INDIANA ENERGY, INC.
EXECUTIVE RESTRICTED STOCK PLAN
(AS AMENDED AND RESTATED EFFECTIVE OCTOBER 1, 1998)
Pursuant to rights reserved under Section 20 of the Indiana
Energy, Inc. Executive Restricted Stock Plan, originally
effective as of October 1, 1987, (the Plan), the Board of
Directors of Indiana Energy, Inc. further amends the Plan,
effective October 1, 1998, to provide, in its entirety, as
follows:
Section 1. Establishment. Indiana Energy, Inc. hereby
establishes a share incentive plan for its and certain of its
subsidiaries' principal officers, as described herein, which
shall be known as the Indiana Energy, Inc. Executive Restricted
Stock Plan.
Section 2. Definitions. Whenever used herein, the
following terms shall have the meanings set forth below:
(a) Board means the Board of Directors of Energy.
(b) Change in Control means:
(i) The acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act") (a "Person") of
beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of
twenty percent (20%) or more of either (a) the
then outstanding shares of common stock of 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 an Change in Control: (A) any
acquisition directly from Energy (excluding an
acquisition by virtue of the exercise of a
conversion privilege), (B) any acquisition by
Energy, (C) any acquisition by any employee
benefit plan (or related trust) sponsored or
maintained by Energy, Indiana Gas or any
corporation controlled by Energy or (D) any
acquisition by any corporation pursuant to a
reorganization, merger or consolidation, if,
following such reorganization, merger or
consolidation, the conditions described in clauses
(A), (B) and (C) of subsection (iii) of this
Section 1.01 are satisfied;
(ii) Individuals who, as of July 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 shareholders of Energy, 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
(iii)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 or
such corporation resulting from such
reorganization, merger or consolidation and any
Person beneficially owning, immediately prior to
such reorganization, merger or consolidation and
any Person beneficially owning, immediately prior
to such reorganization, merger or consolidation,
directly or indirectly, twenty percent (20%) or
more of the Outstanding 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;
(iv) 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 (1) more
than sixty percent (60%) of, respectively, the
then outstanding shares of common stock of such
corporation and the combined voting power of the
then outstanding voting securities of such
corporation entitled to vote generally in the
election of directors is then beneficially owned,
directly or indirectly, by all or substantially
all of the individuals and entities who were the
beneficial owners, respectively, of the
Outstanding 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,(2)
no Person (excluding Energy and any employee
benefit plan or related trust of Energy, Indiana
Gas 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
(3) 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
(v) The closing, as defined in the documents relating
to, or as evidenced by a certificate of any state
or federal governmental authority in connection
with, a transaction approval of which by the
shareholders of Energy would constitute an Change
in Control under subsection (iii) or (iv) of this
Section 1.01.
Notwithstanding anything contained in this Plan, if a
Participant's employment is terminated before a Change
in Control and the Grantee 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 Change in Control
and who effectuates an Change in Control (a "Third
Party") or (ii) otherwise occurred in connection with,
or in anticipation of, an Change in Control which
actually occurs, then for all purposes of this Plan,
the date of an Change in Control with respect to the
Grantee shall mean the date immediately prior to the
date of such termination of the Grantee's employment.
(c) Effective Date means October 1, 1987.
(d) Energy means Indiana Energy, Inc., an Indiana
corporation, and any successor thereof.
(e) Grantee means any principal officer of a
Participating Employer who shall have received a grant
of restricted Shares under the Plan.
(f) Indiana Gas means Indiana Gas Company, Inc., an
Indiana corporation, and any successor thereof.
(g) Measuring Periods mean the three (3) year periods
beginning on October 1, 1997 and each October 1
thereafter.
(h) Participating Employers means Energy, Indiana Gas,
any direct or indirect subsidiary of Energy which
adopts the Plan with the approval of Energy, and any
successors thereof.
(i) Period of Restriction means the period during which
the transfer of restricted Shares granted under the
Plan is restricted pursuant to Section 11 hereof.
(j) Plan means the Indiana Energy, Inc. Executive
Restricted Stock Plan as described herein or as from
time to time hereinafter amended.
(k) Restricted Stock Target Percentage means for any
principal officer of a Participating Employer to whom
restricted Share grants are made the percentage of his
or her aggregate annual base salary from all
Participating Employers designated by the independent
directors of the Board to be used as a basis for
determining the number of restricted Shares to be
granted to him or her during a Measuring Period.
