Exhibit 10.17
TERMINATION BENEFITS AGREEMENT
This Agreement, dated as of January 1, 1997, by and
among IPALCO ENTERPRISES, INC., an Indiana corporation
having its principal executive offices at One Monument
Circle, Indianapolis, Indiana 46204 ("IPALCO"),
INDIANAPOLIS POWER & LIGHT COMPANY, an Indiana
corporation having its principal executive offices at One
Monument Circle, Indianapolis, Indiana 46204 ("IPL")
(both IPALCO and IPL being collectively referred to
herein as the "Company"), and RAMON L. HUMKE, an Indiana
resident whose mailing address is 7624 William Penn
Place, Indianapolis, Indiana 46256 (the "Executive").
R E C I T A L S
The following facts are true:
A. The Executive is serving the Company as a key
executive officer, and is expected to continue to make a
major contribution to the profitability, growth, and
financial strength of the Company.
B. The Company considers the continued services of
the Executive to be in the best interests of the Company
and its shareholders, and desires to assure itself of the
availability of such continued services in the future on
an objective and impartial basis and without distraction
or conflict of interest in the event of an attempt to
obtain control of the Company.
C. The Executive is willing to remain in the employ
of the Company upon the understanding that the Company
will provide him with income security upon the terms and
subject to the conditions contained herein if his
employment is terminated by the Company without cause or
if he voluntarily terminates his employment for good
reason.
D. If the Company and Executive entered into one or
more Termination Benefits Agreements prior to this
Agreement (the "Prior Termination Benefits Agreements"),
this Agreement is intended to supersede and replace the
Prior Termination Benefits Agreements.
A G R E E M E N T
In consideration of the premises and the mutual
covenants and agreements hereinafter set forth, the
Company and the Executive agree as follows:
1. Undertaking. The Company agrees to pay to the
Executive the termination benefits specified in paragraph
2 hereof if (a) control of IPALCO is acquired (as defined
in paragraph 3(a) hereof) during the term of this
Agreement (as described in paragraph 5 hereof) and (b)
within three (3) years after the acquisition of control
occurs (i) the Company terminates the employment of the
Executive for any reason other than Cause (as defined in
paragraph 3(b) hereof), death, or total and permanent
disability, or (ii) the Executive voluntarily terminates
his employment for Good Reason (as defined in paragraph
3(c) hereof).
2. Termination Benefits. If the Executive is
entitled to termination benefits pursuant to paragraph 1
hereof, the Company agrees to pay to the Executive as
termination benefits in a lump-sum payment within five
(5) calendar days of the termination of the Executive's
employment an amount to be computed by multiplying (i)
the Executive's average annual compensation (as defined
in Section 280G of the Internal Revenue Code of 1986, as
amended (the "Code")) payable by the Company which was
includable in the gross income of the Executive for the
most recent five (5) calendar years ending coincident
with or immediately before the date on which control of
the Company is acquired (or such portion of such period
during which the Executive was an employee of the
Company), by (ii) two hundred ninety-nine and ninety-nine
one hundredths percent (299.99%). For purposes of this
Agreement, employment and compensation paid by any direct
or indirect subsidiary of the Company will be deemed to
be employment and compensation paid by the Company.
3. Definitions.
(a) As used in this Agreement, the
"acquisition of control" means:
(i) 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: (A) any acquisition
directly from IPALCO (excluding an
acquisition by virtue of the exercise of a
conversion privilege), (B) any acquisition by
IPALCO, (C) any acquisition by any employee
benefit plan (or related trust) sponsored or
maintained by IPALCO, IPL or any corporation
controlled by IPALCO or (D) 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 (iii)
of this paragraph 3(a) are satisfied;
(ii) 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 (the
"Board"); 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; or
(iii) 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 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 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;
(iv) 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 (1) 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, (2) 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 (3) 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 providing for such sale or other
disposition of assets of IPALCO; or
(v) 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
(iii) or (iv) of this section 3(a) of this
Agreement.
