May 14, 1997
Securities and Exchange Commission
Operations Center
6432 General Green Way
Alexandria, VA 22312-2413
Gentlemen:
We are transmitting herewith Indiana Gas Company, Inc.'s
Quarterly Report on Form 10-Q for the quarter ended
March 31, 1997, pursuant to the requirements of Section 13
of the Securities Exchange Act of 1934.
Very truly yours,
/s/Douglas S. Schmidt
Douglas S. Schmidt
DSS:rs
Enclosures
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-6494
INDIANA GAS COMPANY, INC.
(Exact name of registrant as specified in its charter)
INDIANA 35-0793669
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1630 North Meridian Street, Indianapolis, Indiana 46202
(Address of principal executive offices) (Zip Code)
317-926-3351
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has
filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that
registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90
days.
Yes X No
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest
practicable date.
Common Stock - Without par value 9,080,770 April 30, 1997
Class Number of shares Date
TABLE OF CONTENTS
Page
Numbers
Part I - Financial Information
Consolidated Balance Sheets
at March 31, 1997, and 1996
and September 30, 1996
Consolidated Statements of Income
Three Months Ended March 31, 1997 and 1996,
Six Months Ended March 31, 1997 and 1996,
and Twelve Months Ended March 31, 1997 and 1996
Consolidated Statements of Cash Flows
Six Months Ended March 31, 1997 and 1996,
and Twelve Months Ended March 31, 1997 and 1996
Notes to Consolidated Financial Statements
Management's Discussion and Analysis of Results of
Operations and Financial Condition
Part II - Other Information
Item 1 - Legal Proceedings
Item 4 - Submission of Matters to a Vote of Security
Holders
Item 6 - Exhibits and Reports on Form 8-K
<TABLE>
INDIANA GAS COMPANY, INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
ASSETS
(Thousands - Unaudited)
March 31 September 30
1997 1996 1996
<S> <C> <C> <C>
UTILITY PLANT:
Original cost $955,223 $896,411 $931,092
Less - accumulated depreciation
and amortization 350,362 334,684 344,268
604,861 561,727 586,824
NONUTILITY PLANT - NET 105 184 33
CURRENT ASSETS:
Cash and cash equivalents 18 36,694 20
Accounts receivable, less reserves of
$3,220, $2,990 and $1,853 respectively 45,374 60,407 15,468
Accrued unbilled revenues 25,104 33,300 8,158
Materials and supplies - at average cost 3,820 4,178 4,611
Liquefied petroleum gas - at average cost 860 527 507
Gas in underground storage - at last-in,
first-out cost 467 10,997 39,083
Recoverable gas costs 15,097 - 2,710
Prepayments and other 783 996 43
91,523 147,099 70,600
DEFERRED CHARGES:
Unamortized debt discount and expense 7,170 6,783 7,477
Other 7,650 9,754 7,973
14,820 16,537 15,450
$711,309 $725,547 $672,907
</TABLE>
<TABLE>
INDIANA GAS COMPANY, INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
SHAREHOLDER'S EQUITY AND LIABILITIES
(Thousands - Unaudited)
March 31 September 30
1997 1996 1996
<S> <C> <C> <C>
CAPITALIZATION:
Common stock and paid-in capital $142,995 $142,995 $142,995
Retained earnings 165,097 155,417 138,539
Total common shareholder's equity 308,092 298,412 281,534
Long-term debt 139,733 193,693 174,733
447,825 492,105 456,267
CURRENT LIABILITIES:
Maturities and sinking fund
requirements of long-term debt 35,000 - -
Notes payable 38,500 - 24,236
Accounts payable 47,558 77,708 49,402
Refundable gas costs - 3,563 -
Customer deposits and advance payments 5,680 3,638 14,256
Accrued taxes 18,785 24,119 4,206
Accrued interest 2,584 2,875 2,505
Other current liabilities 15,636 25,930 24,827
163,743 137,833 119,432
DEFERRED CREDITS:
Deferred income taxes 67,977 65,787 66,862
Unamortized investment tax credit 10,709 11,639 11,173
Customer advances for construction 1,469 1,358 1,434
Regulatory income tax liability 2,835 3,797 2,835
Other 16,751 13,028 14,904
99,741 95,609 97,208
COMMITMENTS AND CONTINGENCIES
(see Notes 7 & 9) - - -
$711,309 $725,547 $672,907
</TABLE>
<TABLE>
INDIANA GAS COMPANY, INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
(Thousands - Unaudited)
Three Months Six Months
Ended March 31 Ended March 31
1997 1996 1997 1996
<S> <C> <C> <C> <C>
OPERATING REVENUES $ 215,695 $ 222,553 $ 388,176 $ 376,862
COST OF GAS 140,345 144,017 250,181 233,214
MARGIN 75,350 78,536 137,995 143,648
OPERATING EXPENSES:
Other operation and maintenance 20,378 23,018 39,615 41,708
Depreciation and amortization 8,787 8,230 17,411 16,348
Income taxes 13,994 14,593 23,862 25,998
Taxes other than income taxes 5,038 5,415 9,694 9,660
48,197 51,256 90,582 93,714
OPERATING INCOME 27,153 27,280 47,413 49,934
OTHER INCOME - NET 331 614 665 843
INCOME BEFORE INTEREST
AND OTHER CHARGES 27,484 27,894 48,078 50,777
INTEREST 4,449 4,088 8,734 8,080
OTHER (104) (24) (214) (61)
4,345 4,064 8,520 8,019
NET INCOME $ 23,139 $ 23,830 $ 39,558 $ 42,758
</TABLE>
<TABLE>
INDIANA GAS COMPANY, INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
(Thousands - Unaudited)
Twelve Months
Ended March 31
1997 1996
<S> <C> <C>
OPERATING REVENUES $ 541,908 $ 517,142
COST OF GAS 337,098 306,649
MARGIN 204,810 210,493
OPERATING EXPENSES
Other operation and maintenance 82,043 79,866
Depreciation and amortization 34,295 32,220
Income taxes 21,038 26,010
Taxes other than income taxes 16,402 15,535
153,778 153,631
OPERATING INCOME 51,032 56,862
OTHER INCOME - NET 710 1,777
INCOME BEFORE INTEREST AND OTHER 51,742 58,639
INTEREST 16,561 15,787
OTHER (249) (75)
16,312 15,712
NET INCOME $ 35,430 $ 42,927
</TABLE>
<TABLE>
INDIANA GAS COMPANY, INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Thousands - Unaudited)
Six Months Twelve Months
Ended March 31 Ended March 31
1997 1996 1997 1996
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 39,558 $ 42,758 $ 35,430 $ 42,927
Adjustments to reconcile net income to cash
provided from operating activities -
Depreciation and amortization 17,505 16,442 34,482 32,407
Deferred income taxes 1,115 691 1,228 3,081
Investment tax credit (465) (465) (930) (930)
18,155 16,668 34,780 34,558
Changes in assets and liabilities -
Receivables - net (46,852) (73,899) 23,229 (36,995)
Inventories 39,054 48,465 10,555 22,864
Accounts payable, customer deposits,
advance payments and other
current liabilities (19,611) 5,133 (38,402) 39,166
Accrued taxes and interest 14,658 16,263 (5,625) 475
Recoverable/refundable gas costs (12,387) (1,320) (18,660) (21,921)
Prepayments (740) (852) 213 75
Other - net 3,575 1,793 7,461 4,925
Total adjustments (4,148) 12,251 13,551 43,147
Net cash flow from operations 35,410 55,009 48,981 86,074
CASH FLOWS FROM (REQUIRED FOR)
FINANCING ACTIVITIES:
Sale of long-term debt - 20,000 - 40,000
Reduction in long-term debt - - (18,960) (46)
Net change in short-term borrowings 14,264 (2,225) 38,500 (12,100)
Dividends (13,000) (12,500) (25,750) (24,750)
Net cash flow from (required for) financing activities 1,264 5,275 (6,210) 3,104
CASH FLOWS REQUIRED FOR INVESTING ACTIVITIES:
Capital expenditures (36,676) (23,610) (79,447) (52,504)
Net cash flow required for investing activities (36,676) (23,610) (79,447) (52,504)
NET INCREASE (DECREASE) IN CASH (2) 36,674 (36,676) 36,674
CASH AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD 20 20 36,694 20
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 18 $ 36,694 $ 18 $ 36,694
</TABLE>
Indiana Gas Company, Inc. and Subsidiary Companies
Notes to Consolidated Financial Statements
1. Financial Statements.
Indiana Gas Company, Inc. and its subsidiaries (Indiana
Gas or the company) provide natural gas and
transportation services to a diversified base of
customers in 281 communities in 48 of Indiana's 92
counties.
The interim condensed consolidated financial statements
included in this report have been prepared by Indiana
Gas, without audit, as provided in the rules and
regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures normally
included in financial statements prepared in accordance
with generally accepted accounting principles have been
omitted as provided in such rules and regulations.
Indiana Gas believes that the information in this report
reflects all adjustments necessary to fairly state the
results of the interim periods reported, that all such
adjustments are of a normally recurring nature, and the
disclosures are adequate to make the information
presented not misleading. These interim financial
statements should be read in conjunction with the
financial statements and the notes thereto included in
Indiana Gas' latest annual report on Form 10-K.
Because of the seasonal nature of Indiana Gas' gas
distribution operations, the results shown on a
quarterly basis are not necessarily indicative of annual
results.
2. Cash Flow Information.
For the purposes of the Consolidated Statements of Cash
Flows, Indiana Gas considers cash investments with an
original maturity of three months or less to be cash
equivalents. Cash paid during the periods reported for
interest and income taxes were as follows:
<TABLE>
Six Months Ended Twelve Months Ended
March 31 March 31
<S> <C> <C> <C> <C>
Thousands 1997 1996 1997 1996
Interest (net of
amount capitalized) $ 7,994 $ 7,627 $15,802 $14,403
Income taxes $10,981 $10,963 $29,169 $24,749
</TABLE>
3. Revenues.
To more closely match revenues and expenses, revenues
are recorded for all gas delivered to customers but not
billed at the end of the accounting period.
4. Gas in Underground Storage.
Based on the cost of purchased gas during March 1997,
the cost of replacing the current portion of gas in
underground storage exceeded last-in, first-out cost at
March 31, 1997, by approximately $12,292,000.
5. Refundable or Recoverable Gas Costs.
The cost of gas purchased and refunds from suppliers,
which differ from amounts recovered through rates, are
deferred and are being recovered or refunded in
accordance with procedures approved by the Indiana
Utility Regulatory Commission (IURC).
6. Allowance For Funds Used During Construction.
An allowance for funds used during construction (AFUDC),
which represents the cost of borrowed and equity funds
used for construction purposes, is charged to
construction work in progress during the period of
construction and included in "Other Income-Net" and
"Other" on the Consolidated Statements of Income. An
annual AFUDC rate of 7.5 percent was used for all
periods reported.
The table below reflects the total AFUDC capitalized and
the portion of which was computed on borrowed and equity
funds for all periods reported.
<TABLE>
Three Months Ended Six Months Ended Twelve Months Ended
March 31 March 31 March 31
<S> <C> <C> <C> <C>
Thousands 1997 1996 1997 1996 1997 1996
AFUDC-Borrowed Funds $151 $ 71 $308 $155 $436 $262
AFUDC-Equity Funds 124 58 252 127 357 215
Total AFUDC Capitalized $275 $129 $560 $282 $793 $477
</TABLE>
7. Environmental Costs.
Indiana Gas is currently conducting environmental
investigations and work at certain sites that were the
locations of former manufactured gas plants. It is
seeking to recover the costs of the investigations and
work from insurance carriers, other potentially
responsible parties (PRPs) and customers.
On May 3, 1995, Indiana Gas received an order from the
IURC in which the Commission concluded that the costs
incurred by Indiana Gas to investigate and, if
necessary, clean-up former manufactured gas plant sites
are not utility operating expenses necessary for the
provision of service and, therefore, are not recoverable
as operating expenses from utility customers. On
January 21, 1997, this ruling was affirmed by the
Indiana Court of Appeals. On February 19, 1997, the
company petitioned for transfer to the Indiana Supreme
Court.
On April 14, 1995, Indiana Gas filed suit in the United
States District Court for the Northern District of
Indiana, Fort Wayne Division, against a number of
insurance carriers for payment of claims for
investigation and clean-up costs already incurred, as
well as for a determination that the carriers are
obligated to pay these costs in the future. On October
2, 1996, the Court granted several motions filed by
defendant insurance carriers for summary judgment on a
number of issues relating to the insurers' obligations
to Indiana Gas under insurance policies issued by these
carriers. For example, the Court held that because the
placement of residuals on the ground at the sites was
done intentionally, there was no "fortuitous accident"
and therefore no "occurrence" subject to coverage under
the relevant policies. Based on discussions with
counsel, the management of Indiana Gas believes that a
number of the Court's rulings are contrary to Indiana
law and has appealed all adverse rulings to the United
States Court of Appeals for the Seventh Circuit.
However, if these rulings are not reversed on appeal,
they would effectively eliminate coverage under most of
the policies at issue. There can be no assurance as to
whether Indiana Gas will prevail on this appeal. As of
March 31, 1997, Indiana Gas has obtained settlements
from some insurance carriers in an aggregate amount in
excess of $14.7 million.
The Court's rulings have had no material impact on
earnings since Indiana Gas has previously recorded all
costs (in aggregate $14.8 million) which it presently
expects to incur in connection with remediation
activities. It is possible that future events may
require additional remediation activities which are not
presently foreseen.
8. Postretirement Benefits Other Than Pensions
On May 3, 1995, the IURC issued an order authorizing
Indiana Gas to recover the costs related to
postretirement benefits other than pensions under the
accrual method of accounting consistent with Statement
of Financial Accounting Standards No. 106, Employers'
Accounting for Postretirement Benefits Other Than
Pensions (SFAS 106). The Office of Utility Consumer
Counselor appealed the order. On January 21, 1997, the
Indiana Court of Appeals affirmed the IURC decision
authorizing recovery.