(l) Shares means the common stock, without par value, of
Energy.
(m) 1934 Act means the Securities Exchange Act of 1934,
as amended.
Section 3. Purpose. The purpose of the Plan is to enable
the Participating Employers to retain and motivate their
principal officers who provide valuable service to them, and to
provide their principal officers 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 its
affiliated companies.
Section 4. Shareholder Approval. The Plan was 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
1988 annual shareholders' meeting.
Section 5. Eligible Persons. Any principal officer of a
Participating Employer for whom a grant of restricted Shares is
authorized by the independent directors of the Board for a
Measuring Period shall be eligible for restricted Share grants
under the Plan; provided, however, that no grant of restricted
Shares shall be made to a principal officer until such principal
officer 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 Energy Compensation Committee, consisting of at least
three(3) members of the Board who qualify as Non-Employee
Directors within the meaning of Rule 16b-3(b)(3) promulgated
under the 1934 Act and who shall be designated from time to time
by the Board. The decision of a majority of the members of the
Energy Compensation Committee shall constitute the decision of
the Energy Compensation Committee, and the Energy Compensation
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 Energy 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 Energy Compensation Committee shall have the sole,
final and conclusive authority to administer, construe and
interpret 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 Two Hundred Thousand (200,000) 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 Board,
whose determination shall be conclusive. In such event, the
Board 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. Before the
beginning of each Measuring Period, the independent directors of
the Board shall determine the principal officers to whom
restricted Share grants are to be made and the Restricted Stock
Target Percentages for such Measuring Period. As of the first
day of each Measuring Period, Energy shall issue to each Grantee
a number of restricted Shares determined by dividing:
(a) the product of:
(i) one (1), and
(ii) an amount equal to the Grantee's aggregate annual
base salary from all of the Participating
Employers (excluding any bonuses or incentive
compensation) in effect on such date times his or
her Restricted Stock Target Percentage,
by
(b) the average of the daily averages of the high and low
sales price of the Shares for the twenty (20)
consecutive trading days immediately preceding the
first day of each Measuring Period (as reported in The
Wall Street Journal), rounding up or down any
fractional Share to the nearest whole Share.
During the first twelve (12) months of a Measuring Period,
the independent directors of the Board may provide for additional
grants of restricted Shares to be made to other principal
officers of the Participating Employers. The number of
restricted Shares to be issued to any such principal officer
shall be determined by dividing:
(c) the product of:
(i) the number of full months remaining in the first
twelve (12) months of the Measuring Period at the
effective date of his or her Plan participation,
and
(ii) an amount equal to the principal officer's annual
aggregate base salary from all of the
Participating Employers (excluding bonuses or
incentive compensation) in effect on the effective
date of his or her restricted Share grant times
his or her Restricted Stock Target Percentage,
by
(d) the average of the daily averages of the high and low
sales price of the Shares for the twenty (20)
consecutive trading days immediately preceding the
effective date of his or her Plan participation (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 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 12. 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 Indiana Energy, Inc. Executive
Restricted Stock Plan and rules of administration adopted
pursuant to such Plan. A copy of the Executive 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 and subject to Section 25, 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
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 15. 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
shareholder value performance of the Shares during each Measuring
Period and on the continued employment of the Grantee during the
Period of Restrictions.
The shareholder value performance conditions operate in the
following manner. For each Measuring Period the shareholder
value performance of Energy shall be compared with the
shareholder value performance of a group of comparable companies
designated by the independent directors of the Board before the
beginning of such Measuring Period. Shareholder value
performance shall be determined for Energy and for each company
included as part of the group of comparable companies by
dividing:
(a) the difference between
(i) the sum of (A) the average for each company of the
monthly averages of the highest and lowest trading
price of the common stock of such company for the
last twelve (12) months of the Measuring Period,
and (B) any dividends, cash or stock, paid per
share with respect to such company's common stock
during the Measuring Period, and
(ii) the average of the monthly averages of the highest
and lowest trading price of the common stock of
such company for the twelve (12) months
immediately preceding the Measuring Period,
by
(b) (ii) above;
provided, however, that if during the period in which shareholder
value performance is determined, Energy or any of the comparable
companies incurs a change in its outstanding shares for any
reason enumerated in Section 9 hereof, the independent directors
of the Board shall appropriately modify the above shareholder
value performance determination to reflect such change in
capitalization. The independent directors of the Board shall
adopt a schedule at the beginning of the Measuring Period which,
depending on how Energy performs in relationship to the group of
comparable companies with respect to its Share value, shall
provide for additional grants of restricted Shares, forfeiture of
restricted Shares previously granted or no adjustment at all.
