SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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
IPALCO ENTERPRISES, INC.
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(Name of Registrant As Specified In Its Charter)
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(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.
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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
TO THE SHAREHOLDERS OF
IPALCO ENTERPRISES, INC.
NOTICE IS HEREBY GIVEN that 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, at
11:00 A.M. (Eastern Standard Time), for the following purposes:
1. To elect four directors in Class III to hold office for
terms 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 fixed the close of business on Wednesday,
February 25, 1998 as the record date for determining the shareholders
entitled to notice of, and to vote at, the Annual Meeting and at any
adjournment thereof.
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 9, 1998
TABLE OF CONTENTS
ANNUAL MEETING INFORMATION. . . . . . . . . . . . . . . . . . . 1
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 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") for use at its
Annual Meeting of Shareholders to be held April 15, 1998, at 11:00 A.M. (EST)
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 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, the enclosed proxy gives discretionary authority to the persons
named therein to vote in accordance with their best judgment on such matters.
A shareholder executing and delivering the enclosed proxy has the
unconditional right to revoke it at any time before the authority granted
therein 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
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 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.
This solicitation of proxies is being made by IPALCO and the expenses
thereof will be borne by IPALCO. The principal solicitation is being made by
mail. However, additional solicitation may be made by telephone, telegraph or
personal contact by officers and other employees of IPALCO and its
subsidiaries, who will not be additionally compensated therefor. IPALCO
expects to reimburse broker-dealers and others for reasonable expenses of
forwarding proxy material to beneficial owners.
Other Business
Management is not aware of any business to be presented at the 1998
Annual Meeting other than the election of four directors, and the proposed
approval of the 1998 Restricted Stock Plan. The minutes of the Annual Meeting
of Shareholders held May 21, 1997, will be presented for approval at the 1998
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 Annual Meeting
If a shareholder intends to present a proposal at the Annual Meeting
of Shareholders to be held April 21, 1999, the proposal must be received by
the Corporate Secretary for inclusion in IPALCO's proxy statement and form of
proxy not later than November 9, 1998.
RELATIONSHIP WITH AUDITOR
Deloitte & Touche LLP, with offices at Market Tower, Suite 3000, 10
West Market Street, 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 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, IPALCO had outstanding 44,649,844 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, 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, 1997, the following beneficial owners held
more than 5% of IPALCO's voting securities:
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Name and Address of Amount and Nature of Percent
Title of Class Beneficial Owner Beneficial Ownership of Class
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Common Stock Employees' Thrift Plan 4,687,611 shares<F1> 10.15%
of Indianapolis Power
& Light Company
c/o Merrill Lynch
Trust Company of America,
Trustee
265 Davidson Avenue, 4th Floor
Somerset, NJ 08873
_________________________________
<FN>
<F1> Trustee, under a continuing agreement, has discretion to vote shares
as to which no voting instructions are received.
</FN>
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Beneficial Ownership of Common Stock By Directors, Nominees and Executive
Officers
On December 31, 1997, the following named directors, nominees and
executive officers of IPALCO and its subsidiaries, individually and as a
group, beneficially owned equity securities of IPALCO as follows:
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Name of Amount and Nature Percent
Title of Class Beneficial Owner of Beneficial Ownership<F1> of Class<F2>
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Common Stock Joseph D. Barnette, Jr. 19,000 shares <F3>
Robert A. Borns 48,968 shares <F3>
John R. Brehm 148,317 shares <F4>
Mitchell E. Daniels, Jr. 21,300 shares <F3>
Rexford C. Early 14,686 shares <F3>
Otto N. Frenzel III 34,200 shares <F3>
Max L. Gibson 14,100 shares
Earl B. Herr, Jr. 16,903 shares
John R. Hodowal 498,759 shares <F4> 1.08%
Ramon L. Humke 301,235 shares <F4>
Sam H. Jones 21,360 shares <F3>
Andre B. Lacy 40,884 shares <F5>
L. Ben Lytle 15,765 shares
Michael S. Maurer 14,119 shares
Andrew J. Paine, Jr. 340 shares <F3>
Sallie W. Rowland 22,273 shares <F3>
Thomas H. Sams 26,082 shares <F3>, <F6>
Bryan G. Tabler 60,731 shares <F3>, <F4>
Gerald D. Waltz 118,557 shares <F4>
Other Executive Officers 507,905 shares <F3>, <F4> 1.09%
All 27 directors, nominees,
and executive officers, as
a group 1,945,484 shares (3), (4) 4.21%
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<FN>
<F1> 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.
