SECURlTlES AND EXCHANGE COMMlSSlON
WASHINGTON, D. C. 20549
FORM 10-K
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
(Fee Required)
For the fiscal year ended
December 31, 1994 Commission File Number 1-3132-2
INDIANAPOLIS POWER & LIGHT COMPANY
(Exact name of Registrant as specified in its charter)
Indiana 35-0413620
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
25 Monument Circle
Indianapolis, Indiana 46204
(Address of principal executive offices) (Zip Code)
Registrants's telephone number, including area code: 317-261-8261
Securities Registered Pursuant to Section 12(b) of the Act: None
Securities Registered Pursuant to Section 12(g) of the Act:
518,985 Shares of Cumulative Preferred Stock
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 the registrant was required to file such reports),
and (2) has been subject to the filing requirements for at least the
past 90 days. Yes X No
--------- ---------
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10-K. (X)
As of January 31, 1995, there were 17,206,630 shares of the
registrant's common stock (without par value) issued and outstanding.
------------------------------------
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Indianapolis Power & Light Company definitive
Information Statement for the Annual Meeting of Shareholders to be
held on April 19, 1995 are incorporated by reference into Part III of
this Report.
PART I
Item 1. BUSINESS
ORGANIZATION
Indianapolis Power & Light Company (IPL) is an operating
public utility incorporated under the laws of the state of Indiana
on October 27, 1926. IPL is a subsidiary of IPALCO Enterprises,
Inc. (IPALCO). IPALCO is a holding company incorporated under the
laws of the state of Indiana on September 14, 1983. All common
stock of IPL is owned by IPALCO.
GENERAL
IPL is engaged primarily in generating, transmitting,
distributing and selling electric energy in the city of
Indianapolis and neighboring cities, towns, communities, and
adjacent rural areas, all within the state of Indiana, the most
distant point being about forty miles from Indianapolis. It also
produces, distributes and sells steam within a limited area in
such city. There have been no significant changes in the services
rendered, or in the markets or methods of distribution, since the
beginning of the fiscal year. IPL intends to do business of the
same general character as that in which it is now engaged. No
private or municipally-owned electric public utility companies are
competing with IPL in the territory it serves.
IPL operates under indeterminate permits subject to the
jurisdiction of the Indiana Utility Regulatory Commission (IURC).
Such permits are subject to revocation by the IURC for cause. The
Public Service Commission Act of Indiana (the PSC Act), which
provides for the issuance of such permits, also provides that if
the PSC Act is repealed, indeterminate permits will cease and a
utility will again come into possession of such franchises as were
surrendered at the time of the issue of the permit, but in no
event shall such reinstated franchise be terminated within less
than five years from the date of repeal of the PSC Act.
The electric utility business is affected by the various
seasonal weather patterns throughout the year and, therefore, the
operating revenues and associated operating expenses are not
generated evenly by months during the year.
IPL's electric system is directly interconnected with the
electric systems of Indiana Michigan Power Company, PSI Energy,
Inc., Southern Indiana Gas and Electric Company, Wabash Valley
Power Association and Hoosier Energy Rural Electric Cooperative,
Inc.
Also, IPL and 28 other electric utilities, known as the East
Central Area Reliability Group (the Group), are cooperating under
an agreement which provides for coordinated planning of generating
and transmission facilities and the operation of such facilities
to provide maximum reliability of bulk power supply in the nine-
state region served by the Group. Smaller electric utility
systems, Independent Power Producers, and Power Marketers
participate as associate members.
In 1994, approximately 99.6% of the total kilowatthours sold
by IPL were generated from coal, .3% from middle distillate fuel
oil and .1% from secondary steam purchased from the Indianapolis
Resource Recovery Project. In addition to use in oil-fired
generating units, fuel oil is used for start up and flame
stabilization in coal-fired generating units as well as for coal
thawing and coal handling. Gas fuel is used in IPL's newer
combustion turbines.
IPL's long-term coal contracts provide for the supply of the
major portion of its burn requirements through the year 1999,
assuming environmental regulations can be met. The long-term coal
agreements are with four suppliers and the coal is produced
entirely in the state of Indiana. These four suppliers are
located in Daviess, Greene, Knox and Warrick counties, and are not
affiliates of IPL. See Exhibits listed under Part IV Item
14(a)3(10.1 to 10.9) for a list of coal contracts. It is presently
believed that all coal used by IPL will be mined by others. IPL
normally carries a 70-day supply of coal and fuel oil to offset
unforeseen occurrences such as labor disputes, equipment breakdowns
and power sales to other utilities. When strikes are anticipated
in the coal industry, IPL increases its stockpile to an approximate
92-day supply.
The combined cost of coal and fuel oil used in the generation
of electric energy for 1994 averaged 1.162 cents per kilowatthour
or $24.95 per equivalent ton of coal, compared with the 1993
average fuel cost for electric generation of 1.151 cents per
kilowatthour or $24.49 per equivalent ton of coal.
IPL has a long-term contract to purchase steam for use in its
steam distribution system with Ogden Martin Systems of
Indianapolis, Inc. (Ogden Martin). Ogden Martin owns and operates
the Indianapolis Resource Recovery Project which is a waste-to-
energy facility located in Marion County, Indiana. During 1994,
IPL's steam system purchased 51.1% of its total therm requirement
from Ogden Martin. Additionally, 30.2% of its 1994 one-hour peak
load was met with steam purchased from Ogden Martin. IPL also
purchased 4.9 million secondary therms which represent Ogden
Martin send-out in excess of the IPL steam system requirements.
Such secondary steam is used to produce electricity at the IPL
Perry K and Perry W facilities.
CONSTRUCTION
The cost of IPL's construction program during 1994, 1993 and
1992 was $185.6 million, $149.3 million and $115.3 million,
respectively, including Allowances for Funds Used During
Construction (AFUDC) of $7.3 million, $3.6 million and $3.2
million, respectively.
IPL's construction program is reviewed periodically and is
updated to reflect among other things the changes in economic
conditions, revised load forecasts and cost escalations under
construction contracts. The most recent projections indicate that
IPL will need about 600 megawatts (MW) of additional capacity
resources by the year 2000. IPL plans to meet this need through
the combination of the use of Demand Side Management, power
purchases and peaking turbines.
During 1992, IPL entered into a five-year firm power purchase
agreement with Indiana Michigan Power Company (IMP), which will
supply additional capacity for the near-term requirements. IPL
receives 200 MW of capacity. IPL can also elect to extend the
agreement through November 1999. See Item 7, "MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS" under "Capital Requirements" for additional
information regarding the IMP agreement.
IPL's construction program for the five-year period 1995-
1999, is estimated to cost $608.9 million including AFUDC. The
estimated cost of the program by year (in millions) is $213.6 in
1995; $93.6 in 1996; $87.8 in 1997; $99.1 in 1998; and $114.8 in
1999. It includes $73.6 million for two 80 MW combustion turbines
with in-service dates of 1999 and 2000, respectively. The
forecast also includes $253.1 million for additions, improvements
and extensions to transmission and distribution lines,
substations, power factor and voltage regulating equipment,
distribution transformers and street lighting distribution. With
respect to the expenditures for pollution control facilities to
comply with the Clean Air Act and with respect to the regulatory
authority of the IURC as it relates to the integrated resource
plan, see "REGULATORY MATTERS" and Item 7, "MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS."
FINANCING
Long-term debt, internally generated funds and temporary
short-term borrowings are forecasted to provide the funds
required for the five-year construction program. Uncertainties
which could affect this forecast include the impact of inflation
on operating expenses, the actual degree of growth in KWH sales and
the level of interchange sales with other utilities. Additionally,
IPL has authority from the IURC to redeem and replace certain
of its existing securities.
EMPLOYEE RELATIONS
As of December 31, 1994, IPL had 2,238 employees of whom
1,129 were represented by the International Brotherhood of
Electrical Workers, AFL-CIO (IBEW) and 398 were represented by the
Electric Utility Workers Union (EUWU), an unaffiliated labor
organization. In December 1993, the membership of the IBEW
ratified a new labor agreement which remains in effect until
December 16, 1996. The agreement provided for general pay
adjustments of 4% in 1993 and 3.5% in 1994, and provides for a
3.5% adjustment in 1995, and changes in pension and health care
coverage. In March 1992, the membership of the EUWU ratified a
new labor agreement which was in effect until February 27, 1995.
IPL and the EUWU are currently negotiating a new agreement, and
the current agreement has been extended through March 13, 1995.
The agreement provided for general pay adjustments of 4.5%
in both 1992 and 1993, and 3% in 1994, as well as changes in
health care coverage.
REGULATORY MATTERS
IPL is subject to regulation by the IURC as to its services
and facilities, valuation of property, the construction, purchase
or lease of electric generating facilities, classification of
accounts, rates of depreciation, rates and charges, issuance of
securities (other than evidences of indebtedness payable less than
twelve months after the date of issue), the acquisition and sale
of public utility properties or securities and certain other
matters. For a description of the current rate proceeding, see
Item 3, "LEGAL PROCEEDINGS."
In addition, IPL is subject to the jurisdiction of the
Federal Energy Regulatory Commission, in respect of short-term
borrowings not regulated by the IURC, the transmission of electric
energy in interstate commerce, the classification of its accounts
and the acquisition and sale of utility property in certain
circumstances as provided by the Federal Power Act.
IPL is also subject to federal, state and local environmental
laws and regulations, particularly as to generating station
discharges affecting air and water quality. The impact of such
regulations on the capital and operating costs of IPL has been and
will continue to be substantial. IPL's 1995-1999 construction
program includes $176 million in environmental costs, including
AFUDC, of which approximately $142 million pertains to the Clean
Air Act. Accordingly, IPL has developed a plan to reduce sulfur
dioxide and nitrogen oxide emissions from several generating
units. This plan has been approved by the IURC. Estimated annual
costs for all air, solid waste and water environmental compliance
measures are $131 million and $27 million in 1995 and 1996,
respectively. See also Item 3, "LEGAL PROCEEDINGS."
<TABLE>
INDIANAPOLIS POWER & LIGHT COMPANY
STATISTICAL INFORMATION - ELECTRIC
The following table of statistical information presents additional data on IPL's operation.
<CAPTION>
Year Ended December 31,
----------------------------------------------------------------------------------
1994 1993 1992 1991 1990
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Operating Revenues (In Thousands):
Residential $ 230,805 $ 225,138 $ 212,757 $ 224,039 $ 207,734
Small industrial and commercial 129,346 127,551 126,588 135,456 134,514
Large industrial and commercial 266,703 255,945 243,446 237,200 225,586
Public lighting 6,949 7,186 7,133 7,106 7,122
Miscellaneous 7,186 7,373 6,018 6,960 6,598
-------------- -------------- -------------- -------------- --------------
Revenues - ultimate consumers 640,989 623,193 595,942 610,761 581,554
Sales for resale - REMC 1,098 897 861 900 759
Sales for resale - other 7,680 5,237 2,400 4,197 10,418
-------------- -------------- -------------- -------------- --------------
Total electric revenues $ 649,767 $ 629,327 $ 599,203 $ 615,858 $ 592,731
============== ============== ============== ============== ==============
Kilowatthour Sales (In Millions):
Residential 4,077 4,014 3,675 3,960 3,585
Small industrial and commercial 2,207 2,202 2,171 2,331 2,322
Large industrial and commercial 6,306 6,169 5,843 5,612 5,399
Public lighting 64 62 64 64 65
-------------- -------------- -------------- -------------- --------------
Sales - ultimate consumers 12,654 12,447 11,753 11,967 11,371
Sales for resale - REMC 26 24 23 23 20
Sales for resale - other 456 321 169 256 555
-------------- -------------- -------------- -------------- --------------
Total kilowatthours sold 13,136 12,792 11,945 12,246 11,946
============== ============== ============== ============== ==============
Customers at End of Year:
Residential 360,347 356,015 352,139 347,718 344,094
Small industrial and commercial 38,849 38,359 38,171 38,011 37,863
Large industrial and commercial 3,525 3,342 3,163 2,952 2,714
Public lighting 266 252 239 229 212
-------------- -------------- -------------- -------------- --------------
Total ultimate consumers 402,987 397,968 393,712 388,910 384,883
Sales for resale - REMC 1 1 1 1 1
-------------- -------------- -------------- -------------- --------------
Total electric customers 402,988 397,969 393,713 388,911 384,884
============== ============== ============== ============== ==============
Miscellaneous Statistics:
Kilowatthour output (In Millions):
Generated (net after station use) 13,580 13,254 12,525 12,851 12,254
Purchased 206 325 126 160 300
-------------- -------------- -------------- -------------- --------------
Total generated and purchased 13,786 13,579 12,651 13,011 12,554
Company use, line loss, etc. 650 787 706 765 608
-------------- -------------- -------------- -------------- --------------
Energy sold 13,136 12,792 11,945 12,246 11,946
============== ============== ============== ============== ==============
Load factor (percent) 57.64 57.44 56.72 56.37 54.83
Average BTU per net kilowatthour 10,445 10,503 10,385 10,455 10,474
Cost of fuel per million BTU $ 1.112 $ 1.096 $ 1.103 $ 1.113 $ 1.109
Cost of fuel per ton (includes oil
stated in equivalent tons of coal) $ 24.946 $ 24.488 $ 24.547 $ 24.804 $ 24.711
Summer plant capability (megawatts)* 2,907 2,829 2,829 2,829 2,829
Maximum demand on IPL system (megawatts)* 2,640 2,635 2,505 2,583 2,498
Average use per residential
customer (kilowatthours) 11,393 11,345 10,515 11,460 10,514
Average revenue per residential customer $ 645.02 $ 636.28 $ 608.68 $ 648.36 $ 609.29
Average revenue per small industrial and
commercial customer $ 3,327.04 $ 3,310.59 $ 3,305.94 $ 3,552.03 $ 3,566.13
Average revenue per large industrial and
commercial customer $ 77,960.62 $ 78,055.83 $ 79,324.43 $ 83,816.09 $ 87,065.08
Average residential revenue per
kilowatthour (cents) 5.662 5.609 5.789 5.658 5.795
* All figures are net of station use.
</TABLE>
Item 2. PROPERTIES
IPL's executive offices are located at 25 Monument Circle,
Indianapolis, Indiana. This facility contains approximately
201,300 square feet of space and contains certain administrative
operations of IPALCO's subsidiaries.
IPL also owns two service centers located at 1230 West Morris
Street and 3600 North Arlington Avenue, both in Indianapolis,
Indiana. IPL's customer service center is located at 2102 North
Illinois Street in Indianapolis.
IPL owns and operates five primarily coal-fired generating
plants, three of which are used for total electric generation and
two of which are used for a combination of electric and steam
generation. In relation to electric generation, there exists a
total gross nameplate rating of 2,960 MW, a winter capability of
2,962 MW and a summer capability of 2,907 MW. All figures are net
of station use. In relation to steam generation, there exists a
gross capacity of 2,290 Mlbs. (thousands of pounds) per hour.
Total Electric Stations:
H. T. Pritchard plant (Pritchard), 25 miles southwest of
Indianapolis (six units in service - one in 1949, 1950,
1951, two in 1953 and one in 1956) with 367 MW nameplate
rating and net winter and summer capabilities of 344 MW and
341 MW, respectively.
E. W. Stout plant (Stout) located in southwest part of Marion
County (five units in service - one each in 1941, 1947,
1958, 1961 and 1973) with 846 MW nameplate rating and net
winter and summer capabilities of 898 MW and 845 MW,
respectively.
Petersburg plant (Petersburg), located in Pike County,
Indiana (four units in service - one each in 1967, 1969,
1977 and 1986) with 1,716 MW nameplate rating and net
winter and summer capabilities of 1,690 MW and 1,690 MW,
respectively.
Combination Electric and Steam Stations:
C.C. Perry Section K plant (Perry K), in the city of
Indianapolis with 20 MW nameplate rating (net winter
capability 20 MW, summer 19 MW) for electric and a gross
capacity of 1,990 Mlbs. per hour for steam.
C.C. Perry Section W plant (Perry W), in the city of
Indianapolis with 11 MW nameplate rating (net winter
capability 10 MW, summer 12 MW) for electric and a gross
capacity of 300 Mlbs. per hour for steam.
Net electrical generation during 1994, at the Petersburg,
Stout and Pritchard stations accounted for about 74.9%, 21.1% and
4.0%, respectively, of IPL's total net generation. All steam
generation by IPL for the steam system was produced by the Perry K
and Perry W stations.
Included in the above totals are three gas turbine units at
the Stout station added in 1973 and one gas turbine added in 1994
with a combined nameplate rating of 139 MW, one diesel unit each
at Pritchard and Stout stations, and three diesel units at
Petersburg station, all added in 1967. Each diesel unit has a
nameplate rating of 3 MW.
IPL's transmission system includes 454 circuit miles of
345,000 volt lines, 360 circuit miles of 138,000 volt lines and
274 miles of 34,500 volt lines. Distribution facilities include
4,689 pole miles and 19,807 wire miles of overhead lines.
Underground distribution and service facilities include 436 miles
of conduit and 4,900 wire miles of conductor. Underground street
lighting facilities include 107 miles of conduit and 670 wire
miles of conductor. Also included in the system are 76 bulk power
substations and 84 distribution substations.
Steam distribution properties include 24 miles of mains with
276 services. Other properties include coal and other minerals,
underlying 798 acres in Sullivan County and coal underlying about
6,215 acres in Pike and Gibson Counties, Indiana. Additional
land, approximately 4,722 acres in Morgan County, Indiana and
approximately 884 acres in Switzerland County, Indiana has been
purchased for future plant sites.
All of the facilities owned by IPL are well-maintained, in
good condition and adequate to meet the present needs of IPL.
The Mortgage and Deed of Trust of IPL, together with the
Supplemental Indentures thereto (the "Mortgage"), secure first
mortgage bonds issued by IPL. Pursuant to the terms of the
Mortgage, substantially all property owned by IPL is subject to a
direct first mortgage lien.
Item 3. LEGAL PROCEEDINGS
On August 18, 1993, the IURC entered an order in Cause No.
39437, approving IPL's Environmental Compliance Plan to comply
with the Clean Air Act Amendments of 1990. The estimated cost of
IPL's Environmental Compliance Plan is approximately $250 million
before including allowance for funds used during construction. A
primary part of IPL's Plan, scrubbing IPL's Petersburg 1 and 2
coal-fired units by 1996 to enable IPL to continue to burn high
sulfur coal, was opposed by the Office of Utility Consumer
Counselor (OUCC), the Citizens Action Coalition (CAC) and the
Industrial Intervenors Group (IIG). OUCC, CAC and IIG appealed
the Commission's order to the Indiana Court of Appeals. On June
17, 1994, the OUCC, CAC and IIG filed their respective appellants'
briefs. IPL filed its appellee's brief on September 6, 1994 and
the state of Indiana filed an amicus brief on October 3, 1994 in
support of the constitutionality of the Indiana law that governs
the Environmental Compliance proceedings before the IURC. On
October 24, 1994 appellants filed their reply briefs, and a
decision is anticipated during 1995.
In the retail electric rate case now pending before the IURC,
a prehearing conference was held on June 8, 1994, and an order was
issued July 20, 1994, establishing a test year ending June 30,
1994. Pursuant to the order, IPL prefiled its case-in-chief on
October 11, 1994, and hearings on IPL's case-in-chief commenced on
February 7, 1995. The order further established the following
procedural schedule: April 21, 1995, the OUCC and intervenors
prefile their respective cases-in-chief; May 26, 1995, IPL
prefiles its Supplemental testimony and rebuttal case; June 16,
1995, OUCC and intervenors file cross answering and surrebuttal
testimony; July 10, 1995, hearings commence on OUCC and
intervenors cases-in-chief and all Supplemental and rebuttal
testimony. A hearing for the public pursuant to Indiana Statute
will be held between April 21, 1995 and July 10, 1995 on a date
later to be determined by the IURC. See "MANAGEMENT'S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS -
1994 Rate Proceeding" for additional information regarding the
rate proceeding.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
EXECUTIVE OFFICERS OF THE REGISTRANT AT FEBRUARY 28, 1995
Name, age (at December 31, 1994), and positions and offices held for
the past five years:
From To
John R. Hodowal (49)
Chairman of the Board February, 1990
Chief Executive Officer May, 1989
Executive Vice President April, 1987 May, 1989
Ramon L. Humke (62)
President and Chief Operating
Officer February, 1990
President and Chief Executive
Officer of Ameritech Services
and Senior Vice President of
Ameritech Bell Group September, 1989 February, 1990
President and Chief Executive
Officer of Indiana Bell
Telephone Company October, 1983 September, 1989
John R. Brehm (41)
Senior Vice President - Finance
and Information Services May, 1991
Senior Vice President -
Financial Services May, 1989 May, 1991
Treasurer August, 1987 May, 1989
Robert W. Rawlings (53)
Senior Vice President -
Electric Production May, 1991
Vice President - Electric
Production May, 1989 May, 1991
Vice President - Engineering
and Construction April, 1986 May, 1989
Bryan G. Tabler (51)
Senior Vice President -
Secretary and General Counsel January, 1995
Partner, Barnes & Thornburg January, 1979 October, 1994
Gerald D. Waltz (55)
Senior Vice President -
Business Development May, 1991
Senior Vice President -
Engineering and Operations April, 1986 May, 1991
Max Califar (41)
Vice President - Human
Resources December, 1992
Treasurer May, 1989 December, 1992
Assistant Controller July, 1987 May, 1989
From To
Steven L. Meyer (36)
Treasurer December, 1992
Stephen J. Plunkett (46)
Controller May, 1991
Assistant Controller May, 1989 May, 1991
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED SECURITY
HOLDER MATTERS
All common stock of IPL is owned by IPALCO and is not
publicly traded on any stock exchange.
Aggregate quarterly dividends paid on the common stock
during 1994 and 1993 were as follows (in thousands):
1994 1993
------- -------
First Quarter $19,223 $18,445
Second Quarter 19,995 19,209
Third Quarter 20,011 19,209
Fourth Quarter 20,011 19,209
The IPL Board of Directors at its meeting on February 28,
1995, declared a regular quarterly dividend on common stock of
$20,419,652.34 in total, payable April 15, 1995.
Dividend Restrictions
So long as any of the several series of bonds of IPL issued
under the Mortgage and Deed of Trust, dated as of May 1, 1940, as
supplemented and modified, executed by IPL to American National
Bank and Trust Company of Chicago, as Trustee, remain
outstanding, IPL is restricted in the declaration and payment of
dividends, or other distribution on shares of its capital stock
of any class, or in the purchase or redemption of such shares, to
the aggregate of its net income, as defined in Section 47 of such
Mortgage, after December 31, 1939. The amount which these
Mortgage provisions would have permitted IPL to declare and pay
as dividends at December 31, 1994, exceeded retained earnings at
that date. Such restrictions do not apply to the declaration or
payment of dividends upon any shares of capital stock of any
class to an amount in the aggregate not in excess of $1,107,155,
or to the application to purchase or redemption of any shares of
capital stock of any class of amounts not to exceed in the
aggregate the net proceeds received by IPL from the sale of any
shares of its capital stock of any class subsequent to December
31, 1939. IPL believes these restrictions will not restrict
anticipated dividends.
Item 6. SELECTED FINANCIAL DATA
-----------------------
<TABLE>
<CAPTION>
(In Thousands) 1994 1993 1992 1991 1990
- ------------------------------ -------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Total operating revenues $ 686,076 $ 664,303 $ 633,203 $ 647,873 $ 621,578
Operating income 143,310 142,368 134,240 149,876 143,906
Allowance for funds used
during construction 9,381 5,527 5,081 2,611 2,044
Income applicable to
common stock 100,641 99,584 89,876 100,684 92,169
Utility plant - net 1,711,772 1,608,871 1,532,964 1,488,940 1,463,622
Total assets 1,992,097 1,870,306 1,763,246 1,686,439 1,670,917
Construction expenditures 178,295 145,765 112,037 94,633 89,536
Common shareholder's equity 725,762 705,149 682,413 666,223 636,131
Nonredeemable cumulative
preferred stock 51,898 51,898 51,898 51,898 51,898
Long-term debt (less current
maturities and sinking
fund requirements) 654,121 532,260 540,641 537,718 536,580
See financial statements.
</TABLE>
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
On a national basis, competition for wholesale and retail
sales within the electric utility industry has been increasing.
In Indiana, competition has been primarily focused on the
wholesale power markets. Existing Indiana law provides for
public utilities to have an exclusive permit at the retail
level. The impact of continuing competitive pressures on IPL's
wholesale and retail electric and steam markets cannot be
determined at this time.
Rate Matters
1994 Rate Proceeding
IPL has asked the Indiana Utility Regulatory Commission
(IURC) to approve a new schedule of electric rates. The
overall rate increase amounts to about 13.9% and is estimated
to generate additional annual revenues of $87.7 million. Under
IPL's proposal, the percent of increase will vary for different
customer classes. Hearings on IPL's request began on February
7, 1995. IPL anticipates an IURC order in this proceeding
before 1996. There is no assurance that IPL's request will be
granted, or if granted, how much revenue will be produced. IPL
last received an order from the IURC authorizing an increase in
electric basic rates and charges in August 1986.
Environmental Compliance Plan
IPL is subject to the air quality provisions specified in
the federal Clean Air Act Amendments of 1990 and related
regulations (the Act). During 1993, IPL obtained an order from
the IURC approving its Environmental Compliance Plan, together
with the costs and expenses associated therewith, which
provides for the installation of sulfur dioxide and nitrogen
oxide emissions abatement equipment and the installation of
continuous emission monitoring systems to meet the requirements
of both Phase I and Phase II of the Act - See "Capital
Requirements." Certain intervenors in the hearing before the
IURC have appealed that order. Briefs on this appeal have been
filed by all parties, and a decision is anticipated during
1995. As required by the Act, IPL filed its proposed
compliance plan with the Environmental Protection Agency (EPA)
in February 1993 and subsequently received all required EPA
permits pursuant to its plan during 1994.
Effective January 1, 1995, IPL received annual emission
"allowances" for certain of its generating units. Each
allowance permits the emission of one ton of sulfur dioxide.
IPL presently expects that annual sulfur dioxide emissions will
not exceed annual allowances provided to IPL under the Act.
Allowances not required in the operation of IPL facilities may
be reserved for future periods or sold. The value of such
unused allowances that may be available to IPL for use in
future periods or for sale is subject to a developing market
and is unknown at this time. The IURC order provides for the
deferral of net gains and losses resulting from any sale of
emission allowances. The order further provides for the
amortization of such deferrals, as an expense reduction or as
an expense, to be included in the ordinary, necessary and
reasonable expenses for ratemaking purposes, on a basis to be
determined in a future general retail electric rate proceeding.
Demand Side Management Program
On September 8, 1993, IPL obtained an order from the IURC
approving a Stipulation of Settlement Agreement between IPL,
the Office of Utility Consumer Counselor, Citizens Action
Coalition of Indiana, Inc., an industrial group, the Trustees
of Indiana University and the Indiana Alliance for Fair
Competition relating to IPL's Demand Side Management (DSM)
Program. The order provides for the deferral, as regulatory
assets, and subsequent recognition as ordinary, necessary and
reasonable expenses for ratemaking purposes of certain approved
DSM costs. The order also provides for the recording of a
carrying charge on deferred costs until recognized in the
future for ratemaking purposes. IPL has requested costs
deferred through January 31, 1995, be recognized in its current
electric rate proceeding.
Postretirement Benefits
On December 30, 1992, the IURC issued an order authorizing
Indiana utilities to account for postretirement benefits on the
basis required by the Statement of Financial Accounting
Standards No. 106, "Accounting for Postretirement Benefits
other than Pensions," (SFAS 106). Generally, SFAS 106 requires
the use of an accrual basis accounting method for determining
annual costs of postretirement benefits. Prior to 1993, IPL
used a pay-as-you-go method to account for such costs. IPL was
required to adopt SFAS 106 effective January 1, 1993.
Additionally, the order authorized the deferral as a regulatory
asset of SFAS 106 costs in excess of such costs determined on a
pay-as-you-go basis. The order further provides for the
recognition as ordinary, necessary and reasonable expenses for
ratemaking purposes of such costs in a subsequent general rate
proceeding on an individual company basis in an amount to be
determined in each such proceeding. IPL is deferring as a
regulatory asset the nonconstruction related SFAS 106 costs
associated with its electric business. IPL is expensing its
nonconstruction related SFAS 106 costs associated with its
steam business. IPL has requested recognition as ordinary,
necessary and reasonable expenses for ratemaking purposes of
its electric SFAS 106 cost, including amortization of deferred
amounts, in its current general electric rate proceeding.
Voluntary Employee Beneficiary Association (VEBA) Trust Agreement
On August 30, 1994, the Board of Directors of IPALCO
adopted a VEBA Trust for the funding of postretirement health
and life insurance benefits for retirees and their eligible
dependents and beneficiaries of IPALCO, IPL and Mid-America.
Annual funding is discretionary and is based on the projected
cost over time of benefits to be provided to covered persons
consistent with accepted actuarial methods. To the extent
these postretirement benefits are funded, the benefits will not
be shown as a liability on IPALCO's consolidated financial
statements. The VEBA Trust Agreement provides for full funding
of the accumulated postretirement benefit obligation in the
event of certain change of control transactions.
Regulatory Asset Deferrals
Balance sheet deferrals of regulatory assets for DSM,
postretirement benefits, income taxes, Petersburg Unit 4 costs
and other such costs amounted to $86.2 million at December 31,
1994. Deferrals for such items are expected to increase during
1995 due to SFAS 106 and DSM costs and related carrying charges
until an order in IPL's current retail electric rate proceeding
becomes effective.
Future Rate Relief
IPL may petition the IURC to increase its electric rates and
charges during 1995. A final IURC order on such a request may
not occur until 1996 or 1997.
Steam Rate Order
The IURC authorized IPL to increase its steam system rates
and charges over a six-year period beginning January 13, 1993.
Accordingly, IPL will implement new steam tariffs in 1995 and
later, designed to produce estimated additional annual steam
operating revenues as follows:
<TABLE>
<CAPTION>
Additional Cumulative
Annual Annual
Year Revenues Revenues
---- ---------- -----------
<S> <C> <C>
1995 $1,552,000 $5,535,000
1996 1,625,000 7,160,000
1997 2,384,000 9,544,000
1998 370,000 9,914,000
</TABLE>
Capital Requirements
The capital requirements of IPL are primarily driven by the
need for facilities to ensure customer service reliability and
environmental compliance and by the impact of maturing long-
term debt.
Forecasted Demand & Energy
From 1994 to 1999, annual peak demand is forecasted to
experience a compound 1.3% increase, while retail kilowatthour
(KWH) sales are anticipated to increase at a 1.8% compound
growth rate. Both compound growth rates are computed assuming
normal weather conditions and include the effects of DSM. IPL
expects a reduction of about 133 megawatts (MW) of annual peak
demand by the year 1999 as a result of DSM programs.
Integrated Resource Plan
Sales growth projections indicate a need for about 600 MW
of additional capacity resources by the year 2000. These
resource requirements can be met in a variety of ways
including, but not limited to, a combination of the use of DSM,
power purchases and peaking turbines. IPL continues to review
its integrated resource plan to consider the appropriateness of
all resource options to meet capacity requirements over the
decade of the 1990s and beyond.
IPL has a well-defined, near-term integrated resource plan
and is considering all reasonable options to meet its long-term
capacity requirements. The following discussion makes certain
assumptions regarding IPL's plans to meet these requirements.
In order to maintain adequate capacity reserve margins in
the near-term, IPL entered into a five-year firm power purchase
agreement with Indiana Michigan Power Company (IMP), which
expires March 31, 1997. Under this agreement, IPL is receiving
200 MW of capacity. The agreement provides for monthly
capacity payments by IPL of $1.2 million through March 31,
1997. IPL can terminate the agreement should recognition of
these demand charges as ordinary, necessary and reasonable
expenses for ratemaking purposes be disallowed. IPL and IMP
will also exchange 50 MW of seasonal power over the 1995-1999
period.
IPL placed in-service two 80 MW combustion turbines, the
first on April 20, 1994, and the second on January 13, 1995.
Presently, IPL plans to add two additional 80 MW combustion
turbines with in-service dates in 1999 and 2000. IPL also has
options to extend the 200 MW firm power purchase agreement with
IMP through December 31, 1997, and subsequently through
November 30, 1999, with capacity payments of $1.2 million per
month and $1.55 million per month, respectively. Under a 1993
agreement, IPL has an option to purchase from PSI Energy, Inc.
up to 100 MW of limited reserve power during April 1996 through
March 1997 and up to 250 MW during April 1997 through March
2001.
Environmental Compliance Construction Requests
The estimated capital cost of complying with the Act, as
approved by the IURC, is approximately $260 million, including
Allowance for Funds Used During Construction (AFUDC) of which
$92.4 million has been expended prior to 1995. IPL further
estimates that, subsequent to December 31, 1997, no significant
capital expenditures will be required to bring generating units
into compliance with the Act until the year 2010 or beyond.
Cost of Construction Program
The cost of IPL's construction program during 1994, 1993
and 1992 was $185.6 million, $149.3 million and $115.3 million,
including AFUDC of $7.3 million, $3.6 million and $3.2 million,
respectively.
IPL estimates the cost of the construction program for the
five years, 1995-1999, to be approximately $608.9 million,
including AFUDC of $33.3 million. This program is subject to
continuing review and is revised from time to time in light of
changes in the actual customer demand for electric energy,
IPL's financial condition and construction cost escalations.
In addition to costs of environmental compliance, the five-year
construction program includes $73.6 million for the two 80 MW
combustion turbines mentioned above. Additional expenditures
will be incurred beyond 1999 for the capacity with in-service
dates subsequent to 1999. Expenditures for the new capacity
are contingent upon the review of other long-term and near-term
options previously discussed.
Retirement of Long-term Debt and Equity Securities
During 1994, 1993 and 1992, IPL retired long-term debt,
including sinking fund payments, of $86.5 million, $96.9
million and $75.0 million, respectively, which required
replacement in part with other debt securities at a lower cost.
IPL will retire $15 million and $11.3 million of maturing
long-term debt during 1996 and 1997, respectively, which may
require replacement in whole or in part with other debt or
equity securities. In addition, other existing higher rate
debt may be refinanced depending upon market conditions.
Financing
Financing Requirements
During the three-year period ended December 31, 1994, IPL's
permanent financing totaled $376.5 million in long-term debt.
The net proceeds of these securities were used to retire
existing long-term debt of $266.2 million, including premiums, and
to partially fund IPL's construction expenditures. The remaining
cash requirements during this three-year period were funded
with internally generated funds and short-term debt.
Long-term debt, internally generated funds and temporary
short-term borrowings are forecasted to provide the funds
required for the five-year construction program. Uncertainties
which could affect this forecast include the impact of
inflation on operating expenses, the actual degree of growth in
KWH sales and the level of interchange sales with other
utilities. Additionally, IPL has authority from the IURC to
redeem and replace certain of its existing securities.