Notwithstanding anything contained in this
Agreement to the contrary, if the Executive's
employment is terminated before an "acquisition of
control" as defined in this section 3(a) and the
Executive 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" (a "Third Party") or (ii)
otherwise occurred in connection with, or in
anticipation of, an "acquisition of control" which
actually occurs, then for all purposes of this
Agreement, the date of an "acquisition of control"
with respect to the Executive shall mean the date
immediately prior to the date of such termination
of the Executive's employment.
(b) As used in this Agreement, the term
"Cause" means fraud, dishonesty, theft of
corporate assets, or other gross misconduct by the
Executive. Notwithstanding the foregoing, the
Executive shall not be deemed to have been
terminated for cause unless and until there shall
have been delivered to him a copy of a resolution
duly adopted by the affirmative vote of not less
than a majority of the entire membership of the
Board at a meeting of the Board called and held
for the purpose (after reasonable notice to him
and an opportunity for him, together with his
counsel, to be heard before the Board), finding
that in the good faith opinion of the Board the
Executive was guilty of conduct set forth above in
the first sentence of the subsection and
specifying the particulars thereof in detail.
(c) As used in this Agreement, the term
"Good Reason" means, without the Executive's
written consent, (i) a demotion in the Executive's
status, position or responsibilities which, in his
reasonable judgment, does not represent a
promotion from his status, position or
responsibilities as in effect immediately prior to
the change in control; (ii) the assignment to the
Executive of any duties or responsibilities which,
in his reasonable judgment, are inconsistent with
such status, position or responsibilities; or any
removal of the Executive from or failure to
reappoint or reelect him to any of such positions,
except in connection with the termination of his
employment for total and permanent disability,
death or Cause or by him other than for Good
Reason; (iii) a reduction by the Company in the
Executive's base salary as in effect on the date
hereof or as the same may be increased from time
to time during the term of this Agreement or the
Company's failure to increase (within twelve (12)
months of the Executive's last increase in base
salary) the Executive's base salary after a change
in control in an amount which at least equals, on
a percentage basis, the average percentage
increase in base salary for all executive and
senior officers of the Company effected in the
preceding twelve (12) months; (iv) the relocation
of the principal executive offices of IPALCO or
IPL, whichever entity on behalf of which the
Executive performs a principal function of that
entity as part of his employment services, to a
location outside the Indianapolis, Indiana
metropolitan area or the Company's requiring him
to be based at any place other than the location
at which he performed his duties prior to a change
in control, except for required travel on the
Company's business to an extent substantially
consistent with his business travel obligations at
the time of a change in control; (v) the failure
by the Company to continue in effect any
incentive, bonus or other compensation plan in
which the Executive participates, including but
not limited to the Company's stock option and
restricted stock plans, unless an equitable
arrangement (embodied in an ongoing substitute or
alternative plan), with which he has consented,
has been made with respect to such plan in
connection with the change in control, or the
failure by the Company to continue his
participation therein, or any action by the
Company which would directly or indirectly
materially reduce his participation therein; (vi)
the failure by the Company to continue to provide
the Executive with benefits substantially similar
to those enjoyed by him or to which he was
entitled under any of the Company's pension,
profit sharing, life insurance, medical, dental,
health and accident, or disability plans in which
he was participating at the time of a change in
control, the taking of any action by the Company
which would directly or indirectly materially
reduce any of such benefits or deprive him of any
material fringe benefit enjoyed by him or to which
he was entitled at the time of the change in
control, or the failure by the Company to provide
him with the number of paid vacation and sick
leave days to which he is entitled on the basis of
years of service with the Company in accordance
with the Company's normal vacation policy in
effect on the date hereof; (vii) the failure of
the Company to obtain a satisfactory agreement
from any successor or assign of the Company to
assume and agree to perform this Agreement; (viii)
any purported termination of the Executive's
employment which is not effected pursuant to a
Notice of Termination satisfying the requirements
of paragraph 4(c) hereof (and, if applicable,
paragraph 3(b) hereof); and for purposes of this
Agreement, no such purported termination shall be
effective; or (ix) any request by the Company that
the Executive participate in an unlawful act or
take any action constituting a breach of the
Executive's professional standard of conduct.
