<ins>NOTICE & PROXY STATEMENT</ins>

SCHEDULE 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. - ---------------------------------------------------------------------------- (Name~~Enterprises, 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): - ---------------------------------------------------------------------------- 4) Proposed maximum aggregate value of transaction: - ---------------------------------------------------------------------------- 5) Total fee paid: - ---------------------------------------------------------------------------- [ ] 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: -------------------------------------------------------------------- 2) Form, Schedule or Registration Statement No.: -------------------------------------------------------------------- 3) Filing Party: -------------------------------------------------------------------- 4) Date Filed: --------------------------------------------------------------------

[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):


	(4) Proposed maximum aggregate value of transaction:
	(5) Total fee paid:

[_]	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:
	(2) Form, Schedule or Registration Statement No.:
	(3) Filing Party:
	(4) Date Filed:

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~~

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;

To act upon one shareholder proposal described in the attached Proxy Statement; and

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 shareholders~~March 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 1—ELECTION 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 2—SHAREHOLDER 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 Officer’s Compensation		11
Deductibility of Executive Compensation		12


COMPENSATION OF EXECUTIVE OFFICERS		13
Nature and Types of Compensation		13
Summary Compensation—Table I		13
OptionSAR Grants in Last Fiscal Year —Table II		15
Option/SAR Exercises in Last Fiscal Year —Table III		16
Performance Graph—Table IV		17
Performance Graph		18
Pension Plans		18
Pension Plan Table—Table 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 CONTENTS~~20, 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 use~~to 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 of~~against 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 therein~~it 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 ~~four~~five 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 of~~votes 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 vote~~proposal exceed those cast against the proposal. ~~Broker~~Abstentions and broker non-votes will not be ~~voted~~counted 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. This~~pay 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, ~~telegraph~~telefax 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 ~~material~~materials to, and obtaining instructions from, beneficial owners.

Other Business

Management is not aware of any business to be presented at the ~~1998~~2000 Annual Meeting other than the election of ~~four~~five directors and the ~~proposed approval of the 1998 Restricted Stock Plan.~~shareholder proposal. The minutes of the Annual Meeting of Shareholders held ~~May~~April 21, ~~1997,~~1999, will be presented for approval at the ~~1998~~2000 Annual Meeting; however, such action is not intended to constitute approval or disapproval of any matter referred to in such minutes.

Shareholder Proposals for ~~1999~~2001 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's~~next year’s 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 IPALCO’s Bylaws, other proposals which are not included in the proxy statement will be considered untimely and ~~form~~will not be presented at that meeting unless they are received by the Secretary of ~~proxy not~~IPALCO 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's~~IPALCO’s 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 ~~44,649,844~~85,727,614 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 IPALCO’s voting securities:

~~On December 31, 1997, the following beneficial owners held more than 5%~~

~~- -----------------------------------------------------------------------------------~~ Class
Title of ~~IPALCO's voting securities:~~
	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, nominees~~sole power to dispose or to direct the disposition of these shares, and ~~executive officers~~the sole power to vote 1,247,400 of ~~IPALCO and its subsidiaries, individually and as a group, beneficially owned equity securities~~these 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 12,000~~24,000 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 600~~1,200 shares representing his vested interest in a self-employment retirement plan, totaling ~~15,300~~25,200 shares, ~~11,700~~18,000 shares of which he disclaims beneficial ownership.

(3)	Mr. Sams disclaims beneficial ownership of ~~1,500~~4,500 shares of the total shares shown opposite his name.