Mortgage Restrictions
IPL is limited in its ability to issue certain securities
by restrictions under its Mortgage and Deed of Trust (Mortgage)
and its Amended Articles of Incorporation (Articles). The
restriction under the Articles requires that the net income of
IPL, as specified therein, shall be at least one and one-half
times the total interest on the funded debt and the pro forma
dividend requirements on the outstanding preferred stock and on
any preferred stock proposed to be issued, before any
additional preferred stock can be issued. The Mortgage
restriction requires that net earnings as calculated thereunder
be two and one-half times the annual interest requirements
before additional bonds can be authenticated on the basis of
property additions. Based on IPL's net earnings for the twelve
months ended December 31, 1994, the ratios under the Articles
and the Mortgage are 3.12 and 6.55, respectively. IPL believes
these requirements will not restrict any anticipated future
financings.
RESULTS OF OPERATIONS
1994 vs. 1993
Income applicable to common stock increased by $1.1 million
in 1994 compared to 1993. The following discussion highlights
the factors contributing to the increase.
Operations
Utility operating income increased $.9 million in 1994
compared to 1993. Contributing to this increase were higher
electric operating revenues of $20.4 million, due to increases
in retail sales of $18.0 million and wholesale sales of
$2.6 million, partially offset by a decrease in miscellaneous
electric revenue of $.2 million. Retail electric sales were
higher due to increased retail KWH sales of $11.4 million and
increased fuel cost recoveries of $6.6 million. The increase
in retail KWH sales in this year, as compared to 1993, resulted
primarily from increased industrial and residential sales
resulting from an improved economy and increased residential
customers, partially offset by slightly milder heating season
weather. Wholesale sales were higher as a result of increased
energy requirements of other utilities.
Fuel costs increased $11.4 million due to increases in
deferred fuel costs of $6.7 million, increased units costs of
coal and oil of $2.7 million and increased fuel consumption of
$2.0 million. Other operating expenses increased $3.4 million
primarily due to an increase in administrative and general
expenses of $1.7 million, an increase in miscellaneous power
station operating expenses at the Petersburg plant of $1.2
million, and an increase in other production expenses of $.5
million.
Maintenance expenses increased $1.2 million, reflecting
increased overhead distribution expenses of $3.1 million and
increased transmission and other distribution expenses of $.7
million. These expenses were partially offset by decreased
unit overhaul expenses in 1994, compared to 1993. Depreciation
expense increased $8.7 million primarily due to an adjustment
to property held for future use and as a result of an increase
in the depreciable utility plant balance.
Taxes other than income taxes increased $1.3 million as a
result of an increase in revenues subject to Indiana gross
receipts tax. Income taxes - net, decreased $4.3 million as a
result of a decrease in pretax utility operating income.
Other Income And Deductions
Allowance for equity funds used during construction
increased $2.7 million due to an increased construction base in
1994.
Interest Charges
Interest on long-term debt increased $4.2 million due to
the issuance of $180 million long-term debt on February 3,
1994, (6.05% Series, First Mortgage Bonds and 7.05% Series,
First Mortgage Bonds). The interest on long-term debt was
partially offset by the refinancing of three series of IPL's
First Mortgage Bonds in March 1994 as follows: the 7.4%
Series, First Mortgage Bonds; the 7 1/8% Series, First Mortgage
Bonds; and the 7.65% Series, First Mortgage Bonds; all of which
were replaced with the 6.05% Series, First Mortgage Bonds. The
allowance for borrowed funds used during construction increased
$1.2 million due to an increased construction base.
1993 vs. 1992
Income applicable to common stock increased by $9.7 million
in 1993 compared to 1992. The following discussion highlights
the factors contributing to the increase.
Operations
Utility operating income increased $8.1 million in 1993
compared to 1992. Contributing to this increase was an
increase in electric operating revenues of $30.1 million, due
to increases in retail sales of $25.9 million, wholesale sales
of $2.8 million and miscellaneous electric revenue of
$1.4 million. Retail electric sales were higher due to
increased retail KWH sales of $31.1 million and decreased fuel
cost recoveries of $5.2 million. The increase in retail KWH
sales in 1993 resulted primarily from the return to normal
weather conditions in 1993 as compared to the abnormally mild
summer weather conditions in 1992. During 1992, cooling degree
days were 26.5% below normal. Wholesale sales were higher as a
result of increased energy requirements of other utilities,
which were also affected by the mild summer during 1992. The
continuing health of the Indianapolis economy also contributed
to the growth in KWH sales, particularly in the large
industrial class.
Fuel costs increased $3.3 million due to increases in fuel
consumption of $9.6 million, partially offset by decreased unit
costs of coal and oil of $.5 million and deferred fuel costs of
$5.8 million. Power purchased increased $11.6 million due to
increased capacity payments of $7.2 million to IMP in
accordance with a five-year power purchase agreement, and by
increased purchases of energy as a result of the near normal
weather conditions in 1993 as compared to 1992.
Maintenance expenses increased $4.9 million. This increase
reflects higher unit overhaul and outage expenses in 1993,
partially offset by decreased distribution maintenance expenses
as a result of a severe storm in 1992 that cost $3.9 million.
Taxes other than income taxes decreased $1.7 million as a
result of lower property assessments. Income taxes - net,
increased $4.3 million as a result of the increase in pretax
utility operating income and a one percentage point increase in
the federal income tax rate.
Other Income And Deductions
Other - net, increased $1.6 million as a result of a $1.5
million contribution to customer energy assistance programs
expensed in 1992.
Interest Charges
Interest on long-term debt decreased $1.3 million as a
result of refinancing six series of IPL's First Mortgage Bonds
as follows: the 10 1/4% Series, First Mortgage Bonds in
October 1993 (replaced with the 5.50% Series, First Mortgage
Bonds); the 5.80% Series, First Mortgage Bonds in October 1993
(replaced with the 5.40% Series, First Mortgage Bonds); the
6.90% and the 6.60% Series, First Mortgage Bonds (replaced with
the 6.10% Series, First Mortgage Bonds); and the 9.30% and 9
1/2% Series, First Mortgage Bonds in September 1992 (replaced
with the 7 3/8% Series, First Mortgage Bonds). The allowance
for borrowed funds used during construction increased due
primarily to an increased construction base. Other interest
charges increased $1.1 million due to higher notes payable
balances carried during 1993.
1995
Factors having a bearing on 1995 earnings compared to 1994
will include the impact of economic conditions, weather
conditions, an increased level of construction expenditures,
and the implementation of new electric system tariff rates.
Authorized electric operating income for 1995 as determined
by the IURC is approximately $144.0 million. (IPL earned
$140.4 million during 1994 and $141.2 million during 1993.)
The overall effect these factors will have on 1995 earnings
cannot be accurately determined at this time.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEPENDENT AUDITORS' REPORT
Indianapolis Power & Light Company:
We have audited the accompanying balance sheets and statements of
capitalization of Indianapolis Power & Light Company as of December
31, 1994 and 1993, and the related statements of income, retained
earnings, and cash flows for each of the three years in the period
ended December 31, 1994. Our audits also included the financial
statement schedule listed in the Index at Item 14(a.)2. These
financial statements and financial statement schedule are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements and financial
statement schedule based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all
material respects, the financial position of Indianapolis Power &
Light Company as of December 31, 1994 and 1993, and the results of
its operations and its cash flows for each of the three years in the
period ended December 31, 1994 in conformity with generally accepted
accounting principles. Also, in our opinion, such financial
statement schedule, when considered in relation to the basic
financial statements taken as a whole, presents fairly in all
material respects the information set forth therein.
Deloitte & Touche LLP
Indianapolis, Indiana
January 27, 1995
<TABLE>
INDIANAPOLIS POWER & LIGHT COMPANY
Statements of Income
For the Years Ended December 31, 1994, 1993 and 1992
<CAPTION>
1994 1993 1992
--------------- --------------- ---------------
(In Thousands)
<S> <C> <C> <C>
OPERATING REVENUES (Note 9):
Electric $ 649,767 $ 629,327 $ 599,203
Steam 36,309 34,976 34,000
--------------- --------------- ---------------
Total operating revenues 686,076 664,303 633,203
--------------- --------------- ---------------
OPERATING EXPENSES:
Operation:
Fuel 169,756 158,390 155,072
Other 104,273 100,890 100,447
Power purchased 19,060 19,407 7,804
Purchased steam 7,653 8,051 7,612
Maintenance 68,562 67,326 62,446
Depreciation and amortization 87,028 78,372 78,615
Taxes other than income taxes 30,891 29,627 31,348
Income taxes - net (Note 8) 55,543 59,872 55,619
--------------- --------------- ---------------
Total operating expenses 542,766 521,935 498,963
--------------- --------------- ---------------
OPERATING INCOME 143,310 142,368 134,240
--------------- --------------- ---------------
OTHER INCOME AND (DEDUCTIONS):
Allowance for equity funds used during construction 4,672 2,010 1,985
Other - net (1,527) (1,237) (2,872)
Income taxes - net (Note 8) 823 599 1,143
--------------- --------------- ---------------
Total other income - net 3,968 1,372 256
--------------- --------------- ---------------
INCOME BEFORE INTEREST CHARGES 147,278 143,740 134,496
--------------- --------------- ---------------
INTEREST CHARGES:
Interest on long-term debt 45,566 41,399 42,663
Allowance for borrowed funds used during construction (4,709) (3,517) (3,096)
Other interest 1,497 2,305 1,251
Amortization of redemption premiums and expenses on
debt - net 1,101 787 620
--------------- --------------- ---------------
Total interest charges 43,455 40,974 41,438
--------------- --------------- ---------------
NET INCOME 103,823 102,766 93,058
PREFERRED DIVIDEND REQUIREMENTS 3,182 3,182 3,182
--------------- --------------- ---------------
INCOME APPLICABLE TO COMMON STOCK $ 100,641 $ 99,584 $ 89,876
=============== =============== ===============
See notes to financial statements.
</TABLE>
<TABLE>
INDIANAPOLIS POWER & LIGHT COMPANY
Balance Sheets
December 31, 1994 and 1993
<CAPTION>
ASSETS 1994 1993
- ----------------------------------- ---------------- ----------------
(In Thousands)
<S> <C> <C>
UTILITY PLANT:
Utility plant in service (Note 2) $ 2,415,531 $ 2,300,682
Less accumulated depreciation 916,943 876,054
---------------- ----------------
Utility plant in service - net 1,498,588 1,424,628
Construction work in progress 191,010 168,480
Property held for future use 22,174 15,763
---------------- ----------------
Utility plant - net 1,711,772 1,608,871
---------------- ----------------
OTHER PROPERTY -
At cost, less accumulated depreciation 2,898 1,873
---------------- ----------------
CURRENT ASSETS:
Cash and cash equivalents 7,835 8,349
Accounts receivable (less allowance for doubtful
accounts - 1994, $743,000 and 1993, $626,000) 46,097 47,365
Receivable from parent 1,881 5,482
Fuel - at average cost 37,161 35,213
Materials and supplies - at average cost 55,642 54,847
Prepayments and other current assets 8,176 3,240
---------------- ----------------
Total current assets 156,792 154,496
---------------- ----------------
DEFERRED DEBITS:
Unamortized Petersburg Unit 4 carrying charges 32,521 30,587
Unamortized redemption premiums and expenses on debt (Note 6) 27,577 25,453
Other regulatory assets (Note 4) 53,661 32,954
Miscellaneous 6,876 16,072
---------------- ----------------
Total deferred debits 120,635 105,066
---------------- ----------------
TOTAL $ 1,992,097 $ 1,870,306
================ ================
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
CAPITALIZATION AND LIABILITIES 1994 1993
- ---------------------------------------------------- ---------------- ----------------
(In Thousands)
<S> <C> <C>
CAPITALIZATION (See Statements of Capitalization):
Common shareholder's equity $ 725,762 $ 705,149
Cumulative preferred stock 51,898 51,898
Long-term debt 654,121 532,260
---------------- ----------------
Total capitalization 1,431,781 1,289,307
---------------- ----------------
CURRENT LIABILITIES:
Notes payable - banks and commercial paper (Note 7) 26,400 90,000
Current maturities and sinking fund requirements 350 8,729
Accounts payable and accrued expenses 95,957 74,187
Dividends payable 20,834 20,024
Payrolls accrued 4,475 4,505
Taxes accrued 16,787 21,377
Interest accrued 14,859 11,150
Other current liabilities 8,823 5,316
---------------- ----------------
Total current liabilities 188,485 235,288
---------------- ----------------
DEFERRED CREDITS AND OTHER LONG-TERM LIABILITIES:
Accumulated deferred income taxes - net (Note 8) 282,062 270,182
Unamortized investment tax credit 53,762 57,029
Accrued postretirement benefits (Note 10) 34,517 17,668
Miscellaneous 1,490 832
---------------- ----------------
Total deferred credits and other long-term liabilities 371,831 345,711
---------------- ----------------
COMMITMENTS AND CONTINGENCIES (Note 11)
TOTAL $ 1,992,097 $ 1,870,306
================ ================
See notes to financial statements.
</TABLE>
<TABLE>
INDIANAPOLIS POWER & LIGHT COMPANY
Statements of Cash Flows
For the Years Ended December 31, 1994, 1993 and 1992
<CAPTION>
1994 1993 1992
--------------- ---------------- ----------------
(In Thousands)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATIONS:
Net income $ 103,823 $ 102,766 $ 93,058
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 88,371 79,412 79,297
Deferred income taxes and investment tax
credit adjustments, net 2,650 (430) 216
Allowance for funds used during construction (9,381) (5,476) (5,081)
Decrease (increase) in certain assets:
Accounts receivable 4,869 (3,462) (5,659)
Fuel, materials and supplies (2,743) 10,633 (7,992)
Other current assets (4,936) (1,080) (110)
Increase (decrease) in certain liabilities:
Accounts payable 21,770 7,229 14,470
Taxes accrued (4,590) (2,195) 1,054
Other current liabilities 7,865 (2,458) 2,801
--------------- ---------------- ----------------
Net cash provided by operating activities 207,698 184,939 172,054
--------------- ---------------- ----------------
CASH FLOWS FROM INVESTING:
Construction expenditures (178,295) (145,765) (112,037)
Other 5,847 (8,447) (13,676)
--------------- ---------------- ----------------
Net cash used in investing activities (172,448) (154,212) (125,713)
--------------- ---------------- ----------------
CASH FLOWS FROM FINANCING:
Issuance of long-term debt 200,000 96,500 80,000
Retirement of long-term debt - including premiums (87,291) (98,978) (79,958)
Short-term debt - net (63,600) 50,000 37,000
Dividends paid (82,421) (79,253) (76,072)
Other (2,452) (1,228) (1,142)
--------------- ---------------- ----------------
Net cash used in financing activities (35,764) (32,959) (40,172)
--------------- ---------------- ----------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (514) (2,232) 6,169
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 8,349 10,581 4,412
--------------- ---------------- ----------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 7,835 $ 8,349 $ 10,581
=============== ================ ================
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest (net of amount capitalized) $ 40,747 $ 42,489 $ 41,649
=============== ================ ================
Income taxes $ 59,129 $ 61,806 $ 56,136
=============== ================ ================
See notes to financial statements.
</TABLE>
<TABLE>
INDIANAPOLIS POWER & LIGHT COMPANY
Statements of Capitalization
December 31, 1994 and 1993
<CAPTION>
1994 1993
----------------- -----------------
(In Thousands)
<S> <C> <C>
COMMON SHAREHOLDER'S EQUITY:
Common stock, no par, authorized - 20,000,000 shares,
issued and outstanding - 17,206,630 shares (Note 5) $ 324,537 $ 324,537
Premium on 4% cumulative preferred stock 1,363 1,363
Retained earnings 399,862 379,249
----------------- -----------------
Total common shareholder's equity $ 725,762 $ 705,149
================= =================
CUMULATIVE PREFERRED STOCK (Note 5):
Nonredeemable - $100 par value, authorized
2,000,000 shares Call Price at
December 31, 1994
-----------------
4% Series, 100,000 shares $118.00 $ 10,000 $ 10,000
4.20% Series, 39,000 shares 103.00 3,900 3,900
4.60% Series, 30,000 shares 103.00 3,000 3,000
4.80% Series, 50,000 shares 101.00 5,000 5,000
6% Series, 100,000 shares 102.00 10,000 10,000
8.20% Series, 199,985 shares 101.00 19,998 19,998
----------------- -----------------
Total cumulative preferred stock $ 51,898 $ 51,898
================= =================
VARIABLE CLASS PREFERRED STOCK:
Par value undetermined, authorized
3,000,000 shares, none issued
LONG-TERM DEBT (Notes 2 and 6):
First mortgage bonds:
4 1/2% Series, due August 1994 $ - $ 7,500
5 1/8% Series, due April 1996 15,200 15,400
5 5/8% Series, due May 1997 11,550 11,629
7 1/8% Series, due May 1998 - 19,750
7.40% Series, due March 2002 - 33,200
7.65% Series, due March 2003 - 25,200
6.05% Series, due February 2004 80,000 -
8% Series, due October 2006 58,800 58,800
7 3/8% Series, due August 2007 80,000 80,000
9 5/8% Series, due September 2012 40,000 40,000
10 5/8% Series, due December 2014 40,000 40,000
6.10% Series, due January 2016 41,850 41,850
5.40% Series, due August 2017 24,650 24,650
9 5/8% Series, due June 2019 50,000 50,000
7.45% Series, due August 2019 23,500 23,500
5.50% Series, due October 2023 30,000 30,000
7.05% Series, due February 2024 100,000 -
Unamortized discount - net (1,079) (490)
----------------- -----------------
Total first mortgage bonds 594,471 500,989
Long-term note, variable rate, Series 1991, due August 2021 40,000 40,000
Long-term note, variable rate, Series 1994A, due December 2024 20,000 -
Current maturities and sinking fund requirements (350) (8,729)
----------------- -----------------
Total long-term debt $ 654,121 $ 532,260
================= =================
TOTAL CAPITALIZATION $ 1,431,781 $ 1,289,307
================= =================
See notes to financial statements.
</TABLE>
<TABLE>
INDIANAPOLIS POWER & LIGHT COMPANY
Statements of Retained Earnings
For the Years Ended December 31, 1994, 1993 and 1992
<CAPTION>
1994 1993 1992
--------------- ---------------- ----------------
(In Thousands)
<S> <C> <C> <C>
RETAINED EARNINGS AT BEGINNING OF YEAR $ 379,249 $ 356,513 $ 340,323
NET INCOME 103,823 102,766 93,058
--------------- ---------------- ----------------
Total 483,072 459,279 433,381
DEDUCT:
Cash dividends declared:
Cumulative preferred stock - at prescribed
rate of each series (See Statements of
Capitalization) 3,182 3,182 3,182
Common stock 80,028 76,848 73,686
--------------- ---------------- ----------------
Total 83,210 80,030 76,868
--------------- ---------------- ----------------
RETAINED EARNINGS AT END OF YEAR $ 399,862 $ 379,249 $ 356,513
=============== ================ ================
See notes to financial statements.
</TABLE>
INDIANAPOLIS POWER & LIGHT COMPANY
Notes to Financial Statements
For the Years Ended December 31, 1994, 1993 and 1992
----------------------------------------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
All the outstanding common stock of Indianapolis Power & Light
Company (IPL) is owned by IPALCO Enterprises, Inc. At December 31, 1994
and 1993, IPL had a receivable, which is due on demand, for advances
made to IPALCO.
System of Accounts--The accounts of IPL are maintained in
accordance with the system of accounts prescribed by the Indiana Utility
Regulatory Commission (IURC), which system substantially conforms to
that prescribed by the Federal Energy Regulatory Commission.
Revenues--Revenues are recorded as billed to customers on a monthly
cycle billing basis. Revenue is not accrued for energy delivered but
unbilled at the end of the year. A fuel adjustment charge provision,
which is established after public hearing, is applicable to
substantially all the rate schedules of IPL, and permits the billing or
crediting of fuel costs above or below the levels included in such rate
schedules.
Under current IURC practice, future fuel adjustment revenues may be
temporarily reduced should actual operating expenses be less than or
income levels be above amounts authorized by the IURC.
Authorized Annual Operating Income--In an IURC order dated May 6,
1992, IPL's maximum authorized annual electric operating income, for
purposes of quarterly earnings tests, was established at approximately
$147 million through July 31, 1992, declining ratably to approximately
$144 million at July 31, 1993. This level will be maintained until an
order has been issued in IPL's pending general electric rate proceeding.
Additionally, through the date of IPL's next general electric rate
order, IPL is required to file upward and downward adjustments in fuel
cost credits and charges on a quarterly basis.
As provided in an order dated December 21, 1992, IPL's authorized
annual steam net operating income is $6.2 million, plus any cumulative
annual underearnings occurring during the five-year period subsequent to
the implementation of the new rate tariffs.
Deferred Fuel Expense--Fuel costs recoverable in subsequent periods
under the fuel adjustment charge provision are deferred.
Allowance For Funds Used During Construction (AFUDC)--In accordance
with the prescribed uniform system of accounts, IPL capitalizes an
allowance for the net cost of funds (interest on borrowed funds and a
reasonable rate on equity funds) used for construction purposes during
the period of construction with a corresponding credit to income. IPL
capitalized amounts using pretax composite rates of 9.5%, 8.0% and 9.5%
during 1994, 1993 and 1992, respectively.
Utility Plant and Depreciation--Utility plant is stated at original
cost as defined for regulatory purposes. The cost of additions to
utility plant and replacements of retirement units of property, as
distinct from renewals of minor items which are charged to maintenance,
are charged to plant accounts. Units of property replaced or abandoned
in the ordinary course of business are retired from the plant accounts
at cost; such amounts plus removal costs, less salvage, are charged to
accumulated depreciation. Depreciation was computed by the straight-
line method based on the functional rates and averaged 3.5% during 1994
and 3.4% during 1993 and 1992. Depreciation expense for 1994 includes
an adjustment to property held for future use of approximately $3.9
million.
Statements of Cash Flows - Cash Equivalents--IPL considers all
highly liquid investments purchased with original maturities of 90 days
or less to be cash equivalents.
Unamortized Petersburg Unit 4 Carrying Charges--IPL has deferred
certain post in-service date carrying charges of its investment in
Petersburg Unit 4 (Unit 4). These carrying charges include both AFUDC
on and depreciation of Unit 4 costs from the April 28, 1986, in-service
date through the August 6, 1986, IURC rate order date in which IPL's
investment in Unit 4 was included in rate base. Subsequent to August 6,
1986, IPL has capitalized interest on the AFUDC portion of these
deferred carrying charges. In addition, IPL has capitalized $8.1
million of additional allowance for earnings on shareholders' investment
for rate-making purposes but not for financial reporting purposes. As
provided in the rate order, the deferred carrying charges are included
in IPL's currently pending electric rate case.
Unamortized Redemption Premiums and Expenses on Debt and Preferred
Stock--In accordance with regulatory treatment, IPL defers nonsinking
fund debt redemption premiums and expenses, and amortizes such costs
over the life of the original debt, or, in the case of preferred stock
redemption premiums, over 20 years.
Income Taxes--Deferred taxes are provided for all significant
temporary differences between book and taxable income. Such differences
include the use of accelerated depreciation methods for tax purposes,
the use of different book and tax depreciable lives, rates and in-
service dates, and the accelerated tax amortization of pollution control
facilities.
Investment tax credits which reduced federal income taxes in the
years they arose have been deferred and are being amortized to income
over the useful lives of the properties in accordance with regulatory
treatment.
Effective January 1, 1993, IPL adopted Statement of Financial
Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes" (SFAS
109), on a prospective basis. This statement requires the current
recognition of income tax expense for (a) the amount of income taxes
payable or refundable for the current year, and (b) for deferred tax
liabilities and assets for the future tax consequences of events that
have been recognized in IPL's financial statements or income tax
returns. The effects of income taxes are measured based on enacted laws
and rates. The adjustments required by SFAS 109 were recorded to
deferred tax balance sheet accounts, with substantially all of the
offsetting adjustments to regulatory assets and liabilities. The
adoption of this standard did not have a material impact on IPL's cash
flows or due to the effect of rate regulation on the results of
operations.
Employee Benefit Plans--Substantially all employees of IPL are
covered by a noncontributory, defined benefit pension plan (the Plan)
which is funded through two trusts. Additionally, a select group of
management employees of IPL are covered under a funded supplemental
retirement plan. Collectively, these two plans are referred to as
Plans. Benefits are based on each individual employee's years of
service and compensation. IPL's funding policy is to contribute
annually not less than the minimum required by applicable law, nor more
than the maximum amount which can be deducted for federal income tax
purposes.
IPL also sponsors the Employees' Thrift Plan of Indianapolis Power
& Light Company (Thrift Plan), a defined contribution plan covering
substantially all employees of IPL. Employees elect to make
contributions to the Thrift Plan based on a percentage of their annual
base compensation. IPL matches each employee's contributions in amounts
up to, but not exceeding 4% of the employee's annual base compensation.
Reclassification--Certain amounts from prior years' financial
statements have been reclassified to conform to the current year
presentation.
2. UTILITY PLANT IN SERVICE
The original cost of utility plant in service at December 31,
segregated by functional classifications, follows:
<TABLE>
<CAPTION>
1994 1993
- ----------------------------------------------------------------
(In Thousands)
<S> <C> <C>
Production $1,434,041 $1,387,239
Transmission 227,988 218,369
Distribution:
Electric 600,288 551,217
Steam 44,492 42,205
General 108,722 101,652
---------- ----------
Total utility plant in service $2,415,531 $2,300,682
========== ==========
</TABLE>
Substantially all of IPL's property is subject to the lien of the
indentures securing IPL's First Mortgage Bonds.
3. DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
The following disclosure of the estimated fair value of financial
instruments is made in accordance with the requirements of SFAS No. 107,
"Disclosures about Fair Value of Financial Instruments." The estimated
fair value amounts have been determined by IPL, using available market
information and appropriate valuation methodologies. However,
considerable judgment is required in interpreting market data to develop
the estimates of fair value. Accordingly, the estimates presented
herein are not necessarily indicative of the amounts that IPL could
realize in a current market exchange. The use of different market
assumptions and/or estimation methodologies may have an effect on the
estimated fair value amounts.
Cash, cash equivalents and notes payable--The carrying amount
approximates fair value due to the short maturity of these instruments.
Long-term debt, including current maturities and sinking fund
requirements--Interest rates that are currently available to IPL for
issuance of debt with similar terms and remaining maturities are used to
estimate fair value. At December 31, 1994 and 1993 the carrying amount
of IPL's long-term debt, including current maturities and sinking fund
requirements, and the approximate fair value are as follows:
<TABLE>
<CAPTION>
1994 1993
---------------------------------------------
(In Thousands)
<S> <C> <C>
Carrying amount $654,471 $540,989
Approximate fair value $612,274 $576,621
</TABLE>
4. OTHER REGULATORY ASSETS
At December 31, 1994 and 1993, IPL has deferred certain costs and
expenses which will be included as ordinary, necessary and reasonable
expenses for ratemaking purposes in future rate proceedings as follows:
<TABLE>
<CAPTION>
1994 1993
- -----------------------------------------------------------------
(In Thousands)
<S> <C> <C>
Postretirement benefit costs in excess of
cash payments and amounts capitalized $25,182 $12,893
SFAS 109 21,054 15,091
Demand Side Management Costs 4,504 1,814
Other 2,921 3,156
------- -------
Total $53,661 $32,954
======= =======
</TABLE>
5. CAPITAL STOCK:
Common Stock:
There were no changes in IPL common stock during 1994, 1993 and
1992.
Restrictions on the payment of cash dividends or other
distributions on common stock and on the purchase or redemption of such
shares are contained in the indenture securing IPL's First Mortgage
Bonds. All of the retained earnings at December 31, 1994, were free of
such restrictions.
Cumulative Preferred Stock:
Preferred stock shareholders are entitled to two votes per share,
and if four full quarterly dividends are in default, they are entitled
to elect the smallest number of Directors to constitute a majority.
6. LONG-TERM DEBT:
The 9 5/8% Series due 2012, 10 5/8% Series due 2014, 6.10% Series
due 2016, 5.40% Series due 2017, and 5.50% Series due 2023 were each
issued to the city of Petersburg, Indiana (City) by IPL to secure the
loan of proceeds received from a like amount of tax-exempt Pollution
Control Revenue Bonds issued by the City for the purpose of financing
pollution control facilities at IPL's Petersburg generating station.
On April 13, 1993, IPL issued a First Mortgage Bond, 6.10% Series,
due 2016, in the principal amount of $41.85 million, in connection with
the issuance of the same amount of Pollution Control Refunding Revenue
Bonds by the city of Petersburg, Indiana. The net proceeds, along with
other IPL funds were used to redeem on June 1, 1993, IPL's $19.65
million First Mortgage Bonds, 6.90% Series, due 2006, and IPL's $22.2
million First Mortgage Bonds, 6.60% Series, due 2008, at the prices of
$100 and $101, respectively, plus accrued interest.
On October 14, 1993, IPL issued a First Mortgage Bond, 5.40%
Series, due 2017, in the principal amount of $24.65 million, in
connection with the issuance of the same amount of Pollution Control
Refunding Revenue Bonds by the city of Petersburg, Indiana. The net
proceeds, along with other IPL funds, were used to redeem on November
15, 1993, IPL's $24.65 million First Mortgage Bonds, 5.80% Series, due
2007, at the price of $100 plus accrued interest.
Also, on October 14, 1993, IPL issued a First Mortgage Bond, 5.50%
Series, due 2023, in the principal amount of $30.0 million, in
connection with the issuance of the same amount of Pollution Control
Refunding Revenue Bonds by the city of Petersburg, Indiana. The net
proceeds, along with other IPL funds, were used to redeem on November
15, 1993, IPL's $30.0 million First Mortgage Bonds, 10 1/4% Series, due
2013, at the price of $103 plus accrued interest.
On February 3, 1994, IPL issued First Mortgage Bonds, 6.05% Series,
due 2004, in the principal amount of $80 million. The net proceeds and
other funds were used to redeem on March 1, 1994, IPL's $33.2 million
First Mortgage Bonds, 7.40% Series, due 2002, at a redemption price of
101.79%, and to redeem on March 15, 1994, IPL's $19.75 million First
Mortgage Bonds, 7 1/8% Series, due 1998, at a redemption price of
101.20% and IPL's $25.2 million First Mortgage Bonds, 7.65% Series, due
2003, at a redemption price of 102.11%. Accrued interest was also paid
at the time of redemption.
Also, on February 3, 1994, IPL issued First Mortgage Bonds, 7.05%
Series, due 2024, in the principal amount of $100 million. The net
proceeds were used in part to repay outstanding unsecured promissory
notes and for construction costs.
On August 1, 1994, IPL retired First Mortgage Bond, 4.50% Series,
due August 1, 1994, in the principal amount of $7.5 million.
On December 29, 1994, IPL issued a 30-year unsecured promissory
note which was issued to the city of Petersburg, Indiana, in connection
with the issuance of $20 million of Solid Waste Disposal Revenue Bonds,
due 2024, by the city of Petersburg. This note and the related bonds
provide for a floating interest rate that will bear interest at a tax-
exempt weekly rate. The net proceeds from this issue will provide funds
to pay costs of certain facilities and equipment to be used for solid
waste disposal purposes. At the option of IPL, the bonds can be
converted to First Mortgage Bonds which would bear interest at a fixed
rate.
IPL has a 30-year unsecured promissory note which was issued to the
city of Petersburg, Indiana, in connection with the issuance of $40
million of Pollution Control Refunding Revenue Bonds, due 2021, by the
city of Petersburg. This note and the related bonds provide for a
floating interest rate that approximates tax-exempt Commercial Paper
Rates. The average interest rate on this note was 2.98% for 1994 and
2.40% for 1993. The interest rate at the end of the year was 3.85% for
1994 and 2.39% for 1993. At the option of IPL, the bonds can be
converted to First Mortgage Bonds which would bear interest at a fixed
rate.
IPL has a $60 million long term revolving credit facility which
provides liquidity, if necessary, for the two 30-year unsecured
promissory notes. The revolving credit was unused at December 31, 1994.
Maturities and sinking fund requirements on long-term debt for the
five years subsequent to December 31, 1994, are as follows:
<TABLE>
<CAPTION>
Net Sinking Fund
Maturities Requirements Total
- --------------------------------------------------------------
(In Thousands)
<S> <C> <C> <C>
1995 $ -- $ 350 $ 350
1996 15,000 150 15,150
1997 11,250 -- 11,250
1998 -- -- --
1999 -- -- --
</TABLE>
The Company has filed a Preliminary Official Statement with the
relevant regulatory authorities involving the sale of $40 million
Pollution Control Refunding Bonds by the city of Petersburg and the
issuance by the Company of its First Mortgage Bond in the like amount.
It is anticipated that this transaction will close in early February,
1995. The proceeds will be used to refund the 10 5/8% Series, due
December, 2014.
7. LINES OF CREDIT:
IPL has lines of credit with banks of $100 million at December 31,
1994, to provide loans for interim financing. These lines of credit,
based on separate formal and informal agreements, have expiration dates
ranging from January 31, 1995, to November 30, 1995, and require the
payment of commitment fees. At December 31, 1994, $95 million of these
credit lines were unused. Lines of credit supporting commercial paper
were $21.4 million at December 31, 1994. The weighted average interest
rates on notes payable and commercial paper outstanding were 6.17% and
3.36% at December 31, 1994 and 1993, respectively.
8. INCOME TAXES:
Federal and state income taxes charged to income are as follows:
<TABLE>
<CAPTION>
1994 1993 1992
- ---------------------------------------------------------------------------
(In Thousands)
<S> <C> <C> <C>
Operating Expenses:
Current income taxes:
Federal $45,919 $52,321 $48,504
State 6,919 7,761 7,500
------- ------- -------
Total current taxes 52,838 60,082 56,004
------- ------- -------
Deferred income taxes, net--federal and state:
Excess of tax depreciation over book
depreciation 6,615 7,109 5,254
Early retirement of bonds 271 592 1,965
Allowance for borrowed funds used during
construction (net of capitalized interest
for tax purposes) (1,187) (1,214) (1,050)
Amortization of deferred return - rate
phase-in plan (debt portion) - - (676)
Unbilled revenues 609 (1,768) 436
Accrued pension expense (1,651) (1,865) (1,965)
Miscellaneous 1,316 204 (890)
------- ------- -------
Total deferred taxes 5,973 3,058 3,074
------- ------- -------
Net amortization of investment credit (3,268) (3,268) (3,459)
------- ------- -------
Total charge to operating expenses 55,543 59,872 55,619
Net credit to other income and deductions (823) (599) (1,143)
------- ------- -------
Total federal and state income tax provisions $54,720 $59,273 $54,476
======= ======= =======
</TABLE>
The provision for federal income taxes (including net investment
tax credit adjustments) is less than the amount computed by applying the
statutory tax rate to pretax income. The reasons for the difference,
stated as a percentage of pretax income, are as follows:
<TABLE>
<CAPTION>
1994 1993 1992
- -----------------------------------------------------------------
<S> <C> <C> <C>
Federal statutory tax rate 35.0% 35.0% 34.0%
Effect of state income taxes (1.8) (1.8) (1.9)
Amortization of investment tax credits (2.1) (2.0) (2.3)
Other - net (1.6) 0.1 1.5
---- ---- ----
Effective tax rate 29.5% 31.3% 31.3%
==== ==== ====
</TABLE>
The significant items comprising IPL's net deferred tax liability
recognized in the balance sheets as of December 31, 1994 and 1993 are as
follows:
<TABLE>
<CAPTION>
1994 1993
- -------------------------------------------------------------------
(In Thousands)
<S> <C> <C>
Deferred tax liabilities:
Relating to utility property $349,461 $335,824
Early retirement of bonds 7,697 7,377
Other 4,414 1,626
-------- --------
Total deferred tax liabilities 361,572 344,827
-------- --------
Deferred tax assets:
Unbilled revenue 9,538 10,148
Pension 10,865 9,033
Investment tax credit 32,846 34,842
Other 26,261 20,622
-------- --------
Total deferred tax assets 79,510 74,645
-------- --------
Net deferred tax liability $282,062 $270,182
======== ========
</TABLE>
9. RATE MATTERS
Electric Rate Case
In the retail electric rate case now pending before the IURC, a
prehearing conference was held on June 8, 1994, and an order was issued
July 20, 1994, establishing a test year ending June 30, 1994. IPL filed
its case-in-chief on October 11, 1994. The IURC has scheduled hearings
on IPL's request to begin on February 7, 1995.