Notwithstanding anything in this paragraph
3(c) to the contrary, the Executive's right to
terminate his employment pursuant to this
paragraph 3(c) shall not be affected by his
incapacity due to physical or mental illness.
4. Additional Provisions.
(a) Enforcement of Agreement. The Company
is aware that upon the occurrence of a change in
control the Board of Directors or a shareholder of
the Company may then cause or attempt to cause the
Company to refuse to comply with its obligations
under this Agreement, or may cause or attempt to
cause the Company to institute, or may institute,
litigation seeking to have this Agreement declared
unenforceable, or may take or attempt to take
other action to deny the Executive the benefits
intended under this Agreement. In these
circumstances, the purpose of this Agreement could
be frustrated. It is the intent of the Company
that the Executive not be required to incur the
expenses associated with the enforcement of his
rights under this Agreement by litigation or other
legal action, nor be bound to negotiate any
settlement of his rights hereunder, because the
cost and expense of such legal action or
settlement would substantially detract from the
benefits intended to be extended to the Executive
hereunder. Accordingly, if following a change in
control it should appear to the Executive that the
Company has failed to comply with any of its
obligations under this Agreement or in the event
that the Company or any other person takes any
action to declare this Agreement void or
unenforceable, or institutes any litigation or
other legal action designed to deny, diminish or
to recover from the Executive the benefits
entitled to be provided to the Executive hereunder
and that the Executive has complied with all of
his obligations under this Agreement, the Company
irrevocably authorizes the Executive from time to
time to retain counsel of his choice, at the
expense of the Company as provided in this
paragraph 4(a), to represent the Executive in
connection with the initiation or defense of any
litigation or other legal action, whether such
action is by or against the Company or any
director, officer, shareholder, or other person
affiliated with the Company, in any jurisdiction.
Notwithstanding any existing or prior
attorney-client relationship between the Company
and such counsel, the Company irrevocably consents
to the Executive entering into an attorney-client
relationship with such counsel, and in that
connection the Company and the Executive agree
that a confidential relationship shall exist
between the Executive and such counsel. The
reasonable fees and expenses of counsel selected
from time to time by the Executive as hereinabove
provided shall be paid or reimbursed to the
Executive by the Company on a regular, periodic
basis upon presentation by the Executive of a
statement or statements prepared by such counsel
in accordance with its customary practices, up to
a maximum aggregate amount of $500,000. Any legal
expenses incurred by the Company by reason of any
dispute between the parties as to enforceability
of or the terms contained in this Agreement,
notwithstanding the outcome of any such dispute,
shall be the sole responsibility of the Company,
and the Company shall not take any action to seek
reimbursement from the Executive for such
expenses.
(b) Severance Pay; No Duty to Mitigate. The
amounts payable to the Executive under this
Agreement shall not be treated as damages but as
severance compensation to which the Executive is
entitled by reason of termination of his
employment in the circumstances contemplated by
this Agreement. The Company shall not be entitled
to set off against the amounts payable to the
Executive any amounts earned by the Executive in
other employment after termination of his
employment with the Company, or any amounts which
might have been earned by the Executive in other
employment had he sought such other employment.
(c) Notice of Termination. Any purported
termination by the Company or by the Executive
shall be communicated by written Notice of
Termination to the other party hereto in
accordance with paragraph 4(k) hereof. For
purposes of this Agreement, a "Notice of
Termination" shall mean a notice which shall
indicate the specific termination provision in
this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances
claimed to provide a basis for termination of his
employment under the provision so indicated. For
purposes of this Agreement, no such purported
termination shall be effective without such Notice
of Termination.
(d) Internal Revenue Code. Anything in this
Agreement to the contrary notwithstanding, in the
event that Deloitte & Touche determines that any
payment by the Company to or for the benefit of
the Executive pursuant to the terms of this
Agreement would be nondeductible by the Company
for federal income tax purposes because of Section
280G of the Code, then the amount payable to or
for the benefit of the Executive pursuant to this
Agreement shall be reduced (but not below zero) to
the maximum amount payable without causing the
payment to be nondeductible by the Company because
of Section 280G of the Code. Such determination
by Deloitte & Touche shall be conclusive and
binding upon the parties.
