SECOND AMENDMENT TO AND COMPLETE RESTATEMENT OF
THE INDIANA ENERGY, INC.
DIRECTORS RESTRICTED STOCK PLAN
(EFFECTIVE MAY 1, 1997)
Pursuant to rights reserved under Section 17 of the Indiana
Energy, Inc. Directors' Restricted Stock Plan (the "Plan"), the
Board of Directors of Indiana Energy, Inc. hereby amends and
completely restates the Plan, effective May 1, 1997, to provide,
in its entirety, as follows:
Section 1. Establishment. Indiana Energy, Inc. and Indiana
Gas Company, Inc. established this restricted stock plan for
their respective outside directors, as described herein, which
shall be known as the Indiana Energy, Inc. Directors' Restricted
Stock Plan.
Section 2. Definitions. Whenever used herein, the
following terms shall have the meanings set forth below:
(a) "Attendance Fees" mean any remuneration paid to a
Director from the Participating Companies for attending
Board meetings and meetings of the Board committees.
(b) "Board" means the Board of Directors of Energy, Indiana
Gas or any other Participating Company, whichever is
applicable.
(c) "Change in 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 Energy
(the "Outstanding Energy Common Stock") or (b) the
combined voting power of the then outstanding
voting securities of Energy entitled to vote
generally in the election of directors (the
"Outstanding Energy Voting Securities"); provided,
however, that the following acquisitions shall not
constitute a Change in Control: (i) any
acquisition directly from Energy (excluding an
acquisition by virtue of the exercise of a
conversion privilege), (ii) any acquisition by
Energy, (iii) any acquisition by any employee
benefit plan (or related trust) sponsored or
maintained by Energy, Indiana Gas Company, Inc. or
any corporation controlled by Energy 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 are satisfied;
(2) Individuals who, as of April 25, 1997, constitute
the Board of Directors of Energy (the "Incumbent
Energy Board") cease for any reason to constitute
at least a majority of the Board of Directors of
Energy (the "Energy Board"); provided, however,
that any individual becoming a director subsequent
to the date hereof whose election, or nomination
for election by Energy's shareholders, was
approved by a vote of at least a majority of the
directors then comprising the Incumbent Energy
Board shall be considered as though such
individual were a member of the Incumbent Energy
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 Energy
Board; or
(3) Approval by the shareholders of Energy 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 Energy Common Stock and Outstanding
Energy 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 Energy Stock and Outstanding Energy
Voting Securities, as the case may be, (b) no
Person (excluding Energy, any employee benefit
plan or related trust of Energy, Indiana Gas
Company, Inc. 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 Energy Common Stock or
Outstanding Voting Securities, as the case may be)
beneficially owns, directly or indirectly, twenty
percent (20%) or more of, respectively, the then
outstanding shares of common stock of the
corporation resulting from such reorganization,
merger or consolidation or the combined voting
power of the then outstanding voting securities of
such corporation entitled to vote generally in the
election of directors and (c) at least a majority
of the members of the board of directors of the
corporation resulting from such reorganization,
merger or consolidation were members of the
Incumbent Energy Board at the time of the
execution of the initial agreement providing for
such reorganization, merger or consolidation;
(4) Approval by the shareholders of Energy of (a) a
complete liquidation or dissolution of Energy or
(b) the sale or other disposition of all or
substantially all of the assets of Energy, 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 Energy Common Stock and Outstanding
Energy 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 Energy Common Stock and Outstanding
Energy Voting Securities, as the case may be, (ii)
no Person (excluding Energy and any employee
benefit plan or related trust of Energy, Indiana
Gas Company, Inc. 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 Energy Common Stock or Outstanding
Energy 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
Energy Board at the time of the execution of the
initial agreement or action of the Energy Board
providing for such sale or other disposition of
assets of Energy; 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 Energy would constitute a Change
in Control under subsection (3) or (4) of this
Section 2(c).