Environmental Compliance Plan
On August 18, 1993, IPL obtained an Order from the IURC approving
its Environmental Compliance Plan, together with the costs and expenses
associated therewith, which provides for the installation of sulfur
dioxide and nitrogen oxide emissions abatement equipment and the
installation of continuous emission monitoring systems to meet the
requirements of both Phase I and Phase II of the Federal Clean Air Act
Amendments of 1990 (the Act). The order provides for the deferral of
net gains and losses resulting from any sale of emission allowances.
The order further provides for the amortization of such deferrals, as an
expense reduction or as an expense, to be included in the ordinary,
necessary and reasonable expenses for ratemaking purposes, on a basis to
be determined in a future general electric rate proceeding.
Steam Rate Order
By an order dated January 13, 1993, the IURC authorized IPL to
increase its steam system rates and charges over a six-year period.
Accordingly, IPL implemented new steam tariffs designed to produce
estimated additional annual steam operating revenues as follows:
<TABLE>
<CAPTION>
Additional Cumulative
Annual Annual
Year Revenues Revenues
---- ---------- ----------
<S> <C> <C>
January 13, 1993 $1,932,000 $1,932,000
January 13, 1994 2,051,000 3,983,000
January 13, 1995 1,552,000 5,535,000
January 13, 1996 1,625,000 7,160,000
January 13, 1997 2,384,000 9,544,000
January 13, 1998 370,000 9,914,000
</TABLE>
Demand Side Management Program
On September 8, 1993, IPL obtained an Order from the IURC approving
a Stipulation of Settlement Agreement between IPL, the Office of Utility
Consumer Counselor, Citizens Action Coalition of Indiana, Inc., an
industrial group, the Trustees of Indiana University and the Indiana
Alliance for Fair Competition relating to the Company's Demand Side
Management Program (DSM). The order provides for the deferral and
subsequent recognition as ordinary, necessary and reasonable expenses
for ratemaking purposes of certain approved DSM costs. The order also
provides for the recording of a return on deferred costs until
recognized in the future for ratemaking purposes.
10. EMPLOYEE BENEFIT PLANS AND OTHER POSTRETIREMENT BENEFITS:
IPL's contributions to the Thrift Plan, net of amounts allocated to
related parties were $3.3 million, $3.1 million and $3.1 million in
1994, 1993 and 1992, respectively.
Net pension cost for the Plan including amounts charged to
construction is comprised of the following components:
<TABLE>
<CAPTION>
1994 1993 1992
- -----------------------------------------------------------------------------
(In Thousands)
<S> <C> <C> <C>
Service cost--benefits earned during the period $ 7,832 $ 6,355 $5,563
Interest cost on projected benefit obligation 15,358 14,192 13,739
Actual return on plan assets 10,366 (40,045) (18,865)
Net amortization and deferral (27,297) 25,689 5,366
------- ------- -------
Net periodic pension cost 6,259 6,191 5,803
Less amount allocated to related parties 79 87 71
------- ------- -------
IPL net periodic pension cost $ 6,180 $ 6,104 $ 5,732
======= ======= =======
</TABLE>
A summary of the Plans' funding status, and the amount recognized
in the balance sheets at December 31, 1994 and 1993, follows:
<TABLE>
<CAPTION>
1994 1993
- ---------------------------------------------------------------------------
(In Thousands)
<S> <C> <C>
Actuarial present value of benefit obligations:
Vested benefit obligation $(123,306) $(128,449)
Nonvested benefit obligation (26,394) (28,532)
--------- ---------
Accumulated benefit obligation $(149,700) $(156,981)
========= =========
Projected benefit obligation $(201,345) $(224,037)
Plan assets at fair value 199,522 218,312
--------- ---------
Funded status--plan assets less than projected
benefit obligation (1,823) (5,725)
Unrecognized net gain from past experience different
from that assumed (31,058) (22,922)
Unrecognized past service costs 21,188 22,932
Unrecognized net asset at January 1, 1987 being
amortized over an original life of 18.9 years (15,410) (16,825)
--------- ---------
Net accrued pension costs included in current
liabilities at December 31 $ (27,103) $ (22,540)
========= =========
</TABLE>
Approximately 19.5% of the Plans' assets were in equity securities,
with the remainder in fixed income securities.
IPL also provides certain postretirement health care and life
insurance benefits for employees who retire from active service on or
after attaining age 55 and have rendered at least 10 years of service.
On January 1, 1993, IPL adopted the provisions of SFAS No. 106,
"Employers' Accounting for Postretirement Benefits Other than Pensions"
(SFAS 106). Generally, SFAS 106 requires the use of an accrual basis
accounting method for determining annual costs of postretirement
benefits. The January 1, 1993, transition obligation of $122.4 million
is being amortized over a 20 year period. Prior to 1993, the cost of
such benefits was recognized when incurred and amounted to $3.5 million
in 1992.
Net postretirement benefit cost, including amounts charged to
construction for 1994 and 1993 is comprised of the following components:
<TABLE>
<CAPTION>
1994 1993
- --------------------------------------------------------------------------------
(In Thousands)
<S> <C> <C>
Service cost -- benefits earned during the period $ 5,051 $4,760
Interest cost on accumulated postretirement benefit obligation 11,052 10,792
Actual return on plan assets (435) (297)
Net amortization and deferral 5,740 5,732
------- -------
Net periodic postretirement benefit cost $21,408 $20,987
======= =======
</TABLE>
A summary of the retiree health care and life insurance plan's
funding status, and the amount recognized in the balance sheets at
December 31, 1994 and 1993 follows:
<TABLE>
<CAPTION>
1994 1993
- ---------------------------------------------------------------------------------------------------
(In Thousands)
<S> <C> <C>
Actuarial present value of accumulated postretirement benefit obligation:
Retirees $ (55,462) $ (60,110)
Fully eligible active plan participants (19,531) (21,344)
Other active plan participants (58,573) (73,872)
--------- ---------
Total (133,566) (155,326)
Plan assets at fair value 10,570 10,135
--------- ---------
Funded status--accumulated postretirement benefit obligation in excess
of plan assets (122,996) (145,191)
Unrecognized net gain from past experience different from that assumed (21,606) 11,322
Unrecognized net obligation at January 1, 1993 being amortized over
an original life of 20 years 110,085 116,201
--------- ---------
Net accrued postretirement benefit cost included in deferred liabilities at
December 31 $ (34,517) $ (17,668)
========= =========
</TABLE>
IPL is expensing its nonconstruction related SFAS 106 costs
associated with its steam business. The SFAS 106 costs, net of amounts
paid and capitalized for construction, associated with IPL's electric
business are being deferred as a regulatory asset on the balance sheets,
as authorized by an order of the IURC on December 30, 1992, which
provided for deferral of SFAS 106 costs in excess of such costs
determined on a cash basis. A request for inclusion of these costs as
ordinary, necessary and reasonable expenses for ratemaking purposes has
been made in IPL's pending general electric rate petition.
The assumed health care cost trend rate used in measuring the
accumulated postretirement benefit obligation is 11.7% for 1995,
gradually declining to 5.0% in 2003. A 1% increase in the assumed
health care cost trend rate for each year would increase the accumulated
postretirement benefit obligation as of December 31, 1994, by
approximately $20.4 million and the combined service cost and interest
cost for 1994 by approximately $2.9 million.
Plan assets consist of the cash surrender value of life insurance
policies on certain retired employees.
Assumptions used in determining the information above were:
<TABLE>
<CAPTION>
1994 1993 1992
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Discount rate - pension plans 8.0% 7.0% 7.5%
Discount rate - postretirement benefits 8.0% 7.0% -
Rate of increase in future compensation levels 6.1% 6.1% 6.1%
Expected long-term rate of return on assets - pension plans 8.0% 8.0% 8.0%
</TABLE>
On August 30, 1994, IPALCO's Board of Directors adopted a
Voluntary Employee Beneficiary Association (VEBA) Trust Agreement for
the funding of postretirement health and life insurance benefits for
retirees and their eligible dependents and beneficiaries. Annual
funding is discretionary and is based on the projected cost over time of
benefits to be provided to covered persons consistent with acceptable
actuarial methods. To the extent these postretirement benefits are
funded, the benefits will not be shown as a liability on IPL's financial
statements. The VEBA Trust Agreement provides for full funding of IPL's
accumulated postretirement benefit obligation in the event of certain
change of control transactions.
11. COMMITMENTS AND CONTINGENCIES:
In 1995, IPL anticipates the cost of its construction program to be
approximately $214 million.
IPL will comply with the provisions of the Act through the
installation of SO2 scrubbers and NOx facilities. The cost of complying
with the Act from 1995 through 1997, including AFUDC, is estimated to be
approximately $142 million, of which $125 million is anticipated in
1995. During 1994, 1993, and 1992, expenditures for compliance with the
Act were $59.4 million, $13.7 million, and $20.0 million, respectively.
IPL has a five-year firm power purchase agreement with Indiana
Michigan Power Company (IMP) for 100 megawatts (MW) of capacity
effective April 1992, with the purchase of an additional 100 MW (for a
total of 200 MW) beginning in April 1993. The agreement provides for
monthly capacity payments by IPL of $.6 million from April 1992 through
March 1993, increasing to a monthly amount of $1.2 million which began
in April 1993 and continue through March 31, 1997. The agreement
further provides that IPL can elect to extend purchases through December
31, 1997, and subsequently through November 30, 1999, with capacity
payments of $1.2 million per month and $1.55 million per month,
respectively. IPL can terminate the agreement, should the ability to
include future demand charges in ordinary, necessary and reasonable
expenses for ratemaking purposes be disallowed. Capacity payments
during 1994, 1993 and 1992 under this agreement totaled $14.4 million,
$12.6 million and $5.4 million, respectively.
IPL is involved in litigation and environmental claims arising in
the normal course of business. While the results of such litigation
cannot be predicted with certainty, management, based upon advice of
counsel, believes that the final outcome will not have a material
adverse effect on the financial position and results of operations.
With respect to environmental issues, IPL has ongoing discussions with
various regulatory authorities, and continues to believe that IPL is in
compliance with its various permits, but if IPL's position is found to
be erroneous, they could be subject to fines.
12. QUARTERLY RESULTS (UNAUDITED):
Operating results for the years ended December 31, 1994 and 1993 by
quarter, are as follows (in thousands):
<TABLE>
<CAPTION>
1994
- -----------------------------------------------------------------------
March 31 June 30 September 30 December 31
-------- ------- ------------ -----------
<S> <C> <C> <C> <C>
Operating revenues $181,178 $161,137 $183,666 $160,095
Operating income 41,520 29,440 42,832 29,518
Net income 31,563 19,202 32,640 20,418
<CAPTION>
1993
- -----------------------------------------------------------------------
March 31 June 30 September 30 December 31
-------- ------- ------------ -----------
<S> <C> <C> <C> <C>
Operating revenues $169,042 $153,127 $183,264 $158,870
Operating income 40,068 27,354 44,520 30,426
Net income 30,038 17,551 34,331 20,846
</TABLE>
The quarterly figures reflect seasonal and weather-related
fluctuations which are normal to IPL's operations. Colder weather was
experienced in the first quarter of 1994 and warmer weather was
experienced in the second quarter of 1994, while weather conditions in
1993 reflected near normal conditions. In addition, during the third
quarter of 1994, IPL expensed approximately $3.1 million of property
held for future use.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
None.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information relating to the directors of the registrant, set
forth in the Information Statement of Indianapolis Power &
Light Company dated March 6, 1995 (the registrant's
Information Statement), under "Directors and Nominees" at
pages 2-6 is incorporated herein by reference. Information
relating to the registrant's executive officers is set forth
at pages I-8 - I-9 of this Form 10-K under "Executive
Officers of the Registrant at February 28, 1995."
Item 11. EXECUTIVE COMPENSATION
Information relating to executive compensation, set forth in
the registrant's Information Statement under "Compensation of
Executive Officers" at pages 6-9, "Compensation of Directors"
at page 10, "Compensation Committee Interlocks and Insider
Participation" at page 12, "Pensions Plans" at page 14, and
"Employment Contracts and Termination of Employment and
Change in Control Arrangements" at page 15, is incorporated
herein by reference.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information relating to ownership of the registrant's common
stock by persons known by the registrant to be the beneficial
owners of more than 5% of the outstanding shares of common
stock and by management, set forth in the registrant's
Information Statement under "Voting Securities and Beneficial
Owners" at page 2 is incorporated herein by reference.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information relating to certain relationships and related
transactions, set forth in the registrant's Information
Statement under "Directors and Nominees - Certain Business
Relationships" at page 6, is incorporated herein by
reference.
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) The Financial Statements and Supplemental Schedule under this
Item 14 (a) 1 and 2 filed in this Form 10-K are those of
Indianapolis Power & Light Company.
1. Financial Statements
Included in Part II of this report:
Independent Auditors' Report
Statements of Cash Flows for the Years
Ended December 31, 1994, 1993 and 1992
Statements of Income for the Years Ended
December 31, 1994, 1993 and 1992
Balance Sheets, December 31, 1994 and 1993
Statements of Capitalization
December 31, 1994 and 1993
Statements of Retained Earnings for the Years
Ended December 31, 1994, 1993 and 1992
Notes to Financial Statements
(a) 2. Financial Statement Schedules
Included in Part IV of this report:
For each of the years ended December 31, 1994, 1993
and 1992
Schedule VIII - Valuation and Qualifying Accounts
(a) 3. Exhibits
The Exhibit Index beginning on page IV-6 of this
Annual Report on Form 10-K lists the exhibits that are
filed as part of this report.
(b) Reports on Form 8-K
Indianapolis Power & Light Company filed a report on Form 8-
K, dated January 25, 1994, reporting Item 5, "Other Events",
and Item 7, "Exhibits", with respect to the issuance of $180
million First Mortgage Bonds and filed a report on Form 8-K,
dated September 27, 1994, reporting Item 5, "Other Event" and
Item 7, "Exhibits", with respect to the announced delay of
IPL's proposed Patriot electric generating unit. IPL also
filed a report of Form 8-K dated January 31, 1995, reporting
Item 5, "Other Events" and Item 7, "Exhibits", with respect
to IPL's earnings and the earnings of its parent, IPALCO
Enterprises, Inc. for the year ended December 31, 1994.
<TABLE>
INDIANAPOLIS POWER & LIGHT COMPANY SCHEDULE VIII
Valuation and Qualifying Accounts
For the Years Ended December 31, 1994, 1993 and 1992
(In Thousands)
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
ADDITIONS DEDUCTIONS
---------------------- FOR PURPOSES
CHARGED TO CHARGED FOR WHICH
BALANCE AT COSTS AND TO OTHER RESERVES BALANCE AT
DESCRIPTION JANUARY 1 EXPENSES ACCOUNTS WERE CREATED DECEMBER 31
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1994:
RESERVES DEDUCTED IN BALANCE SHEET
FROM ASSETS TO WHICH THEY APPLY:
Reserve for depreciation of utility property $ 876,054 $ 87,028 $ 0 $ 46,139 $ 916,943
Reserve for depreciation of nonutility property $ 27 $ 10 $ 0 $ 0 $ 37
Reserve for receivables $ 626 $ 1,824 $ 0 $ 1,707 $ 743
YEAR ENDED DECEMBER 31, 1993:
RESERVES DEDUCTED IN BALANCE SHEET
FROM ASSETS TO WHICH THEY APPLY:
Reserve for depreciation of utility property $ 818,319 $ 78,372 $ 0 $ 20,637 $ 876,054
Reserve for depreciation of nonutility property $ 19 $ 8 $ 0 $ 0 $ 27
Reserve for receivables $ 647 $ 1,845 $ 0 $ 1,866 $ 626
YEAR ENDED DECEMBER 31, 1992:
RESERVES DEDUCTED IN BALANCE SHEET
FROM ASSETS TO WHICH THEY APPLY:
Reserve for depreciation of utility property $ 756,093 $ 74,829 $ 0 $ 12,603 $ 818,319
Reserve for depreciation of nonutility property $ 19 $ 0 $ 0 $ 0 $ 19
Reserve for receivables $ 699 $ 1,926 $ 0 $ 1,978 $ 647
</TABLE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
INDIANAPOLIS POWER & LIGHT COMPANY
By /s/ John R. Hodowal
--------------------------------------
(John R. Hodowal, Chairman of the
Board and Chief Executive Officer)
Date February 28, 1995
-----------------
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
(i) Principal Executive Officer:
/s/ John R. Hodowal Chairman of the Board and February 28, 1995
---------------------- Chief Executive Officer
(John R. Hodowal)
(ii) Principal Financial Officer:
/s/ John R. Brehm Senior Vice President - February 28, 1995
--------------------- Finance and Information
(John R. Brehm) Services
(iii) Principal Accounting Officer:
/s/ Stephen J. Plunkett Controller February 28, 1995
-----------------------
(Stephen J. Plunkett)
(iv) A majority of the Board of Directors of Indianapolis Power & Light
Company:
/s/ Joseph D. Barnette, Jr. Director February 28, 1995
---------------------------
(Joseph D. Barnette, Jr.)
SIGNATURES (Continued)
/s/ Robert A. Borns Director February 28, 1995
---------------------------
(Robert A. Borns)
/s/ Mitchell E. Daniels, Jr. Director February 28, 1995
----------------------------
(Mitchell E. Daniels, Jr.)
/s/ Rexford C. Early Director February 28, 1995
---------------------------
(Rexford C. Early)
/s/ Otto N. Frenzel III Director February 28, 1995
---------------------------
(Otto N. Frenzel III)
/s/ Max L. Gibson Director February 28, 1995
---------------------------
(Max L. Gibson)
/s/ Edwin J. Goss Director February 28, 1995
---------------------------
(Edwin J. Goss)
/s/ Dr. Earl B. Herr, Jr. Director February 28, 1995
---------------------------
(Dr. Earl B. Herr, Jr.)
/s/ John R. Hodowal Director February 28, 1995
---------------------------
(John R. Hodowal)
/s/ Ramon L. Humke Director February 28, 1995
---------------------------
(Ramon L. Humke)
/s/ Sam H. Jones Director February 28, 1995
---------------------------
(Sam H. Jones)
/s/ Andre B. Lacy Director February 28, 1995
---------------------------
(Andre B. Lacy)
SIGNATURES (Continued)
/s/ L. Ben Lytle Director February 28, 1995
---------------------------
(L. Ben Lytle)
/s/ Thomas M. Miller Director February 28, 1995
---------------------------
(Thomas M. Miller)
/s/ Sallie W. Rowland Director February 28, 1995
---------------------------
(Sallie W. Rowland)
/s/ Thomas H. Sams Director February 28, 1995
---------------------------
(Thomas H. Sams)
EXHIBIT INDEX
Copies of documents listed below which are identified with an
asterisk (*) are incorporated herein by reference and made a part
hereof. The management contracts or compensatory plans are marked
with a double asterisk (**) after the description of the contract or
plan.
Exhibit
No. Description
------- --------------------------------------------------------------
3.1* Articles of Incorporation of Indianapolis Power & Light
Company, as amended. (Form 10-Q for quarter ended March 31,
1991.)
3.2* Bylaws of Indianapolis Power & Light Company dated January
25, 1994. (Form 10-Q for the quarter ended March 31, 1994.)
4.1* Mortgage and Deed of Trust, dated as of May 1, 1940,
between Indianapolis Power & Light Company and American
National Bank and Trust Company of Chicago, Trustee, as
supplemented and modified by 33 Supplemental Indentures.
Exhibits D in File No. 2-4396; B-1 in File No. 2-6210;
7-C File No. 2-7944; 7-D in File No. 2-72944; 7-E in File
No. 2-8106; 7-F in File No. 2-8749; 7-G in File No. 2-8749;
4-Q in File No. 2-10052; 2-I in File No. 2-12488; 2-J in
File No. 2-13903; 2-K in File No. 2-22553; 2-L in File No. 2-
24581; 2-M in File No. 2-26156; 4-D in File No. 2-26884; 2-D
in File No. 2-38332; Exhibit A to Form 8-K for October 1970;
Exhibit 2-F in File No. 2-47162; 2-F in File No. 2-50260; 2-
G in File No. 2-50260; 2-F in File No. 2-53541; 2E in File
No. 2-55154; 2E in File no. 2-60819; 2F in File No. 2-60819;
2-G in File No. 2-60819; Exhibit A to Form 10-Q for the
quarter ended 9-30-78 File No. 1-3132; 13-4 in File No. 2-
73213; Exhibit 4 in File No. 2-93092. Twenty-eighth, Twenty-
ninth and Thirtieth Supplemental Indentures. (Form 10-K
dated for the year ended December 31, 1985.)
4.2* Thirty-First Supplemental Indenture dated as of October 1,
1986. (Form 10-K for the year ended December 31, 1986.)
4.3* Thirty-Second Supplemental Indenture dated as of June 1,
1989. (Form 10-K for year ended 12-31-89.)
4.4* Thirty-Third Supplemental Indenture dated as of August 1,
1989. (Form 10-K for year ended 12-31-89.)
4.5* Thirty-Fourth Supplemental Indenture dated as of October 15,
1991. (Form 10-K for year ended 12-31-91.)
4.6* Thirty-Fifth Supplemental Indenture dated as of August 1,
1992. (Form 10-K for year ended 12-31-92.)
4.7* Thirty-Sixth Supplemental Indenture dated as of April 1,
1993. (Form 10-Q for quarter ended 9-30-93.)
4.8* Thirty-Seventh Supplemental Indenture dated as of October 1,
1993. (Form 10-Q for quarter ended 9-30-93.)
Exhibit
No. Description
------- --------------------------------------------------------------
4.9* Thirty-Eighth Supplemental Indenture dated as of October 1,
1993. (Form 10-Q for quarter ended 9-30-93.)
4.10* Thirty-Ninth Supplemental Indenture dated as of February 1,
1994. (Form 8-K, dated 1-25-94.)
4.11* Fortieth Supplemental Indenture dated as of February 1,
1994. (Form 8-K, dated 1-25-94.)
4.12 Forty-First Supplemental Indenture dated as of January 15,
1995.
10.1* Coal Supply Agreement between Indianapolis Power & Light
Company and Peabody Coal Company effective as of January 1,
1992 and dated April 7, 1993. Confidential portions of this
Contract have been omitted and filed separately with the SEC
pursuant to 17 CFR 240.24b-2. (Form 10-Q for quarter ended
3-31-93.)
10.2* Amendment to Coal Supply Agreement dated July 5, 1985,
between Indianapolis Power & Light Company and Black Beauty
Coal Company, Inc. (Form 10-K for year ended 12-31-86.)
10.3* Amendment to Coal Supply Agreement dated February 27, 1987,
between Indianapolis Power & Light Company and Black Beauty
Coal Company, Inc. (Form 10-K for year ended 12-31-87.)
10.4* Transportation Contract dated September 28, 1987, between
Indianapolis Power & Light Company and Consolidated Rail
Corporation. (Form 10-K for year ended 12-31-87.)
10.5* Amendment No. 1 to Transportation Contract between
Indianapolis Power & Light Company and Consolidated Rail
Corporation dated November 1, 1988. (Form 10-Q for
quarterly period ended June 30, 1989.)
10.6* Amendments No. 2 and 3 to Transportation Contract between
Indianapolis Power & Light Company and Consolidated Rail
Corporation dated August 1, 1989 and August 2, 1989,
respectively. (Form 10-Q for quarterly period ended
September 30, 1989.)
10.7* Amendment No. 4 to Transportation Contract between
Indianapolis Power & Light Company and Consolidated Rail
Corporation dated July 30, 1990. (Form 10-Q for quarterly
period ended September 30, 1990.)
10.8 Coal Supply Agreement dated September 27, 1994, between
Indianapolis Power & Light Company and Black Diamond Coal
Company, Inc. Confidential portions of this Contract have
been omitted and filed separately with the SEC pursuant to
17 CFR 240.24b-2.
Exhibit
No. Description
------- --------------------------------------------------------------
10.9 Coal Supply Agreement between Indianapolis Power & Light
Company and Triad Mining of Indiana, Inc. and Marine Coal
Sales Company dated December 7, 1994. Confidential portions
of this Contract have been omitted and filed separately with
the SEC pursuant to 17 CFR 240.24b-2.
10.10* Interconnection Agreement, dated December 30, 1960, between
IPL and Indiana & Michigan Electric Company as modified.
(Exhibits 4-A in File No. 2-24581; 5-F in File No. 2-28756;
5-R in File No. 2-43038; 5-S in File No. 2-47162 and 5-L in
File No. 2-53541.)
10.11* Modification 14 to Interconnection Agreement between
Indianapolis Power & Light Company and Indiana & Michigan
Electric Company. (Form 10-K for year ended 12-31-82.)
10.12* Modification 15 to Interconnection Agreement dated September
1, 1985, between Indianapolis Power & Light Company and
Indiana & Michigan Electric Company. (Form 10-K for year
ended 12-31-88.)
10.13* Modification 16 to Interconnection Agreement dated September
1, 1991, between Indianapolis Power & Light Company and
Indiana Michigan Power Company (formerly Indiana & Michigan
Electric Company). (Form 10-K for year ended 12-31-91.)
10.14* Interconnection Agreement, dated May 1, 1962, between
Indianapolis Power & Light Company and Public Service of
Indiana, Inc. as supplemented. (Exhibits 4-B in File No. 2-
24581; 5-L in File No. 2-38332; 5-N in File No. 2-41916; 5-P
in File No. 2-41916; 5-B in File No. 2-60819 and Forms 10-K
for years ended 12-31-82 and 12-31-87.)
10.15* Ninth Supplemental Agreement dated May 1, 1992, to
Interconnection Agreement between Indianapolis Power & Light
Company and PSI Energy, Inc. (Form 10-K for year ended 12-
31-92.)
10.16* Facilities Agreement effective in 1968 among Indianapolis
Power & Light Company, Public Service Company of Indiana,
Inc. and Indiana & Michigan Electric Company. (Exhibit 5-G
in File No. 2-28756.)
10.17* Facilities Agreement dated August 16, 1977, between
Indianapolis Power & Light Company and Public Service
Company of Indiana, Inc. (Form 10-K for year ended 12-31-
81.)
10.18* Amendment No. 1 dated June 1, 1981, to Facilities Agreement
between Indianapolis Power & Light Company and Public
Service Company of Indiana, Inc. (Form 10-K for year ended
12-31-81.)
Exhibit
No. Description
------- --------------------------------------------------------------
10.19* Amendment No. 2 dated October 1, 1984, to Facilities
Agreement between Indianapolis Power & Light Company and
Public Service of Indiana, Inc. (Form 10-K for year ended
12-31-86.)
10.20* East Central Area Reliability Agreement dated August 1,
1967, between Indianapolis Power & Light Company and 23
other electric utility companies as supplemented. (Exhibits
5-I in File No. 2-38332 and 5-J in File No. 2-38332.)
10.21* Interconnection Agreement dated December 2, 1969, between
Indianapolis Power & Light Company and Southern Indiana Gas
and Electric Company as modified. (Exhibits 5-K in File No.
2-38332 and 5-Q in File No. 2-43038.)
10.22* Modification 2, Modification 3 and Modification 4 to
Interconnection Agreement between Indianapolis Power & Light
Company and Southern Indiana Gas and Electric Company.
(Form 10-K for year ended 12-31-80.)
10.23* Modification 5 and Modification 6 to Interconnection
Agreement between Indianapolis Power & Light Company and
Southern Indiana Gas and Electric Company. (Form 10-K for
year ended 12-31-81.)
10.24* Modification 7 to Interconnection Agreement between
Indianapolis Power & Light Company and Southern Indiana Gas
and Electric Company. (Form 10-K for year ended 12-31-82.)
10.25* Modification 8 to Interconnection Agreement between
Indianapolis Power & Light Company and Southern Indiana Gas
and Electric Company. (Form 10-K for year ended 12-31-89.)
10.26* Interconnection Agreement dated December 1, 1981, between
Indianapolis Power & Light Company and Hoosier Energy Rural
Electric Cooperative, Inc. (Form 10-K for year ended 12-31-
81.)
10.27* Modification 1 to Interconnection Agreement between
Indianapolis Power & Light Company and Hoosier Energy Rural
Electric Cooperative, Inc. (Form 10-K for year ended 12-31-
82.)
10.28* Modification 2 to Interconnection Agreement between
Indianapolis Power & Light Company and Hoosier Energy Rural
Electric Cooperative, Inc. (Form 10-K for year ended 12-31-
83.)
10.29* Modification 3 to Interconnection Agreement between
Indianapolis Power & Light Company and Hoosier Energy Rural
Electric Cooperative, Inc. (Form 10-K for year ended 12-31-
89.)
Exhibit
No. Description
------- --------------------------------------------------------------
10.30* Interconnection Agreement, dated October 7, 1987, between
Indianapolis Power & Light Company and Wabash Valley Power
Association. (Form 10-K for year ended 12-31-87.)
10.31 Employment Agreement between Indianapolis Power & Light
Company and Ramon L. Humke dated February 1, 1990. **
10.32 Employment Agreement by and among IPALCO Enterprises, Inc.,
Indianapolis Power & Light Company and John R. Hodowal dated
July 29, 1986. **
10.33 Directors' and Officers' Liability Insurance Policy No.
DO392B1A94 effective June 1, 1994 to June 1, 1995. **
10.34 Unfunded Deferred Compensation Plan for Indianapolis Power &
Light Company Directors dated February 22, 1983, as amended. **
10.35 Resolution adopting the Unfunded Deferred Compensation Plan
for Indianapolis Power & Light Company Officers effective
January 1, 1994. (Form 10-K for year ended 12-31-93.) **
10.36* Eighth Amendment to and Complete Restatement of the
Indianapolis Power & Light Company Unfunded Supplemental
Retirement Plan for a Select Group of Management Employees
effective November 1, 1988. (Form 10-K for year ended 12-31-
88.) **
10.37* Indianapolis Power & Light Company Supplemental Retirement
Plan and Trust Agreement For a Select Group of Management
Employees (As Amended and Restated Effective May 1, 1993).
(Form 10-K for year ended 12-31-93.) **
10.38* First Amendment to the Indianapolis Power & Light Company
Supplemental Retirement Plan and Trust Agreement For A
Select Group of Management Employees (As Last Amended and
Restated Effective May 1, 1993). (Form 10-K for year ended
12-31-93.) **
10.39 1994 Management Incentive Program. **
10.40 Form of Termination Benefits Agreement together with
schedule of parties to, and dates of, the Termination
Benefits Agreements **
21.1 Subsidiaries of the Registrant
23.1 Independent Auditors' Consent
27.1 Financial Data Schedule
99.1* Agreement, dated as of October 27, 1993, by and among IPALCO
Enterprises, Inc., Indianapolis Power & Light Company, PSI
Resources, Inc., PSI Energy, Inc., The Cincinnati Gas &
Electric Company, CINergy Corp., James E. Rogers, John R.
Hodowal and Ramon L. Humke. (Form 10-Q for quarterly period
ended 9-30-93.)
Exhibit
No. Description
------- --------------------------------------------------------------
99.2 Amendment to Agreement dated October 27, 1994, by and among
IPALCO Enterprises, Inc., Indianapolis Power & Light
Company, PSI Resources, Inc., PSI Energy, Inc., The
Cincinnati Gas & Electric Company, CINergy Corp., James E.
Rogers, John R. Hodowal and Ramon L. Humke.
EXHIBIT 4.12
INDIANAPOLIS POWER & LIGHT COMPANY
TO
AMERICAN NATIONAL BANK AND TRUST
COMPANY OF CHICAGO
Trustee
Forty-First Supplemental Indenture
Dated as of January 15, 1995
ESTABLISHING FIRST MORTGAGE BONDS,
6-5.8% Series, Due 2024
<PAGE>
TABLE OF CONTENTS*
of
FORTY-FIRST SUPPLEMENTAL INDENTURE
of
INDIANAPOLIS POWER & LIGHT COMPANY
Page
Parties 1
Recitals 1
Section 1 Granting clauses 3
Part I Electric Distributing Systems 4
Part II Steam and Hot Water
Distributing Systems 4
Part III Indeterminate Permits and
Franchises 5
Part IV Other Property 5
General and after-acquired title 6
Section 2 Designation of Thirty-Ninth series of
bonds and kind and denominations thereof 6
Designation of Company or American
National Bank and Trust Company of
Chicago as paying agent 7
Purpose of bonds 7
Redemption of bonds 8
Exchange of bonds 12
Transfer of bonds 13
Series limited to $40,000,000 13
Section 3 Form of fully registered bond 13
Form of Trustee's certificate on bonds 16
Section 4 Temporary bonds 19
Section 5 Payment of principal and interest;
credits 19
Section 6 Annual Payments for Maintenance and
Improvement Fund 20
Section 7 Compliance with Section 47 of Original
Mortgage with respect to dividend
restrictions 20
Section 8 Acceptance of trusts by Trustee and
conditions of acceptance 20
*Table of Contents is not part of the Forty-First
Supplemental Indenture and should not be considered such. It is included
herein only for purposes of convenient reference.
<PAGE>
Page
Section 9 Successors and assigns 20
Section 10 Limitation of rights hereunder 21
Section 11 Compliance with terms, provisions and
conditions of Mortgage 21
Section 12 Execution in counterparts 21
Testimonium 22
Signatures and Seals 22
Acknowledgements 23
THIS FORTY-FIRST SUPPLEMENTAL INDENTURE, dated as of January 15,
1995, between Indianapolis Power & Light Company, a corporation of the
State of Indiana, hereinafter sometimes called the ''Company,'' party
of the first part, and American National Bank and Trust Company of
Chicago, a national banking association, as Trustee, hereinafter
sometimes called the ''Trustee,'' party of the second part;
Whereas, the Company by a Mortgage and Deed of Trust (hereinafter
sometimes called the ''Original Mortgage'' when referred to as existing
prior to any supplement thereto or modification thereof, and the
''Mortgage'' when referred to as now or heretofore supplemented and
modified) dated as of May 1, 1940, made to said American National Bank
and Trust Company of Chicago, as Trustee, to secure the payment of the
bonds issued from time to time under the Mortgage for the purposes of
and subject to the limitations specified in the Mortgage, and to secure
the performance of the covenants therein contained, conveyed to the
Trustee thereunder upon certain trusts, terms and conditions, and with
and subject to certain provisos and covenants therein contained, all
and singular the property, rights and franchises which the Company then
owned or should thereafter acquire, excepting the property expressly
excepted by the terms of the Original Mortgage or any indenture
supplemental thereto, to which Mortgage reference is hereby made for
greater certainty; and
Whereas, the Original Mortgage has been supplemented and modified by
supplemental indentures dated as of May 1, 1942, as of February 1,
1948, as of April 1, 1949, as of October 1, 1949, as of February 1,
1951, as of March 1, 1953, as of June 1, 1956, as of March 1, 1958, as
of October 1, 1960, as of August 1, 1964, as of April 1, 1966, as of
May 1, 1967, as of May 1, 1968, as of October 1, 1970, as of March 1,
1972, as of March 15, 1973, as of February 15, 1974, as of August 15,
1974, as of September 15, 1975, as of June 1, 1976, as of July 1, 1976,
as of August 1, 1977, as of September 1, 1978, as of August 1, 1981, as
of November 1, 1983, as of November 1, 1984, as of December 1, 1984, as
of September 1, 1985, as of October 1, 1986, as of June 1, 1989, as of
August 1, 1989, as of October 15, 1991, as of August 1, 1992, as of
April 1, 1993, as of October 1, 1993 and as of February 1, 1994.