9. Affiliate Transactions.
Indiana Energy Services, Inc. (IES), an indirect wholly
owned subsidiary of Indiana Energy (Indiana Gas'
parent), provided natural gas and related services to
Indiana Gas from January 1, 1996, to March 31, 1996.
Indiana Gas' purchases from IES for the three months
ended March 31, 1996, totalled $102.7 million. ProLiance
Energy, LLC (ProLiance), a nonregulated marketing
affiliate of Indiana Energy, assumed the business of IES
effective April 1, 1996, and is the supplier of gas and
related services to both Indiana Gas and Citizens Gas
and Coke Utility (Citizens Gas). Indiana Gas' purchases
from ProLiance for the three-, six- and twelve-month
periods ended March 31, 1997, totalled $97.7 million,
$200.8 million and $318.8 million, respectively.
The sale of gas and provision of other services to
Indiana Gas by Indiana Energy's marketing affiliates are
subject to regulatory review through the quarterly gas
cost adjustment proceeding currently pending before the
IURC.
Two proceedings which may affect the formation,
operation or earnings of ProLiance are currently pending
before the IURC. The first proceeding was initiated by
a small group of Indiana Gas' and Citizens Gas' large-
volume customers who contend that the gas service
contracts between ProLiance and Indiana Gas and Citizens
Gas should be disapproved by the IURC or, alternatively,
that the IURC should regulate the operations of
ProLiance. On September 27, 1996, the IURC issued a
partial decision in that proceeding and found that
ProLiance is not subject to regulation as a public
utility. The IURC did confirm that it will continue to
monitor gas costs incurred by Indiana Gas. Hearings on
the remaining issues were concluded on October 9, 1996.
A decision from the IURC is expected during the first
half of calendar 1997.
The second proceeding involves the quarterly gas cost
adjustment applications of Indiana Gas and Citizens Gas
wherein these utilities are proposing to recover the
costs they have and will incur under their gas supply
and related agreements with ProLiance. This proceeding
will consider whether the recovery of those costs is
consistent with Indiana law governing gas cost recovery.
The hearing on the second proceeding has not yet been
scheduled.
While the outcome of these proceedings cannot be
predicted, management does not expect this matter to
have a material impact on Indiana Gas' financial
position or results of operations.
Indiana Gas also participates in a centralized cash
management program with its parent, affiliated companies
and banks which permits funding of checks as they are
presented.
Amounts due affiliated companies, as well as checks
written but not cashed are reflected in Accounts Payable
on the Consolidated Balance Sheet. Amounts owed to
affiliates totaled $37.7 million and $57.3 million at
March 31, 1997 and 1996, respectively.
Indiana Gas Company, Inc. and Subsidiary Companies
Management's Discussion and Analysis of Results of Operations
and Financial Condition
Results of Operations
Earnings
Net income for the three-, six- and twelve-month
periods ended March 31, 1997, when compared to the same
periods one year ago, are listed below. The decreases in
net income for the three- and six-month periods are
primarily attributable to significantly warmer weather
than last year, offset somewhat by lower operation and
maintenance expenses, as well as the addition of new
residential and commercial customers. The twelve-month
earnings reflect weather 8 percent warmer than last year,
offset somewhat by the addition of new residential and
commercial customers. Higher operation and maintenance
expenses, resulting in part from the acceleration of
several distribution system maintenance projects into the
last half of fiscal year 1996, also contributed to the
decline in net income for the twelve-month period. The
acceleration of these projects was made possible by higher
earnings attributable to colder than normal weather during
the 1996 heating season.
<TABLE>
Periods Ended March 31 Net Income
(Millions) 1997 1996
<S> <C> <C>
Three Months $23.1 $23.8
Six Months $39.6 $42.8
Twelve Months $35.4 $42.9
</TABLE>
The following discussion highlights the factors
contributing to these results.
Margin (Revenues Less Cost of Gas)
Margin for the quarter ended March 31, 1997, decreased
$3.2 million compared to the same period last year. The
decrease reflects weather 12 percent warmer than the same
period last year and 7 percent warmer than normal, offset
somewhat by the addition of new residential and commercial
customers.
Margin for the six-month period ended March 31, 1997,
decreased $5.7 million compared to the same period last
year. The decrease is primarily attributable to weather
10 percent warmer than the same period last year and 4
percent warmer than normal, offset somewhat by the
addition of new residential and commercial customers.
Margin for the twelve-month period ended March 31,
1997, decreased $5.7 million compared to the same period
last year. The decrease is primarily attributable to
weather that was 8 percent warmer than the same period
last year and 2 percent warmer than normal, offset
somewhat by the addition of new residential and commercial
customers.
Total system throughput (combined sales and
transportation) decreased 6 percent (3.1 MMDth) for the
second quarter of fiscal 1997, 5 percent (4.9 MMDth) for
the six-month period and 3 percent (3.6 MMDth) for the
twelve-month period ended March 31, 1997, compared to the
same periods one year ago. Indiana Gas' rates for
transportation generally provide the same margins as are
earned on the sale of gas under its sales tariffs.
Approximately one-half of total system throughput
represents gas used for space heating and is affected by
weather.
Total average cost per unit of gas purchased increased
to $3.89 for the three-month period ended March 31, 1997,
compared to $3.56 for the same period one year ago. For
the six-month period, cost of gas per unit increased to
$3.97 in the current period compared to $3.14 for the same
period last year. For the twelve-month period, cost of
gas per unit increased to $3.65 in the current period
compared to $2.83 for the same period last year.
Adjustments to Indiana Gas' rates and charges related
to the cost of gas are made through gas cost adjustment
(GCA) procedures established by Indiana law and
administered by the Indiana Utility Regulatory Commission
(IURC). The GCA passes through increases and decreases in
the cost of gas to Indiana Gas' customers dollar for
dollar.
Operating Expenses
Operation and maintenance expenses decreased $2.6
million and $2.1 million for the three- and six-month
periods ended March 31, 1997, respectively, when compared
to the same periods one year ago. The decreases are
primarily due to lower labor-related costs, including
performance-based compensation.
Operation and maintenance expenses for the twelve-
month period increased $2.2 million when compared to the
same period last year due in part from the acceleration of
several distribution system maintenance projects into the
last half of fiscal 1996. The acceleration of these
projects was made possible by higher earnings attributable
to colder than normal weather during the 1996 heating
season.
Depreciation and amortization expense increased for
the three-, six- and twelve-month periods ended March 31,
1997, when compared to the same periods one year ago as
the result of additions to utility plant to serve new
customers and to maintain dependable service to existing
customers.
Federal and state income taxes decreased for the three-,
six- and twelve-month periods ended March 31, 1997, when
compared to the same periods one year ago due to lower
taxable income.
Taxes other than income taxes remained approximately
the same for the three- and six-month periods ended March
31, 1997, when compared to the same periods one year ago.
Taxes other than income taxes increased for the twelve-
month period due to higher property tax expense and higher
gross receipts tax expense resulting from increased
revenue.
Interest Expense
Interest expense increased for the three-, six- and
twelve-month periods ended March 31, 1997, when compared
to the same periods one year ago due to an increase in
average debt outstanding slightly offset by a decrease in
interest rates.
Other Operating Matters
ProLiance Energy, LLC
ProLiance Energy, LLC (ProLiance), a nonregulated
marketing affiliate of Indiana Energy (Indiana Gas'
parent), began providing natural gas and related services
to Indiana Gas and Citizens Gas and Coke Utility (Citizens
Gas) effective April 1, 1996. ProLiance also provides
products and services to other gas utilities and customers
in Indiana and surrounding states. ProLiance assumed the
business of Indiana Energy Services, Inc., an indirect
wholly owned subsidiary of Indiana Energy, which had
provided similar services to other customers and from
January 1, 1996, to March 31, 1996, to Indiana Gas.
The sale of gas and provision of other services to
Indiana Gas by Indiana Energy's marketing affiliates are
subject to regulatory review through the quarterly gas
cost adjustment proceeding currently pending before the
IURC.
Two proceedings which may affect the formation,
operation or earnings of ProLiance are currently pending
before the IURC. The first proceeding was initiated by a
small group of Indiana Gas' and Citizens Gas' large-volume
customers who contend that the gas service contracts
between ProLiance and Indiana Gas and Citizens Gas should
be disapproved by the IURC or, alternatively, that the
IURC should regulate the operations of ProLiance. On
September 27, 1996, the IURC issued a partial decision in
that proceeding and found that ProLiance is not subject to
regulation as a public utility. The IURC did confirm that
it will continue to monitor gas costs incurred by Indiana
Gas. Hearings on the remaining issues were concluded on
October 9, 1996. A decision from the IURC is expected
during the first half of calendar 1997.
The second proceeding involves the quarterly gas cost
adjustment applications of Indiana Gas and Citizens Gas
wherein these utilities are proposing to recover the costs
they have and will incur under their gas supply and
related agreements with ProLiance. This proceeding will
consider whether the recovery of those costs is consistent
with Indiana law governing gas cost recovery. The hearing
on the second proceeding has not yet been scheduled.
While the outcome of these proceedings cannot be
predicted, management does not expect this matter to have
a material impact on Indiana Gas' financial position or
results of operations.
CIGMA, LLC
On April 1, 1997, IGC Energy, Inc., an indirect wholly
owned subsidiary of Indiana Energy, and Citizens By-
Products Coal Company, a wholly owned subsidiary of
Citizens Gas and Coke Utility (Citizens Gas), formed
CIGMA, a jointly and equally owned limited liability
company. CIGMA will provide materials acquisition and
related services for Indiana Gas and Citizens Gas, as well
as similar services for third parties.
Environmental Matters
Indiana Gas is currently conducting environmental
investigations and work at certain sites that were the
locations of former manufactured gas plants. It is
seeking to recover the costs of the investigations and
work from insurance carriers, other potentially
responsible parties (PRPs) and customers.
On May 3, 1995, Indiana Gas received an order from the
IURC in which the Commission concluded that the costs
incurred by Indiana Gas to investigate and, if necessary,
clean-up former manufactured gas plant sites are not
utility operating expenses necessary for the provision of
service and, therefore, are not recoverable as operating
expenses from utility customers. On January 21, 1997,
this ruling was affirmed by the Indiana Court of Appeals.
On February 19, 1997, the company petitioned for transfer
to the Indiana Supreme Court.
On April 14, 1995, Indiana Gas filed suit in the
United States District Court for the Northern District of
Indiana, Fort Wayne Division, against a number of
insurance carriers for payment of claims for investigation
and clean-up costs already incurred, as well as for a
determination that the carriers are obligated to pay these
costs in the future. On October 2, 1996, the Court
granted several motions filed by defendant insurance
carriers for summary judgment on a number of issues
relating to the insurers' obligations to Indiana Gas under
insurance policies issued by these carriers. For example,
the Court held that because the placement of residuals on
the ground at the sites was done intentionally, there was
no "fortuitous accident" and therefore no "occurrence"
subject to coverage under the relevant policies. Based on
discussions with counsel, the management of Indiana Gas
believes that a number of the Court's rulings are contrary
to Indiana law and has appealed all adverse rulings to the
United States Court of Appeals for the Seventh Circuit.
However, if these rulings are not reversed on appeal, they
would effectively eliminate coverage under most of the
policies at issue. There can be no assurance as to
whether Indiana Gas will prevail on this appeal. As of
March 31, 1997, Indiana Gas has obtained settlements from
some insurance carriers in an aggregate amount in excess
of $14.7 million.
The Court's rulings have had no material impact on
earnings since Indiana Gas has previously recorded all
costs (in aggregate $14.8 million) which it presently
expects to incur in connection with remediation
activities. It is possible that future events may require
additional remediation activities which are not presently
foreseen.
Postretirement Benefits Other Than Pensions
On May 3, 1995, the IURC issued an order authorizing
Indiana Gas to recover the costs related to postretirement
benefits other than pensions under the accrual method of
accounting consistent with Statement of Financial
Accounting Standards No. 106, Employers' Accounting for
Postretirement Benefits Other Than Pensions (SFAS 106).
The Office of Utility Consumer Counselor appealed the
order. On January 21, 1997, the Indiana Court of Appeals
affirmed the IURC decision authorizing recovery.
Liquidity and Capital Resources
New construction, normal system maintenance and
improvements, and information technology investments to
provide service to a growing customer base will continue to
require substantial capital expenditures. Capital
expenditures for fiscal 1997 are estimated at $68.0 million
of which $36.7 million have been expended during the six-
month period ended March 31, 1997. For the twelve months
ended March 31, 1997, Indiana Gas' capital expenditures
totaled $79.4 million. Of this amount, 56 percent was
provided by funds generated internally (net income less
dividends plus charges to net income not requiring funds).
Indiana Gas' long-term goal is to fund internally
approximately 75 percent of its construction program.
Capitalization objectives for Indiana Gas are 55-65
percent common equity and 35-45 percent long-term debt.
This will help Indiana Gas to maintain its high
creditworthiness. The long-term debt of Indiana Gas is
currently rated Aa3 by Moody's Investors Service and AA- by
Standard & Poor's Corporation. Indiana Gas' ratio of
earnings to fixed charges was 4.2 for the twelve months
ended March 31, 1997 (see Exhibit 12).
The nature of Indiana Gas' business creates large short-
term cash working capital requirements primarily to finance
customer accounts receivable, unbilled utility revenues
resulting from cycle billing, gas in underground storage
and construction expenditures until permanently financed.
Short-term borrowings tend to be greatest during the
heating season when accounts receivable and unbilled
utility revenues are at their highest. Depending on cost,
commercial paper or bank lines of credit are used as
sources of short-term financing. Indiana Gas' commercial
paper is rated P-1 by Moody's and A-1+ by Standard &
Poor's. Long-term financial strength and flexibility
require maintaining throughput volumes, controlling costs
and, if absolutely necessary, securing timely increases in
rates to recover costs and provide a fair and reasonable
return to shareholders.