The restrictions in the Shares held by a Grantee at the end
of the Measuring Period (after the adjustment in the number of
Shares by reason of the shareholder value performance schedule is
completed) shall be lifted in whole as of the fourth (4th)
anniversary of the calendar day immediately preceding the first
calendar day of the Measuring Period; provided, however, that
except as provided in Section 16, 17 or 18 hereof: (1) the
restrictions shall be lifted on an anniversary date only if the
Grantee is still employed by a Participating Employer on the
anniversary date, and (2) if a Grantee ceases to be employed by a
Participating Employer before the restrictions lapse on any
Shares held by him or her, the Shares still subject to
restrictions shall be immediately forfeited. The shareholder
value performance comparisons schedule and the Restricted Stock
Target Percentages for the principal officers to whom grants are
to be made shall be established before the beginning of each
Measuring Period by the independent directors of the Board;
provided, however, that the independent directors of the Board
may modify after the beginning of the Measuring Period the
above-described schedule if, in their sole discretion, they
determine a modification is appropriate in light of unforeseen or
unusual circumstances.
Notwithstanding anything contained in the Plan to the
contrary, the Energy Compensation Committee may extend the
forfeiture event based on continuing employment for a Grantee to
a date beyond the date on which the forfeiture would have
otherwise lapsed if the affected Grantee consents to such
extension; provided, however, that the restrictions based on
continuing employment which would have lapsed on September 30,
1998 shall be extended until February 1, 1999 with respect to any
Grantee that consents to the extension of these forfeiture
provisions before September 30, 1998 on a form provided by
Energy.
If a Grantee (i) whose employment is terminated with the
Participating Employers for any reason and (ii) who is a director
of Energy immediately prior to the Grantee's termination of
employment continues to serve Energy as a director following the
Grantee=s termination of employment, the Board shall have the
complete discretion to deem the Grantee's employment with the
Participating Employers as continuing for purposes of this
Section, Section 16 and Section 17 for all or a portion of the
period in which the Grantee continuously serves as a member of
the Board.
Section 16. Effect of Grantee's Attainment of Age 65.
Notwithstanding anything contained in Section 15 hereof to the
contrary, if a Grantee attains age 65 after the end of a
Measuring Period but before his or her employment with the
Participating Employers is terminated and before the restrictions
lapse on the Shares granted for such Measuring Period, the
remaining restrictions on any Shares granted for such Measuring
Period held by the Grantee (after the shareholder value
performance adjustments described in Section 15 are completed for
such Measuring Period) shall immediately lapse on the date of his
or her attainment of age 65.
Notwithstanding anything contained in Section 15 hereof to
the contrary, if a Grantee attains age 65 before his or her
employment with the Participating Employers is terminated and
before the end of a Measuring Period, the remaining restrictions
on any Shares attributable to such Measuring Period held by the
Grantee (after the number of Share are adjusted pursuant to the
shareholder value performance adjustments described in Section 15
hereof are completed for such Measuring Period) shall lapse on
the last calendar day of such Measuring Period; provided,
however, that if the Grantee's employment with the Participating
Employers is terminated, voluntarily or involuntarily, on or
after his or her attainment of age 65 but before the end of the
first twelve (12) months of the Measuring Period, the Grantee
shall be entitled only to a pro-rata portion of the restricted
Shares granted to him or her for such Measuring Period (after the
shareholder value performance adjustments described in Section
15 hereof are completed for such Measuring Period) based on the
portion of the first twelve (12) month period of the Measuring
Period that he or she was employed by a Participating Employer
before his or her termination of employment, rounding up or down
any fractional Share to the nearest whole Share.
