.
SECTION 26
SUCCESSORS
The Plan shall be binding upon the successors and assigns of the
participating Employers.
SECTION 27
TAX WITHHOLDING
IPALCO or IPL, as appropriate, shall have the right to require the
Participant or other person receiving Shares to pay to IPALCO or IPL the
amount of any federal, state or local taxes which IPALCO or IPL are required
to withhold with respect to such Shares. If permitted by the Committee and
pursuant to rules established by the Committee, a Participant may make a
written election to have Shares having an aggregate fair market value, as
determined by the Committee, sufficient to satisfy the applicable withholding
taxes, withheld from the Shares otherwise to be received at the end of the
Period of Restriction.
SECTION 28
EFFECTIVE DATE AND DURATION OF PLAN
This amended and restated Plan shall be effective January 1, 1998;
provided, however, that the granting of Shares are conditioned upon the
approval of the Plan by the holders of a majority of the Shares present, or
represented, and entitled to vote at IPALCO's 1998 annual shareholder
meeting. Except for the provisions set forth in Section 16 which are also
applicable for the January 1, 1995 grants, the Performance Periods beginning
before January 1, 1998 shall be governed by the provisions of the Plan in
effect before January 1, 1998.
APPENDIX A
PERFORMANCE INCENTIVE AWARD SCHEDULE
AWARD AS A PERCENT OF TARGET
S&P 500 Index Ranking: 3 year cumulative Total Return to Shareholder (TRS)
IPALCO Award
Ranking: TRS Percentage
------------ ----------
1-31 400%
32-62 375%
63-93 350%
94-125 325%
126-156 300%
157-187 275%
188-218 250%
219-250 225%
251-281 200%
282-312 175%
313-343 150%
344-375 125%
376-406 100%
407-437 75%
438-468 50%
469-500 0%
[form of proxy/instruction card]
IPALCO ENTERPRISES, INC.
This Proxy/Instruction Card is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints John R. Hodowal and Bryan G. Tabler as
Proxies, each with the power of substitution, and authorizes them to
represent and vote and/or, in the case of shares held in IPALCO PowerInvest,
the dividend reinvestment and direct stock purchase plan, instructs the
agent for such Plan to execute a proxy empowering the above-named persons
to vote, as designated below, all the shares of IPALCO Enterprises, Inc.
common stock held of record by the undersigned and/or credited to the
undersigned's account in such Plan on February 25, 1998, at the annual
meeting of the shareholders to be held April 15, 1998, or at any adjournment
thereof, with respect to the matter(s) set forth below.
1. Election of Four Nominees For Directors, namely: Robert A. Borns,
Otto N. Frenzel III, Andre B. Lacy, L. Ben Lytle
[ ] Vote For All Nominees
[ ] Withhold Vote from All Nominees
[ ] Vote For All Nominees, Except Nominees written below:
--------------------------------------------------------------------
(Please write name(s) of Nominee(s) from whom vote is withheld)
2. Approval of the IPALCO Enterprises, Inc. Long-Term Performance and
Restricted Stock Incentive Plan (as Amended and Restated January 1,
1998).
[ ] For [ ] Against [ ] Abstain
(FOLD HERE - DO NOT TEAR)
This Proxy/Instruction Card when properly executed will be voted in the
manner directed by the undersigned shareholder. If not otherwise indicated,
this Proxy/Instruction Card will be voted FOR Proposals 1 and 2 and confers
discretionary authority to vote on currently unknown matters properly
presented to the meeting. This Proxy/Instruction Card shall be voted on
those matters properly presented in accordance with the best judgment of
the named Proxies.
Receipt of the Notice of Annual Meeting and Proxy Statement dated March 9,
1998, and the 1997 Annual Report is hereby acknowledged.
Dated __________________, 1998.
Your signature must be exactly ___________________________________
as your name appears below. (SIGNATURE)
When signing as attorney-in-fact,
executor, administrator, trustee,
guardian or corporate officer, ___________________________________
please give full title as such. (SIGNATURE IF HELD JOINTLY)
Please complete
1998 Proxy at right.
Then date, sign,
detach it from this
form at perforations,
fold it and return
immediately in
accompanying
postage guaranteed
envelope.
Account ID:
ADDRESS CHANGE
_______________________
STREET
_______________________
APT. NO./P.O. BOX
_______________________
CITY
_______________________
STATE
_______________________
ZIP CODE
_______________________
SIGNATURE
[at perforation]
(DETACH HERE)
[letter soliciting voting instructions
from participants in Employees' Thrift Plan.
IPL
INDIANAPOLIS POWER & LIGHT COMPANY
March 9, 1998
TO PARTICIPANTS IN THE EMPLOYEES' THRIFT PLAN:
As a participant in the Employees' Thrift Plan, you are entitled
to direct the manner in which shares of stock of IPALCO Enterprises, Inc.,
("IPALCO") in which you have an interest, shall be voted by the Trustee at
the forthcoming Annual Meeting of Shareholders of IPALCO to be held
April 15, 1998. This right is given to you by Section 305.90 of the Thrift
Plan.
Enclosed is a copy of the Notice of Annual Meeting and Proxy
Statement dated March 9, 1998 and an Instruction Card indicating the number
of shares with respect to which you may give voting instructions to the
Trustee. You may instruct the Trustee how you wish such shares to be voted
by placing a mark in the box which expresses your choice.