Forward-Looking Information
Certain matters discussed in Management's Discussion and
Analysis are forward-looking. These forward-looking
discussions reflect the company's current best estimates
regarding future operations. Since these are only
estimates, actual results could be materially different.
Several factors, some of which are outside of the company's
control and cannot be accurately and conclusively
predicted, may materially affect estimates of future
operations. Such factors include the effect of weather on
gas consumption, particularly in the residential market,
the effect of general economic conditions on gas
consumption, particularly in industrial and commercial
markets, the direction and pace of change in state and
federal regulation on both the gas and electric industries,
and the effects of competition on markets where prices and
providers have been regulated.
Indiana Gas Company, Inc. and Subsidiary Companies
Part II - Other Information
Item 1. Legal Proceedings
See Note 7 of the Notes to Consolidated Financial
Statements for litigation matters involving insurance
carriers pertaining to Indiana Gas' former manufactured
gas plants and storage facilities.
Item 4. Submission of Matters to a Vote of Security
Holders
At the annual meeting of shareholders of Indiana Gas
Company, Inc. on January 22, 1997, (the "Annual
Meeting"), the shareholders elected the following
directors by the vote specified opposite each
director's name:
<TABLE>
Broker
Director Votes For (1) Votes Withheld Abstentions Non-Vote
<S> <C> <C> <C> <C>
Loren K. Evans 9,080,770 - - -
Niel C. Ellerbrook 9,080,770 - - -
Fred A. Poole 9,080,770 - - -
Jean L. Wojtowicz 9,080,770 - - -
</TABLE>
(1) All outstanding shares of Indiana Gas'
common stock are held by its parent company,
Indiana Energy, Inc.
The terms of the other seven board members, Paul T.
Baker, Lawrence A. Ferger, Otto N. Frenzel III, Anton
H. George, Don E. Marsh, Richard P. Rechter and James
C. Shook will expire at the earlier of the election of
their successors or in January 1998 or January 1999.
Effective as of May 1, 1997, (i) the Articles of
Incorporation of Indiana Gas Company, Inc. were amended
to eliminate a "classified" board and to provide for a
Board of Directors of not less than five with the
number of directors to be specified in the Code of By-
Laws and (ii) the Code of By-Laws were amended to
provide for a Board of seven persons. Effective as of
the same date, a successor Board of Indiana Gas was
elected. The following persons were elected to the
Board of Directors of Indiana Gas to hold office until
the next annual meeting or until their successors have
been duly qualified and elected: Niel C. Ellerbrook,
Paul T. Baker, Loren K. Evans, Lawrence A. Ferger, Otto
N. Frenzel III, Fred A. Poole. Presently, there is one
vacancy on the Board.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
3-A Articles of Incorporation as Amended
and Restated on May 1, 1997, filed
herewith.
3-B Code of By-Laws as Amended and Restated
on May 1, 1997, filed herewith.
12 Computation of Ratio of Earnings to
Fixed Charges, filed herewith.
27 Financial Data Schedule, filed herewith.
(b) No Current Reports on Form 8-K were filed
during the quarter ended March 31, 1997.
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned
thereunto duly authorized.
INDIANA GAS COMPANY, INC.
Registrant
Dated May 14, 1997 /s/Niel C. Ellerbrook
Niel C. Ellerbrook
Executive Vice President
and Chief Financial Officer
Dated May 14, 1997 /s/Jerome A. Benkert
Jerome A. Benkert
Vice President and Controller
RESTATED
ARTICLES OF INCORPORATION
OF
INDIANA GAS COMPANY, INC.
As Fully Restated On May 1, 1997
ARTICLE 1
IDENTIFICATION
The name of the Corporation is INDIANA GAS COMPANY,
INC.
ARTICLE 2
PURPOSE AND POWERS
SECTION 2.01. Purpose. The purpose for which the
Corporation is formed is the transaction of any or all
lawful business for which corporations may be incorporated
under the Indiana Business Corporation Law, as the same may,
from time to time, be amended (the "Act").
SECTION 2.02. Powers. The Corporation, subject to any
limitations or restrictions imposed by the Act, other law or
these Amended and Restated Articles of Incorporation, as the
same may, from time to time, be amended (these "Articles"),
shall have the following general rights, privileges and
powers:
Clause (a). Personal Property. To acquire (by
purchase, exchange, lease, hire or otherwise), hold,
own, use, lease, mortgage, pledge, give as security,
sell, convey, exchange or otherwise deal in and dispose
of, either alone or in conjunction with others,
personal property, tangible or intangible, and
commodities of every kind, character and description
whatsoever and any interests therein.
Clause (b). Real Estate. To acquire (by purchase,
grant, exchange, lease, hire or otherwise), hold, own,
use, lease, mortgage, sell, convey, exchange or
otherwise deal in and dispose of, either alone or in
conjunction with others, real estate of every kind,
character and description whatsoever and any interests
therein, and any improvements thereon or appurtenances
thereto.
Clause (c). Operating Rights. To acquire (by
application, grant, purchase, exchange, lease or
otherwise) permits, concessions, grants, franchises,
indeterminate permits, licenses, rights and privileges
of every kind and nature; to hold, own, use, develop,
operate under, lease, mortgage, pledge, sell, convey,
exchange or otherwise deal with and dispose of the same
to the extent permitted by law.
Clause (d). Patents and Similar Rights. To acquire
(by application, purchase, exchange, lease, hire or
otherwise), hold, own, use, lease, mortgage, pledge,
sell, convey, exchange, and grant licenses or
sublicenses in respect of, or otherwise deal with and
dispose of, letters patent of the United States of
America or any foreign country, patent rights,
licenses, privileges, inventions, discoveries,
improvements, processes, formulae, copyrights,
trademarks, trade names and intellectual property of
any kind or character.
Clause (e). Acquisition of Assets, Properties,
Business, and Goodwill. To acquire (by purchase,
exchange, lease, hire or otherwise) all or any part of
the assets, properties, business or goodwill of any
corporation, unincorporated association, business
trust, estate, partnership, trust, joint venture,
individual or other legal entity (collectively, "Legal
Entities," and individually, a "Legal Entity"); to pay
for the same in cash, shares or obligations of the
Corporation or otherwise; to assume in connection
therewith any liabilities of any such transferor; and
to hold, own, use, develop, operate and in any manner
dispose of the whole, or any part, of the assets,
properties, business or goodwill so acquired.
Clause (f). Securities. To purchase, take,
receive, subscribe for or otherwise acquire, guarantee,
own, hold, vote, use, employ, sell, mortgage, lend,
pledge or otherwise deal in and dispose of shares or
other interests in, or obligations of, any one or more
Legal Entities, including direct or indirect
obligations or other securities of the United States of
America or of any other government, State, territory,
governmental district or municipality or of any agency
or instrumentality thereof.
Clause (g). Arrangements with Others. To enter
into any lawful arrangement for sharing profits, union
of interest, joint venture, reciprocal association, or
cooperative association or partnership with any one or
more Legal Entities.
Clause (h). Agency. To act as agent of or
representative for any one or more Legal Entities.
Clause (i). To Raise Funds. To borrow or raise
monies from time to time, without limit as to amount;
to issue, execute, accept, endorse and deliver, as
evidence of such borrowing, all kinds of securities,
including without limitation promissory notes, drafts,
bills of exchange, bonds, debentures and other
negotiable or non-negotiable instruments and evidences
of indebtedness; and to secure the payment and
performance of the obligations thereunder, by mortgage
on, pledge of, or other security interest in the whole
or any part of the assets, properties, business or
goodwill of the Corporation, whether owned at the time
or thereafter acquired.
Clause (j). To Loan Funds. To lend money to any
one or more Legal Entities, including employees of the
Corporation or its subsidiaries; to take and hold any
property as security for the payment of funds so
loaned; but to make no loan of money or property to,
and no guarantee of any obligation of, any of the
Directors of the Corporation (collectively, the
"Directors," and individually, a "Director"), except in
the manner and upon the terms provided by the Act.
Clause (k). Contracts. To enter into, perform,
modify, terminate and rescind contracts and other
agreements.
Clause (l). Guarantees. To make any guarantee
respecting the shares, dividends, securities,
indebtedness, interest, contracts or other obligations
created by any one or more Legal Entities.
Clause (m). Dealing in Its Own Shares. To
purchase, take, receive or otherwise acquire, hold,
own, use, pledge, cancel, sell, transfer or otherwise
dispose of shares of the Corporation (collectively,
"Shares," and individually, a "Share") to the extent
permitted by the Act and these Articles.
Clause (n). Contributions. To make payments or
donations for the public welfare or for charitable,
scientific or educational purposes.
Clause (o). Capacity to Act. To have the capacity
to act possessed by natural persons, but to have
authority to perform only such acts as are necessary or
convenient to carry out its business and affairs.
Clause (p). Officers, Agents, and Employees. To
elect Officers of the Corporation (collectively,
"Officers," and individually, an "Officer"), to appoint
agents and to hire employees of the Corporation; to
define their duties; to determine their compensation;
and to pay pensions and establish and administer
pension plans, pension trusts, profit sharing plans,
stock bonus plans, stock option plans, welfare plans,
qualified and non-qualified retirement plans, and
benefit or incentive plans for any or all of its
current or former Directors, Officers and employees.
Clause (q). Indemnification. To indemnify persons
to the extent, upon the terms and in the manner
permitted by the Act, and as provided in Section 8.08
hereof.
Clause (r). Statutory Powers. To have and exercise
all the general rights, privileges and powers set forth
in the Act.
Clause (s). Ancillary Powers. To do all acts and
things that are necessary or convenient to carry out
its business and affairs.
SECTION 2.03. Construction of Powers as Purposes. The
powers enumerated in Section 2.02 shall be construed as
purposes as well as powers, and the matters expressed in
each Clause thereof shall be in no wise limited by reference
to, or inference from, the terms of any other Clause, each
of such Clauses being regarded as creating independent
powers and purposes. Enumeration of specific additional
powers in the Clauses of Section 2.02 shall not be construed
as limiting or restricting in any manner, either the meaning
of general terms used in this Article 2 or the scope of
powers of the Corporation created thereby; nor shall the
expression of one thing be deemed to exclude another not
expressed although it be of like nature.
SECTION 2.04. Carrying Out of Purposes and Exercise of
Powers in Any Jurisdiction. The Corporation may carry out
its purposes and exercise its powers in any State,
territory, district or possession of the United States of
America, or in any foreign country (collectively,
"Governmental Jurisdictions," and individually, a
"Governmental Jurisdiction"), to the extent that such
purposes and powers are not forbidden by the respective laws
of such Governmental Jurisdictions; and, in the case of any
Governmental Jurisdiction in which one or more of such
purposes or powers are forbidden by law, limit, in any
application to do business in such Governmental
Jurisdiction, the purpose or purposes that the Corporation
proposes to carry on or the powers it proposes to exercise
in such Governmental Jurisdiction to such purpose or
purposes or powers as are not forbidden by the law thereof.
ARTICLE 3
REGISTERED OFFICE AND REGISTERED AGENT
The street address of the registered office of the
Corporation is:
1630 North Meridian Street
Indianapolis, Indiana 46202-1496
and the name and business office address of its registered
agent in charge of such office are:
Lawrence A. Ferger
1630 North Meridian Street
Indianapolis, Indiana 46202-1496
ARTICLE 4
NUMBER OF SHARES
The Corporation shall have authority to issue a total
of Twenty Million (20,000,000) Shares. Subject to the
provisions of Article 5 of these Articles, (i) Four Million
(4,000,000) of such Shares, known as "Preferred Shares," are
authorized to be issued as Shares of preferred stock of the
Corporation ("Preferred Stock"), and (ii) the remainder of
such Shares, known as "Common Shares," are authorized to be
issued as Shares of common stock of the Corporation ("Common
Stock").
ARTICLE 5
GENERAL PROVISIONS REGARDING
SHARES OF THE CORPORATION
SECTION 5.01. Preferred Stock. All of the Preferred
Shares that the Corporation has authority to issue
constitute a separate and single class of Shares known as
Preferred Stock, which may be issued in one or more series.
Subject to the rights of the holders of any then outstanding
Preferred Shares, the Board is vested with authority to
determine and state the designations and the relative
preferences, limitations, voting rights, if any, and other
rights of each such series of Preferred Stock by the
adoption and filing in accordance with the Act, before the
issuance of any Shares of such series, of an amendment or
amendments to these Articles determining the terms of such
series (a "Section 5.01 Amendment"). All Shares of
Preferred Stock of the same series shall be identical with
each other in all respects.
SECTION 5.02. Common Stock. All of the Common Shares
that the Corporation has authority to issue constitute a
separate and single class of Shares known as Common Stock,
which shall be without par value and shall not be issued in
series. All Common Shares shall be identical with each other
in all respects.
SECTION 5.03. Issuance of Shares. The Board has
authority to authorize and direct the issuance by the
Corporation of Preferred Shares and Common Shares at such
times, in such amounts, to such persons, for such
consideration and upon such terms and conditions as it may,
from time to time, determine upon, subject only to the
restrictions, limitations, conditions and requirements
imposed by the Act, other applicable laws and these
Articles.
SECTION 5.04. Distributions Upon Shares. The Board has
authority to authorize and direct in respect of the issued
and outstanding Preferred Shares and Common Shares (i) the
payment of dividends and the making of other distributions
by the Corporation at such times, in such amounts and forms,
from such sources and upon such terms and conditions as it
may, from time to time, determine upon, subject only to the
restrictions, limitations, conditions and requirements
imposed by the Act, other applicable laws and these
Articles, and (ii) the making by the Corporation of Share
dividends and Share splits, pro rata and without
consideration, in Shares of the same class or series or in
Shares of any other class or series without obtaining the
affirmative vote or the written consent of the holders of
the Shares of the class or series in which the payment or
distribution is to be made, subject only to any
restrictions, limitations, conditions and requirements
imposed by the Act, other applicable laws and these
Articles.