Whereas, Section 8 of the Original Mortgage provides, among other
things, that the form of each series of bonds (other than the initial
issue of bonds) issued thereunder shall be established by an indenture
supplemental thereto authorized by resolution of the Board of Directors
of the Company, and that the form of each series, as established by the
Board of Directors, shall specify the descriptive title of the bonds
and various other terms thereof, and may also contain such other
provisions as the Board of Directors may, in its discretion, cause to
be inserted therein expressing or referring to the terms and conditions
upon which such bonds are to be issued and secured under the Original
Mortgage or any indenture supplemental thereto or in modification
thereof; and
Whereas, the Company has entered into a Loan Agreement, dated as of
January 15, 1995 (hereinafter called the Loan Agreement'') with the
<PAGE>
City of Petersburg, Indiana (the ''City''), in order to obtain funds
for the refunding of the aggregate principal amount of Forty Million
Dollars ($40,000,000) of the City's Pollution Control Revenue Bonds,
Series 1984 (Indianapolis Power & Light Company Project) issued by the
City pursuant to related loan agreements to pay a portion of the cost
of acquisition, construction, installation and equipping by the Company
of certain pollution control facilities (the ''Facilities''), and
pursuant to the Loan Agreement the Company has agreed to issue a series
of its bonds under the Mortgage and this Forty-First Supplemental
Indenture in order to evidence and secure its indebtedness under the
Loan Agreement; and
Whereas, the Company now desires to provide for the establishment,
execution, authentication and delivery under the Mortgage of bonds of a
series to be known as its ''First Mortgage Bonds, 6-5/8% Series, due
2024'' (the bonds of said series being hereinafter sometimes referred
to as the ''2024 PC Bond''), limited to the aggregate principal amount
of Forty Million Dollars ($40,000,000); and
Whereas, all things necessary to make the 2024 PC Bond hereinafter
described, when duly executed by the Company and authenticated and
delivered by the Trustee, a valid, binding and legal obligation of the
Company, and to make this Forty-First Supplemental Indenture a valid
and binding agreement supplemental to the Original Mortgage, have been
done and performed; and
Whereas, the execution and delivery by the Company of this
Forty-First Supplemental Indenture, and the terms of the 2024 PC Bond,
have been duly authorized by the Board of Directors of the Company by
appropriate resolutions of said Board; and
Whereas, it is provided in and by the Original Mortgage that the
Company will execute and deliver such further instruments and do such
further acts as may be necessary or proper to carry out more
effectually the purposes of the Mortgage, and to make subject to the
lien thereof any property thereafter acquired and intended to be
subject to the lien thereof; and
Whereas, the Company has, since the date of execution and delivery
of the Original Mortgage, purchased and acquired property and desires
by this Forty-First Supplemental Indenture specifically to convey to
the Trustee such property for the better protection and security of the
bonds issued and to be issued under the Original Mortgage, or any
indenture supplemental thereto;
Now, Therefore, This Indenture Witnesseth that, in consideration of
the premises and of the acceptance or purchase of the 2024 PC Bond by
the registered owners thereof, and of the sum of one dollar, lawful
money of the United States of America, to the Company duly paid by the
Trustee at or before the execution and delivery of this Forty-First
Supplemental Indenture, the receipt whereof is hereby acknowledged, the
Company and the Trustee, respectively, have entered into, executed and
delivered this Forty-First Supplemental Indenture, for the uses and
<PAGE>
purposes hereinafter expressed, that is to say:
Section 1. The Company has granted, bargained, sold, released,
conveyed, assigned, transferred, mortgaged, pledged, set over and
confirmed, and by these presents does grant, bargain, sell, release,
convey, assign, transfer, mortgage, pledge, set over and confirm
(subject, however, to permitted encumbrances as defined in the Original
Mortgage), unto said American National Bank and Trust Company of
Chicago, as Trustee, as herein provided, and its successors in the
trusts declared in the Original Mortgage and herein, all of the
property, real, personal and mixed, tangible and intangible, of every
kind, character and description which the Company has acquired since
the execution and delivery of the Original Mortgage and now owns
(except property, rights and assets of a character similar to that
excluded from the lien and operation of the Mortgage by the Granting
Clauses of the Original Mortgage, which property, rights and assets are
excluded from the lien and operation of the Mortgage only to the extent
provided therein), including, but without otherwise limiting the
generality of the foregoing, the following described property situated
within the State of Indiana:
PART I.
ELECTRIC DISTRIBUTING SYSTEMS.
All electric distributing systems of the Company acquired by it
after May 1, 1940, the date of the Original Mortgage, and located in
the Counties of Bartholomew, Boone, Daviess, Greene, Hamilton, Hancock,
Hendricks, Johnson, Knox, Madison, Marion, Monroe, Morgan, Owen, Pike,
Putnam, Shelby and Sullivan, State of Indiana; and any additions to or
extensions of any such systems, together with the buildings, erections,
structures, transmission lines, power stations, sub-stations, engines,
boilers, condensers, pumps, turbines, machinery, tools, conduits,
manholes, insulators, dynamos, motors, lamps, cables, wires, poles,
towers, cross-arms, piers, abutments, switchboard equipment, meters,
appliances, instruments, apparatus, appurtenances, maps, records,
ledgers, contracts, facilities and other property or equipment used or
provided for use in connection with the construction, maintenance,
repair and operation thereof; together also with all of the rights,
privileges, rights-of-way, franchises, licenses, grants, liberties,
immunities, ordinances, permits and easements of the Company in respect
of the construction, maintenance, repair and operation of said systems.
PART II.
STEAM AND HOT WATER DISTRIBUTING SYSTEMS.
All the steam and hot water distributing systems acquired by the
Company after May 1, 1940, the date of the Original Mortgage, and
located in the City of Indianapolis, Marion County, Indiana, and any
<PAGE>
additions to or extensions of any such systems; together with the
buildings, erections, structures, boilers, heaters, engines, tanks,
pipe lines, mains, connections, service pipes, meters, tools,
instruments, appliances, apparatus, facilities, machinery and other
property and equipment used or provided for use in the construction,
maintenance, repair and operation thereof; and together also with all
of the rights, privileges, rights-of-way, franchises, licenses, grants,
liberties, immunities, ordinances, permits and easements of the Company
in respect of the construction, maintenance, repair and operation of
said systems.
PART III.
INDETERMINATE PERMITS AND FRANCHISES.
All indeterminate permits, franchises, ordinances, licenses, and
other authorizations by or from any state, county, municipality, or
other governmental authority, acquired by the Company after May 1,
1940, the date of the Original Mortgage, including particularly, but
not limited to, any indeterminate permits under the Public Service
Commission Act of the State of Indiana, and all Acts amendatory thereof
and supplemental thereto, and all right, title and interest therein now
owned by the Company, and all renewals, extensions and modifications of
said indeterminate permits, franchises, ordinances, licenses, and other
authorizations, and of the indeterminate permits, franchises,
ordinances, licenses, and other authorizations referred to in Part VII
of the Granting Clauses of the Original Mortgage.
PART IV.
OTHER PROPERTY.
All other property, whether real, personal or mixed (except any in
the Mortgage expressly excepted), now owned by the Company and
wheresoever situated, including (without in anywise limiting or
impairing by the enumeration of the same the scope and intent of the
foregoing or of any general description contained in the Mortgage) all
lands, flowage rights, water rights, flumes, raceways, dams,
rights-of-way and roads; all plants for the generation of electricity
by water, steam and/or other power, power houses, telephone systems,
water systems, steam heat and power plants, hot water plants,
sub-stations, transmission lines, distribution systems, bridges,
culverts and tracts; all offices, buildings and structures and the
equipment thereof; all machinery, engines, boilers, dynamos, machines,
regulators, meters, transformers, generators and motors; all appliances
whether electrical, gas or mechanical, conduits, cables and lines; all
pipes whether for water, steam heat and power, or other purposes; all
mains and pipes, service pipes, fittings, valves and connections,
poles, wires, tools, implements, apparatus, furniture and chattels; all
municipal franchises, indeterminate permits, and other permits; all
lines for the transportation, transmission and/or distribution of
<PAGE>
electric current, steam heat and power or water for any purpose,
including towers, poles, wires, cables, pipes, conduits and all
apparatus for use in connection therewith; all real estate, lands,
leases, leaseholds; all contracts, whether heat, light, power, water or
street lighting contracts; all easements, servitudes, licenses,
permits, rights, powers, franchises, privileges, rights-of-way and
other rights in or relating to real estate or the occupancy of the same
and (except as hereinafter or in the Mortgage expressly excepted) all
the right, title and interest of the Company in and to all other
property of any kind or nature appertaining to and/or used and/or
occupied and/or enjoyed in connection with any property hereinbefore
described or referred to;
Together with all and singular the tenements, hereditaments and
appurtenances belonging or in anywise appertaining to the aforesaid
property or any part thereof, with the reversion and reversions,
remainder and remainders and (subject to the provisions of Section 64
of the Original Mortgage), the tolls, rents, revenues, issues,
earnings, income, product and profits thereof, and all the estate,
right, title and interest and claim whatsoever, at law as well as in
equity, which the Company now has or may hereafter acquire in and to
the aforesaid property, indeterminate permits, franchises, ordinances,
licenses and other authorizations and every part and parcel thereof.
Section 2. There shall be and is hereby established a series of
bonds, limited in aggregate principal amount to Forty Million Dollars
($40,000,000) to be issued under and secured by the Mortgage, to be
designated '' 6-5/8% Series, due 2024'', each of which shall also bear
the descriptive title ''First Mortgage Bonds''; said bonds shall mature
on December 1, 2024, and shall be issued only as fully registered bonds
without coupons in the denomination of five thousand dollars and any
larger denomination which is a whole multiple of five thousand dollars;
they shall bear interest from the beginning of the current interest
period during which each bond is dated, at the rate per annum
designated in the title thereof, payable semi-annually, on June 1 and
December 1 of each year (except that the first interest payment thereon
shall be made June 1, 1995 for the period from January 15, 1995 through
May 31, 1995); and the principal of, premium, if any, and interest on
said bond shall be payable in lawful money of the United States of
America at the office of the Company in the City of Indianapolis,
Indiana, or, if no such office is maintained, at American National Bank
and Trust Company of Chicago, which is hereby designated and appointed
the office and agency of the Company in the City of Chicago, Illinois,
for the payment of the principal of, premium, if any, and interest on
the 2024 PC Bond, if necessary, and for the registration, transfer and
exchange of such bond as hereinafter provided; all reference herein to
the office or agency of the Company in the City of Chicago, Illinois,
for the payment of the principal of, premium, if any, and interest on
the 2024 PC Bond, or the registration, transfer or exchange thereof,
being to American National Bank and Trust Company of Chicago. In event
of the resignation or inability to act of American National Bank and
Trust Company of Chicago, then a successor agent for all such purposes
in the City of Chicago, Illinois, shall be appointed by the Board of
<PAGE>
Directors of the Company.
The 2024 PC Bond shall be dated as of the date of authentication
thereof, except as otherwise provided in Section 10 of the Original
Mortgage.
The 2024 PC Bond will be issued to evidence and secure a loan to the
Company by the City pursuant to the Loan Agreement of certain funds to
be acquired by the City through the issuance of City of Petersburg,
Indiana, Pollution Control Refunding Revenue Bonds, Series 1995A
(Indianapolis Power & Light Company Project) (the ''Series 1995A
Bonds''), authenticated and delivered under and pursuant to an
Indenture of Trust dated as of January 15, 1995 (hereinafter called the
''City Indenture''), by and between the City and Bank One Indianapolis,
NA, as Trustee (the ''City Trustee''). Pursuant to the City's pledge
and assignment of the Loan Agreement, as set forth in the City
Indenture, the 2024 PC Bond shall be issued to the City and assigned to
the City Trustee. All of the proceeds of the Series 1995A Bonds will be
used for the refunding of the aggregate principal amount of Forty
Million Dollars ($40,000,000) of the City's Pollution Control Revenue
Bonds, Series 1984 (Indianapolis Power & Light Company Project) issued
by the City pursuant to applicable loan agreements.
Upon the notice and in the manner and with the effect provided in
this Section 2, the 2024 PC Bond shall be redeemable prior to the
maturity thereof under any one or more of the following circumstances:
(a) In whole, at the option of the Company, if the Facilities or
Units 3 or 4 of the Petersburg Generating Station serviced by the
Facilities shall have been damaged or destroyed (i) to such extent
that they cannot be reasonably expected, in the opinion of the
Company, to be restored within a period of six (6) months to the
condition thereof immediately preceding such damage or destruction,
or (ii) to such extent that the Company, in its reasonable opinion,
is thereby prevented from carrying on its normal operations for a
period of six (6) months or more, or (iii) to such extent that the
restoration thereof would not be, taking into consideration the net
proceeds of any insurance payable as a result of such damage or
destruction, economic in the reasonable opinion of the Company.
(b) In whole, at the option of the Company, if title to, or the
temporary use of, all or substantially all of the Facilities or
Units 3 or 4 of the Petersburg Generating Station serviced by the
Facilities, shall have been taken, under the exercise of the power
of eminent domain, or should any governmental body or agency
exercise any right which it may have to purchase or designate a
purchaser of the same, or should such property be sold to any
governmental body or agency so that the result of such taking or
takings is that (i) the Company, in its reasonable opinion, is
thereby prevented from carrying on its normal operations of either
the Facilities or such Units 3 or 4 for a period of six (6) months
or more, (ii) the restoration required as a result of the taking
<PAGE>
cannot be reasonably expected, in the opinion of the Company, to be
completed in a period of six (6) months, or (iii) the restoration
thereof, taking into consideration the net proceeds from such
eminent domain award, would not be economic in the reasonable
opinion of the Company.
(c) In whole, at the option of the Company, if, as a result of
any changes in the Constitution or law of the State of Indiana or
the Constitution or law of the United States of America or of
legislative or administrative action (whether state or federal) or
by final decree, judgment or order of any court or administrative
body (whether state or federal) entered after the contest thereof by
the Company in good faith or the decision of the Company not to
contest the same, the Loan Agreement shall, in the reasonable
opinion of counsel for the Company, have become void or
unenforceable or impossible of performance in accordance with the
intent and purpose of the parties as expressed in the Loan
Agreement; or unreasonable burdens or excessive liabilities shall,
in the reasonable opinion of the Company, have been imposed upon the
City or the Company, with respect to the Facilities or operation
thereof, including without limitation federal, state or other ad
valorem, property, income or other taxes not being imposed on the
date of the Loan Agreement other than ad valorem taxes presently
levied upon privately owned property used for the same general
purpose as the Facilities.
(d) In whole, at the option of the Company, if changes in the
economic availability of raw materials, operating supplies or
facilities necessary for the operation of the Facilities or the
operation of Units 3 or 4 of the Petersburg Generating Station serviced by
the Facilities shall have occurred or technological or other changes
shall have occurred which render the Facilities or said Units 3 or 4
uneconomic for use in the reasonable opinion of the Company.
(e) In part, at the option of the Company, to the extent of net
proceeds received from any condemnation award, taking or sale as
stated herein, if title to, or the temporary use of any portion of
the Facilities shall have been taken under the exercise of the power
of eminent domain, or should any governmental body or agency
exercise any right it may have to purchase or designate a purchaser
of the same, or should such property be sold to any governmental
body or agency; provided the Company shall furnish to the City and
the City Trustee a certificate of an Independent Engineer (as
defined in the Loan Agreement) selected by the Company stating (i)
that the property forming the part of the Facilities that was taken
by such condemnation, taking or sale is not essential to the
character or significance of the Facilities, or (ii) that the
Facilities have been restored to a condition substantially
equivalent to their condition prior to the taking by such
condemnation, taking or sale proceedings, or (iii) that improvements
have been acquired which are suitable for the operation of the
Facilities.
<PAGE>
(f) In whole, at any time on or after December 1, 2004, or in
part on any interest payment date on or after December 1, 2004, at
the option of the Company at a price equal to the principal amount
of the 2024 PC Bond so to be redeemed and accrued interest to the
date of redemption, together with a premium equal to a percentage of
the principal amount thereof set forth under the heading
''Redemption Premium'' in the form of the 2024 PC Bond hereinafter
recited, so long as the Company is not in default under the Loan
Agreement or the 2024 PC Bond.
(g) In the event all or substantially all of the mortgaged and
pledged property under the Mortgage, or all or substantially all
such property used in the business of generating, manufacturing,
transporting, transmitting, distributing or supplying electricity,
should be taken by exercise of the power of eminent domain, or
should any governmental body or agency exercise any right which it
may have to purchase or designate a purchaser of the same, or should
such property be sold to any governmental body or agency, the
Company shall be obligated to redeem the 2024 PC Bond outstanding as
promptly as possible in accordance with paragraph B of Section 69 of
the Original Mortgage.
(h) In the event that the Company is notified by the City Trustee
that (i) an event of default under the City Indenture has occurred
and is continuing, and (ii) the City Trustee has declared the
principal of all the Series 1995A Bonds then outstanding immediately
due and payable pursuant to the City Indenture, the Company shall
call for redemption, on a redemption date selected by it not later
than thirty (30) days following the date on which such notice is
mailed, the 2024 PC Bond outstanding, and shall on such redemption
date redeem the same; provided, however, that such requirement of
redemption shall be deemed waived, if prior to the date fixed for
such redemption of the 2024 PC Bond (x) such event of default is
waived or cured as set forth in the City Indenture, or (y) there
shall have occurred any completed default (as defined in the
Mortgage) which affects any bond of any series outstanding under the
Mortgage and which completed default has not been cured and made
good prior to such redemption date, it being the intent of this
proviso that, in lieu of such right to redemption, the holder of the
2024 PC Bond shall be entitled only to such rights as are available
to the holders of bonds of any other series outstanding under the
Mortgage in the event of such completed default; and in case of any
subsequent occurrence or continuance of the events described in (i)
and (ii) of this Section 2(h), the Company shall have the same
obligation (subject to the same proviso) to redeem the 2024 PC Bond.
(i) In the event the City Trustee notifies the Company and the
City that the interest payable on the Series 1995A Bonds held by
persons other than a ''substantial user'' or a ''related person'' as
those terms are used in Section 147(a)(2) of the Internal Revenue
Code of 1986, as amended, has been determined by a court of
competent jurisdiction or a formal ruling of the Internal Revenue
<PAGE>
Service to be subject to federal income taxation by reason of a
breach by the Company of any covenant, agreement or representation
in the Loan Agreement, the Company shall call the 2024 PC Bond then
outstanding to be redeemed on the next succeeding interest payment
date within one hundred eighty (180) days after the date of such
notice; provided, however, that such requirement of redemption,
whether in whole or in part shall be deemed waived if, prior to the
date fixed for redemption of the 2024 PC Bond pursuant to this
Section 2(i), there shall have occurred any completed default (as
defined in the Mortgage) which affects any bond of any series
outstanding under the Mortgage and which completed default has not
been cured and made good prior to such redemption date, it being the
intent of this proviso that, in lieu of such right to redemption,
the holder of the 2024 PC Bond shall be entitled only to such rights
as are available to the holders of bonds of any other series
outstanding under the Mortgage in the event of such completed
default; but when any such completed default shall have been cured
and made good, if interest on the Series 1995A Bonds shall still be
taxable as described above, the Company shall have the same
obligation (subject to the same proviso) to redeem the 2024 PC Bond
on the next succeeding interest payment date within one hundred
eighty (180) days after the curing and making good of such completed
default; provided further, that the Company may call for redemption
such portion of the 2024 PC Bond, which in the written opinion of an
attorney or firm of attorneys of nationally recognized standing on
the subject of municipal bonds, would allow the City Trustee to
redeem the Series 1995A Bonds in part, which redemption would have
the result that the interest payable on the Series 1995A Bonds
remaining outstanding after such redemption in part would not be
subject to federal income taxation in the hands of persons other
than a ''substantial user'' or a ''related person'' as those terms
are used in Section 147(a)(2) of the Internal Revenue Code of 1986,
as amended.
In case of redemption of 2024 PC Bond in whole for the purpose of
prepayment under the Loan Agreement pursuant to subsections (a), (b),
(c), (d), (f), (g), (h) or (i) above, the amounts payable upon
redemption of 2024 PC Bond shall be a sum sufficient, together with
other funds deposited with the City Trustee and available for such
purpose, to pay the principal of (and premium, in the case of
redemption pursuant to (f) above), and interest on the 2024 PC Bond
then outstanding and to pay all reasonable and necessary fees and
expenses of the City Trustee accrued and to accrue through final
payment of the 2024 PC Bond.
In case of redemption in part pursuant to (e), (f) or (i) above,
the amount payable by the Company under this Forty-First Supplemental
Indenture, the Loan Agreement and the 2024 PC Bond shall be a sum
sufficient, together with other funds deposited with the Trustee and
available for such purpose, to pay the principal of (and premium in the
case of prepayment pursuant to (f) above) and interest on the 2024 PC
Bond so to be redeemed, which sum together with other funds deposited
with the City Trustee and available for such purpose shall be
<PAGE>
sufficient to pay the principal of, premium, if any, and interest on
the Series 1995A Bonds and to pay all reasonable and necessary fees and
expenses of the City Trustee accrued and to accrue through such partial
prepayment.
The 2024 PC Bond and the Series 1995A Bonds shall be redeemable at
any time within one hundred eighty (180) days following the event or
events described as giving rise to an option of the Company to redeem
them in subsections (a), (b), (c), (d) or (e) above.
To exercise any of the options granted to redeem the 2024 PC Bond
in whole or in part or to comply with any obligations to redeem the 2024
PC Bond in whole or in part imposed in this Section 2, the Company
shall give written notice of the date of redemption to the City
Trustee, which date shall be not less than thirty (30) days nor more
than ninety (90) days from the date the notice is mailed. No further
notice, by publication or otherwise, shall be required for redemption
of the 2024 PC Bond, and the requirements of Section 59 of the Mortgage
for notice by newspaper publication shall not apply to the 2024 PC
Bond.
At the option of the holder, the 2024 PC Bond, upon surrender
thereof at the office or agency of the Company in Chicago, Illinois,
together with a written instrument of transfer in form approved by the
Company duly executed by the holder or by his duly authorized attorney,
shall be exchangeable for a like aggregate principal amount of fully
registered bonds of the same series of other authorized denominations.
The 2024 PC Bond will be nontransferable except to the City Trustee
and successors thereto, if any, and to the Company. To the extent that
it is transferable, it is transferable by the registered holder
thereof, in person or by attorney duly authorized in writing, on the
books of the Company at the office or agency of the Company in the City
of Chicago, Illinois, upon surrender thereof for cancellation at said
office and upon presentation of a written instrument of transfer duly
executed. Thereupon, the Company shall issue in the name of the
transferee, and the Trustee shall authenticate and deliver, a new
registered 2024 PC Bond or Bonds, in authorized denominations, of equal
aggregate principal amount. Any such transfer shall be subject to the
terms and conditions specified in the Mortgage and in this Forty-First
Supplemental Indenture.
The Company shall not be required to transfer or exchange the 2024
PC Bond for a period of ten (10) days next preceding any interest
payment date of said bond.
Except as set forth herein, no charge shall be made upon any
transfer or exchange of any of the 2024 PC Bond other than for any tax
or taxes or other governmental charge required to be paid by the
Company.
The 2024 PC Bond shall be limited to an aggregate principal amount
<PAGE>
of Forty Million Dollars ($40,000,000) and shall be issued under the
provisions of Article VII of the Original Mortgage.
Section 3. The 2024 PC Bond, and the Trustee's Certificate to be
endorsed thereon, shall be in the following forms, respectively:
[form of face of 2024 pc bond]
This First Mortgage Bond, 6-5/8% Series, due 2024 (hereinafter
called the ''2024 PC Bond'') is not transferable except to a successor
trustee under the Indenture of Trust dated as of January 15, 1995,
between the City of Petersburg, Indiana and Bank One Indianapolis, N.A.,
Indiana, as the Trustee, or to Indianapolis Power & Light Company.
INDIANAPOLIS POWER & LIGHT COMPANY
First Mortgage Bond, 6-5/8% Series, Due 2024
Due December 1, 2024
No. 1
$40,000,000
INDIANAPOLIS POWER & LIGHT COMPANY, a corporation of the State of
Indiana (hereinafter called the ''Company''), for value received,
hereby promises to pay to BankOne Indianapolis, N.A., Indiana, as the
Trustee (hereinafter called the ''City Trustee'') under the Indenture
of Trust between the City of Petersburg, Indiana (the ''City'') and the
City Trustee, dated as of January 15, 1995 (the ''City Indenture'') or
registered assigns, on December 1, 2024, at the office of the Company,
in the City of Indianapolis, State of Indiana, or if no such office is
maintained at the time by the Company, then at the office or agency of
the Company for such purpose in the City of Chicago, State of Illinois,
Forty Million Dollars ($40,000,000) in lawful money of the United
States of America, and to pay to the registered owner hereof interest
thereon from the first day of June or the first day of December next
preceding the date of this 2024 PC Bond (except that the first interest
payment hereunder shall be made June 1, 1995 for the period from
January 15, 1995 through May 31, 1995), at the rate of six and five-eighths
percent (6-5/8%) per annum in like lawful money at said office or agency, on
June 1 and December 1 in each year, until the Company's obligation with
respect to the payment of such principal shall have been discharged.
The interest payable hereunder on June 1 or December 1 will be paid to
the registered owner of this 2024 PC Bond at or before the close of
business on such dates, or if such date shall be a Saturday, Sunday,
holiday or a day on which banking institutions in the City of
Indianapolis or the city of any paying agents are authorized by law to
close, on or before the close of business on the next succeeding
business day on which such banking institutions are open for business.
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS 2024 PC BOND SET
<PAGE>
FORTH ON THE REVERSE HEREOF. SUCH FURTHER PROVISIONS SHALL, FOR ALL
PURPOSES, HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH IN THIS PLACE.
No recourse shall be had for the payment of the principal of or
interest on this 2024 PC Bond against any incorporator or any past,
present or future subscriber to the capital stock, stockholder, officer
or director of the Company or of any predecessor or successor
corporation, as such, either directly or through the Company or any
predecessor or successor corporation, under any rule of law, statute,
or constitution or by the enforcement of any assessment or otherwise,
all such liability of incorporators, subscribers, stockholders,
officers and directors, as such, being waived and released by the terms
of the Mortgage, as herein defined.
This 2024 PC Bond shall not become obligatory until American
National Bank and Trust Company of Chicago, the Trustee under the
Mortgage, as herein defined, or its successor thereunder, shall have
signed the form of certificate endorsed hereon.
In Witness Whereof, Indianapolis Power & Light Company has caused
this 2024 PC Bond to be signed in its name by its President or its
Treasurer, by his signature or a facsimile thereof, and its corporate
seal to be affixed hereon, attested by its Secretary or one of its
Assistant Secretaries, by his signature or a facsimile thereof.
Indianapolis Power & Light Company
Dated
By
Treasurer
Attest:
By
Secretary
[form of trustee's certificate on 2024 pc bond]
Trustee's Certificate
This 2024 PC Bond is one of the bonds, of the series herein
designated, provided for in the within-mentioned Mortgage and
Forty-First Supplemental Indenture thereto.
American National Bank and Trust Company of
Chicago
Trustee
<PAGE>
By
Authorized Signature
[form of reverse side of 2024 pc bond]
INDIANAPOLIS POWER & LIGHT COMPANY
First Mortgage Bond, 6-5/8% Series, due 2024
Due January 1, 2024
This 2024 PC Bond is one of an issue of bonds of the Company,
issuable in series, and is one of a series known as its First Mortgage
Bonds, 6-5/8% Series, due 2024 (herein called the ''2024 PC Bond'')
limited in aggregate principal amount to Forty Million Dollars
($40,000,000) and established by a Forty-First Supplemental Indenture
dated as of January 15, 1995, all bonds of all series issued and to be
issued under and equally secured (except insofar as any sinking or
other fund, established in accordance with the provisions of the
Mortgage hereinafter mentioned, may afford additional security for the
bonds of any particular series) by a Mortgage and Deed of Trust, dated
as of May 1, 1940, executed by the Company to American National Bank
and Trust Company of Chicago, as the Trustee (which Mortgage and Deed
of Trust as supplemented and modified by all supplemental indentures
thereto is hereinafter referred to as the ''Mortgage''), to which
Mortgage reference is made for a description of the property mortgaged
and pledged, the nature and extent of the security, the rights of the
bearers or registered owners of the bonds in respect of such security,
the duties and immunities of the Trustee and the terms and conditions
upon which the bonds are secured.
This 2024 PC Bond evidences and secures a loan made by the City to
the Company, pursuant to a Loan Agreement, dated as of January 15,
1995, between the City and the Company (the ''Loan Agreement''). In
order to obtain funds for such loan, the City, contemporaneously with
the issue of this 2024 PC Bond, will issue Forty Million Dollars
($40,000,000) principal amount of its Pollution Control Refunding
Revenue Bonds, Series 1995A (Indianapolis Power & Light Company
Project) (the ''City Bonds'') under and pursuant to the City Indenture.
The City Bonds are payable from payments made by the Company of
principal of, premium, if any, and interest on this 2024 PC Bond and
from moneys in the Bond Fund created under the City Indenture. The
obligation of the Company to pay the principal of, premium, if any, and
interest on this 2024 PC Bond shall be discharged to the extent that
any moneys in said Bond Fund are available for payments on the City
Bonds and are directed by the Company to be applied thereto, all as
provided in the Forty-First Supplemental Indenture.
This 2024 PC Bond is not subject to redemption prior to December 1,
2004, except as provided in Section 2 of the Forty-First Supplemental
Indenture, to which reference is made for full description of
redemption provisions.
<PAGE>
This 2024 PC Bond is subject to redemption in whole at any time on
or after December 1, 2004, or in part on any interest payment date on
or after December 1, 2004, at the option of the Company, upon at least
thirty (30) days prior notice, all as provided in the Forty-First
Supplemental Indenture, at a price equal to the principal amount of the
2024 PC Bond so to be redeemed and accrued interest to the date of
redemption, together with a premium equal to a percentage of the
principal amount thereof set forth below under the heading ''Redemption
Premium'':
If Redeemed During the Twelve Months
Ending With the Thirtieth Day Redemption
of November of the Year Stated Premium
2005 2.0%
2006 1.0%
and without premium if redeemed after November 30, 2006.
With the consent of the Company and to the extent permitted by and
as provided in the Mortgage, the rights and obligations of the Company
and/or of the holders of the bonds and/or coupons and/or the terms and
provisions of the Mortgage and/or any instruments supplemental thereto
may be modified or altered by affirmative vote of the holders of at
least sixty-six and two-thirds per centum (662/3%) in principal amount
of the bonds affected by such modification or alteration then
outstanding under the Mortgage (excluding bonds disqualified from
voting by reason of the Company's interest therein as provided in the
Mortgage); provided that no such modification or alteration shall
permit the extension of the maturity of the principal of this 2024 PC
Bond or the reduction in the rate of interest hereon or any other
modification in the terms of payment of such principal or interest
without the consent of the holder hereof. The principal hereof may be
declared or may become due and payable prior to the stated date of
maturity hereof, on the conditions, in the manner and at the time set
forth in the Mortgage, upon the occurrence of a completed default as in
the Mortgage provided.
No reference herein to the Mortgage, and no provision of this 2024
PC Bond or of the Mortgage, shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay, subject to the
provisions of the Forty-First Supplemental Indenture, the principal of,
and premium, if any, and interest on this 2024 PC Bond at the place, at
the respective times and at the rate and the manner herein prescribed.
This 2024 PC Bond is issuable only in full registered form without
coupons in denominations of Five Thousand Dollars and any larger
denomination which is a whole multiple of Five Thousand Dollars.
This 2024 PC Bond will be nontransferable except to the City Trustee
and successors thereto, if any, and to the Company. To the extent that
it is transferable, it is transferable by the registered holder
thereof, in person or by attorney duly authorized in writing, on the
<PAGE>
books of the Company at the office or agency of the Company in the City
of Chicago, Illinois, upon surrender thereof for cancellation at said
office and upon presentation of a written instrument of transfer duly
executed. Thereupon, the Company shall issue in the name of the
transferee, and the Trustee shall authenticate and deliver, a new
registered 2024 PC Bond or Bonds, in authorized denominations, of equal
aggregate principal amount. Any such transfer shall be subject to the
terms and conditions specified in the Mortgage and in the Forty-First
Supplemental Indenture.
[end of 2024 pc bond form]
Section 4. Until the 2024 PC Bond in definitive form is ready for
delivery, the Company may execute, and upon its request in writing the
Trustee shall authenticate and deliver, in lieu thereof, a fully
registered 2024 PC Bond in temporary form, as provided in Section 15 of
the Original Mortgage. Such bond may, in lieu of the statement of the
specific redemption prices required to be set forth in such bond in
definitive form, include a reference to this Forty-First Supplemental
Indenture for a statement of such redemption prices.
Section 5. The Company covenants and agrees that it will duly and
punctually pay to the holder of the 2024 PC Bond the principal thereof,
premium, if any, and interest on said bond at the dates and place and
in the manner mentioned therein; provided, however, that:
(a) The obligation of the Company to pay the principal of, and
premium, if any, and interest on the 2024 PC Bond shall be
discharged to the extent that any moneys in the Series 1995A Bond
Account within the Bond Fund created under and pursuant to the City
Indenture are available for the payment of the principal of, or
premium, if any, or interest on the Series 1995A Bonds and are
directed by the Company to be applied to the payment thereof in the
manner provided in the City Indenture on or prior to the dates on
which the Company is required to pay the principal of, or premium,
if any, or interest on the 2024 PC Bond.
(b) Except as otherwise provided in this Section 5, the principal
amount of any Series 1995A Bond acquired by the Company and
delivered to the City Trustee, or acquired by the City Trustee and
cancelled, shall be credited against the obligation of the Company
to pay the principal of the 2024 PC Bond.
As the principal of, premium, if any, and interest on the 2024 PC Bond
is paid or deemed paid in full, and upon its receipt by the Company,
such bond shall be delivered to the Trustee for cancellation. The
Company shall promptly inform the Trustee of all payments made and
credits availed of with respect to its obligations on the 2024 PC Bond.