(e) Assignment. This Agreement shall inure
to the benefit of and be binding upon the parties
hereto and their respective executors,
administrators, heirs, personal representatives,
successors, and assigns, but neither this
Agreement nor any right hereunder may be assigned
or transferred by either party hereto, any
beneficiary, or any other person, nor be subject
to alienation, anticipation, sale, pledge,
encumbrance, execution, levy, or other legal
process of any kind against the Executive, his
beneficiary or any other person. Notwithstanding
the foregoing, the Company will assign this
Agreement to any corporation or other business
entity succeeding to substantially all of the
business and assets of the Company by merger,
consolidation, sale of assets, or otherwise and
shall obtain the assumption of this Agreement by
such successor.
(f) Entire Agreement. This Agreement
contains the entire agreement between the parties
with respect to the subject matter hereof. All
representations, promises, and prior or
contemporaneous understandings among the parties
with respect to the subject matter hereof,
including any Prior Termination Benefits
Agreements, are merged into and expressed in this
Agreement, and any and all prior agreements
between the parties with respect to the subject
matter hereof are hereby cancelled.
(g) Amendment. This Agreement shall not be
amended, modified, or supplemented without the
written agreement of the parties at the time of
such amendment, modification, or supplement.
(h) Governing Law. This Agreement shall be
governed by and subject to the laws of the State
of Indiana.
(i) Severability. The invalidity or
unenforceability of any particular provision of
this Agreement shall not affect the other
provisions, and this Agreement shall be construed
in all respects as if such invalid or
unenforceable provision had not been contained
herein.
(j) Captions. The captions in this
Agreement are for convenience and identification
purposes only, are not an integral part of this
Agreement, and are not to be considered in the
interpretation of any part hereof.
(k) Notices. Except as otherwise
specifically provided in this Agreement, all
notices and other communications hereunder shall
be in writing and shall be deemed to have been
duly given if delivered in person or sent by
registered or certified mail, postage prepaid,
addressed as set forth above, or to such other
address as shall be furnished in writing by any
party to the others.
(l) Waivers. Except as otherwise
specifically provided in this Agreement, no waiver
by either party hereto of any breach by the other
party hereto of any condition or provision of this
Agreement to be performed by such other party
shall be deemed to be a valid waiver unless such
waiver is in writing or, even if in writing, shall
be deemed to be a waiver of a subsequent breach of
such condition or provision or a waiver of a
similar or dissimilar provision or condition at
the same or at any prior or subsequent time.
(m) Gender. The use of the masculine gender
throughout this Agreement is solely for
convenience; thus, in cases where the Executive is
female, the feminine gender shall be deemed to be
used in place of the masculine gender.
5. Term of this Agreement. This Agreement shall
remain in effect until December 31, 1999 or until the
expiration of any extension thereof. The term of this
Agreement shall be automatically extended for one (1)
year periods without further action of the parties as of
January 1, 1998 and each succeeding January 1 thereafter,
unless IPALCO shall have served written notice to the
Executive prior to January 1, 1998 or prior to January 1
of each succeeding year, as the case may be, of its
intention that the Agreement shall terminate at the end
of the three (3) year period that begins with the
January 1 following the date of such written notice.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the day and year first above written.
IPALCO ENTERPRISES, INC.
By:/s/ John R. Hodowal
John R. Hodowal, Chairman of
the Board and President
Attest:
/s/ Bryan G. Tabler
Bryan G. Tabler, Secretary
INDIANAPOLIS POWER & LIGHT COMPANY
By:/s/ John R. Hodowal
John R. Hodowal, Chairman of the
Board and Chief Executive Officer
Attest:
/s/ Bryan G. Tabler
Bryan G. Tabler, Secretary
/s/ Ramon L. Humke
Ramon L. Humke