SECTION 5.05. Acquisition of Shares. The Board has
authority to authorize and direct the acquisition by the
Corporation of the issued and outstanding Preferred Shares
and Common Shares at such times, in such amounts, from such
persons, for such considerations, from such sources and upon
such terms and conditions as it may, from time to time,
determine upon, subject only to the restrictions,
limitations, conditions and requirements imposed by the Act,
other applicable laws and these Articles.
SECTION 5.06. Record Ownership of Shares or Rights. The
Corporation, to the extent permitted by law, shall be
entitled to treat the person in whose name any Share or
Right of the Corporation (a "Right") is registered on the
books of the Corporation as the owner thereof, for all
purposes, and shall not be bound to recognize any equitable
or other claim to, or interest in, such Share or Right on
the part of any other person, whether or not the Corporation
shall have notice thereof.
SECTION 5.07. Recognition Procedure for Beneficial
Ownership of Shares or Rights. The Board may establish in
the By-Laws a recognition procedure by which the beneficial
owner of any Share or Right that is registered on the books
of the Corporation in the name of a nominee is recognized by
the Corporation, to the extent provided in any such
recognition procedure, as the owner thereof.
SECTION 5.08. Disclosure Procedure for Beneficial
Ownership of Shares or Rights. The Board may establish in
the By-Laws a disclosure procedure by which the name of the
beneficial owner of any Share or Right that is registered on
the books of the Corporation in the name of a nominee shall,
to the extent not prohibited by the Act or other applicable
laws, be disclosed to the Corporation. Any disclosure
procedure established by the Board may include reasonable
sanctions to ensure compliance therewith, including without
limitation (i) prohibiting the voting of, (ii) providing for
mandatory or optional reacquisition by the Corporation of,
and (iii) the withholding or payment into escrow of any
dividend or other distribution in respect of, any Share or
Right as to which the name of the beneficial owner is not
disclosed to the Corporation as required by such disclosure
procedure.
ARTICLE 6
VOTING RIGHTS OF SHARES
OF THE CORPORATION
SECTION 6.01. Preferred Stock. The holders of Shares of
Preferred Stock have the right, voting separately by class
or by series, to cast one vote for each duly authorized,
issued and outstanding Share of Preferred Stock held by them
upon each question or matter in respect of which, under the
Act, such holders are entitled to vote by class or by
series. The holders of Shares of a series of Preferred
Stock shall also have such other voting rights, if any, as
are provided for in such series in a Section 5.01 Amendment.
SECTION 6.02. Common Stock. The holders of Common
Shares have the right, voting separately by class, to cast
one vote for each duly authorized, issued and outstanding
Common Share held by them upon each question or matter in
respect of which, under the Act, such holders are entitled
to vote by class. Such holders also have the right, voting
in common with the holders of Shares of any series of
Preferred Stock to which such voting rights are granted, and
not separately by class, to cast one vote for each duly
authorized, issued and outstanding Common Share held by them
upon each question or matter submitted generally to the
holders of Shares of the Corporation (collectively, the
"Shareholders," and individually, a "Shareholder") in
respect of which, under the Act, voting by class or series
is not required.
ARTICLE 7
DIRECTORS
SECTION 7.01. Number. The number of Directors of the
Corporation shall not be less than five (5), and shall be
specified in the By-Laws. If and whenever the By-Laws do not
contain a provision specifying the number of Directors, the
number shall be five (5). Each Director shall hold office
until the next Annual Meeting of Shareholders or until his
successor is duly qualified and elected. Directors need not
be Shareholders of the Corporation.
SECTION 7.02. Vacancies. Subject to the rights of the
holders of any then outstanding Preferred Shares, and except
as may be expressly provided by law, newly created
directorships resulting from any increase in the authorized
number of Directors or any vacancies in the Board resulting
from death, resignation, retirement, disqualification,
removal from office or other cause shall be filled by a
majority vote of the Directors then in office, and Directors
so chosen shall hold office for a term expiring at the next
Annual Meeting of Shareholders.
SECTION 7.03. Removal. Subject to the rights of the
holders of any then outstanding Preferred Shares, any
Director, or the entire Board, may be removed from office at
any time, but only for cause and only by the affirmative
vote of the holders of at least eighty percent (80%) of the
voting power of all of the then outstanding Shares entitled
to vote generally in the election of Directors ("Voting
Stock"), voting together as a single class.
SECTION 7.04. Amendment, Repeal. Notwithstanding
anything contained in these Articles to the contrary, the
affirmative vote of the holders of at least eighty percent
(80%) of the voting power of all of the then outstanding
Shares of Voting Stock, voting together as a single class,
shall be required to alter, amend or repeal this Article 7.
ARTICLE 8
PROVISIONS FOR REGULATION OF BUSINESS
AND CONDUCT OF AFFAIRS OF CORPORATION
SECTION 8.01. Action By Shareholders. Meetings of the
Shareholders shall be held at such place, within or without
the State of Indiana, as may be specified in the By-Laws or
in the respective notices, or waivers of notice, thereof.
Any action required or permitted to be taken at any meeting
of the Shareholders may be taken without a meeting if a
consent in writing setting forth the action so taken is
signed by all the Shareholders entitled to vote with respect
thereto, and such written consent is filed with the minutes
of the proceedings of the Shareholders.
SECTION 8.02. Action By Directors. Meetings of the
Board or any committees thereof (collectively, "Committees,"
and individually, a "Committee") shall be held at such
place, within or without the State of Indiana, as may be
specified in the By-Laws or in the respective notices, or
waivers of notice, thereof and shall be conducted in such
manner as may be specified in the By-Laws or permitted by
the Act. Any action required or permitted to be taken at any
meeting of the Board or a Committee may be taken without a
meeting if a consent in writing setting forth the action so
taken is signed by all members of the Board or such
Committee, and such written consent is filed with the
minutes of the proceedings of the Board or such Committee.
SECTION 8.03. Code of By-Laws. The Board shall have
power, without the assent or vote of the Shareholders, to
make, alter, amend or repeal the By-Laws by the affirmative
vote of a number of Directors equal to a majority of the
number who would constitute a full Board at the time of such
action. If the Shareholders are or become entitled by law to
alter, amend or repeal the By-Laws, notwithstanding anything
contained in these Articles or the By-Laws to the contrary,
the affirmative vote of the holders of at least eighty
percent (80%) of the voting power of all of the then
outstanding Shares of Voting Stock, voting together as a
single class, shall be required to alter, amend or repeal
the By-Laws.
SECTION 8.04. Board Committees. Unless the By-Laws
otherwise provide, the Board may, by resolution adopted by a
majority of the actual number of Directors elected and
qualified, from time to time, designate from among its
members one or more Committees, each of which shall, to the
extent provided in the resolution or By-Laws and not
prohibited by the Act and other applicable laws, have and
exercise all of the authority of the Board in the management
of the Corporation.
SECTION 8.05. Places of Keeping of Corporate Records.
The Corporation shall keep at its principal office a copy of
(1) these Articles, and all amendments thereto currently in
effect; (2) the By-Laws, and all amendments thereto
currently in effect; (3) minutes of all meetings of the
Shareholders and records of all actions taken by the
Shareholders without a meeting (collectively, "Shareholders
Minutes") for the prior three (3) years; (4) all written
communications by the Corporation to the Shareholders
including the financial statements furnished by the
Corporation to the Shareholders for the prior three (3)
years; (5) a list of the names and business addresses of the
current Directors and the current Officers; and (6) the most
recent Annual Report of the Corporation as filed with the
Secretary of State of Indiana. The Corporation shall also
keep and maintain at its principal office, or at such other
place or places within or without the State of Indiana as
may be provided, from time to time, in the By-Laws, (1)
minutes of all meetings of the Board and of each Committee,
and records of all actions taken by the Board and by each
Committee without a meeting; (2) appropriate accounting
records of the Corporation; (3) a record of the Shareholders
in a form that permits preparation of a list of the names
and addresses of all the Shareholders, in alphabetical order
by class of Shares, stating the number and class of Shares
held by each Shareholder; and (4) Shareholders Minutes for
periods preceding the prior three (3) years. All of the
records of the Corporation described in this Section
(collectively, the "Corporate Records") shall be maintained
in written form or in another form capable of conversion
into written form within a reasonable time.
SECTION 8.06. Provisions for Working Capital. The Board
shall have the power, from time to time, to fix and
determine and to vary an amount to be reserved as working
capital of the Corporation and, before the payment of any
dividends, it may set aside out of the net profits of the
Corporation such sum or sums as it may from time to time in
its absolute discretion determine to be proper, whether as a
reserve fund to meet contingencies or for the equalizing of
dividends, or for repairing or maintaining any property of
the Corporation, or for any corporate purposes that the
Board shall think conducive to the best interest of the
Corporation, subject only to such limitations as the By-Laws
may from time to time impose.
SECTION 8.07. Interest of Directors in Contracts. Any
contract or other transaction between the Corporation and
(i) any Director, or (ii) any Legal Entity (A) in which any
Director has a material financial interest or is a general
partner, or (B) of which any Director is a director, officer
or trustee (collectively, a "Conflict Transaction"), shall
be valid for all purposes, if the material facts of the
Conflict Transaction and the Director's interest were
disclosed or known to the Board, a Committee with authority
to act thereon, or the Shareholders entitled to vote
thereon, and the Board, such Committee or such Shareholders
authorized, approved or ratified the Conflict Transaction. A
Conflict Transaction is authorized, approved or ratified:
(1) By the Board or such Committee, if it receives
the affirmative vote of a majority of the Directors who
have no interest in the Conflict Transaction,
notwithstanding the fact that such majority may not
constitute a quorum or a majority of the Board or such
Committee or a majority of the Directors present at the
meeting, and notwithstanding the presence or vote of
any Director who does have such an interest; provided,
however, that no Conflict Transaction may be
authorized, approved or ratified by a single Director;
and
(2) By such Shareholders, if it receives the vote
of a majority of the Shares entitled to be counted, in
which vote Shares owned or voted under the control of
any Director who, or of any Legal Entity that, has an
interest in the Conflict Transaction may be counted.
This Section shall not be construed to require
authorization, ratification or approval by the Shareholders
of any Conflict Transaction, or to invalidate any Conflict
Transaction that would otherwise be valid under the common
and statutory law applicable thereto.
Section 8.08. Limitation of Liability and
Indemnification of Directors, Officers and Others.
Clause (a). Limitation of Liability. The following
provisions apply with respect to liability on the part
of a Director, a member of any Committee or of another
committee appointed by the Board (an "Appointed
Committee"), Officer, employee or agent of the
Corporation (collectively, "Corporate Persons," and
individually, a "Corporate Person") for any loss or
damage suffered on account of any action taken or
omitted to be taken by a Corporate Person:
(1) General Limitation. No Corporate Person
shall be liable for any loss or damage if, in
taking or omitting to take any action causing such
loss or damage, either (i) such Corporate Person
acted (A) in good faith, (B) with the care an
ordinarily prudent person in a like position would
have exercised under similar circumstances, and
(C) in a manner such Corporate Person reasonably
believed was in the best interests of the
Corporation, or (ii) such Corporate Person's
breach of or failure to act in accordance with the
standards of conduct set forth in Clause (a)(1)(i)
above (the "Standards of Conduct") did not
constitute willful misconduct or recklessness.
(2) Reliance on Corporate Records and Other
Information. Any Corporate Person shall be fully
protected, and shall be deemed to have complied
with the Standards of Conduct, in relying in good
faith, with respect to any information contained
therein, upon (i) the Corporate Records, or (ii)
information, opinions, reports or statements
(including financial statements and other
financial data) prepared or presented by (A) one
or more other Corporate Persons whom such
Corporate Person reasonably believes to be
competent in the matters presented, (B) legal
counsel, public accountants or other persons as to
matters that such Corporate Person reasonably
believes are within such person's professional or
expert competence, (C) a Committee or an Appointed
Committee, of which such Corporate Person is not a
member, if such Corporate Person reasonably
believes such Committee or Appointed Committee
merits confidence, or (D) the Board, if such
Corporate Person is not a Director and reasonably
believes that the Board merits confidence.
Clause (b). Indemnification of Corporate Persons
and Related Matters. The following provisions apply to
the indemnification by the Corporation of Corporate
Persons and matters related thereto:
(1) Indemnification Standards. The
Corporation shall indemnify any person who was or
is a party or is threatened to be made a party to
any threatened, pending or completed action, suit
or proceeding, whether civil or criminal,
administrative or investigative, formal or
informal (an "Action"), by reason of the fact that
he is or was a Corporate Person of the Corporation
or is or was serving at the request of the
Corporation as a Corporate Person, partner,
trustee or member or in another authorized
capacity (collectively, an "Authorized Capacity")
of or for another Legal Entity, whether or not
organized or formed for profit (collectively,
"Another Entity"), against expenses (including
attorneys' fees) ("Expenses") and judgments,
penalties, fines and amounts paid in settlement
actually and reasonably incurred by him in
connection with such Action, if such person (i)
acted in good faith, (ii) acted in a manner he
reasonably believed (A) with respect to actions as
a Corporate Person of the Corporation, to be in
the best interests of the Corporation, or (B) with
respect to actions in an Authorized Capacity of or
for Another Entity, was not opposed to the best
interests of the Corporation, and (iii) with
respect to any criminal Action, either (A) had
reasonable cause to believe his conduct was
lawful, or (B) had no reasonable cause to believe
his conduct was unlawful. The termination of any
Action by judgment, order, settlement, conviction,
or upon a plea of nolo contendere or its
equivalent, shall not, of itself, be determinative
that the person did not meet the standards for
indemnification set forth in this Clause (b)(1)
(the "Indemnification Standards").