The Trustee shall not be required to recognize any payment made or
credit availed of with respect to any 2024 PC Bond unless it has
received (a) the bond for cancellation by it, or (b) a certificate
signed by a duly authorized officer of the City Trustee specifying the
amount of such payment or credit and the principal amount of the 2024
PC Bond with respect to which the payment or credit was applied. In the
<PAGE>
absence of receipt by the Trustee of any 2024 PC Bond, any such
certificate shall be controlling and conclusive.
Section 6. The covenant of the Company to make annual payments to
the Trustee for a Maintenance and Improvement Fund as contained in
Section 41 of the Original Mortgage and in the first twenty-four
Supplemental Indentures to the Original Mortgage creating the several
series of First Mortgage Bonds presently outstanding under such
Supplemental Indentures shall not apply to nor be for the benefit of
the 2024 PC Bond, and the Company reserves the right, without any
consent of, or other action by, the holder of the 2024 PC Bond, to
amend, modify or delete the provisions of the Mortgage relating to such
Maintenance and Improvement Fund and by acceptance of the 2024 PC Bond
the holder thereof waives any right or privilege so to consent or take
any other action with respect thereto.
Section 7. The Company covenants that, so long as the 2024 PC Bond
shall remain outstanding, it will comply with all of the provisions of
Section 47 of the Original Mortgage, including the provisions with
respect to limitations on dividends and distributions and the purchase
and redemption of stock.
Section 8. The Trustee hereby accepts the trusts herein declared,
provided and created and agrees to perform the same upon the terms and
conditions herein and in the Mortgage set forth and upon the following
terms and conditions:
The recitals contained herein and in the bonds shall be taken as the
statements of the Company and the Trustee assumes no responsibility for
the correctness of the same. The Trustee makes no representations as to
the validity or adequacy of the security afforded hereby, or as to the
validity of this Forty-First Supplemental Indenture or of the 2024 PC
Bond issued hereunder.
Section 9. Whenever in this Forty-First Supplemental Indenture
either of the parties hereto is named or referred to, this shall,
subject to the provisions of Article XVII of the Original Mortgage, be
deemed to include the successors or assigns of such party, and all the
covenants and agreements in this Forty-First Supplemental Indenture
contained by or on behalf of the Company, or by or on behalf of the
Trustee, shall, subject as aforesaid, bind and inure to the benefit of
the respective successors and assigns of such parties, whether so
expressed or not.
Section 10. Nothing in this Forty-First Supplemental Indenture
expressed or implied, is intended or shall be construed to confer upon,
or to give to, any person, co-partnership or corporation, other than
the parties hereto and the holders of the bonds and coupons outstanding
under the Mortgage, any right, remedy, or claim under or by reason of
this Forty-First Supplemental Indenture or any covenant, condition or
stipulation hereof; and all the covenants, conditions, stipulations,
promises and agreements in this Forty-First Supplemental Indenture
contained by or on behalf of the Company shall be for the sole and
<PAGE>
exclusive benefit of the parties hereto and of the holders of the bonds
and of the coupons outstanding under the Mortgage.
Section 11. The Company covenants that all of the terms, provisions
and conditions of the Mortgage shall be applicable to the 2024 PC Bond
issued hereunder, except as herein otherwise provided and except
insofar as the same may be inconsistent with the provisions of this
Forty-First Supplemental Indenture.
Section 12. This Forty-First Supplemental Indenture is dated as of
January 15, 1995, although executed and delivered on the date of the
acknowledgement hereof by the Trustee; and shall be simultaneously
executed and delivered in several counterparts, and all such
counterparts executed and delivered, each as an original, shall
constitute but one and the same instrument.
<PAGE>
In Witness Whereof, Indianapolis Power & Light Company, party of the
first part, has caused its corporate name to be hereunto affixed and
this instrument to be signed and acknowledged by its President or a
Vice-President, and its corporate seal to be hereto affixed and
attested by its Secretary or an Assistant Secretary, for and in its
behalf, and American National Bank And Trust Company Of Chicago, party
of the second part, as Trustee, has caused its corporate name to be
hereunto affixed and this instrument to be signed and acknowledged by
one of its Vice-Presidents, and its corporate seal to be hereto affixed
and attested by one of its Assistant Secretaries, all as of the day,
month and year first above written.
Indianapolis Power & Light Company,
By /s/ Bryan G. Tabler
Bryan G. Tabler,
Senior Vice-President
Attest:
/s/ Clark L. Snyder
Clark L. Snyder,
Assistant Secretary
American National Bank And Trust Company of
Chicago
By /s/ Ronald B. Bremen
Ronald B. Bremen,
Vice-President
Attest:
(Seal)
/s/ Robert M. Selangowski
Robert M. Selangowski,
Assistant Secretary
<PAGE>
State of Indiana
County of Marion
On this 2nd day of February, in the year 1995, before me, a Notary
Public in and for the County and State aforesaid, personally came Bryan
G. Tabler, Senior Vice-President, and Clark L. Snyder, Assistant
Secretary, of Indianapolis Power & Light Company, one of the
corporations described in and which executed the foregoing instrument,
to me personally known and known to me personally to be such Senior
Vice-President and Assistant Secretary, respectively. Said Bryan G.
Tabler and Clark L. Snyder being by me severally duly sworn did depose
and say that the said Bryan G. Tabler resides in Marion County, Indiana
and the said Clark L. Snyder resides in Marion County, Indiana; that
said Bryan G. Tabler is Senior Vice-President and said Clark L. Snyder
is Assistant Secretary of said Indianapolis Power & Light Company; that
each of them knows the corporate seal of said corporation; that the
seal affixed to said instrument and bearing the name of said
corporation is such corporate seal; that it was so affixed by order of
the Board of Directors of said corporation; and that each of them
signed his name thereto by like order; and each of them acknowledged
the execution of said instrument on behalf of said corporation to be
his free and voluntary act and deed and the free and voluntary act and
deed of said corporation, for the uses and purposes therein set forth.
In Witness Whereof, I have hereunto set my hand and affixed my
official seal this 2nd day of February 1995.
/s/ Gloria K. Bryant
Gloria K. Bryant,
Notary Public
My Commission Expires:
June 11, 1995
My County of Residence is:
Marion
(Notarial Seal)
State of Illinois
County of Cook
<PAGE>
On this 1st day of February, in the year 1995, before me, a Notary
Public in and for the County and State aforesaid, personally came Ronald B.
Bremen, Vice-President, and Robert M. Selangowski, Assistant Secretary, of
American National Bank and Trust Company of Chicago, one of the corporations
described in and which executed the foregoing instrument, to me personally
known and known to me personally to be such Senior Vice-President and
Assistant Secretary, respectively. Said Ronald B. Bremen and Robert M.
Selangowski, being by me severally sworn did depose and say that the said
Ronald B. Bremen resides in Glencoe, Illinois, and that the said Robert M.
Selangowski resides in Lansing, Illinois; that said Ronald B. Bremen is
Vice-President and said Robert M. Selangowski is Assistant Secretary of
said American National Bank and Trust Company of Chicago; that each of them
knows the corporate seal of said corporation; that the seal affixed to said
instrument and bearing the name of said corporation is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation; that each of them signed his name thereto by like authority;
and each of them acknowledged the execution of said instrument on behalf of
said corporation to be his free and voluntary act and deed and the free and
voluntary act and deed of said corporation, for the uses and purposes
therein set forth.
In Witness Whereof, I have hereunto set my hand and affixed my
official seal this 1st day of February, 1995.
/s/ Bernadette G. Janairo
Bernadette G. Janairo
Notary Public
My Commission Expires:
May 22, 1998
My County of Residence is:
Cook
(Notarial Seal)
This instrument was prepared by
Bryan G. Tabler
RECORDING DATA
Forty-First Supplemental Indenture Dated As of January 15, 1995
Recording
County Record Page Instr. No. Date
Bartholomew 95-000937 02/03/95
Boone Mtg. Rec. 339 349 959 02/03/95
Daviess Drawer No. 2 95-0420 02/03/95
Card No. 2136
Gibson 95-700 02/03/95
Greene Mtg. Rec. S-12 477-503 524 02/03/95
Hamilton 9503907 02/03/95
Hancock 9500799 02/03/95
Hendricks Mtg. Rec. 631 469-495 1803 02/03/95
Johnson Mtg. Rec. 344 760 95001725 02/03/95
Knox Mtg. Rec. 417 101 000671 02/03/95
Madison Book 588 301 9501953 02/03/95
Marion 1995-0013024 02/03/95
Monroe Mtg. Rec. A759 515 501333 02/03/95
Morgan Mtg. Rec. 592 71 9501176 02/03/95
Owen Mtg. Rec. EK 307 104353 02/03/95
Pike Mtg. Rec. 174 168-194 95-216 02/03/95
Putnam Mtg. Rec. 330 49 582 02/03/95
Shelby Mtg. Rec. 344 95-121 00674 02/03/95
Sullivan Mtg. Rec. 252 93 950377 02/03/95
Switzerland Mtg. Rec. 92 117 2924 02/03/95
EXHIBIT 10.8
COAL SUPPLY AGREEMENT
BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY
AND
BLACK DIAMOND COAL COMPANY, INC.
<PAGE>
TABLE OF CONTENTS
PAGE
SECTION 1. TERM. . . . . . . . . . . . . . . 4
SECTION 2. QUANTITY. . . . . . . . . . . . . 5
SECTION 3. SOURCE; POINT OF DELIVERY;
DESTINATION . . . . . . . . . . 5
SECTION 4. QUALITY . . . . . . . . . . . . . 6
SECTION 5. BASE PRICE FOR COAL . . . . . . . 8
SECTION 6. ADJUSTMENTS TO BASE PRICE . . . . 8
SECTION 7. CALORIFIC PRICE ADJUSTMENTS . . . 13
SECTION 8. WEIGHTS . . . . . . . . . . . . . 14
SECTION 9. SAMPLING AND ANALYSIS . . . . . . 16
SECTION 10. BILLING AND PAYMENT . . . . . . . 18
SECTION 11. RECORDS . . . . . . . . . . . . . 18
SECTION 12. FORCE MAJEURE . . . . . . . . . . 19
SECTION 13. COMPLIANCE WITH ANTIPOLLUTION LAWS &
REGULATIONS, ETC. . . . . . . . 21
SECTION 14. NOTICES . . . . . . . . . . . . . 22
SECTION 15. WAIVERS AND REMEDIES. . . . . . . 23
SECTION 16. SUCCESSORS AND ASSIGNS. . . . . . 24
SECTION 17. HEADINGS NOT TO AFFECT CONSTRUCTION24
SECTION 18. WRITTEN INSTRUMENT CONTAINS ENTIRE
AGREEMENT . . . . . . . . . . . 25
SECTION 19. EXECUTION OF COUNTERPARTS . . . . 25
SECTION 20. CONSTRUCTION OF AGREEMENT . . . . 25
SECTION 21. REPRESENTATIONS . . . . . . . . . 26
SECTION 22. DEDICATION OF RESERVES AND GUARANTEE
OF PERFORMANCE . . . . . . . . 26
<PAGE>
COAL SUPPLY AGREEMENT
THIS AGREEMENT, made and entered into as of the 27th day of
September, 1994, by and between Black Diamond Coal Company, Inc., an
Indiana corporation, with an office at Sullivan, Indiana
(hereinafter referred to as "Seller"), and Indianapolis Power &
Light Company, an Indiana corporation, with offices at Indianapolis,
Indiana (herein sometimes referred to as "Buyer").
WITNESSETH:
WHEREAS, Buyer is a public utility rendering electric utility
service over certain areas within the State of Indiana; and
WHEREAS, Buyer desires to secure, to the extent of the
quantities and for the period hereinafter stated, a supply of
bituminous coal of the quality hereinafter set forth for use at its
H. T. Pritchard and C.C. Perry K Generating Stations or such other
generating stations as designated solely by Buyer from time to time,
which supply of bituminous coal would assure compliance with
applicable sulfur dioxide emission limitations for such generating
stations imposed by authorities having jurisdiction therein, a copy
of which proposed regulations is attached as "Exhibit A"; and
WHEREAS, Seller represents that it is experienced in the
commercial production of bituminous coal and that it owns, leases,
controls or has mining rights to proven and recoverable coal
reserves as described in the attached "Exhibit B" with the qualities
and characteristics set forth herein; and,
WHEREAS, Buyer desires to purchase coal and Seller desires to
supply coal pursuant to the terms and conditions of this Agreement;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements of the parties hereinafter set
forth, it is hereby agreed by and between the parties hereto as
follows:
SECTION 1. TERM.
CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
SEPTEMBER 27, 1994 BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY
AND BLACK DIAMOND COAL COMPANY, INC.
HAVE BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
SECTION 2. QUANTITY.
CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
SEPTEMBER 27, 1994 BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY
AND BLACK DIAMOND COAL COMPANY, INC.
HAVE BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
SECTION 3. SOURCE; POINT OF DELIVERY; DESTINATION.
The source of the coal shall be the Black Diamond Mine of
Seller located in Greene County, Indiana. The coal shall be
delivered by Seller to Buyer f.o.b. trucks (to be arranged by Buyer)
loaded at the Black Diamond Mine, or, at Buyer 's direction, Seller
will deliver coal f.o.b. train (rail cars to be supplied by Buyer or
the railroad if so arranged by Buyer) at Seller's siding on the
Indiana Rail Road as shown on Exhibit "B",
CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
SEPTEMBER 27, 1994 BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY
AND BLACK DIAMOND COAL COMPANY, INC.
HAVE BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
Buyer shall have the right to direct Seller to change the
transportation mode at any time during the term of this Agreement.
CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
SEPTEMBER 27, 1994 BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY
AND BLACK DIAMOND COAL COMPANY, INC.
HAVE BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
Title to the coal shall pass from Seller at said point of delivery
and risk of loss shall follow title, provided however, Buyer shall
not be responsible for costs incurred as a result of Seller's
failure to comply with loading specifications of the carrier(s).
Point of delivery for purposes of Sections 5 and 6 of this Agreement
shall be F.O.B. railcar or truck as the case may be. Point of
delivery for Purposes of Sections 4, 7 and 9 of this Agreement shall
be F.O.B. Buyer's Generating Station(s).
Coal deliveries hereunder shall be made in substantially equal
monthly quantities subject to vacation and holiday schedules of the
Black Diamond Mine, the Buyer and the shipper; and in accordance
with Buyer's shipping instructions.
SECTION 4. QUALITY.
The coal to be delivered hereunder shall be:
(a) crushed run-of-mine Indiana #4, 2" x 28" mesh coal washed
using magnetite in Seller's heavy media preparation plant as shown
on the attached flow chart marked as "Exhibit C"; and
(b) of quality equal to or better than the following
characteristics on a monthly weighted average "as received" basis,
as determined pursuant to Section 9 hereof:
CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
SEPTEMBER 27, 1994 BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY
AND BLACK DIAMOND COAL COMPANY, INC.
HAVE BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(c) Should the "as received" quality of the coal fail to meet
any one or more of the characteristics described in Section 4(b) on
a monthly weighted average "as received" basis, or should the coal
in any one (1) rail car or any four (4) truckloads fail to meet any
one or more of the following quality limitations on a "dry" basis:
CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
SEPTEMBER 27, 1994 BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY
AND BLACK DIAMOND COAL COMPANY, INC.
HAVE BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
then Buyer, at its option, may immediately suspend future deliveries
of all coal until Seller gives assurances acceptable to Buyer that
it has corrected such deviations. Should such assurances not be
given within thirty (30) days following such suspension, Buyer may:
terminate this Agreement with out further obligation to Seller; or
pursue other legal remedies; or invoke any or all contractual
remedies; or all of the foregoing.
(d) Seller warrants that the coal shall be free of any
extraneous materials, such as slate, shale, fire clay, rock, stone,
dirt, mud or any other impurities or quality characteristics that
render the coal unsuitable for use at Buyer's Generating Station(s).
Should any Shipment(s) of coal containing such extraneous material
be delivered to any of Buyer's Generating Stations then Buyer may
immediately reject such Shipment(s) and title to such Shipment(s)
shall revert to Supplier. If Buyer rejects such Shipment(s) then
Seller will be responsible for all costs associated with the
rejected coal Shipment(s).
(e) For purposes of this Agreement pounds of sulfur dioxide
per million BTU shall be calculated according to the following:
CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
SEPTEMBER 27, 1994 BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY
AND BLACK DIAMOND COAL COMPANY, INC.
HAVE BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
Percent sulfur and As-received BTU per pound shall be determined in
accordance with Section 9.
SECTION 5. BASE PRICE FOR COAL.
CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
SEPTEMBER 27, 1994 BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY
AND BLACK DIAMOND COAL COMPANY, INC.
HAVE BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
SECTION 6. ADJUSTMENTS TO BASE PRICE.
(a) The Base Price includes the Federal Black Lung Excise Tax
(presently $0.92 per ton for deep mined coal), the reclamation fee
assessed pursuant to the Surface Mining Control and Reclamation Act
of 1977 (presently $0.15 per ton for deep mined coal) and all
federal, state or local taxes (excluding taxes based on income),
fees or other governmental charges that are presently in effect.
Any adjustments made under Section 6(b) shall not be subject to any
further adjustment pursuant to Section 6(c) hereof.
(b) After January 1, 1995, in the event federal, state or
local legislative, regulatory or court action results in significant
and documentable changes in the cost of mining and producing coal at
the Black Diamond Mine, Seller may present to Buyer a written
request for a Base Price revision for those readily identifiable
cost changes. Buyer shall efficiently act upon such a request and
respond as soon as practicable within ninety (90) days after such
written request is received. Buyer's action and response shall be
to either (i) agree with Seller's request, (ii) mutually agree with
Seller on a revision to the Base Price other than as requested by
Seller, or (iii) if no agreement can be reached as to an adjustment
to Base Price and if Seller chooses not to withdraw its request,
terminate this Agreement upon sixty (60) days written notice to
Seller with no further liability to either party, except that Buyer
shall be obligated to pay for the coal delivered prior to such
termination, for which payment has not yet been made, at the Base
Price then in effect.
(c) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
SEPTEMBER 27, 1994 BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY
AND BLACK DIAMOND COAL COMPANY, INC.
HAVE BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(d) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
SEPTEMBER 27, 1994 BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY
AND BLACK DIAMOND COAL COMPANY, INC.
HAVE BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(e) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
SEPTEMBER 27, 1994 BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY
AND BLACK DIAMOND COAL COMPANY, INC.
HAVE BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(f) Each time the Base Price is adjusted in accordance with
Section 6 hereof, and at any other time upon thirty days notice from
Buyer, Seller shall furnish to Buyer a detailed statement showing
the calculations of the new Base Price and the basis for the
adjustment made thereto.
SECTION 7. CALORIFIC PRICE ADJUSTMENT.
(a) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
SEPTEMBER 27, 1994 BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY
AND BLACK DIAMOND COAL COMPANY, INC.
HAVE BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
It is recognized by the parties that the calorific value of the coal
may vary. Therefore, an adjustment shall be calculated each month
in order to compensate for variations of more than 200 BTU's per
pound during that month. This calculation shall be made by Buyer as
follows:
CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
SEPTEMBER 27, 1994 BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY
AND BLACK DIAMOND COAL COMPANY, INC.
HAVE BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(1) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
SEPTEMBER 27, 1994 BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY
AND BLACK DIAMOND COAL COMPANY, INC.
HAVE BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(2) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
SEPTEMBER 27, 1994 BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY
AND BLACK DIAMOND COAL COMPANY, INC.
HAVE BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(3) The adjustment on a per ton basis so calculated shall be
added to or subtracted from (as the case may be) the Base
Price for Shipments received during the month to which such
weighted average BTU/lb. applies. This calorific price
adjustment provision shall not be construed to be the sole
remedy available to Buyer, but shall be in addition to and
cumulative to any other remedies.
(b) These provisions of Section 7 shall apply notwithstanding
the provisions stated in Section 6(c)(2) and Section 6(d) above.
SECTION 8. WEIGHTS.
(a) The weight of coal shipped by rail shall be determined by
Buyer using belt scales at Buyer's Generating Station(s). The
weight of coal shipped by truck to Buyer's Station(s) equipped with
truck scales shall be determined by Buyer using such truck scales.
The weight of coal shipped by truck to Buyer's Station(s) not
presently equipped with truck scales shall be determined by Buyer
using truck scales, if installed. The weights thus determined shall
be accepted as the quantity of the coal for which invoices are to be
rendered and payments made in accordance with Section 10 hereof.
(b) Buyer shall arrange for its scales to be properly
inspected and approved on a semi-annual basis by either the Indiana
State Bureau of Weights and Measures, a mutually acceptable
representative agency, or the scale manufacturer in accordance with
the applicable standards established by such appropriate weighing
and inspection bureau, and subject to verification by Seller and the
carrier(s) involved in delivery to Buyer's Generating Station(s).
Seller shall have the right to have a representative present
at any and all times to observe the weighing of the coal. If Seller
should at any time question the accuracy of the weights thus
determined, Seller shall so advise Buyer and Buyer shall arrange for
tests to be conducted by either the Indiana State Bureau of Weights
and Measures, a mutually acceptable representative agency, or the
scale manufacturer in accordance with the applicable standards
established by such appropriate weighing and inspection bureau. If
such tests reveal Buyer's scales to be in error, they shall promptly
be adjusted to an accurate condition. If any such tests reveal an
error in weight in excess of one-quarter of one percent (0.25%) the
weights of the coal measured on such scale during the period
commencing with the date on which the accuracy was questioned and
ending on the date such scales are correctly calibrated, shall be
adjusted by the amount of the as-found calibration error. Invoices
shall be adjusted to reflect such change in weight.
(c) In the event Buyer's weighing facilities for truck
deliveries are not operational or installed, weights will be
determined on truck scales at Black Diamond Mine by Seller, in
accordance with the testing and other provisions of this Section 8
and such weights shall be accepted as the quantity of the coal for
which invoices are to be rendered and payments made in accordance
with Section 10 hereof.
In the event Buyer's weighing facilities for rail deliveries
are not operational, the weight per rail car will be established by
using the average lading weight per rail car of the ten (10) most
recent Shipments which were weighed prior to such inoperability, or
if ten (10) Shipments have not moved prior to such inoperability,
the average lading weight of rail cars in the ten (10) Shipments
following reinstatement of operability of Buyer's scales will be
used as the weight per rail car.
SECTION 9. SAMPLING AND ANALYSIS.
Each day that coal is delivered hereunder, Buyer shall take or
cause to be taken, representative samples of such coal and cause to
be determined by proper analyses the quality and characteristics of
the coal for each Shipment. Sampling shall consist of
representative samples, manually gathered, from at least 20% of the
railcars in each Shipment, or, in the event of truck delivery, 20%
of the trucks in each Shipment. Where mechanical sampling systems
are available, such sampling systems shall be used in accordance
with standards developed by the American Society for Testing and
Materials (herein referred to as "ASTM"), unless the Buyer and
Seller shall agree on alternate standards. Analyses shall be
performed in general accordance with ASTM procedures. Buyer shall
furnish semi-monthly to Seller a report showing the quality and
characteristics of the coal made on a per shipment basis. Seller
shall have the right to have a representative present at any and all
times to observe the sampling. Results of the sampling and analyses
by Buyer shall be accepted as the quality and characteristics of the
coal delivered hereunder; provided however, that if Seller should at
any time question the correctness of either the sampling or the
analyses made by Buyer, Seller shall have the right, at its expense,
to have the coal sampled at destination and analyzed by a commercial
testing laboratory, mutually chosen, and using standards developed
by ASTM, Bureau of Mines or mutually acceptable procedures. The
results of such sampling and analyses shall be accepted as the
quality and characteristics of the coal for those Shipments. If the
Buyer's sample is from less than 20% of the Shipment, the results of
Seller's sample and analysis shall be accepted as the quality and
characteristics of the Shipment.
SECTION 10. BILLING AND PAYMENT.
On or about the tenth (10th) day of each month, Seller shall
render invoices to Buyer covering the coal shipped during the first
ten (10) days of said month. Buyer shall, within ten (10) days
after receipt of such invoices, pay to Seller by cash or check, in
United States funds, the net amount of the invoice. On or about the
twentieth (20th) day of each month, Seller shall render invoices to
Buyer covering the coal shipped during the second ten (10) days of
said month. Buyer shall, within ten (10) days after receipt of such
invoices, pay to Seller by cash or check, in United States funds,
the net amount of the invoices. On or before the third (3rd)
working day of each calendar month, or as soon thereafter as
practical, Seller shall render to Buyer invoices covering the coal
shipped during the period from the twenty-first (21st) day to the
last day of the preceding month and shall give effect to all
pertinent adjustments for the second preceding calendar month.
Buyer shall pay to Seller by cash or check, in United States funds,
the net amount of such invoices within ten (10) days after receipt
of the invoices.
SECTION 11. RECORDS.
Seller shall keep accurate and satisfactory records and books
of account showing all costs, payments, price adjustments, credits,
debits and all other data required for purposes of this Agreement.
Buyer shall have the right at all times and at any time, upon
reasonable and written notice, to examine or to cause a nationally
recognized accounting firm or mining engineering firm to examine the
reserves, mine, and records of Seller as they pertain to this
Agreement. The cost of such examination shall be borne by Buyer.
SECTION 12. FORCE MAJEURE.
(a) The term "force majeure" as used herein shall mean any
and all causes beyond the control and without the fault or
negligence of the party failing to perform, including but not
limited to acts of God, acts of the public enemy, insurrections,
riots, labor disputes, boycotts, labor and material shortages,
fires, explosions, floods, breakdowns of or damage to equipment or
facilities, interruptions to transportation, embargoes, acts of
military authorities, or other causes of a similar nature which
wholly or partly prevent the mining, delivering and/or loading of
the coal by Seller, or the receiving, unloading, accepting and/or
utilizing of the coal by Buyer.
(b) If, because of a verifiable condition of force majeure,
either party hereto is unable to carry out any of its obligations
under this Agreement (other than the obligation of a party to pay
money in connection with the performance of this Agreement) and if
such party shall promptly give to the other party written notice of
such force majeure, then the obligation of the party giving such
notice shall be suspended to the extent made necessary by such force
majeure and during its continuance; provided however, that the party
giving such notice shall use its best efforts to eliminate such
force majeure insofar as possible with a minimum of delay. Any
deficiencies in deliveries of the coal caused by force majeure shall
not be made up except by mutual consent. In the event the force
majeure clause is invoked by either party to this Agreement,
deliveries or purchases, as the case may be, shall be prorated among
Seller's contract purchasers or Buyer's contract suppliers based
upon existing shipping schedules and projections for the pertinent
destinations specified in the force majeure notice, during the
period such force majeure is in effect.
(c) During a period in which a condition of total force
majeure is invoked by Buyer, Seller, in the absence of mutual
consent to make up such deficient deliveries, may sell to others the
coal otherwise designated for Buyer. Conversely, during a period in
which a condition of total force majeure is invoked by Seller,
Buyer, in the absence of mutual consent to make up such deficient
deliveries, may buy from others the coal otherwise to have been
purchased from Seller.
(d) Notwithstanding the foregoing provisions of this Section
12, it is expressly understood that any prohibition to take
deliveries of, or to utilize coal, which is imposed upon Buyer by
means of laws, regulations or orders of a court or administrative
body, whether or not such event is beyond the control of Buyer,
shall not for the purposes hereof negate the provisions of Section
13 hereof.
SECTION 13. COMPLIANCE WITH ANTIPOLLUTION LAWS AND
REGULATIONS, ETC.
The parties hereto recognize that, during the term of this
Agreement, legislative or regulatory bodies or the courts having
competent jurisdiction over the subject matter hereof may enact laws
and regulations, or issue orders or enforcement policies such as,
but not limited to, those relating to air pollution, the effect of
which will make it impossible or impractical for Buyer to utilize
the coal without substantially changing or altering its utilization
equipment. Such laws, regulations, enforcement policies, or orders
may pertain to but would not necessarily be limited to, the sulfur
content of the coal. If such laws, regulations, enforcement
policies or orders are imposed, Buyer shall provide written notice
to Seller of such laws, regulations, enforcement policies and orders
as soon as reasonably practicable. If Buyer, in its sole reasonable
opinion, is unable to utilize the coal with its then present
equipment at its H. T. Pritchard or Perry K Generating Stations and
desires to replace the coal with other coal of suitable quality
specifications, then Buyer shall give Seller notice of termination
of this Agreement effective in one hundred twenty (120) days and
Seller shall have the exclusive right to submit a proposal for such
replacement coal within thirty (30) days after receipt of such
notice. If Seller's proposal for supplying such replacement coal to
Buyer is not timely submitted or if the parties are unable to reach
a new agreement concerning such replacement coal, including quality
and price, within sixty (60) days after submittal of such proposal
by Seller, the exclusive right to negotiate shall expire immediately
and this Agreement shall terminate on the date specified in Buyer's
termination notice. Upon such termination, neither party hereto
shall have any further liability to the other party hereunder except
to pay for the coal delivered prior to such termination for which
payment has not yet been made.
SECTION 14. NOTICES.
(a) Any notice, request, consent, demand, report or statement
given to or made upon either party hereto by the other party hereto
under any of the provisions of this Agreement shall be in writing,
unless it is otherwise specifically provided herein, and shall be
treated as duly delivered when the same is either (i) personally
delivered to the officer listed below of Buyer or personally
delivered to the officer listed below of Seller, or (ii) deposited
in the United States mail, postage prepaid and properly addressed as
follows:
If notice is to Buyer, addressed as follows:
Indianapolis Power & Light Company
P. O. Box 1595
Indianapolis, Indiana 46206-1595
Attention: Vice President - Fuel Supply
with a copy to:
Indianapolis Power & Light Company
P. O. Box 1595
Indianapolis, Indiana 46206-1595
Attention: Vice President, Secretary and General Counsel
If notice is to Seller, addressed as follows:
Black Diamond Coal Company, Inc.
516 Wulfenberger
Sullivan, Indiana 47882
Attention: Mr. Richard H. Whitehead, President
(b) Any notice, request or demand pertaining to matters of an
operating nature may be delivered by mail, messenger, telephone,
telegraph or verbally to such agent of the party hereto being
notified as may be appropriate; and, if given by telephone,
telegraph or verbally, shall be confirmed in writing as soon as
practicable thereafter, if the party to whom the notice is given so
requests in any particular instance.
SECTION 15. WAIVERS AND REMEDIES.
(a) The failure of either party hereto to insist in any one
or more instances upon strict performance of any provision of this
Agreement by the other party hereto, or to take advantage of any of
its rights hereunder, shall not be construed as a waiver by it of
any such provision or the relinquishment by it of any such rights in
respect of any subsequent nonperformance of such provision; but the
same shall continue and remain in full force and effect.
(b) Each remedy specifically provided for under this
Agreement shall be taken and construed as cumulative and in addition
to every other remedy provided for herein or by law.
(c) No default (including but not limited to failure to meet
or exceed all quality specifications in Section 4 hereof) by either
party hereto in the performance of any of its covenants or
obligations hereunder, which except for this provision would be the
legal basis for the right or rescission or termination of this
Agreement by the other party hereto, shall give or result in such a
right unless and until such defaulting party shall fail to correct
or take all such actions as are necessary to correct such default
thereafter within thirty (30) days after written notice of claim of
such default is given to such defaulting party by the other party
hereto.
SECTION 16. SUCCESSORS AND ASSIGNS.
This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective successors and assigns;
provided however, that this Agreement may not be assigned nor may
either party transfer a controlling interest in the ownership of
such party, without the written consent of the other party, except
as a pledge, assignment or other security arrangement to secure
indebtedness incurred for the purpose of or in connection with
performance under this Agreement.
SECTION 17. HEADINGS NOT TO AFFECT CONSTRUCTION.
The headings to the respective sections and paragraphs of this
Agreement are inserted for convenience of reference and are neither
to be taken to be any part of the provisions hereof nor to control
or affect the meaning, construction or effect of the same.
SECTION 18. WRITTEN INSTRUMENT CONTAINS ENTIRE AGREEMENT.
This written instrument contains the entire agreement between
the parties hereto in respect of the subject matter, and there are
no other understandings or agreements between said parties, or
either of them in respect thereof.
SECTION 19. EXECUTION OF COUNTERPARTS.
This instrument may be executed in any number of counterparts,
and all such counterparts shall constitute but one and the same
instrument.
SECTION 20. CONSTRUCTION OF AGREEMENT.
This instrument shall be governed by and construed in
accordance with the laws of the State of Indiana.
SECTION 21. REPRESENTATIONS.
Buyer and Seller each represent to the other that the person
signing this Agreement on behalf of said party has the full right,
power and authority to enter into this Agreement, to bind the
corporation by the terms of this Agreement and that all necessary
corporate action has been taken in connection therewith.
SECTION 22. DEDICATION OF RESERVES AND GUARANTEE OF PERFORMANCE
(a) To secure full and faithful performance by Seller under
this Agreement, Seller hereby dedicates to Buyer all of the coal
reserves that are presently owned, leased or controlled by Seller
and all coal reserves that Seller hereafter may acquire, lease or
control in Greene County, Indiana, commonly known as Seller's Black
Diamond Mine and more specifically identified and shown on Exhibits
B and B1. The dedication of the coal reserves shall be subordinate
to the interest of United Leasing,Inc., Seller's lender, and shall
be made in the form of a written recordable instrument. The
dedication shall commit Seller to mine, produce and deliver the coal
to Buyer in accordance with the provisions of this Agreement.
During the term of this Agreement, Seller agrees to keep the
dedicated coal reserves free and clear of any and all liens,
mortgages and encumbrances, except for the interests of United
Leasing, Inc. and current easements, property rights and
restrictions of record of any property owner. Except as stated
above, Seller shall refrain from encumbering the dedicated coal
reserves as a pledge, assignment or other security arrangement to
secure any indebtedness.
(b) In order to meet the delivery commencement date in Section
2, Seller agrees to secure financing no later than September 27,
1994 and to concurrently commence mining activities at the Black
Diamond Mine that are necessary and required to operate the Mine and
commence deliveries of coal no later than December 31, 1994. In the
event that Seller defaults in the performance of its obligations at
anytime during the term of this Agreement, Buyer shall have the
right to designate, in conjunction with Seller's lender, a qualified
substitute contract miner to assume the obligations of the Seller
and to perform in accordance with this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized respective
corporate officers or representatives, all as of the date first
above written.
INDIANAPOLIS POWER & LIGHT COMPANY
By: /s/ Ramon L. Humke
Ramon L. Humke
President & Chief Operating Officer
Attest:
By: /s/ Marcus E. Woods
Marcus E. Woods
Secretary & General Counsel
BLACK DIAMOND COAL COMPANY, INC.
By: /s/ Richard H. Whitehead
Richard H. Whitehead, President
Attest:
By:_____________________________________
Title:
<PAGE>
EXHIBIT A
326 IAC 7-4-11 Morgan County sulfur dioxide emission
limitations
Authority: IC 13-1-1-4; IC 13-7-7
Affected: IC 13-1-1; IC 13-7
Sec. 11. Indianapolis Power and Light (IPL) Pritchard
Generating Station shall comply with the sulfur dioxide emission
limitations in pounds per million Btu and other requirements as
follows:
Emission
Facility Description Limitations
(1) Units 1 and 2 0.37 each
(2) Units 3, 4, 5, and 6 on and before
September 30, 1990 6.0 each
Unit 3 after September 30, 1990 0.37
Units 4, 5, and 6 after September 30,
1990 3.04 each
(3) As an exception to the emission limitations specified in
subdivision (2), after September 30, 1990, at any time in which IPL
burns coal on Unit 3, sulfur dioxide emissions from Units 3, 4, 5,
and 6 shall be limited to two and fifty-seven hundredths (2.57)
pounds per million Btu each.
