EXHIBIT 10.1
FORM OF
TERMINATION BENEFITS AGREEMENT
AS AMENDED AND RESTATED, EFFECTIVE JANUARY 1, 1993
[See Schedule A attached hereto for a list of parties to,
and dates of, the Termination Benefits Agreements]
This Agreement, dated as of January 1, 1993, by and among IPALCO
ENTERPRISES, INC., an Indiana corporation having its principal executive
offices at 25 Monument Circle, Indianapolis, Indiana 46204 ("IPALCO"),
INDIANAPOLIS POWER & LIGHT COMPANY, an Indiana corporation having its
principal executive offices at 25 Monument Circle, Indianapolis, Indiana
46204 ("IPL") (both IPALCO and IPL being collectively referred to herein as
the "Company"), and , an Indiana resident whose mailing address is
(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, the Executive's
attainment of age sixty-five (65) 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 January 1, 1998 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, 1994 and each succeeding January 1 thereafter, unless IPALCO
shall have served written notice to the Executive prior to January 1, 1994
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 five (5)
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:
Attest:
INDIANAPOLIS POWER & LIGHT COMPANY
By:
Attest:
SCHEDULE A
TO
TERMINATION BENEFITS AGREEMENT
As Amended and Restated, Effective January 1, 1993
By and among IPALCO Enterprises, Inc., Indianapolis Power & Light
Company and the following individuals:
Michael G. Banta (effective as of July 1, 1995)
John C. Berlier, Jr.
John R. Brehm
Max Califar
Ralph E. Canter (effective as of May 1, 1995)
John R. Hodowal
Ramon L. Humke
Donald W. Knight
Robert A. McKnight, Jr.
Steven L. Meyer
Stephen J. Plunkett
Robert W. Rawlings
Joseph A. Slash
Clark L. Snyder
Thomas A. Steiner
Gerald D. Waltz
John D. Wilson
Bryan G. Tabler (effective as of October 1, 1994)
Wendy V. Yerkes (effective as of May 1, 1995)