(2) Indemnification in Successfully Defended
Actions. To the extent that a person who is or was
a Corporate Person of the Corporation, or is or
was serving at the request of the Corporation in
an Authorized Capacity of or for Another Entity,
has been successful on the merits or otherwise in
the defense of any Action referred to in Clause
(b)(1) above, or in the defense of any claim,
issue or matter in any such Action, the
Corporation shall indemnify him against Expenses
actually and reasonably incurred by him in
connection therewith.
(3) Indemnification Procedure. Unless ordered
by a court, any indemnification of any person
under Clause (b)(1) above shall be made by the
Corporation only as authorized in the specific
case upon a determination that indemnification of
such person is proper in the circumstances because
he met the Indemnification Standards. Such
determination shall be made (i) by the Board, by a
majority vote of a quorum consisting of Directors
who are not at the time parties to the Action
involved ("Parties"); or (ii) if a quorum cannot
be obtained under Subparagraph (i), by a majority
vote of a Committee duly designated by the Board
(in which designation Directors who are Parties
may participate), consisting solely of two (2) or
more Directors who are not at the time Parties; or
(iii) by written opinion of independent legal
counsel (A) selected by the Board or such
Committee in the manner prescribed in Subparagraph
(i) or (ii), respectively, or (B) if a quorum
cannot be obtained or a Committee cannot be
designated under Subparagraphs (i) and (ii),
respectively, selected by a majority of the full
Board, in which selection Directors who are
Parties may participate; or (iv) by the
Shareholders who are not at the time Parties,
voting together as a single class.
(4) Advances for Expenses. Expenses
reasonably incurred in defending an Action by any
person who may be entitled to indemnification
under Clause (b)(1) above may be paid by the
Corporation in advance of the final disposition of
such Action if (i) such person furnishes the
Corporation with (A) a written affirmation of his
good faith belief that he has met, and (B) a
written undertaking, executed personally or on his
behalf, to repay the advance (an "Undertaking") if
it is ultimately determined that he did not meet,
the Indemnification Standards; and (ii) a
determination is made, under the procedure set
forth in Clause (b)(3) above, that the facts then
known to those making the determination would not
preclude indemnification under Clause (b)(1)
above. An Undertaking must be an unlimited general
obligation of the person making it, but need not
be secured and may be accepted by the Corporation
without reference to such person's financial
ability to make repayment.
(5) Rights Not Exclusive. The indemnification
provided in these Articles (i) shall not be deemed
exclusive of any other rights to which a person
seeking indemnification may be entitled under (A)
any law, (B) the By-Laws, (C) any resolution of
the Board or of the Shareholders, (D) any other
authorization, whenever adopted, after notice, by
a majority vote of all Shares entitled to vote on
General Voting Matters, or (E) the articles of
incorporation, code of by-laws or other governing
documents, or any resolution of or other
authorization by the directors, shareholders,
partners, trustees, members, owners or governing
body, of Another Entity; (ii) shall inure to the
benefit of the heirs, executors and administrators
of such person; and (iii) shall continue as to any
such person who has ceased to be a Corporate
Person of the Corporation or to be serving in an
Authorized Capacity of or for Another Entity.
(6) Insurance. The Corporation shall have
power to purchase and maintain insurance on behalf
of any person who is or was a Corporate Person of
the Corporation, or is or was serving at the
request of the Corporation in an Authorized
Capacity of or for Another Entity, against any
liability asserted against and incurred by him in
any such capacity, or arising out of his status as
such, whether or not the Corporation would have
the power to indemnify him against such liability
under the provisions of this Clause (b).
(7) Definition of Corporation. For the
purposes of this Clause (b), references to "the
Corporation" include any constituent corporation
absorbed in a consolidation or merger (a
"Constituent") as well as the resulting or
surviving corporation (the "Survivor"), such that
any person who is or was a Corporate Person of
such a Constituent, or is or was serving at the
request of such Constituent in an Authorized
Capacity of or for Another Entity, shall stand in
the same position under the provisions of this
Clause (b) with respect to the Survivor as he
would if he had served the Survivor, or at its
request, in the same capacity.
SECTION 8.09. Compensation of Directors. The Board is
hereby specifically authorized, in and by the By-Laws, or by
resolution duly adopted by the Board, to make provision for
reasonable compensation to its members for their services as
Directors, and to fix the basis and conditions upon which
such compensation shall be paid. Any Director may also serve
the Corporation in any other capacity and receive
compensation therefor in any form.
SECTION 8.10. Direction of Purposes and Exercise of
Powers By Directors. The Board, subject to any specific
limitations or restrictions imposed by the Act or these
Articles, shall direct the carrying out of the purposes and
exercise the powers of the Corporation, without previous
authorization or subsequent approval by the Shareholders.
SECTION 8.11. Amendments of Articles of Incorporation.
Except as otherwise expressly provided in Articles 7 and 9
hereof, and subject to the terms of any outstanding series
of Preferred Stock, the Corporation reserves the right to
increase or decrease the number of its authorized Shares, or
any class or series thereof, and to reclassify the same, and
to amend, alter, change or repeal any provision contained in
these Articles, or in any amendment hereto, or to add any
provision to these Articles or to any amendment hereto, in
any manner now or hereafter prescribed or permitted by the
Act or by any other applicable laws; and all rights
conferred upon the Shareholders in these Articles or any
amendment hereto are granted subject to this reservation. No
Shareholder has a vested property right resulting from any
provision in these Articles, or authorized to be in the
By-Laws by the Act or these Articles, including without
limitation provisions relating to management, control,
capital structure, dividend entitlement, or purpose or
duration of the Corporation.
ARTICLE 9
PROVISIONS FOR CERTAIN BUSINESS COMBINATIONS
SECTION 9.01. Vote Required.
Clause (a). Higher Vote for Certain Business
Combinations. In addition to any affirmative vote
required by law or these Articles, and except as
otherwise expressly provided in Section 9.02:
(1) Any merger or consolidation or any
similar transaction of the Corporation or any
Subsidiary (as hereinafter defined) with (A) any
Interested Shareholder (as hereinafter defined),
or (B) any other corporation (whether or not
itself an Interested Shareholder) that is, or
after such merger or consolidation would be, an
Affiliate (as hereinafter defined) of an
Interested Shareholder; or
(2) Any sale, lease, exchange, mortgage,
pledge, transfer or other disposition (in one
transaction or a series of transactions) to or
with any Interested Shareholder or any Affiliate
of any Interested Shareholder of any assets of the
Corporation or any Subsidiary having an aggregate
Fair Market Value (as hereinafter defined) of One
Million Dollars ($1,000,000) or more; or
(3) The issuance or transfer by the
Corporation or any Subsidiary (in one transaction
or a series of transactions) of any securities of
the Corporation or any Subsidiary to any
Interested Shareholder or any Affiliate of any
Interested Shareholder in exchange for cash,
securities or other property (or a combination
thereof) having an aggregate Fair Market Value of
One Million Dollars ($1,000,000) or more; or
(4) The adoption of any plan or proposal for
the liquidation or dissolution of the Corporation
proposed by or on behalf of an Interested
Shareholder or any Affiliate of any Interested
Shareholder; or
(5) Any reclassification of securities
(including any reverse stock split) or
recapitalization of the Corporation, or any merger
or consolidation of the Corporation with any of
its Subsidiaries or any other transaction (whether
or not with or into or otherwise involving an
Interested Shareholder) that has the effect,
directly or indirectly, of increasing the
proportionate share of the outstanding Shares of
any class of equity or convertible securities of
the Corporation or any Subsidiary that is directly
or indirectly owned by any Interested Shareholder
or any Affiliate of any Interested Shareholder;
shall require the affirmative vote of the holders of at
least eighty percent (80%) of the voting power of all of the
then outstanding Shares of Voting Stock, voting together as
a single class. Such affirmative vote shall be required,
notwithstanding the fact that no vote may be required, or
that a lesser percentage may be specified, by law or in any
agreement with any national securities exchange or
otherwise.
Clause (b). Definition of "Business Combination".
The term "Business Combination" as used in this Article
9 shall mean any transaction that is referred to in any
one or more of paragraphs (1) through (5) of Clause (a)
of this Section 9.01.
SECTION 9.02. When Higher Vote is Not Required. The
provisions of Section 9.01 shall not be applicable to any
particular Business Combination, and such Business
Combination shall require only such affirmative vote as is
required by law and any other provision of these Articles,
if all of the conditions specified in either of the
following Clauses (a) & (b) are met:
Clause (a). Approval By Continuing Directors. The
Business Combination shall have been approved by a
majority of the Continuing Directors (as hereinafter
defined).
Clause (b). Price and Procedure Requirements. All
of the following conditions shall have been met:
(1) The aggregate amount of the cash and the
Fair Market Value as of the date of the
consummation of the Business Combination of
consideration other than cash to be received per
Share by holders of Common Stock in such Business
Combination shall be at least equal to the highest
of the following:
(A) The highest per Share price
(including any brokerage commissions,
transfer taxes and soliciting dealers' fees
[collectively, "Commissions, Taxes and
Fees"]) paid by the Interested Shareholder
for any Shares of Common Stock acquired by it
(i) within the two (2) year period
immediately prior to the first public
announcement of the proposal of the Business
Combination (the "Announcement Date"), or
(ii) in the transaction in which it became an
Interested Shareholder, whichever is higher;
(B) The Fair Market Value per Share of
Common Stock on (i) the Announcement Date, or
(ii) on the date on which the Interested
Shareholder became an Interested Shareholder
(the "Determination Date"), whichever is
higher; and
(C) The price per Share equal to the
Fair Market Value per Share of Common Stock
determined pursuant to Clause (b)(1)(B)
above, multiplied by the ratio of (i) the
highest per Share price (including any
Commissions, Taxes and Fees) paid by the
Interested Shareholder for any Shares of
Common Stock acquired by it within the two
(2) year period immediately prior to the
Announcement Date, to (ii) the Fair Market
Value per Share of Common Stock on the first
day in such two (2) year period upon which
the Interested Shareholder acquired any
Shares of Common Stock.
(2) The aggregate amount of the cash and the
Fair Market Value as of the date of the
consummation of the Business Combination of
consideration other than cash to be received per
Share by holders of Shares of any other class or
series of outstanding Voting Stock shall be at
least equal to the highest of the following (it
being intended that the requirements of this
Clause (b)(2) shall be required to be met with
respect to every class of outstanding Voting Stock
whether or not the Interested Shareholder has
previously acquired any Shares of a particular
class of Voting Stock):
(A) The highest per Share price
(including any Commissions, Taxes and Fees)
paid by the Interested Shareholder for any
Shares of such class of Voting Stock acquired
by it (i) within the two (2) year period
immediately prior to the Announcement Date or
(ii) in the transaction in which it became an
Interested Shareholder, whichever is higher;
(B) The highest preferential amount per
Share to which the holders of Shares of such
class of Voting Stock are entitled in the
event of any voluntary or involuntary
liquidation, dissolution or winding up of the
Corporation;
(C) The Fair Market Value per Share of
such class of Voting Stock on the
Announcement Date or the Determination Date,
whichever is higher; and
(D) The price per Share equal to the
Fair Market Value per Share of such class of
Voting Stock determined pursuant to Clause
(b)(2)(C) above, multiplied by the ratio of
(i) the highest per Share price (including
any Commissions, Taxes and Fees) paid by the
Interested Shareholder for any Shares of such
class of Voting Stock acquired by it within
the two (2) year period immediately prior to
the Announcement Date, to (ii) the Fair
Market Value per Share of such class of
Voting Stock on the first day in such two (2)
year period upon which the Interested
Shareholder acquired any Shares of such class
of Voting Stock;
(3) The consideration to be received by
holders of a particular class of outstanding
Voting Stock (including Common Stock) shall be in
cash or in the same form as the Interested
Shareholder has previously paid for Shares of such
class of Voting Stock. If the Interested
Shareholder has paid for Shares of any class of
Voting Stock with varying forms of consideration,
the form of consideration for such class of Voting
Stock shall be either cash or the form used to
acquire the largest number of Shares of such class
of Voting Stock previously acquired by it.
(4) After such Interested Shareholder has
become an Interested Shareholder and prior to the
consummation of such Business Combination:
(A) except as approved by a majority of
the Continuing Directors, there shall have
been no failure to declare and pay at the
regular date therefor any full quarterly
dividends (whether or not cumulative) on any
outstanding Preferred Stock;
(B) there shall have been (i) no
reduction in the annual rate of dividends
paid on Common Stock (except as necessary to
reflect any subdivision of Common Stock),
except as approved by a majority of the
Continuing Directors, and (ii) an increase in
such annual rate of dividends as necessary to
reflect any reclassification (including any
reverse stock split), recapitalization,
reorganization or any similar transaction
that has the effect of reducing the number of
outstanding Shares of Common Stock, unless
the failure so to increase such annual rate
is approved by a majority of the Continuing
Directors; and
(C) such Interested Shareholder shall
have not become the beneficial owner of any
additional Shares of Voting Stock except as
part of the transaction that results in such
Interested Shareholder becoming an Interested
Shareholder.
(5) After such Interested Shareholder has
become an Interested Shareholder, such Interested
Shareholder shall not have received the benefit,
directly or indirectly (except proportionately as
a Shareholder), of any loans, advances,
guarantees, pledges or other financial assistance
or any tax credits or other tax advantages
provided by the Corporation, whether in
anticipation of or in connection with such
Business Combination or otherwise.
(6) A proxy or information statement
describing the proposed Business Combination and
complying with the requirements of the Securities
Exchange Act of 1934 and the rules and regulations
thereunder (collectively, the "Exchange Act"), or
any subsequent provisions replacing the Exchange
Act, shall be mailed to Shareholders of the
Corporation at least thirty (30) days prior to the
consummation of such Business Combination (whether
or not such proxy or information statement is
required to be mailed pursuant to the Exchange Act
or such subsequent provisions).