(4) Prior to October 31, 1989, IPL shall modify the two (2) stacks
servings Units 3, 4, 5, and 6 to increase the height of each stack
to at least two hundred and eighty-one (281) feet above grade.
(5) Prior to February 28, 1989, IPL shall submit completed
engineering plans and drawings of flue gas conditioning systems for
Units 4 and 5 to the department. Prior to May 31, 1990, IPL shall
complete installation of flue gas conditioning systems for Units 4
and 5.
(6) After September 30, 1990, on a day for which Unit 3 does not
burn any coal, the limitations in subdivision (2) are in effect, and
compliance shall be determined as specified in 326 IAC 7-2-1(c).
(7) After September 30, 1990, on a day for which unit 3 burns any
coal, the limitations in subdivision (3) are in effect. As an
exception to the requirements of 326 IAC 7-2-1(c)(1) on a day for
which Unit 3 burns any coal, if the thirty (30) day rolling weighted
average for any unit is above two and fifty-seven hundredths (2.57)
pounds per million Btu, then 326 IAC 7-2-1(c)(1) does not apply, and
the daily average emission rate for that unit for that day shall not
exceed two and fifty-seven hundredths (2.57) pounds per million Btu.
(8) After September 30, 1990, for the purposes of determining
compliance under 326 IAC 7-2-1(b), stack tests performed on Units 3,
4, 5, and 6 shall demonstrate compliance with the most stringent set
of limits in effect at any time during the day prior to or during
the test based on the Unit 3 operating status and fuel type as
indicated by the log maintained pursuant to subdivision (9).
(9) After September 30, 1990, IPL shall maintain and make
available to the department upon request a log of the operating
status and fuel type used for Unit 3. In addition, in the quarterly
report required by 326 IAC 7-2-1(a), IPL shall submit to the
department a daily summary indicating fuel type for Unit 3, and, for
days on which Unit 3 burned any coal and any thirty (30) day rolling
weighted average was greater than two and fifty-seven hundredths
(2.57) pounds per million Btu, IPL shall submit to the department
the daily average sulfur content, heat content, and sulfur dioxide
emission rate for Units 3, 4, 5, and 6.
(Air Pollution Control Board, 326 IAC 7-4-11;
filed Aug 28, 1990, 4:50 p.m.: 14 IR 76)
326 IAC 7-4-2 Marion County sulfur dioxide emission
limitations
Authority: IC 13-1-1-4; IC 13-7-7
Affected: IC 13-1-1; IC 13-7
Sec. 2. The following sources and facilities located in
Marion County shall comply with the sulfur dioxide emission
limitations in pounds per million Btu (lbs./MMBtu) and pounds per
hour (lbs./hr.), unless otherwise specified, and other requirement:
(Material not relevant deleted)
(29) Indianapolis Power and Light Perry K shall comply with the
sulfur dioxide emission limitations in pounds per million Btu and
other requirements as follows:
Emission
Boiler Number Limitations
(A) 17 and 18 0.3
(B) 11, 12, 13, 14, 15, and 16 2.1
(C) As an alternative to the emission limitations in clause (B),
sulfur dioxide emissions from Boilers 11, 12, 13, 14, 15, and 16 may
comply with any one (1) of the sets of emission limitations in
pounds per million Btu as follows:
Emission
Boiler Number Limitations
(i) 13, 14, 15, and 16 0.0
11 and 12 4.4
(ii) 11, 12, 15, and 16 0.0
13 and 14 4.4
(iii) 11, 12, 13, and 14 0.0
15 and 16 4.4
(iv) 11, 12, 15, and 16 3.0
13 and 14 0.3
(v) 11 and 12 0.3
13, 14, 15, and 16 3.0
(D) The department or the Indianapolis Air Pollution Control
Division shall be notified prior to the reliance by Indianapolis
Power and Light on any one (1) of the sets of alternative emission
limitations specified in clause (C).
(E) A log of hourly operating status for each boiler shall be
maintained and made available to the department upon request. A
daily summary indicating which boilers were in service during the
day shall be submitted to the department quarterly. In addition,
records of the daily average sulfur content, heat content, and
sulfur dioxide emission rate for each day in which an alternative
set of emission limitations specified in clause (C) is used shall be
submitted to the department quarterly.
(F) For the purposes of 326 IAC 7-2-1(c)(1), during thirty (30)
day periods in which Indianapolis Power and Light relies on more
than one (1) set of emission limitations specified in clauses (B)
through (C), a separate thirty (30) day rolling weighted average for
each set of limitations shall be determined. Each thirty (30) day
rolling weighted average shall be based on data from the previous
thirty (30) operational days within the last ninety (90) days for
that set of limitations. If Indianapolis Power and Light does not
operate thirty (30) days under any one (1) set of limitations within
the last ninety (90) days, the rolling weighted average shall be
based on all operational days within the last ninety (90) days for
that set of limitations.
(G) Boilers 11 through 16 shall be limited to six and zero-tenths
(6.0) pounds per million Btu each until Boilers 11 through 16
achieve compliance with the sulfur dioxide emission limitations
specified in clauses (B) through (C). Compliance with the emission
limitations specified in clauses (B) through (C) shall be achieved
according to the following schedule:
(i) Complete engineering analysis of modifications by April 2,
1988.
(ii) Complete testing and design of modifications and place
orders for necessary equipment by May 2, 1989.
(iii) Complete installation of necessary equipment and
achieve compliance with emission limitations specified in
clauses (B) through (C) by June 2, 1990.
<PAGE>
EXHIBIT B
[Narrative Description of Map: Exhibit B to this Contract is a map
detailing the location of the Black Diamond Mine, indicating the
mineral rights owners, and showing the location of the Indiana Rail
Road]
<PAGE>
EXHIBIT B1
BLACK DIAMOND COAL COMPANY, INC.
RESERVE DEDICATION
<PAGE>
ATTACHMENT TO
COAL SUPPLY AGREEMENT BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY AND
BLACK DIAMOND COAL COMPANY, INC.
DEDICATION OF COAL RESERVES
This dedication made this 3rd day of November, 1994, by and
between Black Diamond Coal Company, Inc., an Indiana corporation
doing business in the State of Indiana (hereinafter Black Diamond)
and Indianapolis Power & Light Company, an Indiana corporation
(hereinafter IPL).
WITNESSETH
That Black Diamond and IPL have by separate agreement dated
September 27, 1994, entered into an Coal Supply Agreement for the
sale and purchase of coal from the Black Diamond Mine in Green
County, Indiana; and
That by the terms of said contract, Black Diamond has agreed
to make the Black Diamond Mine captive to IPL by dedicating to IPL
all the coal reserves from said mine as hereinafter described; and
That the parties desire to record this dedication of coal
reserves in order to service notice of such encumbrance and to make
such dedication a matter of public record so that the dedication
becomes a covenant running with the land.
NOW THEREFORE, Black Diamond hereby dedicates of record to IPL
all the coal reserves owned, leased or controlled by Black Diamond
and all coal reserves hereafter acquired, leased or controlled by
Black Diamond at the Black Diamond Mine in Green County, Indiana
subject to the pre-existing interests of any other parties therein.
These coal reserves are more fully described in the above mentioned
Agreement, and are more particularly described in the metes and
bounds perimeter description attached hereto and made a part hereof.
IN WITNESS WHEREOF, Black Diamond has caused this instrument
to be executed by its duly authorized officers.
BLACK DIAMOND COAL COMPANY, INC.
By: /s/ Richard H. Whitehead, Pres.
STATE OF INDIANA)
: SS.:
COUNTY OF MARION)
Before me, a notary public, personally appeared Richard H.
Whitehead of Black Diamond Coal Company, Inc., who acknowledged the
execution of the foregoing instrument to be his free and voluntary
act and deed and the free, voluntary and duly authorized act and
deed of said corporation on this 3rd day of November, 1994.
/s/ Teresa M. Wall
Notary Public
My Commission Expires: 5-29-95
My County of Residence: Marion
This instrument prepared by David B. Barnard, Attorney at Law
Indianapolis Power & Light Company
25 Monument Circle
Indianapolis, Indiana 46206
<PAGE>
Metes and Bounds Description of the Coal Reserves
in the Coal Supply Agreement between
Indianapolis Power & Light Company
and
Black Diamond Coal Company, Inc.
Effective November 3, 1994
CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
SEPTEMBER 27, 1994 BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY
AND BLACK DIAMOND COAL COMPANY, INC.
HAVE BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
<PAGE>
EXHIBIT C
[Narrative Description of Exhibit C: Exhibit C to this Contract is
a flowchart showing the process the coal to be delivered under the
Contract must complete.]
EXHIBIT 10.9
COAL SUPPLY AGREEMENT
BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY
AND
TRIAD MINING OF INDIANA, INC.
AND
MARINE COAL SALES COMPANY
<PAGE>
TABLE OF CONTENTS
SECTION PAGE
1. TERM . . . . . . . . . . . . . . . . . . 3
2. QUANTITY. . . . . . . . . . . . . . . . . 3
3. SOURCE OF COAL AND DELIVERIES . . . . . . . . 4
4. QUALITY . . . . . . . . . . . . . . . . . 5
5. BASE PRICE FOR COAL . . . . . . . . . . . . 7
6. ADJUSTMENTS TO BASE PRICE . . . . . . . . . . 8
7. CALORIFIC COST ADJUSTMENTS. . . . . . . . . . 14
8. WEIGHTS . . . . . . . . . . . . . . . . . 15
9. SAMPLING AND ANALYSIS. . . . . . . . . . . . 16
10. BILLING AND PAYMENT . . . . . . . . . . . . 17
11. RECORDS AND AUDITS. . . . . . . . . . . . . 17
12. FORCE MAJEURE. . . . . . . . . . . . . . . 18
13. COMPLIANCE WITH ANTI-POLLUTION LAWS AND
REGULATIONS, ETC. . . . . . . . . . . . . . 18
14. NOTICES . . . . . . . . . . . . . . . . . 19
15. WAIVERS AND REMEDIES . . . . . . . . . . . . 20
16. ARBITRATION. . . . . . . . . . . . . . . . 21
17. SUCCESSORS AND ASSIGNS . . . . . . . . . . . 21
18. HEADINGS NOT TO AFFECT CONSTRUCTION . . . . . . 21
19. WRITTEN INSTRUMENT. . . . . . . . . . . . . 21
20. LIMITATION OF LIABILITY OF MARINE. . . . . . . 22
21. EXECUTION OF COUNTERPARTS . . . . . . . . . . 22
22. CONSTRUCTION OF AGREEMENT . . . . . . . . . . 22
EXHIBIT A . . RESERVE LOCATION
EXHIBIT B . . CURRENT PUBLISHED EMISSION STANDARD
EXHIBIT C . . MARKETING AND SALES SERVICE AGREEMENT
EXHIBIT D . . COAL PREPARATION PLANT FLOW DIAGRAM
<PAGE>
COAL SUPPLY AGREEMENT
THIS AGREEMENT, made and entered into as of this 7th day of December,
1994 by and among Triad Mining of Indiana, Inc. ("Seller"), an Indiana
corporation, with offices at Owensboro, Kentucky, Marine Coal Sales Company
("Marine"), a Delaware corporation, with offices at Carmel, Indiana, and
Indianapolis Power & Light Company ("Buyer"), with offices at Indianapolis,
Indiana.
RECITALS
WHEREAS, Buyer is a public utility rendering electric utility and
steam service over certain areas within the State of Indiana; and
WHEREAS, Buyer intends to purchase, in accordance with the terms and
conditions stated herein, a supply of bituminous coal for use at various
stations as needed and determined by Buyer ("Stations"). The coal shall be
of the qualities and characteristics set forth in this Agreement to assure
compliance with the applicable sulfur dioxide emission limitations imposed
by governmental authorities having jurisdiction thereover.
WHEREAS, Seller owns, leases, or controls (as such term is commonly
used in the coal industry), bituminous coal reserves in Greene County,
Indiana as identified in Exhibit "A" attached. Seller intends to supply to
Buyer coal in accordance with the terms and conditions of this Agreement
which shall assure compliance with the applicable sulfur dioxide emission
limitations imposed by governmental authorities having jurisdiction
thereover. A copy of the current regulations is attached as Exhibit "B";
and
WHEREAS, Seller has entered into a Marketing and Sales Service
Agreement ("Sales Service Agreement") with Marine, a copy of which is
attached hereto, for informational purposes, as Exhibit "C". A copy of any
amendment thereto will be furnished promptly to Buyer by Seller, and will
be incorporated into Exhibit "C".
NOW THEREFORE, in consideration of the premises and the mutual
covenants and agreements of the parties hereinafter set forth, it is hereby
agreed by and between the parties hereto as follows:
<PAGE>
SECTION 1. TERM.
(a) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7, 1994
BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(b) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7, 1994
BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
SECTION 2. QUANTITY.
(a) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7, 1994
BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(b) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7, 1994
BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(c) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7, 1994
BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
SECTION 3. SOURCE OF COAL AND DELIVERIES.
(a) The source of coal shall be the reserves of Seller located in
Greene County, Indiana, identified on Exhibit A and nearby
reserves which may be acquired by Seller. Exhibit A will be
updated as Seller acquires additional reserves for this
Agreement. Seller covenants that it will not sell or contract
to sell coal from said reserves in such manner or quantity as
to jeopardize its ability to perform under the terms of this
Agreement. Seller further covenants that coal from sources
not previously approved by Buyer in writing will not be
included in shipments to Buyer.
(b) Coal subject to this Agreement shall be delivered by Seller to
Buyer FOB trucks (to be arranged by Buyer) loaded at Seller's
mine, or at Buyer's option, FOB railcars (to be arranged by
Buyer) at Seller's rail siding (the location of which is set
forth in Exhibit A).
CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7, 1994
BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
in accordance with existing tariff or applicable rail contract
or both.
CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7, 1994
BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
from any one of Seller's loading points to any one of Buyer's
Stations. Risk of loss shall follow title to the coal. Title
shall pass when coal is delivered to trucks or railcars by
Seller. Point of delivery for purposes of Sections 5 and 6 of
this Agreement shall be FOB railcar or truck as the case may
be. Point of delivery for Purposes of Sections 4, 7 and 9 of
this Agreement shall be FOB Buyer's Station(s).
(c) Coal deliveries subject to this Agreement shall be made in
substantially equal monthly quantities subject to the vacation
and holiday schedules of Seller, Buyer and shippers and in
accordance with Buyer's shipping instructions.
(d) The primary destination of coal deliveries shall be Buyer's
H.T. Pritchard Station and C.C. Perry K Station. Buyer shall
have the right, but not the obligation, to direct shipments to
any other of its Stations.
SECTION 4. QUALITY.
The procedures outlined in Section 9 shall be used to determine the quality
of the coal received.
(a) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7, 1994
BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(1) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7, 1994
BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(2) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7, 1994
BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(b) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7, 1994
BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(1) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7, 1994
BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(2) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7, 1994
BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(c) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7, 1994
BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(d) In order to assure environmental compliance, Seller shall collect
representative samples, analyze the samples, and advise Buyer of
Seller's determination of the sulphur content expressed in pounds
of sulphur dioxide per million Btu's or percent sulphur, whichever
is applicable, of each Shipment prior to loading into trucks or
railcars.
(e) Seller warrants that coal delivered to Buyer shall not contain
extraneous materials that would render the coal, in Buyer's sole
opinion, unsuitable for use at Buyer's Station(s). Extraneous
materials include, but are not limited to, slate, shale, fireclay,
rock, stone, dirt, mud, wood and rags. Should any Shipment(s) of
coal containing such extraneous material be delivered to any of
Buyer's Stations then Buyer may immediately reject such Shipment(s)
and title to such Shipment(s) shall revert to Supplier.
(f) THE QUALITY SPECIFICATIONS SET FORTH IN THIS SECTION 4 SHALL BE IN
LIEU OF ANY OTHER WARRANTY OF QUALITY, EXPRESS OR IMPLIED,
INCLUDING BUT NOT LIMITED TO, ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
(g) For purposes of this Agreement pounds of sulfur dioxide per million
BTU shall be calculated according to the following:
CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7, 1994
BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
Percent sulfur and As-received BTU per pound shall be determined in
accordance with Section 9.
SECTION 5. BASE PRICE FOR COAL.
CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7, 1994
BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
SECTION 6. ADJUSTMENTS TO BASE PRICE.
CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7, 1994
BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(a) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7, 1994
BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(1) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7, 1994
BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(2) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7, 1994
BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(3) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7, 1994
BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(4) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7, 1994
BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(b) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7, 1994
BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(c) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7, 1994
BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(d) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7, 1994
BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(e) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7, 1994
BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(f) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7, 1994
BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(1) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7, 1994
BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(2) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7, 1994
BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(3) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7, 1994
BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(4) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7, 1994
BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(g) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7, 1994
BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(h) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7, 1994
BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(i) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7, 1994
BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(j) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7, 1994
BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(k) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7, 1994
BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(l) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7, 1994
BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(m) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7, 1994
BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(n) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7, 1994
BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(1) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7, 1994
BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(i) CONFIDENTIAL PORTIONS OF THIS
CONTRACT DATED DECEMBER 7, 1994 BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY
AND TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(ii) CONFIDENTIAL PORTIONS OF THIS
CONTRACT DATED DECEMBER 7, 1994 BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY
AND TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(iii) CONFIDENTIAL PORTIONS OF THIS
CONTRACT DATED DECEMBER 7, 1994 BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY
AND TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(iv) CONFIDENTIAL PORTIONS OF THIS
CONTRACT DATED DECEMBER 7, 1994 BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY
AND TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(2) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7, 1994
BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(3) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7, 1994
BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(o) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7,
1994 BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(p) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7,
1994 BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(q) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7,
1994 BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(r) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7,
1994 BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
SECTION 7. CALORIFIC COST ADJUSTMENT.
(a) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7,
1994 BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(b) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7,
1994 BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
(c) CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7,
1994 BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
SECTION 8. WEIGHTS.
(a) The weight of coal shipped shall be determined on scales maintained
by Seller. The weights thus determined shall be accepted as the
quantity of coal for which invoices are to be rendered and payments
made in accordance with Section 10. Seller shall arrange for such
scales to be properly inspected and approved at least twice each
year by either the railroad, a mutually acceptable representative
agency, or the scale manufacturer in accordance with the applicable
standards established by the carrier or the appropriate weighing
and inspection bureau, and subject to verification by Buyer and all
carriers involved in the delivery to Buyer's Station(s). Seller
shall notify Buyer in advance of all scale inspections, and Buyer
shall have the right to have a representative present.
(b) Buyer shall have the right to have a representative present at any
and all times to observe the weighing of the coal. If Buyer should
at any time question the accuracy of the scales, Buyer shall so
advise Seller, who shall arrange for the scales to be tested,
subject to Buyer's rights detailed in Subsection 8(a). Such tests
shall be conducted by the railroad, the Indiana State Bureau of
Weights and Measures, a mutually acceptable representative agency
or the scale manufacturer. Tests shall be performed in accordance
with the applicable standards established by the carrier or the
appropriate weighing and inspection bureau. If such tests show
Seller's scales to be in error, said scales shall be adjusted to an
accurate condition. If any such inspection or test reveals an
error in weight in excess of one-half percent (1/2%), then weights
of the coal measured on that scale during the period commencing
with the date on which the accuracy was questioned to the date that
scale is correctly calibrated shall be adjusted in proportion to
the calibration error. Invoices submitted during this period shall
be adjusted in accordance with said adjustment to weights. No
adjustments shall be made to invoices submitted prior to the time
the accuracy of the scales was questioned.
(c) Buyer retains the option to weigh coal deliveries on Buyer's scales
at any time and for any reason from time to time. If Buyer chooses
to exercise this option, then Buyer will notify Seller in writing
and the rights and responsibilities of Seller per Subsections 8(a)
and 8(b) shall be assumed by Buyer, and the rights and
responsibilities of Buyer thereunder shall be assumed by Seller.
SECTION 9. SAMPLING AND ANALYSIS.
(a) Each day that coal is delivered hereunder, Buyer shall take or
cause to be taken representative samples of such coal. Buyer shall
further cause to be determined by proper analysis the quality and
characteristics of the coal. Sampling shall consist of
representative samples, manually gathered, from at least 20% of the
railcars or trucks in each Shipment or by mechanical sampling
systems where available. Analysis of each Shipment shall be
performed in general accordance with ASTM procedures. Buyer shall
furnish semi-monthly to Marine and Triad a report showing the
quality of the coal on a Shipment basis. Seller shall have the
right to have a representative present at any and all times to
observe the sampling and analysis. Results of sampling and
analysis by Buyer shall determine the quality of each Shipment.
(b) If Seller should at any time question either Buyer's sampling
methods or the results of any of Buyer's analyses, Seller shall
have the right, at its expense, to have the coal sampled at
destination and analyzed by a commercial testing laboratory, which
will be chosen mutually by the Parties. Tests shall be performed
using standards developed by ASTM, Bureau of Mines, or other
mutually acceptable procedures. The results of such sampling and
analysis shall be accepted as the quality of the coal for each
Shipment so sampled.
(c) If Buyer's sample is from less than 20% of a Shipment, the results
of Seller's sample and analysis shall determine the quality and
characteristics of such Shipment.
(d) Buyer has the right to require sampling and analysis on a more
frequent basis and as necessary in order to assure compliance with
applicable environmental standards. In such event, the term
"Shipment" in Subsection 3(b) shall be redefined by Buyer to the
extent required to assure such compliance.
SECTION 10. BILLING AND PAYMENT.
(a) As provided in the Sales Service Agreement, Marine shall be
responsible for the rendering of invoices to Buyer. After the 15th
day of each month, Marine shall render an invoice to Buyer covering
the coal shipped during the first fifteen (15) days of that month.
After the last day of each month, Marine shall render an invoice to
Buyer covering the coal shipped during the sixteenth day through
the last day of that month. Buyer shall, within ten (10) business
days after receipt of each invoice, pay to Seller's account at
National City Bank of Louisville, by cash or check, in United
States funds, the net amount of that invoice. Each invoice shall
be for the Adjusted Base Price approved by Buyer, in effect at the
time of shipment.
(b) As soon as practical after all pertinent data has been received
relating to quality, Buyer shall issue to Marine a debit or credit
memo giving effect to all adjustments for the month's shipments
relative to quality as detailed in Section 7. If additional
amounts are due from Buyer, Buyer shall pay to Seller's account at
National City Bank of Louisville, by cash or check, in United
States funds, the net amount of each invoice within ten (10)
business days after receipt. If credits are due, Buyer shall
deduct the amount of any credit memo from the next payment due.
(c) Payment shall be deemed to have been made on the date that any
check is deposited in the United States Mail.
SECTION 11. RECORDS AND AUDITS.
(a) Seller and Marine shall keep accurate and satisfactory records and
books of account showing all financial and technical data required
for purposes of administering this Agreement.
(b) Each time the Base Price is adjusted in accordance with any
provision of Section 6, Marine shall furnish to Buyer a detailed
statement showing the calculations of the Adjusted Base Price and
the basis for the proposed adjustment.
(c) Buyer shall have the right at all times and at any time, upon
reasonable and written notice, to examine or to cause a nationally
recognized accounting firm or mining engineering firm to examine
the reserves, mine, and records of Seller and Marine as they
pertain to this Agreement. The cost of such examination shall be
borne by Buyer.
SECTION 12. FORCE MAJEURE.
(a) The term "force majeure" shall mean any and all causes beyond the
control and without the fault or negligence of the Party failing to
perform. Such causes shall include but not be limited to acts of
God, acts of the public enemy, insurrections, riots, labor
disputes, boycotts, labor and material shortages, fires,
explosions, floods, breakdowns of or damage to equipment or
facilities, interruptions to transportation, embargoes, acts of
military authorities, or other causes of a similar nature whether
or not foreseen or foreseeable which wholly or partly prevent the
mining, loading and/or delivery of the coal by Seller; or the
receiving, unloading, accepting, and/or utilizing of the coal by
Buyer. Settlement of labor disputes shall be deemed beyond the
control and without the fault or negligence of the Party
experiencing such event. Documentation verifying a condition of
force majeure shall be made available by the Party invoking the
provisions of this Section.
(b) If, because of a verifiable condition of force majeure, either
Party is unable to carry out any of its obligations under this
Agreement (except for obligation of either Party to pay money in
connection with the performance of this Agreement), that Party
shall promptly give written notice to the other Party. The
obligation of the Party giving notice shall be suspended to the
extent made necessary by said force majeure during its continuance.
However, the Party giving notice shall use commercially reasonable
efforts to eliminate the force majeure with a minimum of delay.
Any deficiencies in deliveries of the coal caused by a condition of
force majeure shall not be made up except by mutual consent.
(c) During a period in which Buyer invokes a condition of force
majeure, Seller, in the absence of mutual agreement to make up
deficient deliveries, may sell to others the coal otherwise
designated for Buyer. Likewise, during a period in which Seller
invokes a condition of force majeure, Buyer, in the absence of
mutual agreement to make up deficient deliveries, may buy from
others the coal otherwise to have been purchased from Seller.
SECTION 13. COMPLIANCE WITH ANTI-POLLUTION LAWS AND
REGULATIONS, ETC.
(a) The Parties to this Agreement recognize that, during the term of
this Agreement, legislative bodies, regulatory agencies or courts
having competent jurisdiction over the subject matter of this
Agreement may enact laws or regulations, or issue orders such as,
but not limited to, those relating to air pollution, the effect of
which will make it impossible or impractical for Buyer to utilize
the coal subject to this Agreement at H.T. Pritchard Station for
the
CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7,
1994 BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
pounds of sulphur dioxide per mmBTU product, or C.C. Perry K
Station for the
CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7,
1994 BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
pounds of sulphur dioxide per mmBTU product without changing or
altering its present equipment. Such laws, regulations or orders
may pertain to, but would not necessarily be limited to, the sulfur
content of the coal. If any such laws, regulations or orders are
imposed, Buyer shall provide written notice to Seller of same as
soon as practicable.
(b) If Buyer in its sole reasonable opinion, is unable to utilize the
coal with its present equipment at H.T. Pritchard Station for the
CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7,
1994 BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
pounds of sulphur dioxide per MMBTU product, or C.C. Perry K
Station for the
CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED DECEMBER 7,
1994 BETWEEN INDIANAPOLIS POWER & LIGHT COMPANY AND
TRIAD MINING OF INDIANA, INC. AND
MARINE COAL SALES COMPANY HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
pounds of sulphur dioxide per MMBTU product, then Buyer shall give
Seller notice of termination of this Agreement which will be
effective one hundred twenty (120) days from receipt of notice.
Buyer shall not be obligated to take any of the products at any of
its other Stations. Seller shall have the exclusive right to
notify Buyer that it desires to submit a proposal for replacement
coal within thirty (30) days after receipt of notice. If Seller's
proposal for supplying replacement coal to Buyer is not submitted
within sixty (60) days, the exclusive right to negotiate shall
expire immediately and this Agreement shall terminate on the date
specified in Buyer's notice of termination. If the Parties are
unable to reach a new agreement concerning replacement fuel within
sixty (60) days after submittal of a bona fide proposal by Seller,
this exclusive right shall likewise expire. Upon termination under
this Section, neither Party to this Agreement shall have any
further liability to the other except to pay for coal delivered
prior to termination and for which payment has not yet been
tendered.
SECTION 14. NOTICES.
(a) Any notice, request, consent, demand, report or statement given to
or made upon either Party to this Agreement by the other under any
of the provisions of this Agreement shall be in writing, unless it
is otherwise specifically provided in this Agreement, and shall be
treated as duly delivered when either (i) personally delivered to
the designated agent of the Party being notified (listed as
follows), (ii) sent by express courier mail service, or (iii)
deposited in the United States Mail, postage prepaid and properly
addressed, or (iv) sent by telecopier.
(b) Mail to Buyer's designated agent shall be addressed to:
Indianapolis Power & Light Company
25 Monument Circle
P.O. Box 1595
Indianapolis, IN 46206-1595
Attn: Vice President - Fuel Supply
with a copy to:
Indianapolis Power & Light Company
25 Monument Circle
P.O. Box 1595
Indianapolis, IN 46206-1595
Attn: Senior Vice President
Secretary & General Counsel
Mail to Seller's designated agent shall be addressed to:
Marine Coal Sales Company
645 West Carmel Drive
Suite 190
Carmel, IN 46032
Attn: President
with copies to:
Triad Mining of Indiana, Inc.
401 Frederica Street
Building A, Suite 101
Owensboro, KY 42302
Attn: President
SECTION 15. WAIVERS AND REMEDIES.
(a) In any one or more instances, the failure of either Party to this
Agreement to insist upon strict performance of any provision of
this Agreement by the other, or to take advantage of any right or
rights provided by this Agreement, shall not be construed as a
waiver of any provision or the relinquishment of any right or
rights respecting any subsequent nonperformance of any provision.
The Agreement shall therefore continue and remain in full force and
effect.
(b) Each remedy specifically provided under this Agreement is
non-exclusive and shall be taken and construed as cumulative and in
addition to any other remedy provided herein or by law.
(c) No default (including but not limited to failure to meet or exceed
all quality specifications in Section 4 hereof) by either Party to
this Agreement in the performance of any covenants or obligations
under this Agreement, which except for this subsection would be the
legal basis for a right of rescission or termination of this
Agreement by the other party, shall give or result in such a right
unless and until the defaulting Party shall fail to correct or
commence actions necessary to correct such default within thirty
(30) days after written notice of claim of default is given to
defaulting Party by the Party claiming default.
SECTION 16. ARBITRATION.
Any controversy or claim arising out of or relating to this Agreement, or
the alleged breach thereof (whether or not arbitra-tion has been
specifically mentioned in any section of this Agree-ment), shall be settled
by arbitration in accordance with the Commercial Arbitration Rules of the
American Arbitration Associa-tion and judgment upon the award rendered by
the arbitrator(s) may be entered in any court having jurisdiction thereof.
Each Party shall choose one arbitrator and the third arbitrator shall be
chosen pursuant to the Rules of the American Arbitration Associa-tion. Each
Party agrees to pay the award of the arbitration within sixty (60) days of
receipt of the arbitrators' decision. It is the intent of the Parties that
arbitration be used to resolve disputes under this Agreement as quickly as
possible and, therefore, the arbitrators shall be requested to render a
decision within ninety (90) days of the date the dispute is referred to
arbitration. Each Party shall bear the cost of the arbitrator selected by
that Party and the Parties shall share equally the cost of the third
arbitra-tor. Discovery rules pursuant to the Federal Rules of Civil Proce-
dure shall be applicable to any arbitration under this Agreement.
SECTION 17. SUCCESSORS AND ASSIGNS.
This Agreement may not be assigned by either Seller or Buyer without the
written consent of the other Party, except as a pledge, assignment to secure
indebtedness, or other security arrangement to secure indebtedness incurred
for the purpose of or in connection with performance under this Agreement.
SECTION 18. HEADINGS NOT TO AFFECT CONSTRUCTION.
The headings to the respective sections and paragraphs of this Agreement are
inserted for convenience of reference and are neither to be taken to be any
part of the provisions hereof nor to control or affect the meaning,
construction or effect of the same.
SECTION 19. WRITTEN INSTRUMENT.
This written instrument contains the entire agreement between the Parties
and there are no other understandings or agreements, oral or written,
between said Parties. Any amendments to this Agreement shall be made in
writing and signed by both Parties. Purported amendments not in writing and
signed shall be null and void.
SECTION 20. LIMITATION OF LIABILITY OF MARINE.
Marine is a Party to this Agreement for the marketing, negotiating, and
administrative purposes stated herein and in the Sales Service Agreement
attached hereto as Exhibit "C". In no event shall Marine be held liable for
the performance or non-performance of any obligations relating to the
delivery or failure in the delivery of coal in the quantity required to be
supplied hereunder at any time during the term hereof.
SECTION 21. EXECUTION OF COUNTERPARTS.
This instrument may be executed in any number of counterparts, and all such
counterparts shall constitute but one and the same instrument.
SECTION 22. CONSTRUCTION OF AGREEMENT.
This instrument shall be governed by and construed in accordance with the
laws of the State of Indiana.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized respective corporate officers or
representatives, all as of the date December 7, 1994.
INDIANAPOLIS POWER & LIGHT COMPANY
By /s/ Ramon L. Humke
Ramon L. Humke
President and Chief Operating Officer
ATTEST:
/s/ Donald W. Knight
TRIAD MINING OF INDIANA, INC.
By /s/ Timothy Aull
Timothy Aull, President
ATTEST:
/s/ Richard E. Miller
MARINE COAL SALES COMPANY
By /s/ Larry F. Kaelin
Larry F. Kaelin, President
ATTEST:
/s/ Richard E. Miller
<PAGE>
EXHIBIT A
[Narrative Description of Map: Exhibit A to this Contract is a map
detailing the location of the coal reserves in Greene County, Indiana]
<PAGE>
EXHIBIT B
326 IAC 7-4-11 Morgan County sulfur dioxide emission limitations
Authority: IC 13-1-1-4; IC 13-7-7
Affected: IC 13-1-1; IC 13-7
Sec. 11. Indianapolis Power and Light (IPL) Pritchard Generating
Station shall comply with the sulfur dioxide emission limitations in pounds
per million Btu and other requirements as follows:
Emission
Facility Description Limitations
(1) Units 1 and 2 0.37 each
(2) Units 3, 4, 5, and 6 on and before
September 30, 1990 6.0 each
Unit 3 after September 30, 1990 0.37
Units 4, 5, and 6 after September 30,
1990 3.04 each
(3) As an exception to the emission limitations specified in subdivision
(2), after September 30, 1990, at any time in which IPL burns coal on Unit
3, sulfur dioxide emissions from Units 3, 4, 5, and 6 shall be limited to
two and fifty-seven hundredths (2.57) pounds per million Btu each.
(4) Prior to October 31, 1989, IPL shall modify the two (2) stacks
servings Units 3, 4, 5, and 6 to increase the height of each stack to at
least two hundred and eighty-one (281) feet above grade.
(5) Prior to February 28, 1989, IPL shall submit completed engineering
plans and drawings of flue gas conditioning systems for Units 4 and 5 to the
department. Prior to May 31, 1990, IPL shall complete installation of flue
gas conditioning systems for Units 4 and 5.
(6) After September 30, 1990, on a day for which Unit 3 does not burn
any coal, the limitations in subdivision (2) are in effect, and compliance
shall be determined as specified in 326 IAC 7-2-1(c).
(7) After September 30, 1990, on a day for which unit 3 burns any coal,
the limitations in subdivision (3) are in effect. As an exception to the
requirements of 326 IAC 7-2-1(c)(1) on a day for which Unit 3 burns any
coal, if the thirty (30) day rolling weighted average for any unit is above
two and fifty-seven hundredths (2.57) pounds per million Btu, then 326 IAC
7-2-1(c)(1) does not apply, and the daily average emission rate for that
unit for that day shall not exceed two and fifty-seven hundredths (2.57)
pounds per million Btu.