<F2> Percentages less than 1% of total common stock outstanding are not
indicated.
<F3> Includes 47,870 shares owned by or with family members sharing their
home and shares held in trust or other arrangements with family
members.
<F4> 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.
<F5> Includes 12,000 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 shares representing his vested interest in a
self-employment retirement plan, totaling 15,300 shares, 11,700 of
which he disclaims beneficial ownership.
<F6> Mr. Sams disclaims beneficial ownership of 1,500 shares of the total
shares shown opposite his name.
</FN>
PROPOSAL 1 - ELECTION OF FOUR DIRECTORS
At a meeting held January 27, 1998, the Executive Committee of
IPALCO's Board of Directors nominated four directors to stand for election
as Class III directors of IPALCO at its Annual Meeting of Shareholders to be
held April 15, 1998, for terms of three years each and until their successors
are duly elected and qualified.
Proxies representing shares held on the record date which are
returned duly executed, will be voted, unless otherwise specified, in favor
of the four nominees for the Board of Directors named below in Class III.
All such nominees are members of 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, the current directors in
Class I and Class II, as assigned by the Board of Directors, and the names,
ages (as of April 15, 1998), business experience and directorships of such
nominees and directors are as follows:
Nominees For Directors To Be Elected At The 1998 Annual Meeting:
CLASS III
Robert A. Borns, 62, 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, Indianapolis Symphony Orchestra,
Indiana University Foundation and St. Vincent Hospital Advisory
Board. He is also a director of IPL, Standard Management
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, 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, American
United Life Insurance Company, Indiana Energy, Inc., Indiana
Gas Company, Inc., and Baldwin & Lyons, Inc. He has been a
director of IPALCO since September, 1983.
Andre B. Lacy, 58, 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, FinishMaster, Inc., Herff 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, Anthem Insurance
Companies, Inc. (insurance and financial services), Indianapolis,
Indiana. He served as Chairman from March, 1994 to March, 1996, and
has held the remaining positions for more than five years. He is a
director of IPL, Bank One, Indiana, NA, and Anthem Insurance
Companies, Inc. and its subsidiaries. He has been a director of
IPALCO since April, 1992.
Current Directors Whose Terms Expire in 1999 (Class I) and in 2000
(Class II):
CLASS I
Mitchell E. Daniels, Jr., 49, 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, 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 as its Chairman. He is a director
of IPL and has been a director of IPALCO since August, 1993.
John R. Hodowal, 53, 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.
He has been a director of IPALCO since April, 1984.
Michael S. Maurer, 55, 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 is Chair, United Way of Central Indiana.
He has been a director of IPL and IPALCO since January, 1993.
Thomas H. Sams, 56, 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 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 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, the Board of Directors of IPALCO held 11 meetings and
committees of the Board held a total of 20 meetings. Each director attended
more than 85% of the aggregate of Board meetings and assigned committee
meetings except for Mr. Robert A. Borns who attended more than 70%, and
Mr. L. Ben Lytle who attended more than 71%. All directors, on average,
attended over 91% 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.
Compensation Committee Interlocks and Insider Participation
Mr. Frenzel is Chairman, and Messrs. Borns, Early, Herr and Sams are
the members of the Compensation Committee. 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 directors serving on the Board of IPALCO are paid an
annual fee of $8,500 plus $500 for each meeting attended; however, 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 of IPALCO or one of its subsidiaries receive
no director fees.
Certain Business Relationships
During 1997, companies associated with Anthem Insurance Companies,
Inc. ("Anthem") administered health care programs for IPALCO and its
subsidiaries under contracts that involve payments to Anthem aggregating
approximately $17 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 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.
IPL engaged Rowland Design, Inc. for architectural and design
services for certain improvements to the corporate offices located at One
Monument Circle. During 1997, IPL paid fees of approximately $97,000 under
such agreements. Mrs. Sallie W. Rowland is Chairman and CEO of Rowland
Design, Inc.