The only business to be acted upon at the meeting of which Management
is presently aware, is the election of four directors to hold office for
terms of three years each and until their successors are duly elected and
qualified, and the approval of the IPALCO Long-Term Performance and
Restricted Stock Incentive Plan (as Amended and Restated effective January
1, 1998).
It is important that you instruct the Trustee as to the voting of the
shares in which you have an interest. After designating how you wish such
shares to be voted, sign the instruction form and return it in the
accompanying interoffice envelope to the Secretary of IPALCO, Room 729,
IPALCO Corporate Center, on or before April 8, 1998.
Shares with respect to which no voting instructions are given will be
voted by the Trustee in its discretion.
/s/ John D. Wilson
John D. Wilson, Secretary
Employees' Pension Committee
[form to be executed by Thrift Plan participants]
IPALCO ENTERPRISES, INC.
Instructions To Thrift Plan Trustee For
Annual Meeting Of Shareholders - April 15, 1998
TO THE EMPLOYEE PENSION COMMITTEE:
I understand that in accordance with Section 305.90 of the Thrift
Plan, I may instruct the voting of the number of shares shown on this form.
Will you please direct the Trustee to execute a proxy empowering the persons
appointed therein to vote as follows:
1. Election of Four Nominees For Director, namely: Robert A. Borns,
Otto N. Frenzel III, Andre B. Lacy, L. Ben Lytle
[ ] Vote For All Nominees
[ ] Withhold Vote from All Nominees
[ ] Vote For All Nominees, Except Nominees written below:
-----------------------------------------------------------------
Please write name(s) of Nominee(s) from whom vote is withheld)
2. Approval of the IPALCO Enterprises, Inc. Long-Term Performance and
Restricted Stock Incentive Plan (as Amended and Restated effective
January 1, 1998).
[ ] For [ ] Against [ ] Abstain
(FOLD HERE - DO NOT TEAR)
The Trustee will execute the proxy as above directed, or, if no choice is
indicated, the proxy will be voted by the Trustee in its discretion. This
Instruction Card confers discretionary authority to vote on currently unknown
matters properly presented to the meeting.
Receipt of the Notice of Annual Meeting and Proxy Statement dated March 9,
1998, and the 1997 Annual Report is hereby acknowledged.
Dated _______________________, 1998.
Your signature must be exactly ____________________________________
as your name appears below. (SIGNATURE)
Please complete
1998 Instruction Card
at right. Then date,
sign, detach it from this
form at performations,
fold it and return
immediately in
accompanying
interoffice envelope.
[at perforation]
(DETACH
| | |
Please complete
2000 Proxy at right.
Then date, sign,
detach it from this
form at perforations,
fold it, and return
immediately in
accompanying
postage guaranteed
envelope. | (DETACH
HERE) | IPALCO ENTERPRISES, INC. This Proxy/Instruction Card is Solicited on Behalf of the
Board of Directors The undersigned hereby appoints John R.
Hodowal and Bryan G. Tabler as Proxies, each with the power of
substitution, and authorizes them to represent and vote and/or,
in the case of shares held in IPALCO PowerInvest, the dividend reinvestment and direct
stock purchase plan, instructs the agent for
such Plan to execute a proxy empowering the above-named persons to
vote, as designated below, all the shares of IPALCO Enterprises,
Inc. common stock held of record by the undersigned and/or credited to
the undersigned's account in such Plan on March 1, 2000, at the
annual meeting of the shareholders to be held April 19, 2000, or at any
adjournment thereof, with respect to the matter(s) set
forth below. The Board of Directors recommends a vote
FOR proposal No. 1. 1. Election of Five Nominees For Director,
namely: Joseph D. Barnette, Jr., Max L. Gibson,
Ramon L. Humke, Andrew J. Paine, Jr., Sallie W.
Rowland Vote For
All Nominees
Withhold Vote from All
Nominees Vote For All
Nominees, Except Nominees written below: _________________________________________________________
_______________
(Please write names(s) of Nominee(s) from whom
vote is withheld) The Board of Directors recommends a vote
AGAINST proposalNo. 2. 2. Shareholder proposal regarding Executive
Compensation. For Against
Abstain
(FOLD HERE - DO NOT TEAR) |
Account ID: ADDRESS CHANGE STREET
APT. NO. / P.O. BOX
CITY
STATE
ZIP CODE
SIGNATURE | | This Proxy/instruction Card when properly executed
will be voted in the manner directed by the undersigned shareholder. If
not otherwise indicated,this Proxy/instruction Card will be voted FOR all
nominees for Director, AGAINST the shareholder proposal described in
the Proxy Statement, and confers discretionary authority to vote on
currently unknown matters properly presented to the meeting. This
Proxy/instruction Card shall be voted on those matters properly presented in accordance
with the best judgment of the named Proxies. Receipt of the Notice of Annual Meeting and Proxy
Statement dated March 20, 2000, and the 1999 Annual Report is hereby
acknowledged. |
| Your signature must be exactly as your name
appears below. When signing as attorney-in-fact,
executor, administrator, trustee, guardian or
corporate officer, please give full title as such. | } | Dated
, 2000. ___________________________
(SIGNATURE) ___________________________
(SIGNATURE IF HELD JOINTLY) |