(8) After September 30, 1990, for the purposes of determining compliance
under 326 IAC 7-2-1(b), stack tests performed on Units 3, 4, 5, and 6 shall
demonstrate compliance with the most stringent set of limits in effect at
any time during the day prior to or during the test based on the Unit 3
operating status and fuel type as indicated by the log maintained pursuant
to subdivision (9).
<PAGE>
(9) After September 30, 1990, IPL shall maintain and make available to
the department upon request a log of the operating status and fuel type used
for Unit 3. In addition, in the quarterly report required by 326 IAC 7-2-
1(a), IPL shall submit to the department a daily summary indicating fuel
type for Unit 3, and, for days on which Unit 3 burned any coal and any
thirty (30) day rolling weighted average was greater than two and fifty-
seven hundredths (2.57) pounds per million Btu, IPL shall submit to the
department the daily average sulfur content, heat content, and sulfur
dioxide emission rate for Units 3, 4, 5, and 6.
(Air Pollution Control Board, 326 IAC 7-4-11;
filed Aug 28, 1990, 4:50 p.m.: 14 IR 76)
326 IAC 7-4-2 Marion County sulfur dioxide emission limitations
Authority: IC 13-1-1-4; IC 13-7-7
Affected: IC 13-1-1; IC 13-7
Sec. 2. The following sources and facilities located in Marion
County shall comply with the sulfur dioxide emission limitations in pounds
per million Btu (lbs./MMBtu) and pounds per hour (lbs./hr.), unless
otherwise specified, and other requirement:
(Material not relevant deleted)
(29) Indianapolis Power and Light Perry K shall comply with the sulfur
dioxide emission limitations in pounds per million Btu and other
requirements as follows:
Emission
Boiler Number Limitations
(A) 17 and 18 0.3
(B) 11, 12, 13, 14, 15, and 16 2.1
(C) As an alternative to the emission limitations in clause (B), sulfur
dioxide emissions from Boilers 11, 12, 13, 14, 15, and 16 may comply with
any one (1) of the sets of emission limitations in pounds per million Btu
as follows:
Emission
Boiler Number Limitations
(i) 13, 14, 15, and 16 0.0
11 and 12 4.4
(ii) 11, 12, 15, and 16 0.0
13 and 14 4.4
(iii) 11, 12, 13, and 14 0.0
15 and 16 4.4
(iv) 11, 12, 15, and 16 3.0
13 and 14 0.3
(v) 11 and 12 0.3
13, 14, 15, and 16 3.0
(D) The department or the Indianapolis Air Pollution Control Division
shall be notified prior to the reliance by Indianapolis Power and Light on
any one (1) of the sets of alternative emission limitations specified in
clause (C).
(E) A log of hourly operating status for each boiler shall be maintained
and made available to the department upon request. A daily summary
indicating which boilers were in service during the day shall be submitted
to the department quarterly. In addition, records of the daily average
sulfur content, heat content, and sulfur dioxide emission rate for each day
in which an alternative set of emission limitations specified in clause (C)
is used shall be submitted to the department quarterly.
(F) For the purposes of 326 IAC 7-2-1(c)(1), during thirty (30) day
periods in which Indianapolis Power and Light relies on more than one (1)
set of emission limitations specified in clauses (B) through (C), a separate
thirty (30) day rolling weighted average for each set of limitations shall
be determined. Each thirty (30) day rolling weighted average shall be based
on data from the previous thirty (30) operational days within the last
ninety (90) days for that set of limitations. If Indianapolis Power and
Light does not operate thirty (30) days under any one (1) set of limitations
within the last ninety (90) days, the rolling weighted average shall be
based on all operational days within the last ninety (90) days for that set
of limitations.
(G) Boilers 11 through 16 shall be limited to six and zero-tenths (6.0)
pounds per million Btu each until Boilers 11 through 16 achieve compliance
with the sulfur dioxide emission limitations specified in clauses (B)
through (C). Compliance with the emission limitations specified in clauses
(B) through (C) shall be achieved according to the following schedule:
(i) Complete engineering analysis of modifications by April 2,
1988.
(ii) Complete testing and design of modifications and place orders
for necessary equipment by May 2, 1989.
(iii) Complete installation of necessary equipment and achieve
compliance with emission limitations specified in clauses (B)
through (C) by June 2, 1990.
<PAGE>
Exhibit C
MARKETING AND SALES SERVICE AGREEMENT
THIS AGREEMENT entered into as of this 8th day of November, 1990 is
between MARINE COAL SALES COMPANY ("Marine"), an Indiana partnership, and
TRIAD MINING OF INDIANA, INC. ("Triad"), an Indiana corporation.
WHEREAS, Marine and Triad had entered into a Coal Mining and
Marketing Agreement dated as of November 8, 1990 which provides for the
execution of this Marketing and Sales Service Agreement between the same
parties; and
WHEREAS, the Coal Mining and Marketing Agreement obligates Triad to
construct and operate a coal mine near Switz City, Indiana utilizing coal
reserves from Ayrshire Land Company (the "Switz City Mine").
NOW, THEREFORE, in consideration of the covenants and promises set
forth herein, the parties agree as follows:
1. Term. The term of this Agreement shall commence upon the
execution hereof and shall continue until the later of the following:
(a) The permanent cessation of the production of coal from
the Switz City Mine; or
(b) The expiration of the initial term of the coal supply
agreement with Indianapolis Power & Light Company described in
Paragraph 7 of the Coal Mining and Marketing Agreement and further
described in Paragraph 9 of this Agreement.
2. Services to be Provided by Marine. With respect to coal to
be produced and sold from the mines described in Paragraph 1 above
(hereinafter called the "Subject Mines"), Marine shall provide such of the
following services as may be requested by Triad:
(a) Provide market research to determine markets for the
coal to be produced.
(b) Identify potential markets for such coal.
(c) Make presentations to potential customers for such coal.
(d) Conduct negotiations with customers; close and document
sales to customers; investigate creditworthiness.
(e) Obtain estimates and orders for coal from customers.
(f) Coordinate transportation arrangements with carriers.
(g) Send required shipping notices to customers.
(h) Handle customer complaints about quantity or quality.
(i) Prepare and send invoices and statements to customers.
(j) Calculate all price adjustments - both escalation and
quality adjustments; negotiate agreement on price revisions, if
required.
(k) Collect amounts due by customers.*
(l) Remit to Triad and, if applicable, to the carrier,
amounts due them.*
(m) Remit to appropriate governmental agency any applicable
sales, use or other taxes imposed on the sale of the coal.*
(n) Handle Force Majeure notices for Triad - issuance and
receipt.
(o) Assist Triad in obtaining replacement or substitute coal
if required.
* Not applicable to Coal Supply Agreement between
Indianapolis Power & Light Company ("IP&L") and Triad because of
provisions of Paragraph 7 of Coal Mining and Marketing Agreement
referenced above.
3. Compensation to Marine. In consideration of the services to
be provided by Marine hereunder and in further consideration of the
assignment of interests made by Marine to Triad pursuant to the Coal Mining
and Marketing Agreement, it is agreed that Marine shall receive the
following compensation for coal produced from the Subject Mines:
CONFIDENTIAL PORTIONS OF THIS CONTRACT DATED
SEPTEMBER 27, 1994 BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY
AND BLACK DIAMOND COAL COMPANY, INC.
HAVE BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
PURSUANT TO 17 CFR 240.24b-2
4. Coal Supply Agreements. In the case of coal sold to customers
falling into the categories set forth in subsections (d) and (e) of Section
3 above, Marine will consult with Triad on terms for sales of coal to such
customers. All such sales shall be made on terms acceptable to Triad in its
sole and absolute discretion.
5. Indemnification.
(a) Triad agrees to indemnify and save Marine harmless from
and against any and all liabilities, losses, claims, demands,
expenses or damages which are caused by any of the following: (i)
any willful or negligent act or omission of Triad in the operation
of the Subject Mines; (ii) any failure by Triad to comply with the
terms and conditions of this Agreement or the Coal Mining and
Marketing Agreement; (iii) any failure to comply with applicable
laws and regulations relating hereto. Triad agrees that it will
defend the interests of Marine in any claim or lawsuit covered by
this indemnification provision, including, but not limited to,
payment of all attorney fees, court costs, costs of settlements and
satisfaction of any judgments entered.
(b) Marine agrees to indemnify and save Triad harmless from
and against any and all liabilities, losses, claims, demands,
expenses or damages which are caused by any of the following: (i)
any willful or negligent act or omission of Marine in the sale of
coal produced from the Subject Mines; (ii) any failure by Marine to
comply with the terms and conditions of this Agreement or the Coal
Mining and Marketing Agreement; (iii) any failure to comply with
applicable laws and regulations relating hereto. Marine agrees
that it will defend the interests of Triad in any claim or lawsuit
covered by this indemnification provision, including, but not
limited to, payment of all attorney fees, court costs, costs of
settlements and satisfaction of any judgments entered.
6. Default of Triad.
(a) Events of Default. The following shall constitute
events of default by Triad hereunder:
(i) Failure to perform any material obligation
imposed on Triad set forth in the Coal Mining and Marketing
Agreement, in this Agreement, or in the Agreements described
in Paragraph 2 of the Coal Mining and Marketing Agreement.
(ii) The bankruptcy or insolvency of Triad or its
cessation of business as a going concern.
(b) Remedies for Default. Subject to the notice of default
and the cure period provisions of Paragraph 9 hereof, Marine shall
have the following remedies for an event of default committed by
Triad:
(i) To recover damages under applicable legal
theories.
(ii) To obtain equitable relief under applicable legal
theories.
7. Default of Marine.
(a) Events of Default. The following shall constitute
events of default by Marine hereunder:
(i) Failure to perform any material obligation
imposed on Marine set forth in the Coal Mining and Marketing
Agreement or in this Agreement.
(ii) Failure to remit when due any funds received
from customers which are due to Triad or any third party.
(iii) The bankruptcy or insolvency of Marine or its
cessation of business as a going concern.
(b) Remedies for Default. Subject to notice of default and
the cure period provisions of Paragraph 9 hereof, Triad shall have
the following remedies for an event of default committed by Marine:
(i) To recover damages under applicable legal
theories.
(ii) To obtain equitable relief under applicable legal
theories.
8. Notices and Cure Provisions.
(a) Either party shall be entitled to exercise the remedies
for default available to it as set forth in Paragraph 7 and 8
hereof if the party alleged to be in default (the "Defaulting
Party") by the other party (the "Non-Defaulting Party") fails to
cure any such default within a period of thirty (30) days (the
"Cure Period") (except that the Cure Period for Paragraph 7(a)(ii)
shall be ten (10) days) after written notice of claim of such
default has been sent by the Non-Defaulting Party to the Defaulting
Party unless such default cannot reasonably be cured within the
Cure Period and the Defaulting Party can demonstrate that steps
have been taken to cure such default within a reasonable period of
time and the Defaulting Party proceeds with due diligence to cure
the default within a reasonable period of time.
9. Additional Agreement with IP&L. If the parties are successful
in negotiating an additional coal supply agreement with IP&L to be supplied
from the Petersburg Mine as described in Paragraph 8 of the Coal Mining and
Marketing Agreement, it is understood that Triad shall own and operate the
Petersburg Mine and that Marine shall be the exclusive sales agent for the
coal produced and sold from such Mine to IP&L for the initial terms of the
coal supply agreement with IP&L. The parties shall negotiate a Marketing
and Sales Service Agreement for the coal sold to IP&L from the Petersburg
Mine upon reasonable terms taking into account the sales price of the coal
and the costs of mining, preparing and delivering the coal to IP&L. If the
parties mutually agree, such Marketing and Sales Service Agreement may cover
other coal produced at the Petersburg Mine.
10. Assignment. This Agreement is personal to the parties hereto
and to the principals of such parties, and neither party shall transfer or
assign this Agreement to any third party without the prior written consent
of the other party.
11. Notices. All notices hereunder shall be in writing and shall
be given either by personal delivery or by the U.S. mails, courier service,
telex, telecopier, or any similar means, properly addressed to the Parties
as follows:
If notice is to Marine, addressed as follows:
Richard E. Miller, President
Marine Coal Sales Company
645 W. Carmel Drive - Suite 190
Carmel, Indiana 46032
If notice is to Triad, addressed as follows:
Joe M. Aull, President
Triad Mining of Indiana, Inc.
5000 Back Square Drive
Owensboro, Kentucky 42301
Either party may, by written notice to the other, change the person or
address to which notice (including copies thereof to other persons) are to
be sent.
12. Waivers. The failure of a party hereto to insist upon any one
or more instances of strict performance of any provision hereof or to take
advantage of any rights hereunder shall not be construed as a waiver of any
such provision or the relinquishment of any such rights. To be effective
any waiver must be in writing and must set forth clearly the right being
waived.
13. Arbitration. Except for the provisions hereof relating to
Events of Default and remedies therefor which shall not be subject to
arbitration, all other controversies or claims arising out of or relating
to this Agreement which are not resolved by negotiations between the parties
hereto shall be settled by arbitration in accordance with Commercial
Arbitration Rules of the American Arbitration Association, and judgment may
be entered on the award in any court having jurisdiction. Either party may
determine, in its sole discretion, that negotiations or continued
negotiations, would be unavailing.
14. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Indiana.
15. Headings. The headings in this Agreement are for convenience
only, and shall not be considered a part of, or used in the interpretation
of, this Agreement.
16. Construction. No understanding or agreements not expressly
stated herein shall be binding on the parties in the construction or
fulfillment hereof unless such understandings, or agreements are reduced to
writing and signed by the respective parties.
17. Amendments. No waiver, alteration or modification of any of
the provisions, or termination, of this Agreement shall be effective unless
in writing and fully executed by the party to be bound thereby.
18. Entire Agreement. This Agreement contains the entire
Agreement between the parties with respect to the subject matter hereof.
All previous and collateral agreements, representations, warranties,
promises and conditions of sale are superseded by this Agreement. Any
representation, promise or condition not incorporated in this Agreement
shall not be binding on either party.
19. Execution of Counterparts. This Agreement may be executed in
any number of counterparts, and all such counterparts shall constitute but
one and the same Agreement.
20. Severability. All agreements and covenants herein contained
are severable, and in the event any of them shall be held to be invalid by
any court having jurisdiction, all remaining agreements and covenants shall
remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their duly authorized respective corporate officers or
representatives, all as of the date first above written.
MARINE COAL SALES COMPANY,
a Partnership
ATTEST: By Marine Coal Sales, Inc.,
General Partner
/s/ Judy K. Van Abeele By: /s/Richard E. Miller
Secretary President
TRIAD MINING OF INDIANA, INC.
ATTEST:
/s/ Michael W. Howard By: /s/ Joseph M. Aull
<PAGE>
CONSENT TO SUBSTITUTION OF PARTIES
WHEREAS, the undersigned entered into a certain Coal Marketing and
Sales Service Agreement dated November 8, 1990, (the "Agreement") with
Marine Coal Sales Company, an Indiana partnership ("MCSC-1"); and
WHEREAS, Marine Coal Sales Company, a Delaware corporation ("MCSC-
2") has acquired all rights, title and interest of MCSC-1 and has assumed
the obligation to perform all executory agreements to which MCSC-1 is a
party; and
WHEREAS, MCSC-1 was dissolved as of January 12, 1994;
NOW, THEREFORE, the undersigned hereby consents to the substitution
of MCSC-2 for MCSC-1 as a party to the Agreement as of January 12, 1994.
IN WITNESS WHEREOF, the undersigned has caused this Consent to
Substitution of Parties to be executed to be effective as of January 12,
1994.
TRIAD MINING OF INDIANA, INC.
By: /s/ Timothy R. Aull
Title: /s/ President
<PAGE>
EXHIBIT D
[Narrative Description of Exhibit D: Exhibit D to this Contract is a
flowchart showing the process the coal to be delivered under the Contract
must complete.]
EXHIBIT 10.31
EMPLOYMENT AGREEMENT
RAMON L. HUMKE
This Agreement, dated as of February 1, 1990, is
between Indianapolis Power & Light Company, an Indiana
corporation having its principal executive offices at 25
Monument Circle, Indianapolis, Indiana 46204 (the
"Company"), and RAMON L. HUMKE, an Indiana resident whose
mailing address is 7121 Tuliptree Trail, Indianapolis, IN
46256 (the "Executive").
R E C I T A L S
The following facts are true:
A. The Executive has for many years served the
Company as a key executive officer, and is expected to
continue to make a major contribution to the
profitability, growth and financial strength of the
Company.
B. The Company considers the continued services of
the Executive to be in the best interests of the Company
and its shareholders, and desires to assure itself of the
availability of such continued services in the future.
C. The Executive is willing to remain in the
employ of the Company upon the terms and subject to the
conditions hereinafter provided.
A G R E E M E N T
In consideration of the premises and the mutual
covenants and agreements hereinafter set forth, the
Company and the Executive agree as follows:
1. Employment. The Company hereby employs the
Executive for the Term of Employment (as defined in
Paragraph 6 hereof) as Vice President and Treasurer or in
such other executive capacity, for the Company or a major
affiliate thereof, as may be determined by the Board of
Directors of the Company (the "Board"), with such duties
as may be reasonably assigned to him by the By-Laws of
the Company and by the Board. During the Term of
Employment, the Executive shall devote his best efforts
and ability, skill and attention to the business of the
Company and to the promotion of its interests during
normal working hours (with the exception of absences
because of vacations or illness). The Executive's office
shall continue to be located in the Indianapolis, Indiana
metropolitan area, unless he shall consent to a
relocation.
2. Base Salary. During the Term of Employment,
the Executive shall receive a minimum base salary of
$260,000.00 per year, payable in monthly intervals, or
such larger amount as the Board shall in its discretion
determine from time to time.
3. Fringe Benefits. During the Term of
Employment, the Company shall provide to the Executive
such fringe benefits as are generally provided to its key
executive officers, including without limitation,
incentive compensation and bonus arrangements,
retirement, profit-sharing and stock bonus plans (whether
qualified or nonqualified), and life, health and
accident, director and officer liability and long term
disability insurance.
4. Reimbursement of Expenses. The Company shall
reimburse the Executive for all of his reasonable
expenses incurred in the performance of his duties
hereunder, in accordance with the Company's generally
applicable expense reimbursement policy as in effect from
time to time and upon compliance with all reasonable
accounting and reporting requirements as set forth in
such policy.
5. Noncompetition. During the Term of Employment
and thereafter so long as the Executive is receiving
payments pursuant to Paragraph 7 hereof, the Executive
shall not, without the consent of the Company, engage in,
be employed by, be a director of or own an equity
interest in any business or activity competing with or of
a nature similar to the business of the Company within
the Company's service territory as constituted from time
to time.
6. Term of Employment. The "Term of Employment"
shall commence on the date of this Agreement and shall
continue indefinitely until three (3) years after either
the Company or the Executive gives notice to the other
party of a decision to fix the duration thereof, unless
earlier terminated as follows. The Term of Employment
shall terminate early upon the first to occur of (a) the
death of the Executive, (b) the Total Disability (as
hereinafter defined) of the Executive, (c) the voluntary
retirement of the Executive upon reaching retirement age
as provided in the Employees' Retirement Plan of
Indianapolis Power & Light Company as now in effect or
hereinafter amended (the "Retirement Plan"), (d)
termination of employment by the Company for Cause (as
hereinafter defined), (e) the resignation of the
Executive for Good Reason (as hereinafter defined), (f)
termination of employment by the Company without Cause on
six (6) months notice, or (g) termination of employment
by the Executive on six (6) months notice. For purposes
of this Agreement, the term "Total Disability" shall mean
a physical or mental condition which prevents the
Executive from performing his duties for the Company;
provided, however, that the Executive shall not be deemed
to have incurred a Total Disability unless he is eligible
for disability retirement under the Retirement Plan. The
term "Cause" shall mean fraud, dishonesty, theft of
corporate assets or other gross misconduct by the
Executive. The term "Good Reason" shall mean, without
the Executive's written consent, a demotion in the
Executive's status, position or responsibilities; the
assignment to the Executive of any duties which are
inconsistent with such status, position or
responsibilities; or the relocation of the principal
executive offices of the Company to a location outside
the Indianapolis, Indiana metropolitan area.
7. Payments on Early Termination. In the event
the Term of Employment is terminated early by reason of
Paragraphs 6(e) (resignation for Good Reason) or 6(f)
(termination by the Company without Cause), the Company
shall continue to pay to the Executive the base salary
which would have been payable pursuant to Paragraph 2
above for what would have been the remainder of the Term
of Employment had the event specified in Paragraphs 6(e)
or 6(f) not occurred. Such payments shall in no event
continue past the Executive's normal retirement age under
the Retirement Plan. The Company shall also continue for
the same period to provide life, health and accident and
long term disability insurance for the Executive and his
dependents to the extent provided before such termination
and, if the Term of Employment would have ended with the
retirement of the Executive but for such early
termination, the Company shall provide such insurance
thereafter to the extent generally provided by the
Company to retired employees.
Notwithstanding the foregoing:
(a) In the event the Executive receives
severance benefits from the Company as a result of
such termination pursuant to any other plan or
agreement in or to which the Executive is a
participant or party, other than the Retirement Plan
or the Indianapolis Power & Light Company Unfunded
Supplemental Retirement Plan for a Select Group of
Management Employees or any similar or successor
plan, such benefits shall be applied on a first
dollar basis against the payments owing to the
Executive under this Paragraph 7; and
(b) In the event that Deloitte Haskins & Sells
determines that any payment by the Company to or for
the benefit of the Executive pursuant to this
Paragraph 7 would be nondeductible by the Company
for federal income tax purposes because of Section
280G of the Internal Revenue Code of 1954, as
amended from time to time (the "Code"), then the
amount payable to or for the benefit of the
Executive pursuant to this Paragraph 7 shall be
reduced (but not below zero) to the maximum amount
payable without causing the payment to be
nondeductible by the Company because of Section 280G
of the Code. Such determination by Deloitte Haskins
& Sells shall be conclusive and binding upon the
parties.
8. Miscellaneous.
(a) This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their
respective executors, administrators, heirs,
personal representatives, successors, and assigns,
but neither this Agreement nor any right hereunder
may be assigned or transferred by either party
hereto, any beneficiary, or any other person, nor be
subject to alienation, anticipation, sale, pledge,
encumbrance, execution, levy, or other legal process
of any kind against the Executive, his beneficiary
or any other person. Notwithstanding the foregoing,
the Company will assign this Agreement to any
corporation or other business entity succeeding to
substantially all of the business and assets of the
Company by merger, consolidation, sale of assets, or
otherwise and shall obtain the assumption of this
Agreement by such successor.
(b) This Agreement contains the entire
agreement between the parties with respect to the
subject matter hereof. All representations,
promises, and prior or contemporaneous
understandings among the parties with respect to the
subject matter hereof are merged into and expressed
in this Agreement, and any and all prior agreements
between the parties with respect to the subject
matter hereof are hereby cancelled.
(c) This Agreement shall not be amended,
modified, or supplemented without the written
agreement of the parties at the time of such
amendment, modification, or supplement.
(d) This Agreement shall be governed by and
subject to the laws of the State of Indiana.
(e) The invalidity or unenforceability of any
particular provision of this particular Agreement
shall not affect the other provisions, and this
Agreement shall be construed in all respects as if
such invalid or unenforceable provision had not been
contained herein.
(f) The captions in this Agreement are for
convenience and identification purposes only, are
not an integral part of this Agreement, and are not
to be considered in the interpretation of any part
hereof.
(g) Except as specifically set forth in this
Agreement, all notices and other communications
hereunder shall be in writing and shall be deemed to
have been duly given if delivered in person or sent
by registered or certified mail, postage prepaid,
addressed as set forth above, or to such other
address as shall be furnished in writing by any
party to the others.
(h) Except as otherwise specifically provided
in this Agreement, no waiver by either party hereto
of any breach by the other party hereto of any
condition or provision of this Agreement to be
performed by such other party shall be deemed to be
a valid waiver unless such waiver is in writing or,
even if in writing, shall be deemed to be a waiver
of a subsequent breach of such condition or
provision or a waiver of a similar or dissimilar
provision or condition at the same or at any prior
or subsequent time.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the day and year first above written.
IPALCO ENTERPRISES, INC.
By: /s/John R. Hodowal
Chairman of the Board and
Chief Executive Officer
Attest: /s/Marcus E. Woods
Secretary
/s/Ramon L. Humke
Ramon L. Humke
EXHIBIT 10.32
EMPLOYMENT AGREEMENT
JOHN R. HODOWAL
This Agreement, dated as of July 29, 1986, is between IPALCO
ENTERPRISES, INC., an Indiana corporation having its principal executive
offices at 25 Monument Circle, Indianapolis, Indiana 46204 (the
"Company"), and JOHN R. HODOWAL, an Indiana resident whose mailing
address is 5136 E. 74th Place, Indianapolis, Indiana 46250 (the
"Executive").
R E C I T A L S
The following facts are true:
A. The Executive has for many years served the Company as a key
executive officer, and is expected to continue to make a major
contribution to the profitability, growth and financial strength of the
Company.
B. The Company considers the continued services of the Executive
to be in the best interests of the Company and its shareholders, and
desires to assure itself of the availability of such continued services
in the future.
C. The Executive is willing to remain in the employ of the
Company upon the terms and subject to the conditions hereinafter
provided.
A G R E E M E N T
In consideration of the premises and the mutual covenants and
agreements hereinafter set forth, the Company and the Executive agree as
follows:
1. Employment. The Company hereby employs the Executive for the
Term of Employment (as defined in Paragraph 6 hereof) as Vice President
and Treasurer or in such other executive capacity, for the Company or a
major affiliate thereof, as may be determined by the Board of Directors
of the Company (the "Board"), with such duties as may be reasonably
assigned to him by the By-Laws of the Company and by the Board. During
the Term of Employment, the Executive shall devote his best efforts and
ability, skill and attention to the business of the Company and to the
promotion of its interests during normal working hours (with the
exception of absences because of vacations or illness). The Executive's
office shall continue to be located in the Indianapolis, Indiana
metropolitan area, unless he shall consent to a relocation.
2. Base Salary. During the Term of Employment, the Executive
shall receive a minimum base salary of $165,000.00 per year, payable in
monthly intervals, or such larger amount as the Board shall in its
discretion determine from time to time.
3. Fringe Benefits. During the Term of Employment, the Company
shall provide to the Executive such fringe benefits as are generally
provided to its key executive officers, including without limitation,
incentive compensation and bonus arrangements, retirement, profit-sharing
and stock bonus plans (whether qualified or nonqualified), and life,
health and accident, director and officer liability and long term
disability insurance.
4. Reimbursement of Expenses. The Company shall reimburse the
Executive for all of his reasonable expenses incurred in the performance
of his duties hereunder, in accordance with the Company's generally
applicable expense reimbursement policy as in effect from time to time
and upon compliance with all reasonable accounting and reporting
requirements as set forth in such policy.
5. Noncompetition. During the Term of Employment and thereafter
so long as the Executive is receiving payments pursuant to Paragraph 7
hereof, the Executive shall not, without the consent of the Company,
engage in, be employed by, be a director of or own an equity interest in
any business or activity competing with or of a nature similar to the
business of the Company within the Company's service territory as
constituted from time to time.
6. Term of Employment. The "Term of Employment" shall commence
on the date of this Agreement and shall continue indefinitely until three
(3) years after either the Company or the Executive gives notice to the
other party of a decision to fix the duration thereof, unless earlier
terminated as follows. The Term of Employment shall terminate early upon
the first to occur of (a) the death of the Executive, (b) the Total
Disability (as hereinafter defined) of the Executive, (c) the voluntary
retirement of the Executive upon reaching retirement age as provided in
the Employees' Retirement Plan of Indianapolis Power & Light Company as
now in effect or hereinafter amended (the "Retirement Plan"), (d)
termination of employment by the Company for Cause (as hereinafter
defined), (e) the resignation of the Executive for Good Reason (as
hereinafter defined), (f) termination of employment by the Company
without Cause on six (6) months notice, or (g) termination of employment
by the Executive on six (6) months notice. For purposes of this
Agreement, the term "Total Disability" shall mean a physical or mental
condition which prevents the Executive from performing his duties for the
Company; provided, however, that the Executive shall not be deemed to
have incurred a Total Disability unless he is eligible for disability
retirement under the Retirement Plan. The term "Cause" shall mean fraud,
dishonesty, theft of corporate assets or other gross misconduct by the
Executive. The term "Good Reason" shall mean, without the Executive's
written consent, a demotion in the Executive's status, position or
responsibilities; the assignment to the Executive of any duties which are
inconsistent with such status, position or responsibilities; or the
relocation of the principal executive offices of the Company to a
location outside the Indianapolis, Indiana metropolitan area.
7. Payments on Early Termination. In the event the Term of
Employment is terminated early by reason of Paragraphs 6(e) (resignation
for Good Reason) or 6(f) (termination by the Company without Cause), the
Company shall continue to pay to the Executive the base salary which
would have been payable pursuant to Paragraph 2 above for what would have
been the remainder of the Term of Employment had the event specified in
Paragraphs 6(e) or 6(f) not occurred. Such payments shall in no event
continue past the Executive's normal retirement age under the Retirement
Plan. The Company shall also continue for the same period to provide
life, health and accident and long term disability insurance for the
Executive and his dependents to the extent provided before such
termination and, if the Term of Employment would have ended with the
retirement of the Executive but for such early termination, the Company
shall provide such insurance thereafter to the extent generally provided
by the Company to retired employees.
Notwithstanding the foregoing:
(a) In the event the Executive receives severance benefits
from the Company as a result of such termination pursuant to any
other plan or agreement in or to which the Executive is a
participant or party, other than the Retirement Plan or the
Indianapolis Power & Light Company Unfunded Supplemental Retirement
Plan for a Select Group of Management Employees or any similar or
successor plan, such benefits shall be applied on a first dollar
basis against the payments owing to the Executive under this
Paragraph 7; and
(b) In the event that Deloitte Haskins & Sells determines
that any payment by the Company to or for the benefit of the
Executive pursuant to this Paragraph 7 would be nondeductible by
the Company for federal income tax purposes because of Section 280G
of the Internal Revenue Code of 1954, as amended from time to time
(the "Code"), then the amount payable to or for the benefit of the
Executive pursuant to this Paragraph 7 shall be reduced (but not
below zero) to the maximum amount payable without causing the
payment to be nondeductible by the Company because of Section 280G
of the Code. Such determination by Deloitte Haskins & Sells shall
be conclusive and binding upon the parties.
8. Miscellaneous.
(a) This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective executors,
administrators, heirs, personal representatives, successors, and
assigns, but neither this Agreement nor any right hereunder may be
assigned or transferred by either party hereto, any beneficiary, or
any other person, nor be subject to alienation, anticipation, sale,
pledge, encumbrance, execution, levy, or other legal process of any
kind against the Executive, his beneficiary or any other person.
Notwithstanding the foregoing, the Company will assign this
Agreement to any corporation or other business entity succeeding to
substantially all of the business and assets of the Company by
merger, consolidation, sale of assets, or otherwise and shall
obtain the assumption of this Agreement by such successor.
(b) This Agreement contains the entire agreement between
the parties with respect to the subject matter hereof. All
representations, promises, and prior or contemporaneous
understandings among the parties with respect to the subject matter
hereof are merged into and expressed in this Agreement, and any and
all prior agreements between the parties with respect to the
subject matter hereof are hereby cancelled.
(c) This Agreement shall not be amended, modified, or
supplemented without the written agreement of the parties at the
time of such amendment, modification, or supplement.
(d) This Agreement shall be governed by and subject to the
laws of the State of Indiana.
(e) The invalidity or unenforceability of any particular
provision of this particular Agreement shall not affect the other
provisions, and this Agreement shall be construed in all respects
as if such invalid or unenforceable provision had not been
contained herein.
(f) The captions in this Agreement are for convenience and
identification purposes only, are not an integral part of this
Agreement, and are not to be considered in the interpretation of
any part hereof.
(g) Except as specifically set forth in this Agreement, all
notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if delivered in person or
sent by registered or certified mail, postage prepaid, addressed as
set forth above, or to such other address as shall be furnished in
writing by any party to the others.
(h) Except as otherwise specifically provided in this
Agreement, no waiver by either party hereto of any breach by the
other party hereto of any condition or provision of this Agreement
to be performed by such other party shall be deemed to be a valid
waiver unless such waiver is in writing or, even if in writing,
shall be deemed to be a waiver of a subsequent breach of such
condition or provision or a waiver of a similar or dissimilar
provision or condition at the same or at any prior or subsequent
time.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the day and year first above written.
IPALCO ENTERPRISES, INC.
By: /s/Zane G. Todd
President
Attest:
/s/Marcus E. Woods
Secretary
/s/John R. Hodowal
John R. Hodowal
EXHIBIT 10.33
DIRECTORS AND OFFICERS LIABILITY
INSURANCE POLICY
THIS IS A "CLAIMS-FIRST-MADE"
INSURANCE POLICY. PLEASE READ IT CAREFULLY.
Words and phrases which appear in all capital letters have the special
meanings set forth in
Section II - Definitions
AEGIS
ASSOCIATED ELECTRIC & GAS
INSURANCE SERVICES LIMITED
HAMILTON, BERMUDA
DECLARATIONS
POLICY NO. D0392B1A94
DECLARATIONS NO. 1
Item 1: This POLICY provides indemnification with respect to the
DIRECTORS and OFFICERS of:
IPALCO Enterprises, Inc.
25 Monument Circle
Indianapolis, IN 46204
Item 2: POLICY PERIOD: from the 1st day of June, 1994, to the 1st
day of June, 1995 both days at 12:01 A.M. Standard Time at
the address of the COMPANY.
Item 3: RETROACTIVE DATE: the 4th day of December, 1970 at 12:01
A.M. Standard Time at the address of the COMPANY.
Item 4: A. POLICY PREMIUM: $230,673.
B. MINIMUM PREMIUM: $ 92,269.
Item 5: Limits of Liability:
A. $ 35,000,000 Each WRONGFUL ACT
B. $ 35,000,000 Aggregate Limit of Liability for the POLICY
PERIOD
Item 6: UNDERLYING LIMITS:
This POLICY is written as primary insurance
A. If this POLICY is written as Primary Insurance with
respect to Insuring Agreement 1(A)(2) only:
(1) $ 200,000 Each WRONGFUL ACT not arising from
NUCLEAR OPERATIONS
(2) $ 200,000 Each WRONGFUL ACT arising from
NUCLEAR OPERATIONS
B. If this POLICY is written as EXCESS Insurance:
(1) (a) $ ________ Each WRONGFUL ACT
(b) $ ________ In the Aggregate for all
WRONGFUL ACTS
(2) $ ________ Each WRONGFUL ACT not covered
under Underlying Insurance
(3) In the Event of Exhaustion of the UNDERLYING
LIMIT stated in Item 6(B)(1)(b) above with
respect to Insuring Agreement I(A)(2) only:
(a) $ ________ Each WRONGFUL ACT not arising
from NUCLEAR OPERATIONS
<PAGE>
DECLARATIONS
continued
POLICY NO. D0392B1A94
DECLARATIONS NO. 1
(b) $ ________ Each WRONGFUL ACT arising from
NUCLEAR OPERATIONS
Item 7: Any notice to be provided or any payment to be made hereunder
to the COMPANY shall be made to:
NAME Mr. Bruce H. Smith
TITLE Administrator, Risk Management
ADDRESS Indianapolis Power & Light Company
25 Monument Circle
P.O. Box 1595 (Zip 46206-1595)
Indianapolis, IN 46204
Item 8: Any notice to be provided or any payment to be made hereunder
to the INSURER shall be made to:
NAME Aegis Insurance Services, Inc.