(d) "Compensation Committee" means the Compensation
Committee of the Board of Energy.
(e) "Director" means each and every member of the Board of
a Participating Company.
(f) "Disability" means a physical or mental condition
which, in the opinion of a physician acceptable to
Energy, precludes a Director from continuing to serve
as a Director.
(g) "Effective Date" means January 13, 1992.
(h) "Eligible Director" means each Director of a
Participating Company who is not also an employee of
any Participating Company. No member of the Board who
is also an employee of a Participating Company shall be
eligible to participate in this Plan.
(i) "Energy" means Indiana Energy, Inc., an Indiana
corporation, and any successor thereof.
(j) "Grantee" means each Eligible Director.
(k) "Participating Company" means each entity affiliated
with Energy (within the meaning of Section 414(b) of
the Internal Revenue Code of 1986, as amended) which
(with the consent of Energy's Board) adopts the Plan,
and any successors thereto.
(l) "Period of Restriction" means the period during which
the transfer of restricted Shares granted under the
Plan is restricted pursuant to Section 11 hereof.
(m) "Plan" means the Indiana Energy, Inc. Directors
Restricted Stock Plan as described herein or as from
time to time hereinafter amended.
(n) "Shares" means the common stock, without par value, of
Energy.
(o) "Term of Office" means the period that a Director is
elected to serve on the Board of Energy; provided,
however, that (i) as to any Term of Office which began
before the Effective Date but ends after the Effective
Date, Term of Office shall mean the number of years
(rounded to the nearest whole year) remaining in such
Term of Office after the Effective Date and (ii) as to
any Director who is required to retire in accordance
with the policy of Energy (the "Retirement Policy")
before the expiration of the period that such Director
is elected to serve on the Board of Energy, "Term of
Office" shall mean the period (rounded to the nearest
twelfth of a year) during which such Director is
eligible to serve on the Board of Energy in accordance
with the Retirement Policy.
(p) "1934 Act" means the Securities Exchange Act of 1934,
as amended.
Section 3. Purpose. The purpose of the Plan is to enable
the Participating Companies to retain and motivate their outside
Directors who provide valuable service to them and to provide
them with a means of acquiring or increasing a proprietary
interest in Energy so that they shall have an increased incentive
to work toward the attainment of the long term growth and profit
objectives of Energy and the other Participating Companies.
Section 4. Shareholder Approval. The Plan shall be
conditioned upon the approval of the Plan by the holders of a
majority of the Shares present, or represented, and entitled to
vote at Energy's 1992 annual shareholders' meeting.
Section 5. Eligibility. Each Eligible Director shall
receive restricted Share grants under the Plan; provided,
however, that no grant of restricted Shares shall be made to an
Eligible Director until such Director consents in writing to
abide by the restrictions imposed on the Shares granted to him or
her.
Section 6. Administration. The Plan shall be administered
by the Compensation Committee. The decision of a majority of the
members of the Compensation Committee shall constitute the
decision of the Compensation Committee, and the Compensation
Committee may act either at a meeting, including a telephonic
meeting, at which a majority of its members are present or by a
written consent signed by all of its members. The Compensation
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 Compensation Committee shall
have the sole, final and conclusive authority to administer,
construe and interpret the Plan. Notwithstanding anything
contained in this Section to the contrary, no member of the
Compensation Committee may vote or act with respect to any
administrative decision or interpretation which directly or
indirectly affects his, but not all Grantees', interests under
the Plan.
Section 7. Number of Shares Subject to the Plan. The total
number of Shares that may be granted under the Plan may not
exceed fifty thousand (50,000) Shares, subject to adjustment as
provided in Section 9 hereof. Those Shares may consist, in whole
or in part, of authorized but unissued Shares or Shares
reacquired by Energy, including Shares purchased in the open
market, not reserved for any other purpose.