SECTION 9.03. Certain Definitions. For the purposes of
this Article 9:
Clause (a). A "person" shall include any Legal
Entity. When two (2) or more persons act as a
partnership, limited partnership, syndicate or other
group for the purpose of acquiring voting stock of the
Company, such partnership, syndicate or group shall be
deemed a "person."
Clause (b). "Interested Shareholder" shall mean
any person (other than the Corporation or any
Subsidiary) who or that:
(1) Is the beneficial owner, directly or
indirectly, of more than ten percent (10%) of the
voting power of the outstanding Voting Stock; or
(2) Is an Affiliate of the Corporation that
at any time within the two (2) year period
immediately prior to the date in question was the
beneficial owner, directly or indirectly, of ten
percent (10%) or more of the voting power of the
then outstanding Voting Stock; or
(3) Is an assignee of or has otherwise
succeeded to any Shares of Voting Stock that were
at any time within the two (2) year period
immediately prior to the date in question
beneficially owned by any Interested Shareholder,
if such assignment or succession shall have
occurred in the course of a transaction or series
of transactions not involving a public offering
within the meaning of the Securities Act of 1933.
Clause (c). A person shall be a "beneficial owner"
of any Shares of Voting Stock that:
(1) Such person or any of its Affiliates or
Associates (as hereinafter defined) beneficially
owns, directly or indirectly; or
(2) Such person or any of its Affiliates or
Associates has (A) the right to acquire (whether
such right is exercisable immediately or only
after the passage of time), pursuant to any
agreement, arrangement or understanding or upon
the exercise of conversion rights, exchange
rights, warrants or options, or otherwise, or (B)
the right to vote pursuant to any agreement,
arrangement or understanding; or
(3) Are beneficially owned, directly or
indirectly, by any other person with which such
person or any of its Affiliates or Associates has
any agreement, arrangement or understanding for
the purpose of acquiring, holding, voting or
disposing of any Shares of Voting Stock.
Clause (d). For the purpose of determining whether
a person is an Interested Shareholder pursuant to
Clause (b) of this Section 9.03, the number of Shares
of Voting Stock deemed to be outstanding shall include
Shares deemed owned through application of Clause (c)
of this Section 9.03, but shall not include any other
Shares of Voting Stock that may be issuable pursuant to
any agreement, arrangement or understanding, or upon
exercise of conversion rights, warrants or options, or
otherwise.
Clause (e). "Affiliate" or "Associate" shall have
the respective meanings ascribed to such terms in Rule
12b-2 of the General Rules and Regulations under the
Exchange Act, as in effect on October 28, 1983.
Clause (f). "Subsidiary" means any corporation of
which a majority of any class of equity security is
owned, directly or indirectly, by the Corporation;
provided, however, that for the purposes of the
definition of Interested Shareholder set forth in
Clause (b) of this Section 9.03, the term "Subsidiary"
shall mean only a corporation of which a majority of
each class of equity security is owned, directly or
indirectly, by the Corporation.
Clause (g). "Continuing Director" means any member
of the Board who is unaffiliated with the Interested
Shareholder and was a member of the Board prior to the
time that the Interested Shareholder became an
Interested Shareholder, and any successor of a
Continuing Director who is unaffiliated with the
Interested Shareholder and is recommended to succeed a
Continuing Director by a majority of Continuing
Directors then on the Board.
Clause (h). "Fair Market Value" means:
(1) In the case of stock, (i) the highest
closing sale price (or, with respect to
Subparagraph (D), bid quotation) during the thirty
(30) day period immediately preceding the date in
question of a share of such stock on (A) the
Composite Tape for New York Stock Exchange-List
Stock, or (B) if such stock is not quoted on the
Composite Tape, on the New York Stock Exchange, or
(C) if such stock is not listed on such Exchange,
on the principal United States securities exchange
registered under the Exchange Act on which such
stock is listed or (D) if such stock is not listed
on any such exchange, on the National Association
of Securities Dealers, Inc. Automated Quotations
System or any system then in use; or (ii) if such
stock is not listed on any such exchange and there
is no such quotation of a share of such stock, as
determined by the Board in good faith; and
(2) In the case of property other than cash
or stock, the fair market value of such property
on the date in question as determined by the Board
in good faith.
Clause (i). In the event of any Business
Combination in which the Corporation survives, the
phrase "other consideration to be received" as used in
clauses (b)(1) and (2) of Section 9.02 shall include
the Shares of Common Stock and/or the Shares of any
other class of outstanding Voting Stock by the holders
of such Shares.
SECTION 9.04. Powers of the Board of Directors. A
majority of the Directors shall have the power and duty to
determine for the purposes of this Article 9, on the basis
of information known to them after reasonable inquiry, (a)
whether a person is an Interested Shareholder, (b) the
number of Shares of Voting Stock beneficially owned by any
person, (c) whether a person is an Affiliate or Associate of
another, and (d) whether the assets that are the subject of
any Business Combination have, or the consideration to be
received for the issuance or transfer of securities by the
Corporation or any Subsidiary in any Business Combination
has, an aggregate Fair Market Value of One Million Dollars
($1,000,000) or more.
SECTION 9.05. No Effect on Fiduciary Obligations of
Interested Shareholders. Nothing contained in this Article 9
shall be construed to relieve any Interested Shareholder
from any fiduciary obligation imposed by law.
SECTION 9.06. Amendment, Repeal, etc. Notwithstanding
any other provisions of these Articles or the By-Laws (and
notwithstanding the fact that a lesser percentage may be
specified by law, these Articles or the By-Laws), the
affirmative vote of the holders of eighty percent (80%) or
more of the voting power of the Shares of the then
outstanding Voting Stock, voting together as a single class,
shall be required to amend or repeal, or adopt provisions
inconsistent with, this Article 9.
CODE OF BY-LAWS
OF
INDIANA GAS COMPANY, INC.
AS AMENDED AND RESTATED
IN FULL ON JULY 1, 1987
AS FURTHER AMENDED OCTOBER 27, 1989
AS FURTHER AMENDED AUGUST 31, 1990
AS FURTHER AMENDED JULY 26, 1991
AS FURTHER AMENDED SEPTEMBER 24, 1993
AS FURTHER AMENDED FEBRUARY 25, 1994
AS FURTHER AMENDED JULY 28, 1995
AS FURTHER AMENDED APRIL 26, 1996
AS FURTHER AMENDED JULY 26, 1996
AS FURTHER AMENDED MAY 1, 1997
ARTICLE I
OFFICES
SECTION 1. PRINCIPAL OFFICE. The principal office (the
"Principal Office") of INDIANA GAS COMPANY, INC. (the
"Corporation") shall be at the registered office of the
Corporation, or such other place as shall be determined by
resolution of the Board of Directors of the Corporation (the
"Board").
SECTION 2. OTHER OFFICES. The Corporation may have such
other offices at such other places within or without the State
of Indiana as the Board may from time to time designate, or as
the business of the Corporation may require.
ARTICLE II
SEAL
SECTION 1. CORPORATE SEAL. The corporate seal of the
Corporation (the "Seal") shall be circular in form and shall
have inscribed thereon the words "INDIANA GAS COMPANY, INC. --
CORPORATE SEAL -- INDIANA." Use of the Seal or an impression
thereof shall not be required, and shall not affect the
validity of any instrument whatsoever.
ARTICLE III
SHAREHOLDERS' MEETINGS
SECTION 1. PLACE OF MEETING. Every meeting of the
shareholders of the Corporation (the "Shareholders") shall be
held at the Principal Office, unless a different place is
specified in the notice or waiver of notice of such meeting or
by resolution of the Board or the Shareholders, in which event
such meeting may be held at the place so specified, either
within or without the State of Indiana.
SECTION 2. ANNUAL MEETING. The annual meeting of the
Shareholders (the "Annual Meeting") shall be held each year at
9:00 o'clock A.M. on the fourth Wednesday in January, or such
other time or date determined by resolution of the Board, for
the purpose of electing directors of the Corporation
("Directors") and for the transaction of such other business
as may legally come before the Annual Meeting. If for any
reason the Annual Meeting shall not be held at the date and
time specified or fixed as herein provided, the business to be
transacted at such Annual Meeting may be transacted at any
special meeting of the Shareholders (a "Special Meeting")
called for that purpose.
SECTION 3. NOTICE OF ANNUAL MEETING. Written or printed
notice of the Annual Meeting, stating the date, time and place
thereof, shall be delivered or mailed by the Secretary or an
Assistant Secretary to each Shareholder of record entitled to
notice of such Meeting, at such address as appears on the
records of the Corporation, at least ten and not more than
sixty days before the date of such Meeting.
SECTION 4. SPECIAL MEETINGS. Special Meetings, for any
purpose or purposes (unless otherwise prescribed by law), may
be called by the Board, the Chief Executive Officer or the
President, and shall be called by the Chief Executive Officer,
the President or any Vice President at (a) the request in
writing of a majority of the Board, or (b) the written demand,
delivered to the Secretary, of Shareholders holding of record
not less than a majority of the voting power of all the shares
of the Corporation ("Shares") issued and outstanding and
entitled by the Amended and Restated Articles of Incorporation
of the Corporation, as the same may, from time to time, be
amended (the "Articles"), to vote on the business proposed to
be transacted thereat; provided however that, for purposes of
calculating such majority, only shares which have been
beneficially owned or held of record by the holders thereof
for at least three (3) years shall be included. All requests
or demands for Special Meetings shall state the purpose or
purposes thereof, and the business transacted at such Meeting
shall be confined to the purposes stated in the call and
matters germane thereto.
SECTION 5. NOTICE OF SPECIAL MEETINGS. Written or
printed notice of all Special Meetings, stating the date,
time, place and purpose or purposes thereof, shall be
delivered or mailed by the Secretary or the Chief Executive
Officer, the President or the Vice President calling the
Meeting to each Shareholder of record entitled to notice of
such Meeting, at such address as appears on the records of the
Corporation, at least ten and not more than sixty days before
the date of such Meeting. Notice of any Special Meeting
called at the written demand of Shareholders shall be
delivered or mailed within sixty days of the Secretary's
receipt of such demand.
SECTION 6. WAIVER OF NOTICE OF MEETINGS. Notice of any
Annual or Special Meeting (a "Meeting") may be waived in
writing by any Shareholder, before or after the date and time
of the Meeting specified in the notice thereof, by a written
waiver delivered to the Corporation for inclusion in the
minutes or filing with the corporate records. A Shareholder's
attendance at any Meeting in person or by proxy shall
constitute a waiver of (a) notice of such Meeting, unless the
Shareholder at the beginning of the Meeting objects to the
holding of or the transaction of business at the Meeting, and
(b) consideration at such Meeting of any business that is not
within the purpose or purposes described in the Meeting
notice, unless the Shareholder objects to considering the
matter when it is presented.
SECTION 7. QUORUM. At any Meeting, the holders of a
majority of the voting power of Shares issued and outstanding
and entitled to vote at such Meeting, represented in person or
by proxy, shall constitute a quorum for the election of
Directors or for the transaction of other business, unless
otherwise provided by law, the Articles or this Code of
By-Laws, as the same may, from time to time, be amended (these
"By-Laws"). If, however, a quorum shall not be present or
represented at any Meeting, the Shareholders entitled to vote
thereat, present in person or represented by proxy, shall have
power to adjourn the Meeting from time to time, without notice
other than announcement at the Meeting of the date, time and
place of the adjourned Meeting, unless the date of the
adjourned Meeting requires that the Board fix a new record
date (the "Record Date") therefor, in which case notice of the
adjourned Meeting shall be given. At such adjourned Meeting,
if a quorum shall be present or represented, any business may
be transacted that might have been transacted at the Meeting
as originally scheduled.
SECTION 8. VOTING. At each Meeting, every Shareholder
entitled to vote shall have one vote for each Share standing
in his name on the books of the Corporation as of the Record
Date fixed by the Board for such Meeting, except as otherwise
provided by law or the Articles, and except that no Share
shall be voted at any Meeting upon which any installment is
due and unpaid. Voting for Directors and, upon the demand of
any Shareholder, voting upon any question properly before a
Meeting, shall be by ballot. A plurality vote shall be
necessary to elect any Director, and on all other matters, the
action or a question shall be approved if the number of votes
cast thereon in favor of the action or question exceeds the
number of votes cast opposing the action or question, except
as otherwise provided by law or the Articles.
SECTION 9. SHAREHOLDER LIST. The Secretary shall
prepare before each Meeting a complete list of the
Shareholders entitled to notice of such Meeting, arranged in
alphabetical order by class of Shares (and each series within
a class), and showing the address of, and the number of Shares
entitled to vote held by, each Shareholder (the "Shareholder
List"). Beginning five business days before the Meeting and
continuing throughout the Meeting, the Shareholder List shall
be on file at the Principal Office or at a place identified in
the Meeting notice in the city where the Meeting will be held,
and shall be available for inspection by any Shareholder
entitled to vote at the Meeting. On written demand, made in
good faith and for a proper purpose and describing with
reasonable particularity the Shareholder's purpose, and if the
Shareholder List is directly connected with the Shareholder's
purpose, a Shareholder (or such Shareholder's agent or
attorney authorized in writing) shall be entitled to inspect
and to copy the Shareholder List, during regular business
hours and at the Shareholder's expense, during the period the
Shareholder List is available for inspection. The original
stock register or transfer book (the "Stock Book"), or a
duplicate thereof kept in the State of Indiana, shall be the
only evidence as to who are the Shareholders entitled to
examine the Shareholder List, or to notice of or to vote at
any Meeting.
SECTION 10. PROXIES. A Shareholder may vote either in
person or by proxy executed in writing by the Shareholder or a
duly authorized attorney-in-fact. No proxy shall be valid
after eleven months from the date of its execution, unless a
longer time is expressly provided therein.