PROPOSAL 2 -- APPROVING ADOPTION OF IPALCO ENTERPRISES, INC.
LONG-TERM PERFORMANCE AND RESTRICTED STOCK INCENTIVE PLAN
(As Amended and Restated Effective January 1, 1998)
Introduction
At its meeting held January 27, 1998, the Board of Directors approved
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 by the shareholders at the Annual Meeting held April 19, 1995, and
was amended in 1998 to make changes in 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"). The Board of Directors believes that restricted Stock
grants have been 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 for the continued success of these
companies. The Plan is set forth in Appendix A to this Proxy Statement, to
which reference is made for a full and complete statement of its terms and
conditions. A summary of the principal features of the Plan follows. (See
also "Compensation of Executive Officers" and "Board Compensation Committee
Report on Executive Compensation" below.)
Summary of the Plan
Administration. The Plan is administered by the Compensation
Committee of IPALCO's 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 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 compensation paid
to a participant. The targeted number 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<F1> 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
<FN>
<F1> 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.
</FN>
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.
BOARD COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
Compensation Policies Relating Generally to Executive Officers
The Compensation Committee ("Committee") of the Board of Directors
("Board"), in consultation with its outside advisor, establishes the
compensation policies of IPALCO Enterprises, Inc. and its subsidiaries
("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'
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: 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 the Committee thoroughly reviewed base salary of
officers, including the named executive officers, in light of 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. The Committee agreed to continue its
practice of tying a greater percentage of total compensation to IPALCO's
performance. As such, no named executive officer received a 1997 base salary
increase.
The Committee targeted 1997 base salaries for officers, including
the named executive officers, at the 75th percentile for similar positions
within comparably performing utilities, and where such positions are also
found in general industry, at a level approximately one-half the difference
between the utility industry and general industry medians. 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 salary increases, if any,
and the salary for each officer, including the named executive officers.
In 1997 nineteen officers, including all named executive officers,
received the same base salary as in 1996 while eleven officers received base
salary increases. Total base salary increases for all officers averaged 2.1%.
The comparative compensation data for electric utilities used by the
Committee were derived from companies with comparable revenues as reported in
the annual Edison Electric Institute Executive Compensation Survey. Data
for general industry were drawn from five 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 400 MidCap general industry companies.
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 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; 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 are applied
to the award percentage based upon the participant's position.
The Plan permits the reduction or elimination of an award should an
individual participant's performance be below expectations. No awards were
reduced in 1997.
For 1997, the Company met the Maximum performance goals in all four
performance measures: Net Income, Customer Satisfaction, Productivity and
Budget Compliance.
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 1 (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 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
awarded at the beginning of each three-year performance period. Final awards
are based upon IPALCO's ranking within the Peer Group over the performance
period, with one-third of the shares to be vested during each of the fourth,
fifth, and sixth years after the beginning of the performance period. The
performance period for Program 1 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, the named executive officers received incentive
payments totaling $331,336.34 in 1997.
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 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, the
Compensation Committee assessed the competitiveness of IPALCO's total
compensation (base salary + annual incentive + long-term incentives) relative
to the electric utility industry 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 the named executive
officers, were granted stock options on March 25, 1997, in varying amounts
at the exercise price of $31.375 per share, vesting immediately.
Basis for Chief Executive Officer's Compensation
The Chief Executive Officer's ("CEO") compensation continues to be
directly and explicitly linked to IPALCO performance with consideration
given to the Committee's assessment of his individual performance. The
Committee thoroughly reviews the CEO's performance, including strategic
direction, leadership and management team development, as well as overall
company performance. The 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 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, but was below
the median of CEO compensation in comparable high-performing general industry
companies.
At Target performance, under the current compensation program,
approximately 56% of the CEO's total direct compensation is variable and at
risk. During 1997, approximately 53% of the 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" compensation. This limitation
will have insignificant impact on IPALCO with respect to executive
compensation paid in 1997. 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.