Section 8. Unused Shares. In the event any Shares subject
to grants made under the Plan are forfeited pursuant to
Section 15 hereof, such forfeited Shares shall again become
available for issuance under the Plan.
Section 9. 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 members of
the Board of Energy who are not eligible to participate in the
Plan, whose determination shall be conclusive. In such event,
the members of the Board of Energy who are not eligible to
participate in the Plan 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 10. Grant of Restricted Shares. An Eligible
Director shall be entitled to a grant of Shares for any Term of
Office ending after the Effective Date. As soon as practicable
after the beginning of each Term of Office, the Secretary of
Energy shall issue to each Grantee a number of restricted Shares
determined by dividing:
(a) an amount equal to the product of:
(i) three (3) or, if the Grantee's Term of
Office for which the grant relates is for a period
of less than three (3) years, the number of years,
with fractional years computed to the nearest
twelfth (12th), in such Term of Office; and
(ii) one-third (1/3) of the Grantee's annual
rate of remuneration (exclusive of any Attendance
Fees) from the Participating Companies in effect
on such date;
by
(b) the average of the daily averages of the high and low
sales price of the Shares for the five (5) consecutive
trading days immediately preceding the first day of
such Term of Office (as reported in The Wall Street
Journal),
rounding up or down any fractional Share to the nearest whole
Share.
Section 11. Restrictions on Transferability. Until the
lifting of the restrictions on the Shares granted under Section
10 hereof, no Shares granted under Section 10 of 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. The Period of Restriction with respect to any
Share granted under Section 10 shall expire upon the first to
occur of the following:
(a) the expiration of the Term of Office for which the
grant relates without effect to any extension of such
Term of Office because of the failure to elect a
successor Director,
(b) the Grantee's death or Disability,
(c) the involuntary termination of the Grantee's status as
a Director of the Participating Companies by the
Participating Companies,
(d) conditioned upon the approval of the majority of
the Directors other than the affected Grantee, the
Grantee's voluntary termination of his status as a
Director of Energy before the expiration of the Term of
Office for which the grant relates because of health
problems or, in the case of a Grantee whose principal
place of residence at the beginning of his Term of
Office is Indiana, because of the relocation of his
principal place of residence outside of Indiana and
such voluntary termination is not approved by the
majority of the Directors of Energy other than the
affected Grantee; or
(e) a Change in Control of Energy;
provided, however, that under no circumstances shall the Shares
be transferable and free of restriction before the expiration of
a six (6) month period beginning on the first day of the Term of
Office or, if later, their date of issuance.
Section 12. Certificate Legend. Each certificate
representing restricted Shares granted pursuant to Section 10 of
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 Indiana Energy, Inc. Directors
Restricted Stock Plan and rules of administration adopted
pursuant to such Plan. A copy of the Directors Restricted
Stock Plan and the rules of such Plan may be obtained from
the Secretary of Indiana Energy, Inc."
Once the restricted Shares are released from the restrictions set
forth in Section 11 hereof, the Grantee shall be entitled to have
the legend required by this Section 12 removed from such Share
certificate(s).
Section 13. Voting Rights. During the Period of
Restriction, Grantees holding restricted Shares granted hereunder
may exercise full voting rights with respect to those Shares.
Section 14. Dividends and Other Distributions. During the
Period of Restriction, Grantees holding restricted Shares granted
under Section 10 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 15. Lifting of Restrictions and Forfeiture of
Shares. The restricted Share grants under Section 10 of the Plan
shall be lifted automatically upon the expiration of the Period
of Restriction. If a Grantee voluntarily terminates his status
as a Director of Energy before the expiration of the Period of
Restriction of any grant and except as otherwise provided by
Section 11(d), any Shares still held by the Grantee subject to
restriction shall be immediately forfeited.