SECTION 11. NOTICE OF SHAREHOLDER BUSINESS. At any
meeting of the shareholders, only such business may be
conducted as shall have been properly brought before the
meeting, and as shall have been determined to be lawful and
appropriate for consideration by shareholders at the meeting.
To be properly brought before a meeting, business must be (a)
specified in the notice of meeting given in accordance with
Section 3 or 5 of this Article III, (b) otherwise properly
brought before the meeting by or at the direction of the board
of directors or the chief executive officer, or (c) otherwise
properly brought before the meeting by a shareholder. For
business to be properly brought before a meeting by a
shareholder pursuant to clause (c) above, the shareholder must
have given timely notice thereof in writing to the secretary
of the Corporation. To be timely, a shareholder's notice must
be delivered to, or mailed and received at, the principal
office of the Corporation, not less than fifty days nor more
than ninety days prior to the meeting; provided, however, that
in the event that less than sixty days' notice of the date of
the meeting is given to shareholders, notice by the
shareholder to be timely must be so received not later than
the close of business on the tenth day following the day on
which such notice of the date of the meeting was given. A
shareholder's notice to the secretary shall set forth as to
each matter the shareholder proposes to bring before the
meeting (a) a brief description of the business desired to be
brought before the meeting, (b) the name and address, as they
appear on the Corporation's stock records, of the shareholder
proposing such business, (c) the class and number of shares of
the Corporation which are beneficially owned by the
shareholder, and (d) any interest of the shareholder in such
business. Notwithstanding anything in these by-laws to the
contrary, no business shall be conducted at a meeting except
in accordance with the procedures set forth in this Section
11. The person presiding at the meeting shall, if the facts
warrant, determine and declare to the meeting that business
was not properly brought before the meeting in accordance with
the by-laws, or that business was not lawful or appropriate
for consideration by shareholders at the meeting, and if he
should so determine, he shall so declare to the meeting and
any such business shall not be transacted.
SECTION 12. NOTICE OF SHAREHOLDER NOMINEES. Nominations
of persons for election to the Board of Directors of the
Corporation may be made at any meeting of shareholders by or
at the direction of the Board of Directors or by any
shareholder of the Corporation entitled to vote for the
election of directors at the meeting. Shareholder nominations
shall be made pursuant to timely notice given in writing to
the Secretary of the Corporation in accordance with Section 11
of this Article III. Such shareholder's notice shall set
forth, in addition to the information required by Section 11,
as to each person whom the shareholder proposes to nominate
for election or re-election as a director, (i) the name, age,
business address and residence address of such person, (ii)
the principal occupation or employment of such person, (iii)
the class and number of shares of the Corporation which are
beneficially owned by such person, (iv) any other information
relating to such person that is required to be disclosed in
solicitation of proxies for election of directors, or is
otherwise required, in each case pursuant to Regulation 14A
under the Securities Exchange Act of 1934, as amended
(including, without limitation, such person's written consent
to being named in the proxy statement as a nominee and to
serving as a director, if elected), and (v) the qualifications
of the nominee to serve as a director of the Corporation. No
shareholder nomination shall be effective unless made in
accordance with the procedures set forth in this Section 12.
The person presiding at the meeting shall, if the facts
warrant, determine and declare to the meeting that a
shareholder nomination was not made in accordance with the by-
laws, and if he should so determine, he shall so declare to
the meeting and the defective nomination shall be disregarded.
ARTICLE IV
BOARD OF DIRECTORS
SECTION 1. NUMBER. The business and affairs of the
Corporation shall be managed by a Board of seven (7)
Directors. The Board may elect or appoint, from among its
members, a Chairman of the Board (the "Chairman"), who need
not be an Officer or employee of the Corporation. The
Chairman shall preside at all Shareholders Meetings and Board
Meetings and shall have such other powers and perform such
other duties as are incident to such position and as may be
assigned by the Board.
SECTION 2. VACANCIES AND REMOVAL. Any vacancy occurring
in the Board shall be filled as provided in the Articles.
Shareholders shall be notified of any increase in the number
of Directors and the name, principal occupation and other
pertinent information about any Director elected by the Board
to fill any vacancy. Any Director, or the entire Board, may
be removed from office only as provided in the Articles.
SECTION 3. POWERS AND DUTIES. In addition to the powers
and duties expressly conferred upon it by law, the Articles or
these By-Laws, the Board may exercise all such powers of the
Corporation and do all such lawful acts and things as are not
inconsistent with the law, the Articles or these By-Laws.
SECTION 4. ANNUAL BOARD MEETING. Unless otherwise
determined by the Board, the Board shall meet each year on the
same day as the Annual Meeting, at the place where such
Meeting has been held, for the purpose of organization,
election of Officers of the Corporation (the "Officers") and
consideration of any other business that may properly be
brought before such annual meeting of the Board (the "Annual
Board Meeting"). The time of the meeting shall be specified
in the notice for the holding of the Annual Board Meeting. If
the Annual Board Meeting is not held as above provided, the
election of Officers may be held at any subsequent duly
constituted meeting of the Board (a "Board Meeting").
SECTION 5. REGULAR BOARD MEETINGS. Regular meetings of
the Board ("Regular Board Meetings") may be held at stated
times or from time to time, and at such place, either within
or without the State of Indiana, as the Board may determine,
without call and without notice.
SECTION 6. SPECIAL BOARD MEETINGS. Special meetings of
the Board ("Special Board Meetings") may be called at any time
or from time to time, and shall be called on the written
request of at least two Directors, by the Chairman, the Chief
Executive Officer or the President, by causing the Secretary
or any Assistant Secretary to give to each Director, either
personally or by mail, telephone, telegraph, teletype or other
form of wire or wireless communication at least two days'
notice of the date, time and place of such Meeting. Special
Board Meetings shall be held at the Principal Office or at
such other place, within or without the State of Indiana, as
shall be specified in the respective notices or waivers of
notice thereof.
SECTION 7. WAIVER OF NOTICE AND ASSENT. A Director may
waive notice of any Board Meeting before or after the date and
time of the Board Meeting stated in the notice by a written
waiver signed by the Director and filed with the minutes or
corporate records. A Director's attendance at or
participation in a Board Meeting shall constitute a waiver of
notice of such Meeting and assent to any corporate action
taken at such Meeting, unless (a) the Director at the
beginning of such Meeting (or promptly upon his arrival)
objects to holding of or transacting business at the Meeting
and does not thereafter vote for or assent to action taken at
the Meeting; (b) the Director's dissent or abstention from the
action taken is entered in the minutes of such Meeting; or (c)
the Director delivers written notice of his dissent or
abstention to the presiding Director at such Meeting before
its adjournment, or to the Secretary immediately after its
adjournment. The right of dissent or abstention is not
available to a Director who votes in favor of the action
taken.
SECTION 8. QUORUM. At all Board Meetings, a majority of
the number of Directors designated for the full Board (the
"Full Board") shall be necessary to constitute a quorum for
the transaction of any business, except (a) that for the
purpose of filling of vacancies a majority of Directors then
in office shall constitute a quorum, and (b) that a lesser
number may adjourn the Meeting from time to time until a
quorum is present. The act of a majority of the Board present
at a Meeting at which a quorum is present shall be the act of
the Board, unless the act of a greater number is required by
law, the Articles or these By-Laws.
SECTION 9. COMMITTEES OF THE BOARD. The Board may, by
resolution adopted by a majority of the Full Board, designate
regular or special committees of the Board ("Committees"), in
each case comprised of two or more Directors and to have such
powers and exercise such duties as shall be provided by
resolution of the Board.
SECTION 10. RESIGNATIONS. Any Director may resign at
any time by giving written notice to the Board, the Chairman,
the Chief Executive Officer, the President or the Secretary.
Any such resignation shall take effect when delivered unless
the notice specifies a later effective date. Unless otherwise
specified in the notice, the acceptance of such resignation
shall not be necessary to make it effective.
ARTICLE V
OFFICERS
SECTION 1. OFFICERS. The Officers shall be the Chief
Executive Officer, the President, one or more Vice Presidents,
the Secretary and the Treasurer, and may include one or more
Assistant Secretaries, one or more Assistant Treasurers, a
Controller and one or more Assistant Controllers. Any two or
more offices may be held by the same person. The Board may
from time to time elect or appoint such other Officers as it
shall deem necessary, who shall exercise such powers and
perform such duties as may be prescribed from time to time by
these By-Laws or, in the absence of a provision in these By-
Laws in respect thereto, as may be prescribed from time to
time by the Board.
SECTION 2. ELECTION OF OFFICERS. The Officers shall be
elected by the Board at the Annual Board Meeting and shall
hold office for one year or until their respective successors
shall have been duly elected and shall have qualified;
provided, however, that the Board may at any time elect one or
more persons to new or different offices and/or change the
title, designation and duties and responsibilities of any of
the Officers consistent with the law, the Articles and these
By-Laws.
SECTION 3. VACANCIES; REMOVAL. Any vacancy among the
Officers may be filled for the unexpired term by the Board.
Any Officer may be removed at any time by the affirmative vote
of a majority of the Full Board.
SECTION 4. DELEGATION OF DUTIES. In the case of the
absence, disability, death, resignation or removal from office
of any Officer, or for any other reason that the Board shall
deem sufficient, the Board may delegate, for the time being,
any or all of the powers or duties of such Officer to any
other Officer or to any Director.
SECTION 5. CHIEF EXECUTIVE OFFICER. The Chief Executive
Officer shall be a Director and, subject to the control of the
Board, shall have general charge of, and supervision and
authority over, the business and affairs of the Corporation.
If the Chief Executive Officer is not also the Chairman, in
the case of the absence or disability of the Chairman or if no
Chairman shall be elected or appointed by the Board, the Chief
Executive Officer shall preside at all Shareholders' Meetings
and Board Meetings.
SECTION 6. PRESIDENT. The President shall be a
Director, and, subject to the supervision of the Board,
itself, and the Chief Executive Officer, shall have general
charge of, and supervision and authority over, the operations
of the Corporation, and shall have such other powers and
perform such other duties as are incident to this office and
as may be assigned to him by the Board or the Chief Executive
Officer. In the case of the absence, disability, death,
resignation, or removal from office of the Chief Executive
Officer or the vacancy of that office, the powers and duties
of the Chief Executive Officer shall, for the time being,
devolve upon and be exercised by the President, and he shall
thereupon, during such period, exercise and perform all of the
powers and duties of the Chief Executive Officer, except as
may otherwise be provided by the Board.
SECTION 7. VICE PRESIDENTS. Each of the Vice Presidents
shall have such powers and perform such duties as may be
prescribed for him by the Board or delegated to him by the
Chief Executive Officer or the President. In the case of the
absence, disability, death, resignation or removal from office
of the President, the powers and duties of the President
shall, for the time being, devolve upon and be exercised by
the Executive Vice President, if there be one, and if not,
then by such one of the Vice Presidents as the Board, the
Chief Executive Officer or the President may designate, or, if
there be but one Vice President, then upon such Vice
President; and he shall thereupon, during such period,
exercise and perform all of the powers and duties of the
President, except as may be otherwise provided by the Board.
SECTION 8. SECRETARY. The Secretary shall have the
custody and care of the Seal, records, minutes and the Stock
Book of the Corporation; shall attend all Shareholders'
Meetings and Board Meetings, and duly record and keep the
minutes of their proceedings in a book or books to be kept for
that purpose; shall give or cause to be given notice of all
Shareholders' Meetings and Board Meetings when such notice
shall be required; shall file and take charge of all papers
and documents belonging to the Corporation; and shall have
such other powers and perform such other duties as are
incident to the office of secretary of a business corporation,
subject at all times to the direction and control of the
Board, the Chief Executive Officer and the President.
SECTION 9. ASSISTANT SECRETARIES. Each of the Assistant
Secretaries shall assist the Secretary in his duties and shall
have such other powers and perform such other duties as may be
prescribed for him by the Board or delegated to him by the
Chief Executive Officer or the President. In case of the
absence, disability, death, resignation or removal from office
of the Secretary, his powers and duties shall, for the time
being, devolve upon such one of the Assistant Secretaries as
the Board, the Chief Executive Officer, the President or the
Secretary may designate, or, if there be but one Assistant
Secretary, then upon such Assistant Secretary; and he shall
thereupon, during such period, exercise and perform all of the
powers and duties of the Secretary, except as may be otherwise
provided by the Board.
SECTION 10. TREASURER. The Treasurer shall have control
over all records of the Corporation pertaining to moneys and
securities belonging to the Corporation; shall have charge of,
and be responsible for, the collection, receipt, custody and
disbursements of funds of the Corporation; shall have the
custody of all securities belonging to the Corporation; shall
keep full and accurate accounts of receipts and disbursements
in books belonging to the Corporation; and shall disburse the
funds of the Corporation as may be ordered by the Board,
taking proper receipts or making proper vouchers for such
disbursements and preserving the same at all times during his
term of office. When necessary or proper, he shall endorse on
behalf of the Corporation all checks, notes or other
obligations payable to the Corporation or coming into his
possession for or on behalf of the Corporation, and shall
deposit the funds arising therefrom, together with all other
funds and valuable effects of the Corporation coming into his
possession, in the name and the credit of the Corporation in
such depositories as the Board from time to time shall direct,
or in the absence of such action by the Board, as may be
determined by the Chief Executive Officer, the President or
any Vice President. If the Board has not elected a Controller
or an Assistant Controller, or in the absence or disability of
the Controller and each Assistant Controller or if, for any
reason, a vacancy shall occur in such offices, then during
such period the Treasurer shall have, exercise and perform all
of the powers and duties of the Controller. The Treasurer
shall also have such other powers and perform such other
duties as are incident to the office of treasurer of a
business corporation, subject at all times to the direction
and control of the Board, the Chief Executive Officer and the
President.