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")
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), a
table showing Option/SAR Grants in Last Fiscal Year (Table II), an Aggregated
Option/SAR Exercises In Last Fiscal Year and Fiscal Year-End Option/SAR
Values Table (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).
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
Long-Term Compensation
-------------------------------------------
Annual Compensation Awards Awards Payouts
--------------------------------------------------------------------------------
Other Securities
Annual Restricted Underlying All Other
Compen- Stock Options/ LTIP Compen-
Name and Salary sation<F2> Awards<F3> SARs<F4> Payouts<F5> sation<F6>
Principal Position Year ($)<F1> Bonus ($) ($) ($) (#) ($) ($)
- --------------------- ---- -------- --------- ---------- ---------- ----------- ----------- ----------
John R. Hodowal 1995 $476,012 $206,425 $ 43,721 $491,790 -0- $ 75,488 $ 8,310
Chairman & President; 1996 515,125 272,370 229,775 -0- -0- 111,333 6,000
Chairman & CEO of IPL 1997 532,958 468,125 70,087 -0- 250,000 127,550 5,831
Ramon L. Humke 1995 $394,591 $171,120 $ 157,606 $407,700 -0- $ 62,975 $ 8,310
Vice Chairman; 1996 432,812 228,935 200,277 -0- -0- 92,296 6,000
President & COO of IPL 1997 450,778 395,937 236,242 -0- 125,000 106,147 5,831
John R. Brehm 1995 $225,315 $ 89,513 $ 6,301 $133,050 -0- $ 24,228 $ 8,310
Vice President 1996 236,394 83,253 7,788 -0- -0- 34,996 6,698
& Treasurer; SVP, 1997 240,781 84,595 7,512 -0- 75,000 39,858 5,630
Finance & 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
- ------------------------------
<FN>
<F1> The named executive officers did not receive a base salary increase
from 1996 to 1997. Salary increases, if applicable take effect in
May. 1996 figures reflect 4 months pay at 1995 base salary rates and
8 months at 1996 base salary rates , while 1997 figures reflect 12
months pay at the 1996 base salary rates.
<F2> Represents taxes paid by IPALCO and/or IPL on accrued interest and
contributions of principal under the Funded Supplemental Retirement
Plan (See "Pension Plans"). Includes $10,227 and $17,783 earned in
above market interest on deferred compensation for Mr. Humke in 1996
and 1997, respectively.
<F3> Restricted common stock awards are valued at the closing market price
as of the date of grant. Restricted common stock holdings and the
value thereof based on the closing price of the common stock at year
end are as follows: Mr. Hodowal - 24,589 shares ($1,031,201);
Mr. Humke - 20,385 shares ($854,896); Mr. Brehm - 6,652 shares
($278,968); Mr. Tabler - 6,067 shares ($254,435); and Mr. Waltz -
6,076 shares ($254,812). Dividends on the restricted common stock
are payable to the named officers. Shares awarded in 1995 represent
a cumulative 3-year award for years 1995, 1996, and 1997. Under the
terms of the Plan, no additional shares will be awarded to the named
officers before 1998.
<F4> No options have stock appreciation rights.
<F5> Payouts shown were made pursuant to the 1990 Long-Term Incentive Plan
(the "LTIP Plan"). The LTIP Plan was replaced by the IPALCO
Enterprises, Inc. Long-Term Performance and Restricted Stock
Incentive Plan and no additional payments will be made under the LTIP
Plan.
<F6> Represents contributions made by IPL to the Trustee of the Employees'
Thrift Plan.
</FN> TABLE I
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Potential
Realizable Value at
Assumed Annual
Rates of Stock Price
Appreciation
Individual Grants for Option Term
------------------------------------------------------------- -----------------------
% of
Total
Number of Options/
Securities SARs
Underlying Granted to Exercise
Options/ Employees or Base Expira-
SARs in Fiscal Price<F2> tion
Name Granted (#)<F1> Year ($/Sh) Date 5% ($)<F3> 10%($)<F3>
- ---------------------------------------------------------------------------------------------------------------------
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 $ 6,250,459
John R. Brehm 75,000 7.0 $31.375 03/25/07 $1,479,868 $ 3,750,275
Bryan G. Tabler 45,000 4.2 $31.375 03/25/07 $ 887,921 $ 2,250,165
Gerald D. Waltz 45,000 4.2 $31.375 03/25/07 $ 887,921 $ 2,250,165
_________________________
<FN>
<F1> 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. All options are exercisable
immediately; however, incentive stock options expire one day before
the expiration date shown. None of the stock options contain stock
appreciation rights.