Section 16. Elective Purchases of Shares. Eligible
Directors shall also be permitted to receive the portion of their
calendar year remuneration not already granted in restricted
Shares as provided in Section 10 (exclusive of Attendance Fees)
in Shares rather than cash in accordance with the following
provisions:
(a) Election to Participate. Any Eligible Director may
elect to receive the remaining portion of his calendar
year remuneration not already granted in restricted
Shares as provided in Section 10 (exclusive of
Attendance Fees) from the Participating Companies in
Shares rather than cash by tendering an irrevocable
written election to the Secretary of Energy before the
beginning of the calendar year for which the election
relates; provided, however, that with respect to the
Eligible Director's initial term of office, the
Director shall be provided a reasonable time period by
the Compensation Committee after his or her election to
the Board to make the elective purchase of shares under
this Section 16 for the remainder of the calendar year
during which his or her Term of Office commences. To
the extent the Term of Office of an Eligible Director
who elects to receive the remaining portion of his
annual remuneration in Shares expires in January of the
calendar year for which the election relates and such
Eligible Director is not re-elected to a new Term of
Office as a Director of a Participating Company, such
Director's election shall be null and void. An
Eligible Director who does not elect for his annual
remuneration to be paid in Shares shall receive his
remuneration in cash at such times that such
remuneration is otherwise due.
(b) Issuance of Shares. If an Eligible Director elects
under this Section to receive the portion of his annual
remuneration available to him in cash in Shares, such
Shares shall be issued to him by the Secretary of
Energy as soon as practicable after the election as an
Eligible Director. The number of Shares to be issued
under this Section to an electing Eligible Director
shall be determined by dividing:
(i) the Eligible Director's annual
remuneration (exclusive of the portion of his
annual remuneration payable in restricted Shares
under Section 10 and exclusive of Attendance Fees)
from the Participating Companies in effect
immediately following the annual shareholders'
meeting of Energy for such calendar year (or, in
the case of the Eligible Director's initial term
of office, the remuneration that (but for the
election under this Section) would have been
payable to the Director in the calendar year
during which his initial term of office
commences), by
(ii) the average of the daily averages of the
high and low sales price of the Shares for the
five (5) consecutive trading days immediately
preceding Energy's shareholder meeting for such
calendar year (or, in the case of the Eligible
Director's initial term of office, the five (5)
consecutive trading days immediately preceding the
commencement of his term of office), as reported
in The Wall Street Journal, rounding up or down
any fractional Share to the nearest whole Share.
Any fractional Shares shall be paid to the Director in
cash.
(c) No Restrictions. Any Shares issued under this Section
16 shall be free of any restrictions under this Plan
except for restrictions applicable under the 1934 Act.
Section 17. Amendment and Termination. The Board of Energy
may amend, modify, alter, or terminate the Plan; provided,
however, that without the approval of the Energy shareholders:
(a) the number of Shares which may be reserved for issuance
under the Plan may not be increased except as provided
in Section 9 hereof;
(b) the class of individuals to whom grants may be granted
under the Plan shall not be modified materially;
(c) the manner in which Shares are granted shall not be
modified materially; and
(d) the benefits accruing to Grantees under the Plan shall
not be increased materially.
Section 18. Indemnification. Each person who is or shall
have been a member of the Board or the Compensation Committee
shall be indemnified and held harmless by Energy 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 Energy's approval,
or paid by him in satisfaction of a judgment in any such action,
suit or proceeding against him, provided he shall give Energy 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 Energy Articles of Incorporation or Code of
By-Laws, as a matter of law, or otherwise, or any power that
Energy may have to indemnify them or hold them harmless.
Section 19. 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 20. Expenses of Plan. The expenses of
administering the Plan shall be borne by Energy.
Section 21. Successors. The Plan shall be binding upon the
successors and assigns of the Participating Employers.
This Second Amendment to and Complete Restatement of the
Indiana Energy, Inc. Directors' Restricted Stock Plan was
approved by the Board of Directors of Indiana Energy, Inc. on
April 25, 1997.
INDIANA ENERGY, INC.
By
Its: Chairman of the Board