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. 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 ~~FOUR~~FIVE DIRECTORS ~~At a meeting held January 27, 1998, the~~

The Executive Committee of ~~IPALCO's~~IPALCO’s Board of Directors nominated ~~four~~five directors to stand for election as Class ~~III~~II directors of IPALCO at its Annual ~~Meeting~~Meeting. Under IPALCO’s 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 years~~election 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 ~~four~~five nominees for the Board of Directors named below in Class ~~III.~~II. All such nominees are members of ~~IPALCO's~~IPALCO’s 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 ~~1998~~2000 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 ~~Foundation~~Foundation; 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 Indiana’s 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 serves~~served 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. Maurer~~He is ~~Chair, United Way~~a director of ~~Central Indiana. He~~IPL 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's~~shareholder’s 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's~~IPALCO’s 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. Borns~~Andre 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

*Chairperson

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 auditor’s 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 IPALCO’s 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, ~~Herr~~Gibson and Sams are the members of the Compensation Committee. ~~IPALCO's~~IPALCO’s 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
Audit—Compensation —Strategies Committees		4,000

Meeting Fees:

Board of Directors		$ 1,000
Executive Committee		0
Audit—Compensation —Strategies Committees		1,000

The Chairperson of ~~IPALCO are paid~~the Audit Committee, Compensation Committee and Committee on Strategies each receives an ~~annual~~additional 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 IPALCO’s common stock on the date of grant. The options expire after ten years.

Directors may elect to defer part or ~~one~~all 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 IPL’s 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 line~~Board 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 OF~~—SHAREHOLDER PROPOSAL

A shareholder has notified IPALCO ~~ENTERPRISES, INC. LONG-TERM PERFORMANCE AND RESTRICTED STOCK INCENTIVE PLAN (As Amended~~that he intends to present the proposal set forth below at this year’s 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 ~~Board~~shareholder proponent will be supplied upon oral or written request to IPALCO.

“RESOLVED: That the pay and remunerations of ~~Directors approved~~all 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 ~~shareholders~~C.P.I. at the ~~Annual Meeting held April 19, 1995, and was amended~~end of the year in ~~1998 to make changes in~~which 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 been~~recommends 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 work~~incentives for the ~~continued success~~officers and the Chief Executive Officer is the key responsibility of ~~these companies. The Plan is set forth in Appendix A to~~the 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 of~~in the ~~principal features of the Plan follows. (See also "Compensation of Executive Officers" and "Board~~Board Compensation Committee Report on Executive ~~Compensation" below.) Summary of the Plan Administration. The Plan is administered by~~Compensation, 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's~~total 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) determine~~are 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 number~~other 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 ~~1997~~1999 the Committee thoroughly reviewed base salary of officers, including the named executive officers, in light of ~~IPALCO's~~IPALCO ’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 practice~~following 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 ~~tying~~the 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, no~~truly exceptional level. No named executive officer received a ~~1997~~1999 base salary increase.

The Committee ~~targeted 1997~~established 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 in~~S & 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 ~~salary~~increase was for ~~each officer, including the named executive officers.~~a one-year or two-year period.

In ~~1997 nineteen~~1999 seventeen officers, including all named executive officers, received the same base salary as in ~~1996~~1998 while ~~eleven~~five officers received a base salary ~~increases. Total~~increase covering the next two-year period. The total 1999 officers base ~~salary increases for all~~salaries were 2.5% greater than the total 1998 officers ~~averaged 2.1%.~~base salaries.

The comparative compensation data for electric ~~utilities~~utility industry competitors used by the Committee ~~were~~was derived from ~~companies with comparable revenues as reported in~~an executive compensation database maintained by the outside consultant and the annual Edison Electric Institute Executive Compensation Survey. Data for general industry ~~were~~was drawn from ~~five~~three 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 between~~at 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 ~~2.5~~3.0 are applied to the award percentage based upon the ~~participant's~~participant’s position.