<F2> Equal to market price on grant date.
<F3> 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
</FN>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs
FY-End(#) FY-End ($)*
Shares Acquired Exercisable/ Exercisable/
Name On Exercise (#) Value Realized ($) Unexercisable Unexercisable
- ----------------- --------------- ------------------ ------------- -------------
John R. Hodowal -0- -0- 430,000 (e) $5,686,076
-0- (u) -0-
Ramon L. Humke -0- -0- 230,000 (e) $3,101,513
-0- (u) -0-
John R. Brehm -0- -0- 127,500 (e) $1,682,788
-0- (u) -0-
Bryan G. Tabler -0- -0- 45,000 (e) $ 475,312
-0- (u) -0-
Gerald D. Waltz 43,481 $462,401 56,839 (e) $ 671,919
-0- (u) -0-
- ----------------------
(e) Exercisable.
(u) Unexercisable.
* Based upon year-end closing market price of $41.9375 per share of common stock.
TABLE III
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 through December 31, 1997, compared
with the total cumulative return to shareholders of companies comprising the
Standard and Poor's 500 Index (dotted line) and the Standard & Poor's
Electric Companies Index (dash/dotted 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 <F1>
Remuneration Years of Service
15 20 25 30 35
- --------------------------------------------------------------------
$125,000 $ 81,250 $ 81,250 $ 81,250 $ 81,250 $ 81,250
150,000 97,500 97,500 97,500 97,500 97,500
175,000 113,750 113,750 113,750 113,750 113,750
200,000 130,000 130,000 130,000 130,000 130,000
225,000 146,250 146,250 146,250 146,250 146,250
250,000 162,500 162,500 162,500 162,500 162,500
300,000 195,000 195,000 195,000 195,000 195,000
400,000 260,000 260,000 260,000 260,000 260,000
450,000 292,500 292,500 292,500 292,500 292,500
500,000 325,000 325,000 325,000 325,000 325,000
___________________________________
<FN>
<F1> 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
- -----------------------------------------------------------------------------
</FN>
IPL's Employees' Retirement Plan (the "Base Retirement 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" but excludes "Bonus" and "Other Compensation," annual or
otherwise, as those terms are used in the Summary Compensation Table (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,
Mr. Humke - 8, Mr. Brehm - 22, Mr. Tabler - 3, and Mr. Waltz - 37.
The Funded Supplemental Retirement Plan referred to above is
applicable to 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
for early retirement. Contributions and accrued interest credited during 1997
to the accounts of Messrs. Hodowal, Humke, Brehm, Tabler and Waltz amounted
to $46,676, $208,285, $5,895, $22,176 and $7,842, 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 has an employment contract with Mr. Humke which provides for a 3-year
term expiring on December 31, 1999. Such contracts terminate upon death,
total disability or retirement. Should they be terminated without "cause" or
resign for "good reason" (as those terms are defined in the contract--see
below), they would continue to receive their Salary, as that term is used
in Table I above, for up to 3 years thereafter, 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' average
compensation (as defined in Section 280G of the Internal Revenue Code)
payable by IPALCO and its subsidiaries which was includable in the gross
income of the officer, if IPALCO undergoes an "acquisition of control" while
the agreement is in effect and if, within 3 years after an acquisition of
control, any such officer is terminated without "cause" or resigns for
"good reason," as those terms are therein defined (see below).
The term "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 for '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 status, position or
responsibilities; reduction in base salary or failure to grant annual
increases commensurate with increases of other officers; relocation of the
headquarters of IPALCO or IPL to a location outside Greater Indianapolis;
or termination of the executive's participation in, or the existence of, an
incentive compensation, insurance or pension program. The term "acquisition
of 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 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") 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, and at December 31, 1997, the sum of $945,439 was reserved in
trust for such expenses.
By order of the Board of Directors.
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).
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 HERE)