If required by the Board, the Treasurer shall give the
Corporation a bond, in such an amount and with such surety or
sureties as may be ordered by the Board, for the faithful
performance of the duties of his office and for the
restoration to the Corporation, in case of his death,
resignation, retirement or removal from office, of all books,
papers, vouchers, money and other property of whatever kind in
his possession or under his control belonging to the
Corporation.
SECTION 11. ASSISTANT TREASURERS. Each of the Assistant
Treasurers shall assist the Treasurer in his duties, and shall
have such other powers and perform such other duties as may be
prescribed for him by the Board or delegated to him by the
Chief Executive Officer or the President. In case of the
absence, disability, death, resignation or removal from office
of the Treasurer, his powers and duties shall, for the time
being, devolve upon such one of the Assistant Treasurers as
the Board, the Chief Executive Officer, the President or the
Treasurer may designate, or, if there be but one Assistant
Treasurer, then upon such Assistant Treasurer; and he shall
thereupon, during such period, exercise and perform all the
powers and duties of the Treasurer except as may be otherwise
provided by the Board. If required by the Board, each
Assistant Treasurer shall likewise give the Corporation a
bond, in such amount and with such surety or sureties as may
be ordered by the Board, for the same purposes as the bond
that may be required to be given by the Treasurer.
SECTION 12. CONTROLLER. The Controller shall have
direct control over all accounting records of the Corporation
pertaining to moneys, properties, materials and supplies,
including the bookkeeping and accounting departments; shall
have direct supervision over the accounting records in all
other departments pertaining to moneys, properties, materials
and supplies; shall render to the Chief Executive Officer, the
President and the Board, at Regular Board Meetings or whenever
the same shall be required, an account of all his transactions
as Controller and of the financial condition of the
Corporation; and shall have such other powers and perform such
other duties as are incident to the office of controller of a
business corporation, subject at all times to the direction
and control of the Board, the Chief Executive Officer and the
President.
SECTION 13. ASSISTANT CONTROLLERS. Each of the
Assistant Controllers shall assist the Controller in his
duties, and shall have such other powers and perform such
other duties as may be prescribed for him by the Board or
delegated to him by the Chief Executive Officer or the
President. In case of the absence, disability, death,
resignation or removal from office of the Controller, his
powers and duties shall, for the time being, devolve upon such
one of the Assistant Controllers as the Board, the Chief
Executive Officer, the President or the Controller may
designate, or, if there be but one Assistant Controller, then
upon such Assistant Controller; and he shall thereupon, during
such period, exercise and perform all the powers and duties of
the Controller, except as may be otherwise provided by the
Board.
ARTICLE VI
CERTIFICATES FOR SHARES
SECTION 1. CERTIFICATES. Certificates for Shares
("Certificates") shall be in such form, consistent with law
and the Articles, as shall be approved by the Board.
Certificates for each class, or series within a class, of
Shares, shall be numbered consecutively as issued. Each
Certificate shall state the name of the Corporation and that
it is organized under the laws of the State of Indiana; the
name of the registered holder; the number and class and the
designation of the series, if any, of the Shares represented
thereby; and a summary of the designations, relative rights,
preferences and limitations applicable to such class and, if
applicable, the variations in rights, preferences and
limitations determined for each series and the authority of
the Board to determine such variations for future series;
provided, however, that such summary may be omitted if the
Certificate states conspicuously on its front or back that the
Corporation will furnish the Shareholder such information upon
written request and without charge. Each Certificate shall be
signed (either manually or in facsimile) by (i) the Chief
Executive Officer, the President or a Vice President and (ii)
the Secretary or an Assistant Secretary, or by any two or more
Officers that may be designated by the Board, and may have
affixed thereto the Seal, which may be a facsimile, engraved
or printed.
SECTION 2. RECORD OF CERTIFICATES. Shares shall be
entered in the Stock Book as they are issued, and shall be
transferable on the Stock Book by the holder thereof in
person, or by his attorney duly authorized thereto in writing,
upon the surrender of the outstanding Certificate therefor
properly endorsed.
SECTION 3. LOST OR DESTROYED CERTIFICATES. Any person
claiming a Certificate to be lost or destroyed shall make
affidavit or affirmation of that fact and, if the Board, the
Chief Executive Officer or the President shall so require,
shall give the Corporation and/or the transfer agents and
registrars, if they shall so require, a bond of indemnity, in
form and with one or more sureties satisfactory to the Board,
the Chief Executive Officer or the President and/or the
transfer agents and registrars, in such amount as the Board,
the Chief Executive Officer or the President may direct and/or
the transfer agents and registrars may require, whereupon a
new Certificate may be issued of the same tenor and for the
same number of Shares as the one alleged to be lost or
destroyed.
SECTION 4. SHAREHOLDER ADDRESSES. Every Shareholder
shall furnish the Secretary with an address to which notices
of Meetings and all other notices may be served upon him or
mailed to him, and in default thereof notices may be addressed
to him at his last known address or at the Principal Office.
ARTICLE VII
CORPORATE BOOKS AND RECORDS
SECTION 1. PLACES OF KEEPING. Except as otherwise
provided by law, the Articles or these By-Laws, the books and
records of the Corporation (including the "Corporate Records,"
as defined in the Articles) may be kept at such place or
places, within or without the State of Indiana, as the Board
may from time to time by resolution determine or, in the
absence of such determination by the Board, as shall be
determined by the Chief Executive Officer or the President.
SECTION 2. STOCK BOOK. The Corporation shall keep at
the Principal Office the original Stock Book or a duplicate
thereof, or, in case the Corporation employs a stock registrar
or transfer agent within or without the State of Indiana,
another record of the Shareholders in a form that permits
preparation of a list of the names and addresses of all the
Shareholders, in alphabetical order by class of Shares,
stating the number and class of Shares held by each
Shareholder (the "Record of Shareholders").
SECTION 3. INSPECTION OF CORPORATE RECORDS. Any
Shareholder (or the Shareholder's agent or attorney authorized
in writing) shall be entitled to inspect and copy at his
expense, after giving the Corporation at least five business
days written notice of his demand to do so, the following
Corporate Records: (1) the Articles; (2) these By-Laws; (3)
minutes of all Shareholders' Meetings and records of all
actions taken by the Shareholders without a meeting
(collectively, "Shareholders Minutes") for the prior three
years; (4) all written communications by the Corporation to
the Shareholders including the financial statements furnished
by the Corporation to the Shareholders for the prior three
years; (5) a list of the names and business addresses of the
current Directors and the current Officers; and (6) the most
recent Annual Report of the Corporation as filed with the
Secretary of State of Indiana. Any Shareholder (or the
Shareholder's agent or attorney authorized in writing) shall
also be entitled to inspect and copy at his expense, after
giving the Corporation at least five business days written
notice of his demand to do so, the following Corporate
Records, if his demand is made in good faith and for a proper
purpose and describes with reasonable particularity his
purpose and the records he desires to inspect, and the records
are directly connected with his purpose: (1) to the extent
not subject to inspection under the previous sentence,
Shareholders Minutes, excerpts from minutes of Board Meetings
and of Committee meetings, and records of any actions taken by
the Board or any Committee without a meeting; (2) appropriate
accounting records of the Corporation; and (3) the Record of
Shareholders.
SECTION 4. RECORD DATE. The Board may, in its
discretion, fix in advance a Record Date not more than seventy
days before the date (a) of any Shareholders' Meeting, (b) for
the payment of any dividend or the making of any other
distribution, (c) for the allotment of rights, or (d) when any
change or conversion or exchange of Shares shall go into
effect. If the Board fixes a Record Date, then only
Shareholders who are Shareholders of record on such Record
Date shall be entitled (a) to notice of and/or to vote at any
such Meeting, (b) to receive any such dividend or other
distribution, (c) to receive any such allotment of rights, or
(d) to exercise the rights in respect of any such change,
conversion or exchange of Shares, as the case may be,
notwithstanding any transfer of Shares on the Stock Book after
such Record Date.
SECTION 5. TRANSFER AGENTS; REGISTRARS. The Board may
appoint one or more transfer agents and registrars for its
Shares and may require all Certificates to bear the signature
either of a transfer agent or of a registrar, or both.
ARTICLE VIII
CHECKS, DRAFTS, DEEDS AND SHARES OF STOCK
SECTION 1. CHECKS, DRAFTS, NOTES, ETC. All checks,
drafts, notes or orders for the payment of money of the
Corporation shall, unless otherwise directed by the Board or
otherwise required by law, be signed by one or more Officers
as authorized in writing by the Chief Executive Officer or the
President. In addition, the Chief Executive Officer or the
President may authorize any one or more employees of the
Corporation ("Employees") to sign checks, drafts and orders
for the payment of money not to exceed specific maximum
amounts as designated in writing by the Chief Executive
Officer or the President for any one check, draft or order.
When so authorized by the Chief Executive Officer or the
President, the signature of any such Officer or Employee may
be a facsimile signature.
SECTION 2. DEEDS, NOTES, BONDS, MORTGAGES, CONTRACTS,
ETC. All deeds, notes, bonds and mortgages made by the
Corporation, and all other written contracts and agreements,
other than those executed in the ordinary course of corporate
business, to which the Corporation shall be a party, shall be
executed in its name by the Chief Executive Officer, the
President, a Vice President or any other Officer so authorized
by the Board and, when necessary or required, the Secretary or
an Assistant Secretary shall attest the execution thereof.
All written contracts and agreements into which the
Corporation enters in the ordinary course of corporate
business shall be executed by any Officer or by any other
Employee designated by the Chief Executive Officer, the
President or a Vice President to execute such contracts and
agreements.
SECTION 3. SALE OR TRANSFER OF STOCK. Subject always to
the further orders and directions of the Board, any share of
stock issued by any corporation and owned by the Corporation
(including reacquired Shares of the Corporation) may, for sale
or transfer, be endorsed in the name of the Corporation by the
Chief Executive Officer, the President or a Vice President,
and said endorsement shall be duly attested by the Secretary
or an Assistant Secretary either with or without affixing
thereto the Seal.
SECTION 4. VOTING OF STOCK OF OTHER CORPORATIONS.
Subject always to the further orders and directions of the
Board, any share of stock issued by any other corporation and
owned or controlled by the Corporation (an "Investment Share")
may be voted at any shareholders' meeting of such other
corporation by the Chief Executive Officer, the President or a
Vice President. Whenever, in the judgment of the Chief
Executive Officer or the President, it is desirable for the
Corporation to execute a proxy or give a shareholder's consent
in respect of any Investment Share, such proxy or consent
shall be executed in the name of the Corporation, by the Chief
Executive Officer, the President or a Vice President, and,
when necessary or required, shall be attested by the Secretary
or an Assistant Secretary either with or without affixing
thereto the Seal. Any person or persons designated in the
manner above stated as the proxy or proxies of the Corporation
shall have full right, power and authority to vote an
Investment Share the same as such Investment Share might be
voted by the Corporation.
ARTICLE IX
FISCAL YEAR
SECTION 1. FISCAL YEAR. The Corporation's fiscal year
shall begin on October 1 of each year and end on September 30
of the following year.
ARTICLE X
AMENDMENTS
SECTION 1. AMENDMENTS. These By-Laws may be altered,
amended or repealed, in whole or in part, and new By-Laws may
be adopted, at any Board Meeting by the affirmative vote of a
majority of the Full Board.
<TABLE>
EXHIBIT 12
INDIANA GAS COMPANY, INC.
AND SUBSIDIARY COMPANIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(In Thousands, Except Ratios)
Twelve Mos.
Ended Fiscal Year Ended September 30
3/31/97 1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C>
Earnings:
Net income $35,430 $38,630 $32,109 $34,596 $28,534 $25,743
Adjustments:
Income taxes 20,190 22,568 18,630 17,977 16,030 12,800
Fixed charges (see below) 17,515 16,844 16,395 16,986 17,556 15,642
Total adjusted earnings $73,135 $78,042 $67,134 $69,559 $62,120 $54,185
Fixed charges:
Total interest expense $16,561 $15,907 $15,530 $16,037 $16,640 $14,556
Interest component of rents 954 937 865 949 916 1,086
Total fixed charges $17,515 $16,844 $16,395 $16,986 $17,556 $15,642
Ratio of earnings to fixed charges 4.2 4.6 4.1 4.1 3.5 3.5
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from Indiana Gas
Company, Inc.'s consolidated financial statements as of March 31, 1997, and for
the six months then ended and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> MAR-31-1997
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 604,861
<OTHER-PROPERTY-AND-INVEST> 105
<TOTAL-CURRENT-ASSETS> 91,523
<TOTAL-DEFERRED-CHARGES> 14,820
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 711,309
<COMMON> 142,995
<CAPITAL-SURPLUS-PAID-IN> 0
<RETAINED-EARNINGS> 165,097
<TOTAL-COMMON-STOCKHOLDERS-EQ> 308,092
0
0
<LONG-TERM-DEBT-NET> 139,733
<SHORT-TERM-NOTES> 38,500
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 35,000
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 189,984
<TOT-CAPITALIZATION-AND-LIAB> 711,309
<GROSS-OPERATING-REVENUE> 388,176
<INCOME-TAX-EXPENSE> 23,862
<OTHER-OPERATING-EXPENSES> 316,901
<TOTAL-OPERATING-EXPENSES> 340,763
<OPERATING-INCOME-LOSS> 47,413
<OTHER-INCOME-NET> 879
<INCOME-BEFORE-INTEREST-EXPEN> 48,292
<TOTAL-INTEREST-EXPENSE> 8,734
<NET-INCOME> 39,558
0
<EARNINGS-AVAILABLE-FOR-COMM> 39,558
<COMMON-STOCK-DIVIDENDS> 13,000
<TOTAL-INTEREST-ON-BONDS> 6,985
<CASH-FLOW-OPERATIONS> 35,410
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
