EXHIBIT 10.1
FORM OF
TERMINATION BENEFITS AGREEMENT
AS AMENDED AND RESTATED, [insert effective date]
[See Schedule A attached hereto for a list of parties to,
and dates of, the Termination Benefits Agreements]
This Agreement, dated as of [insert effective date], 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 , 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, [insert year which is four years after the next January 1]
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, [insert year following year
of this Termination Benefits Agreement] and each succeeding January 1
thereafter, unless IPALCO shall have served written notice to the Executive
prior to January 1, [insert year following year of this Termination Benefits
Agreement] 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
Each of the Termination Benefits Agreements is effective as of January 1,
1993 unless indicated otherwise.
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
David J. McCarthy (effective as of January 1, 1996)
Robert A. McKnight, Jr.
Steven L. Meyer
Stephen J. Plunkett
Robert W. Rawlings
Joseph A. Slash
Clark L. Snyder
Gerald D. Waltz
John D. Wilson
Bryan G. Tabler (effective as of October 1, 1994)
Wendy V. Yerkes (effective as of May 1, 1995)