Section 17. Effect of Termination of Employment Due to
Early Retirement, Death or Disability. Notwithstanding anything
contained in Section 15 hereof to the contrary, if a Grantee's
employment with the Participating Employers is terminated before
his or her attainment of age 65 by reason of his or her early
retirement with the consent of the Chief Executive Officer of
Energy, his or her death or his or her total and permanent
disability (as such term is defined in the Indiana Gas Company,
Inc. Combined Non-Bargaining Retirement Plan or in any successor
retirement plan thereto) and occurs after the end of the
Measuring Period but before the restrictions lapse on the Shares
granted for such Measuring Period, the remaining restrictions on
any Shares attributable to such Measuring Period held by the
Grantee (after the shareholder value performance adjustments
described in Section 15 hereof are completed for such Measuring
Period) shall immediately lapse on the date of his or her
approved early retirement, death or total and permanent
disability, whichever is applicable.
Notwithstanding anything contained in Section 15 hereof to
the contrary, if a Grantee's employment with the Participating
Employers is terminated before his or her attainment of age 65 by
reason of his or her approved early retirement, death or total
and permanent disability and occurs before the end of a Measuring
Period, the Grantee shall be entitled only to a pro-rata portion
of the restricted Shares granted to him or her for such Measuring
Period (after the number of Shares are adjusted pursuant to the
shareholder value performance adjustments described in Section 15
hereof are completed for such Measuring Period) based on the
portion of the Measuring Period that he or she was employed by a
Participating Employer, rounding up or down any fractional Share
to the nearest whole Share, and the restrictions in these
remaining Shares after effecting the pro-rata reduction shall
lapse on the last calendar day of the Measuring Period.
Section 18. Change in Control. In the event that Energy
incurs a Change in Control and notwithstanding anything contained
in Section 15 to the contrary, the lifting of the restrictions on
the restricted Shares held by a Grantee who was employed by a
Participating Employer on the calendar day immediately preceding
the date of the Change in Control shall immediately occur.
Moreover, no Shares may be forfeited after a Change in Control of
Energy, regardless of the shareholder value performance of the
Shares for the Measuring Period during which the Change in
Control occurs; provided, however, that additional Shares (which
Shares shall be freely transferable and non-forfeitable) may be
granted at the end of the Measuring Period in accordance with
Section 15 hereof during which the Change in Control occurs
depending on the shareholder value performance of the Shares for
the Measuring Period.
Section 19. No Employment Contract. The Plan is not and is
not intended to be an employment contract with respect to any of
the Grantees, and the Participating Employers' rights to continue
or to terminate the employment relationship of any Grantee shall
not be affected by the Plan.
Section 20. Amendment and Termination. The Board may at
any time 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 employees to whom grants may be granted
under the Plan shall not be modified materially; and
(c) the benefits accruing to Grantees under the Plan shall
not be increased materially;
provided, further, that except for the modifications expressly
permitted by the last paragraph of Section 15 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
Grantee, including any shareholder value performance adjustments
which occur at the end of a Measuring Period, shall not become
effective until the first Measuring Period following the
Measuring Period during which such amendment, modification,
alteration or termination to the Plan is adopted without the
written consent of the Grantee.
Section 21. Indemnification. Each person who is or shall
have been a member of the Board or the Energy 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 or her in
connection with or resulting from any claim, action, suit, or
proceeding to which he or she may be a party or in which he or
she 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 or her in settlement thereof with Energy's approval, or
paid by him or her in satisfaction of a judgment in any such
action, suit or proceeding against him or her, provided he or she
shall give Energy an opportunity, at its own expense, to handle
and defend the same before he or she undertakes to handle and
defend it on his or her 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 22. 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 23. Expenses of Plan. The expenses of
administering the Plan shall be borne by Energy.
Section 24. Successors. The Plan shall be binding upon the
successors and assigns of the Participating Employers.
Section 25. Tax Withholding. Energy, as appropriate, shall
have the right to require the Grantee or other person receiving
Shares to pay to the Participating Employers the amount of any
federal, state or local taxes which the Participant Employers are
required to withhold with respect to such Shares. If permitted
by the Compensation Committee or the Board and pursuant to rules
established by the Compensation Committee, a Grantee may make a
written election to have Shares having an aggregate fair market
value, as determined by the Compensation Committee, sufficient to
satisfy the applicable withholding taxes, withheld from the
Shares otherwise to be received at the end of the Period of
Restriction.
This Amended and Restated Plan has been executed on this
25th day of September, 1998 to be effective as of
October 1, 1998.
INDIANA ENERGY, INC.
By: /s/ O. N. Frenzell III
O. N. Frenzel III, as Chairman
of the Compensation Committee