~~The Plan permits the reduction or elimination of an award should an individual ~~participant's~~participant’s performance be below expectations. No awards were reduced in ~~1997.~~1999.~~

For ~~1997,~~1999, the Company met the Maximum performance goals in ~~all~~three 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 IPALCO’s 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 ~~are~~were set approximately halfway between general industry and utility medians. Conditional restricted stock grants, at Target levels ranging from 10% to 35% of base salary, ~~are~~were awarded at the beginning of ~~each~~the three-year performance period. Final awards ~~are~~were based upon ~~IPALCO's~~IPALCO’s ranking within the Peer Group over the performance period, with one-third of the shares ~~to be vested~~paid 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's~~IPALCO’s 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 competitiveness~~’s 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 ~~the~~an 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's~~Officer’s Compensation~~

The Chief Executive ~~Officer's ("CEO"~~Officer’s (“CEO”) compensation continues to be directly and explicitly linked to IPALCO performance with consideration given to the ~~Committee's~~Committee’s assessment of his individual performance. The Committee thoroughly reviews the ~~CEO's~~CEO’s performance, including strategic direction, leadership and management team development, as well as overall company performance. The ~~Committee's~~Committee’s 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 ~~1997~~1999 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,~~CEO’s 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's~~CEO’s total direct compensation is variable and at risk. During ~~1997,~~1999, approximately ~~53%~~71% of the ~~CEO's~~CEO’s 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

Robert A. Borns

Rexford C. Early

Max L. Gibson

Thomas H. Sams

~~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 ~~1996~~1998 to ~~1997.~~1999. Salary increases, if applicable take effect in May. ~~1996~~The 1998 figures reflect 4 ~~months~~month’s pay at ~~1995~~the 1997 base salary rates and 8 ~~months~~month’s pay at ~~1996~~the 1998 base salary rates , while ~~1997~~1999 figures reflect 12 ~~months~~month’s pay at the ~~1996~~1998 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 ~~1996~~1997, 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 IPALCO’s 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 ~~value~~values 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 for~~For
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

(e)
Exercisable.

(u)
Unexercisable.

                     *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 Poor’s 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, ~~1992~~1994 through December 31, ~~1997,~~1999, compared with the total cumulative return to shareholders of companies comprising the ~~Standard and Poor's~~S & P 500 Index ~~(dotted~~(dash line) and the ~~Standard & Poor's~~S&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

                    IPL’s Employees’ Retirement Plan (the ~~"Base~~“Base 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 ~~"Other~~“Other 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,~~Gustin—28, and Mr. ~~Waltz - 37.~~Tabler—5.

                    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 ~~credited~~credit during ~~1997~~1999 to the accounts of Messrs. Hodowal, Humke, Brehm, ~~Tabler~~Gustin and ~~Waltz~~Tabler 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. ~~IPL~~IPALCO has an employment contract with Mr. Humke which provides for an indefinite term that is convertible into a ~~3-year~~fixed 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--see~~contract—see below), ~~they~~the 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 ~~Section~~section 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 ~~"acquisition~~“acquisition 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 ~~"good~~“good 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 ~~"resign~~“resign 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's~~officer’s status, position or responsibilities; reduction in base salary or failure to grant annual increases commensurate with increases of ~~other~~the officers; relocation of ~~the~~ headquarters of IPALCO or IPL to a location outside Greater Indianapolis; or termination of the ~~executive's~~executive’s participation in, or the existence of, an incentive compensation, insurance or pension program. The term ~~"acquisition~~“acquisition 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 ~~acquisitions~~acquisition 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~~

IPALCO Enterprises, Inc.
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 write names(s) of Nominee(s) from whom vote is withheld)
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)

					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) ($)
Name and Principal Position	Year	Salary ~~sation~~ ~~Awards~~ ~~SARs~~ ~~Payouts~~ ~~sation~~ ~~Principal Position Year ($)~~ ~~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 -

	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 ~~value~~values 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

	Individual Grants					Potential Realizable Value at Assumed Annual Rates of Stock Price Appreciation ~~Individual Grants for~~For 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

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($)* ~~Shares Acquired~~
Name	Shares Acquired On Exercise (#)	Value Realized ($)	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

	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

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


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)