ADDRESS Harborside Financial Center
700 Plaza Two
Jersey City, New Jersey 07311-3994
ENDORSEMENTS ATTACHED AT POLICY ISSUANCE: 1-3
Countersigned at Jersey City, New Jersey
On June 9, 1994
Aegis Insurance Services, Inc.
By /s/ Karen Larson
Authorized Representative
<PAGE>
POLICY OF DIRECTORS AND OFFICERS LIABILITY INSURANCE EFFECTED
WITH ASSOCIATED ELECTRIC & GAS INSURANCE SERVICES LIMITED
HAMILTON, BERMUDA
(hereinafter referred to the "POLICY")
THIS IS A "CLAIMS-FIRST-MADE" INSURANCE POLICY.
PLEASE READ IT CAREFULLY.
Words and phrases which appear in all capital letters
have the special meanings set forth in
Section II - Definitions.
In consideration of the payment of premium, and in reliance upon all
statements made and information furnished to Associated Electric & Gas
Insurance Services Limited (hereinafter referred to as the "INSURER") by
the Application attached hereto which is hereby made a part hereof, and
subject to all the terms hereinafter provided, the INSURER agrees as
follows:
I. INSURING AGREEMENT
(A) Indemnity
(1) The INSURER shall indemnify the DIRECTORS and OFFICERS
for any and all sums which they shall become legally
obligated to pay as ULTIMATE NET LOSS for which the
COMPANY has not provided reimbursement, by reason of
any WRONGFUL ACT which takes place during the COVERAGE
PERIOD and is actually or allegedly caused, committed
or attempted by the DIRECTORS or OFFICERS while acting
in their respective capacities as DIRECTORS or
OFFICERS, provided such ULTIMATE NET LOSS arises from a
CLAIM first made against the DIRECTORS or OFFICERS
during the POLICY PERIOD or during the DISCOVERY
PERIOD, if purchased.
(2) The INSURER shall indemnify the COMPANY for any and all
sums required to reimburse it for ULTIMATE NET LOSS it
has occurred, as required or permitted by applicable
common or statutory law or under provisions of the
COMPANY'S Charter or Bylaws effected pursuant to such
law, to indemnify DIRECTORS or OFFICERS for ULTIMATE
NET LOSS which they are legally obligated to pay by
reason of any WRONGFUL ACT which takes place during the
COVERAGE PERIOD and is actually or allegedly caused,
committed or attempted by such DIRECTORS or OFFICERS
while acting in their respective capacities as
DIRECTORS or OFFICERS, provided the ULTIMATE NET LOSS
arises from a CLAIM first made against the DIRECTORS or
OFFICERS during the POLICY PERIOD or during the
DISCOVERY PERIOD, if purchased.
(B) Limits of Liability
(1) The INSURER shall only be liable hereunder for the
amount of ULTIMATE NET LOSS in excess of the UNDERLYING
LIMITS as stated in Item 6 of the Declarations as a
result of each WRONGFUL ACT covered under Insuring
Agreement I(A)(I) or I(A)(2) or both, and then only up
to the Limit of Liability stated in Item 5A of the
Declarations and further subject to the aggregate Limit
of Liability stated in Item 5B of the Declarations as
the maximum amount payable hereunder in the aggregate
for all CLAIMS first made against the DIRECTORS or
OFFICERS during both:
<PAGE>
(a) the POLICY PERIOD and
(b) the DISCOVERY PERIOD, if purchased.
Notwithstanding the foregoing, in the event that the
INSURER cancels or refuses to renew this POLICY, and a
DISCOVERY PERIOD extension is purchased by the COMPANY,
then the aggregate Limit of Liability stated in Item 5B
of the Declarations shall be reinstated but only with
respect to CLAIMS first made against the DIRECTORS or
OFFICERS during such DISCOVERY PERIOD.
(2) Multiple CLAIMS arising out of the same WRONGFUL ACT,
even if made against different DIRECTORS or OFFICERS,
shall be deemed to be a single CLAIM arising from a
single WRONGFUL ACT and to have been reported during
the POLICY PERIOD or, if purchased, during the
DISCOVERY PERIOD in which the first of such multiple
CLAIMS is made against any of the DIRECTORS or
OFFICERS. The Limits of Liability and UNDERLYING
LIMITS, stated in Items 5 and 6 of the Declarations
respectively, shall apply only once regardless of the
number of CLAIMS arising out of the same WRONGFUL ACT.
All interrelated acts shall be deemed to be a single
WRONGFUL ACT.
(3) The inclusion herein of more than one DIRECTOR or
OFFICER, or the application of both Insuring Agreements
I(A)(1) and I(A)(2), shall not operate to increase the
INSURER'S Limits of Liability as stated in Item 5 of
the Declarations.
(4) With respect to ULTIMATE NET LOSS arising out of any
WRONGFUL ACT in connection with service for a NOT-FOR-
PROFIT ORGANIZATION as provided in Section II(E)(2),
if:
(a) such WRONGFUL ACT results in liability being
imposed upon one or more DIRECTORS and OFFICERS
under this POLICY and also upon directors and
officers and general partners under any other
directors and officers or general partner
liability insurance policies issued by the
INSURER to any organization; and
(b) the total of the ULTIMATE NET LOSS under this
POLICY and the ultimate net loss under such other
policies issued by the INSURER equals or exceeds
$35,000,000;
the maximum amount payable by the INSURER under this
POLICY in the aggregate for all ULTIMATE NET LOSS
resulting from such WRONGFUL ACT shall be the lesser of
the applicable Limit of Liability provided by this
POLICY or the product of:
(i) the applicable Limit of Liability provided
by this POLICY divided by the total limits
of liability per wrongful act applicable to
such wrongful act under all policies issued
by the INSURER; and
(ii) $35,000,000.
If the amount paid under this POLICY with respect to
such WRONGFUL ACT exceeds the COMPANY'S proportionate
share of the $35,000,000 as determined above, the
COMPANY shall refund such excess to the INSURER
promptly.
(C) UNDERLYING LIMITS
(1) If this POLICY is written as Primary Insurance with
respect to Insuring Agreement I(A)(2), the UNDERLYING
LIMIT for the COMPANY for each WRONGFUL ACT shall be as
stated in Item 6A(1) of the Declarations, unless it is
based upon, arises out of or is attributable to NUCLEAR
OPERATIONS, in which event it shall be as stated in
Item 6A(2) of the Declarations;
(2) If this POLICY is written as Excess Insurance:
(a) with respect to Insuring Agreements I(A)(1) and
I(A)(2), the UNDERLYING LIMIT for each WRONGFUL
ACT shall be as stated in Item 6B(1)(a) of the
Declarations and the maximum UNDERLYING LIMIT for
all WRONGFUL ACTS shall be as stated in Item
6B(1)(b) of the Declarations;
(b) with respect to ULTIMATE NET LOSS covered
hereunder:
(i) in the event of reduction of the underlying
aggregate limit as stated in Item 6B(1)(b),
the UNDERLYING LIMIT shall be such reduced
underlying aggregate limit; or
(ii) in the event of exhaustion of the
underlying aggregate limit as stated in
Item 6B(1)(b), the UNDERLYING LIMIT shall
be as stated in Item 6B(3) of the
Declarations;
(c) with respect to any WRONGFUL ACT covered
hereunder but not covered under such Underlying
Insurance, the UNDERLYING LIMIT shall be as
stated in Item 6B(2) of the Declarations; and
(d) nothing herein shall make this POLICY subject to
the terms and conditions of any Underlying
Insurance.
(3) Only payment of indemnity or defense expenses which,
except for the amount thereof, would have been
indemnifiable under this POLICY, may reduce or exhaust
an UNDERLYING LIMIT.
(4) In the event that both Insuring Agreement I(A)(1) and
I(A)(2) are applicable to INDEMNITY and DEFENSE COST
resulting from a WRONGFUL ACT then:
(a) if this POLICY is written as Primary Insurance,
the UNDERLYING LIMIT applicable to such WRONGFUL
ACT shall be the UNDERLYING LIMIT stated in Item
6A of the Declarations; and
(b) if this POLICY is written as Excess Insurance and
the UNDERLYING LIMIT has been exhausted, the
UNDERLYING LIMIT applicable to such WRONGFUL ACT
shall be the UNDERLYING LIMIT stated in Item
6B(3);
and there shall be no UNDERLYING LIMIT applicable with
respect to coverage provided under Insuring Agreement
I(A)(1).
(5) The UNDERLYING LIMITS stated in Item 6 of the
Declarations applicable to Insuring Agreement I(A)(2)
shall apply to all INDEMNITY and/or DEFENSE COST for
which indemnification of the DIRECTORS and/or OFFICERS
by the COMPANY is legally permissible, whether or not
such indemnification is granted by the COMPANY.
II. DEFINITIONS
A. CLAIM: The term "CLAIM" shall mean:
(1) any demand, suit or proceeding against any DIRECTORS
and/or OFFICERS during the POLICY PERIOD or during the
DISCOVERY PERIOD, if purchased, which seeks actual
monetary damages or other relief and which may result
in any DIRECTORS and/or OFFICERS becoming legally
obligated to pay ULTIMATE NET LOSS by reason of any
WRONGFUL ACT actually or allegedly caused, committed or
attempted during the COVERAGE PERIOD by the DIRECTORS
and/or OFFICERS while acting in their capacity as such;
or
(2) written notice to the INSURER during the POLICY PERIOD
or during the DISCOVERY PERIOD, if purchased, by the
DIRECTORS, OFFICERS and/or the COMPANY, describing with
the specificity set forth in Condition (C) hereof,
circumstances of which they are aware involving an
identifiable WRONGFUL ACT actually or allegedly caused,
committed or attempted during the COVERAGE PERIOD by
the DIRECTORS and/or OFFICERS while acting in their
capacity as such, which circumstances are likely to
give rise to a demand, suit or proceeding being made
against such DIRECTORS and/or OFFICERS.
A CLAIM shall be deemed to be first made against a
DIRECTOR or OFFICER at the earlier of the time at which
a demand, suit or proceeding is first made against the
DIRECTOR or OFFICER, as set forth in section (1) of
this Definition or the time at which written notice is
given to the INSURER, as set forth in section (2) of
this Definition.
Multiple demands or suits arising out of the same
WRONGFUL ACT or interrelated acts shall be deemed to be
a single "CLAIM".
(B) COMPANY: The term "COMPANY" shall mean the organization(s)
named in Item 1 of the Declarations and, subject to Condition
(A) hereof, any SUBSIDIARIES of such organization(s).
(C) COVERAGE PERIOD: The term "COVERAGE PERIOD" shall mean the
period of time from the RETROACTIVE DATE to the termination
of the POLICY PERIOD.
(D) DEFENSE COST: The terms "DEFENSE COST" shall mean all
expenses incurred by or on behalf of the DIRECTORS, OFFICERS
or the COMPANY, where reimbursable under I(A)(2), in the
investigation, negotiation, settlement and defense of any
CLAIM except all salaries, wages and benefit expenses of
DIRECTORS, OFFICERS or the COMPANY.
(E) DIRECTOR and OFFICER: The terms "DIRECTOR" and "OFFICER" as
used herein, either in the singular or plural, shall mean:
<PAGE>
(1) any person who was, is now, or shall be a director,
officer or trustee of the COMPANY and any other
employee of the COMPANY who may be acting in the
capacity of a director, officer or trustee of the
COMPANY with the express authorization of a director,
officer or trustee of the COMPANY;
(2) any director, officer or trustee of the COMPANY who is
serving or has served at the specific request of the
COMPANY as a director, officer or trustee of any
outside NOT-FOR-PROFIT ORGANIZATION; or
(3) the estates, heirs, legal representatives or assigns of
deceased persons who were directors, officers or
trustee of the COMPANY at the time the WRONGFUL ACTS
upon which such CLAIMS were based were committed, and
the legal representatives or assigns of directors,
officers or trustees of the COMPANY in the event of
their incompetency, insolvency or bankruptcy;
provided, however, that the terms "DIRECTOR" and "OFFICER"
shall not include a trustee appointed pursuant to Title 11,
United States Code, or pursuant to the Securities Investor
Protection Act, a receiver appointed for the benefit of
creditors by Federal or State courts, an assignee for the
benefit of creditors or similar fiduciary appointed under
Federal or State laws for the protection of creditors or the
relief of debtors.
In the event that a CLAIM which is within the coverage
afforded under this POLICY is made against any DIRECTOR or
OFFICER and such CLAIM includes a claim against the lawful
spouse of such DIRECTOR or OFFICER solely by reason of (a)
such spousal status or (b) such spouse's ownership interest
in property or assets which are sought as recovery for
WRONGFUL ACTS of a DIRECTOR or OFFICER, such spouse shall be
deemed to be a DIRECTOR or OFFICER hereunder, but solely with
respect to such claim. In no event, however, shall the
lawful spouse of a DIRECTOR or OFFICER be deemed to be a
DIRECTOR or OFFICER as regards any CLAIM in respect of which
there is a breach of duty, neglect, error, misstatement,
misleading statement or omission actually or allegedly
caused, committed or attempted by or claimed against such
spouse, acting individually or in his or her capacity as the
spouse of a DIRECTOR or OFFICER.
(F) DISCOVERY PERIOD: The term "DISCOVERY PERIOD" shall mean the
period of time set forth in Condition (L).
(G) INDEMNITY: The term "INDEMNITY" shall mean all sums which
the DIRECTORS, OFFICERS or COMPANY, where reimbursable under
I(A)(2), shall become legally obligated to pay as damages
either by adjudication or compromise with the consent of the
INSURER, after making proper deduction for the UNDERLYING
LIMITS and all recoveries, salvages and other valid and
collectible insurance.
(H) INSURER: The term "INSURER" shall mean Associated Electric &
Gas Insurance Services Limited, Hamilton, Bermuda, a non-
assessable mutual insurance company.
(I) NOT-FOR-PROFIT ORGANIZATION: The term "NOT-FOR-PROFIT
ORGANIZATION" shall mean:
(1) an organization, no part of the income or assets of
which is distributable to its owners, stockholders or
members and which is formed and operated for a purpose
other than the pecuniary profit or financial gain of
its owners, stockholders or members; or
(2) a political action committee which is defined for these
purposes as a separate segregated fund to be utilized
for political purposes as described in the United
States Federal Election Campaign Act (2 U.S.C.
441b(2)(C)).
(J) NUCLEAR OPERATIONS: The term "NUCLEAR OPERATIONS" shall mean
the design, engineering, financing, construction, operation,
maintenance, use, ownership, conversion or decommissioning of
any "nuclear facility" as defined in the Broad Form Nuclear
Energy Liability Exclusion, which is endorsed hereto.
(K) POLICY: The term "POLICY" shall mean this insurance policy,
including the Application, the Declarations and any
endorsements issued by the INSURER to the organization first
named in Item 1 of the Declarations for the POLICY PERIOD
listed in Item 2 of the Declarations.
(L) POLICY PERIOD: The term "POLICY PERIOD" shall mean the
period of time stated in Item 2 of the Declarations.
(M) RETROACTIVE DATE: The term "RETROACTIVE DATE" shall mean the
date stated in Item 3 of the Declarations; provided, however,
with respect to any WRONGFUL ACT actually or allegedly
caused, committed or attempted by the DIRECTORS or OFFICERS
of any SUBSIDIARY formed or acquired by the COMPANY or any of
its SUBSIDIARIES after inception of the POLICY PERIOD of this
POLICY, or after inception of any other policy issued by the
INSURER to the COMPANY for a prior policy period, the term
"RETROACTIVE DATE" shall mean the date of such formation or
acquisition.
(N) SUBSIDIARIES: The term "SUBSIDIARY" shall mean any entity
more than fifty (50) percent of whose outstanding securities
representing the present right to vote for election of
directors are owned by the COMPANY and/or one or more of its
"SUBSIDIARIES".
(O) ULTIMATE NET LOSS: The term "ULTIMATE NET LOSS" shall mean
the total INDEMNITY and DEFENSE COST with respect to each
WRONGFUL ACT to which this POLICY applies.
(P) UNDERLYING LIMITS: The term "UNDERLYING LIMITS" shall mean
the amounts stated in Item 6 of the Declarations.
(Q) WRONGFUL ACT: The term "WRONGFUL ACT" shall mean any actual
or alleged breach of duty, neglect, error, misstatement,
misleading statement or omission actually or allegedly
caused, committed or attempted by any DIRECTOR or OFFICER
while acting individually or collectively in their capacity
as such, or claimed against them solely by reason of their
being DIRECTORS or OFFICERS.
All such interrelated breaches of duty, neglects, errors,
misstatements, misleading statements or omissions actually or
allegedly caused, committed or attempted by or claimed
against one or more of the DIRECTORS or OFFICERS shall be
deemed to be a single "WRONGFUL ACT".
III. EXCLUSIONS
The INSURER shall not be liable to make any payment for ULTIMATE
NET LOSS arising from any CLAIMS(S) made against any DIRECTOR or
OFFICER:
(A) (1) for any fines or penalties imposed in a criminal suit,
action or proceeding;
(2) for any fines or penalties imposed in conjunction with
political contributions, payments, commissions or
gratuities; or
(3) for any other fines or penalties imposed by final
adjudication of a court of competent jurisdiction or
any agency or commission possessing quasi-judicial
authority; or
(4) where, at inception of the POLICY PERIOD, such DIRECTOR
or OFFICER had knowledge of a fact or circumstance
which was likely to give rise to such CLAIMS(S) and
which such DIRECTOR or OFFICER failed to disclose or
misrepresented in the Application or in the process of
preparation of the Application, other than in a Renewal
Application; provided, however, that this exclusion
shall not apply to such CLAIM(S) made against any
DIRECTOR or OFFICER other than such DIRECTOR or OFFICER
who failed to disclose or misrepresented such fact or
circumstance; provided further that this exclusion
shall not limit the INSURER'S right to exercise any
remedy available to it with respect to such failure to
disclose or misrepresentation other than the remedy
provided for in this Exclusion.
(B) with respect to Insuring Agreement I(A)(1) only:
(1) based upon, arising out of or attributable to such
DIRECTOR or OFFICER having gained any personal profit,
advantage or remuneration to which such DIRECTOR or
OFFICER was not legally entitled if:
(a) a judgment or other final adjudication adverse to
such DIRECTOR or OFFICER establishes that he in
fact gained such personal profit, advantage or
remuneration; or
(b) such DIRECTOR or OFFICER has entered into a
settlement agreement to repay such personal
profit, advantage or remuneration to the COMPANY;
(2) for an accounting of profits made from the purchase or
sale by such DIRECTOR or OFFICER of securities of the
COMPANY within the meaning of Section 16(b) of the
Securities Exchange Act of 1934 and amendments thereto
or similar provisions of any other federal or state
statutory or common law;
(3) brought about or contributed to by the dishonest,
fraudulent, criminal or malicious act or omission of
such DIRECTOR or OFFICER if a final adjudication
establishes that acts of active and deliberate
dishonesty were committed or attempted with actual
dishonest purpose and intent and were material to the
cause of action so adjudicated; or
(4) where such payment would be contrary to applicable law.
(C) for bodily injury, mental anguish, mental illness, emotional
upset, sickness or disease sustained by any person, death of
any person or for physical injury to or destruction of
tangible property or the loss of use thereof.
(D) for injury based upon, arising out of or attributable to:
(1) false arrest, wrongful detention or wrongful
imprisonment or malicious prosecution;
(2) wrongful entry, wrongful eviction or other invasion of
the right of private occupancy;
(3) discrimination or sexual harassment;
(4) publication or utterance:
(a) of a libel or slander or other defamatory or
disparaging material; and
(b) in violation of an individual's right of privacy;
or
(5) with respect to the COMPANY'S advertising activities:
piracy, plagiarism, unfair competition, idea
misappropriation under implied contract, or
infringement of copyright, title, slogan, registered
trademark, service mark, or trade name.
(E) based upon, arising out of or attributable to the violation
of any responsibility, obligation or duty imposed upon
fiduciaries by the Employee Retirement Income Security Act of
1974 or amendments thereto or by similar common or statutory
law of the United States of America or any state or other
jurisdiction therein.
(F) based upon, arising out of or attributable to:
(1) the rendering of advice with respect to;
(2) the interpreting of; or
(3) the handling of records in connection with the
enrollment, termination or cancellation of employees
under the COMPANY'S group life insurance, group
accident or health insurance, pension plans, employee
stock subscription plans, workers' compensation,
unemployment insurance, social security, disability
benefits and any other employee benefit programs.
(G) based upon, arising out of or attributable to any failure or
omission on the part of the DIRECTORS, OFFICERS and/or the
COMPANY to effect and maintain insurance(s) of the type and
amount which is customary with companies in the same or
similar business.
(H) (1) arising from any circumstances, written notice of which
has been given under any policy or any DISCOVERY PERIOD
thereof, which policy expired prior to or upon the
inception of this POLICY; or
(2) which is one of the number of CLAIMS arising out of the
same WRONGFUL ACT, if any CLAIM of such multiple CLAIMS
was made against the DIRECTORS or OFFICERS during any
policy or any DISCOVERY PERIOD thereof, which policy
expired prior to or upon the inception of this POLICY.
(I) if any other policy or policies also afford(s) coverage in
whole or in part for such CLAIM(S); except, this exclusion
shall not apply:
(1) to the amount of ULTIMATE NET LOSS with respect to such
CLAIM(S) which is in excess of the limit of liability
of such other policy or policies and any applicable
deductible or retention thereunder; or
(2) with respect to coverage afforded such CLAIM(S) by any
other policy or policies purchased or issued
specifically as insurance underlying or in excess of
the coverage afforded under this POLICY;
provided always that nothing herein shall be construed to
cause this POLICY to contribute with any other policy or
policies or to make this POLICY subject to any of the terms
of any other policy or policies.
(J) for any WRONGFUL ACT which took place in whole or in part
prior to the RETROACTIVE DATE.
(K) by, on behalf of, in the right of, at the request of, or for
the benefit of, any security holder of the COMPANY, and any
DIRECTOR or OFFICER, or the COMPANY, unless such CLAIM is:
(1) made derivatively by any shareholder of the COMPANY for
the benefit of the COMPANY and such shareholder is:
(a) acting totally independent of, and totally
without the suggestion, solicitation, direction,
assistance, participation or intervention of, any
DIRECTOR or OFFICER, the COMPANY, or any
affiliate of the COMPANY; and
(b) not an affiliate of the COMPANY nor any entity
within the definition of the term "COMPANY"; or
(2) made non-derivatively by a security holder who is not:
(a) a DIRECTOR or OFFICER; or
(b) an affiliate of the COMPANY or any entity within
the definition of the term "COMPANY"; or
(3) made non-derivatively by an OFFICER acting totally
independent of, and totally without the suggestion,
solicitation, direction, assistance, participation or
intervention of, any other DIRECTOR or OFFICER, the
COMPANY, or any affiliate of the COMPANY and (subject
to all the other exclusions and POLICY provisions)
arising from the wrongful termination of that OFFICER.
(L) where such CLAIM(S) arise out of such DIRECTOR'S or
OFFICER'S activities as a director, officer or trustee of any
entity other than:
(1) the COMPANY; or
(2) any outside NOT-FOR-PROFIT ORGANIZATION as provided in
Section II(E)(2).
IV. CONDITIONS
(A) Acquisition, Merger and Dissolution
(1) (a) If, after inception of the POLICY PERIOD, the
COMPANY or any of its SUBSIDIARIES forms or
acquires any SUBSIDIARY whose operations are
related to, arising from or associated with the
production, transmission, delivery or furnishing
of electricity, gas, water, or sewer service to
the public or the conveyance of telephone
messages for the public and whose total assets
are not greater in value than the lesser of
$50,000,000 or five (5) percent of the COMPANY'S
total assets, coverage shall be provided for the
DIRECTORS and OFFICERS of such newly formed or
acquired SUBSIDIARY from the date of its
formation or acquisition respectively, but only
with respect to WRONGFUL ACTS actually or
allegedly caused, committed or attempted during
that part of the POLICY PERIOD which is
subsequent to the formation or acquisition.
(b) In respect of any SUBSIDIARY formed or acquired
after the inception of the POLICY PERIOD and not
subject to paragraph (a) above, the COMPANY shall
report such formation or acquisition within
ninety (90) days thereafter and, if so reported,
upon payment of an additional premium and upon
terms as may be required by the INSURER, coverage
shall be provided for the DIRECTORS and OFFICERS
of such newly formed or acquired SUBSIDIARY from
the date of its formation or acquisition
respectively, but only with respect to WRONGFUL
ACTS actually or allegedly caused, committed or
attempted during that part of the POLICY PERIOD
which is subsequent to the formation of
acquisition.
(2) If, prior to or after inception of the POLICY PERIOD,
the COMPANY or any of its SUBSIDIARIES is or has been
acquired by or merged with any other entity, or is or
has been dissolved, coverage under this POLICY shall
continue for the POLICY PERIOD but only for DIRECTORS
and OFFICERS of the COMPANY or its SUBSIDIARIES who
were serving as such prior to such acquisition, merger
or dissolution and only with respect to WRONGFUL ACTS
actually or allegedly caused, committed or attempted
during that part of the COVERAGE PERIOD which is prior
to such acquisition, merger or dissolution.
(B) Non-Duplication of Limits
To avoid the duplication of the INSURER'S Limits of Liability
stated in Item 5 of the Declarations, the DIRECTORS, OFFICERS
and COMPANY agree that:
(1) in the event the INSURER provides INDEMNITY or DEFENSE
COSTS for any WRONGFUL ACT under this POLICY, neither
the DIRECTORS, OFFICERS nor the COMPANY shall have any
right to additional INDEMNITY or DEFENSE COSTS for such
WRONGFUL ACT under any other policy issued by the
INSURER to the DIRECTORS, OFFICERS or COMPANY that
otherwise would apply to such WRONGFUL ACT; and
(2) in the event the INSURER provides INDEMNITY or DEFENSE
COSTS for any WRONGFUL ACT under any other policy
issued by the INSURER to the DIRECTORS, OFFICERS, or
COMPANY, neither the DIRECTORS, OFFICERS nor the
COMPANY shall have any right to additional INDEMNITY or
DEFENSE COSTS for such WRONGFUL ACT under this POLICY.
(C) Notice of Claim
As a condition precedent to any rights under this POLICY, the
DIRECTORS, OFFICERS and/or the COMPANY, shall give written
notice to the INSURER as soon as practicable of any CLAIM,
which notice shall include the nature of the WRONGFUL ACT,
the alleged injury, the names of the claimants, and the
manner in which the DIRECTOR, OFFICER or COMPANY first became
aware of the CLAIM, and shall cooperate with the INSURER and
give such additional information as the INSURER may
reasonably require.
The Application or any information contained therein for this
POLICY shall not constitute a notice of CLAIM.
(D) Cooperation and Settlements
In the event of any WRONGFUL ACT which may involve this
POLICY, the DIRECTORS, OFFICERS or COMPANY without prejudice
as to liability, may proceed immediately with settlements
which in their aggregate do not exceed the UNDERLYING LIMITS.
The COMPANY shall notify the INSURER of any such settlements
made.
The INSURER shall not be called upon to assume charge of the
investigation, settlement or defense of any demand, suit or
proceeding, but the INSURER shall have the right and shall be
given the opportunity to associate with the DIRECTORS,
OFFICERS and COMPANY or any underlying insurer, or both, in
the investigation, settlement, defense and control of any
demand, suit or proceeding relative to any WRONGFUL ACT where
the demand, suit or proceeding involves or may involve the
INSURER. At all times, the DIRECTORS, OFFICERS and COMPANY
and the INSURER shall cooperate in the investigation,
settlement and defense of such demand, suit or proceeding.
The DIRECTORS, OFFICERS and COMPANY and their underlying
insurer(s) shall, at all times, use diligence and prudence in
the investigation, settlement and defense of demands, suits
or other proceedings.
(E) Appeals
In the event that the DIRECTORS, OFFICERS, COMPANY or any
underlying insurer elects not to appeal a judgment in excess
of the UNDERLYING LIMITS, the INSURER may elect to conduct
such appeal at its own cost and expense and shall be liable
for any taxable court costs and interest incidental thereto,
but in no event shall the total liability of the INSURER,
exclusive of the cost and expense of appeal exceed its Limits
of Liability stated in Item 5 of the Declarations.
(F) Subrogation
In the event of any payment under this POLICY, the INSURER
shall be subrogated to the extent of such payment to all
rights of recovery thereof, and the DIRECTORS, OFFICERS and
COMPANY shall execute all papers required and shall do
everything that may be necessary to enable the INSURER to
bring suit in the name of the DIRECTORS, OFFICERS or COMPANY.
(G) Bankruptcy or Insolvency
Bankruptcy or insolvency of the COMPANY shall not relieve the
INSURER of any of its obligations hereunder.
In the event of bankruptcy or insolvency of the COMPANY,
subject to all the terms of this POLICY, the INSURER shall
indemnify the DIRECTORS and OFFICERS under Insuring Agreement
I(A)(1) (in excess of the UNDERLYING LIMITS, if any,
applicable to Insuring Agreement I(A)(1) for ULTIMATE NET
LOSS they shall become legally obligated to pay which would
have been indemnified by the COMPANY and reimbursable by the
INSURER under Insuring Agreement I(A)(2) but for such
bankruptcy or insolvency; provided, however, that the INSURER
shall be subrogated, to the extent of any payment, to the
rights of the DIRECTORS and OFFICERS to receive
indemnification from the COMPANY but only up to the amount of
the UNDERLYING LIMITS applicable to Insuring Agreement
I(A)(2) less the amount of the UNDERLYING LIMITS, if any,
applicable to Insuring Agreement I(A)(1).
(H) Uncollectibility of Underlying Insurance
Notwithstanding any of the terms of this POLICY which might
be construed otherwise, if this POLICY is written as excess
over any Underlying Insurance, it shall drop down only in the
event of reduction or exhaustion of any aggregate limits
contained in such Underlying Insurance and shall not drop
down for any other reason including, but not limited, to,
uncollectibility (in whole or in part) because of the
financial impairment or insolvency of an underlying insurer.
The risk of uncollectibility of such Underlying Insurance (in
whole or in part) whether because of financial impairment or
insolvency of an underlying insurer or for any other reason,
is expressly retained by the DIRECTORS, OFFICERS and the
COMPANY and is not in any way or under any circumstances
insured or assumed by the INSURER.
(I) Maintenance of UNDERLYING LIMITS
If this POLICY is written as Excess Insurance, it is a
condition of this POLICY that any UNDERLYING LIMITS stated in
Item 6 of the Declarations shall be maintained in full force
and effect, except for reduction or exhaustion of any
underlying aggregate limits of liability, during the currency
of this POLICY. Failure of the COMPANY to comply with the
foregoing shall not invalidate this POLICY but in the event
of such failure, without the agreement of the INSURER, the
INSURER shall only be liable to the same extent as it would
have been had the COMPANY complied with this Condition.
(J) Changes and Assignment
The terms of this POLICY shall not be waived or changed, nor
shall an assignment of interest be binding, except by an
endorsement to this POLICY issued by the INSURER.
(K) Outside NOT-FOR-PROFIT ORGANIZATION
If any DIRECTOR or OFFICER is serving or has served at the
specific request of the COMPANY as a DIRECTOR or OFFICER of
an outside NOT-FOR-PROFIT ORGANIZATION, the coverage afforded
by this POLICY:
(1) shall be specifically excess of any other indemnity or
insurance available to such DIRECTOR or OFFICER by
reason of such service; and
(2) shall not be construed to extend to the outside NOT-
FOR-PROFIT ORGANIZATION in which the DIRECTOR or
OFFICER is serving or has served, nor to any other
director, officer or employee of such outside NOT-FOR-
PROFIT ORGANIZATION.
(L) DISCOVERY PERIOD
(1) In the event of cancellation or nonrenewal of this
POLICY by the INSURER, the COMPANY shall have the
right, upon execution of a warranty that all known
CLAIMS and facts or circumstances likely to give rise
to a CLAIM have been reported to the INSURER and
payment of an additional premium to be determined by
the INSURER which shall not exceed two hundred (200)
percent of the Policy Premium stated in Item 4 of the
Declarations, to an extension of the coverage afforded
by this POLICY with respect to any CLAIM first made
against any DIRECTOR or OFFICER during the period of
twelve (12) months after the effective date of such
cancellation or nonrenewal, but only with respect to
any WRONGFUL ACT committed during the COVERAGE PERIOD.
This right of extension shall terminate unless written
notice of such election is received by the INSURER
within thirty (30) days after the effective date of
cancellation or nonrenewal.
The offer by the INSURER of renewal on terms,
conditions or premiums different from those in effect
during the POLICY PERIOD shall not constitute
cancellation or refusal to renew this POLICY.
(2) In the event of cancellation or nonrenewal of this
POLICY by the COMPANY, the COMPANY shall have the right
upon payment of an additional premium, which shall not
exceed one hundred (100) percent of the Policy Premium
stated in Item 4 of the Declarations, to an extension
of coverage afforded by this POLICY with respect to any
CLAIM first made against any DIRECTOR or OFFICER during
the period of twelve (12) months after the effective
date of such cancellation or nonrenewal, but only with
respect to any WRONGFUL ACT during the COVERAGE PERIOD.
This right of extension shall terminate unless written
notice of such election is received by the INSURER
within thirty (30) days after the effective date of
cancellation or nonrenewal.
(3) In the event of renewal on terms and conditions
different from those in effect during the POLICY
PERIOD, the COMPANY shall have the right, upon
execution of a warranty that all known CLAIMS and facts
or circumstances likely to give rise to a CLAIM have
been reported to the INSURER and payment of an
additional premium to be determined by the INSURER
which shall not exceed two hundred (200) percent of the
Policy Premium stated in Item 4 of the Declarations, to
an extension of the original terms and conditions with
respect to any CLAIM first made against any DIRECTOR or
OFFICER during the period of twelve (12) months after
the effective date of renewal, but only with respect to
any WRONGFUL ACT committed during the COVERAGE PERIOD
and not covered by the renewal terms and conditions.
This right of extension shall terminate unless written
notice of such election is received by the INSURER
within thirty (30) days after the effective date of
renewal.
(M) Cancellation
This POLICY may be cancelled:
(1) at any time by the COMPANY by mailing written notice to
the INSURER stating when thereafter cancellation shall
be effective; or
(2) at any time by the INSURER by mailing written notice to
the COMPANY stating when, not less than ninety (90)
days from the date such notice was mailed, cancellation
shall be effective, except in the event of cancellation
for nonpayment of premiums, such cancellation shall be
effective ten (10) days after the date notice thereof
is mailed.
The proof of mailing of notice to the address of the COMPANY
stated in Item 7 of the Declarations or the address of the
INSURER stated in Item 8 of the Declarations shall be
sufficient proof of notice and the insurance under this
POLICY shall end on the effective date and hour of
cancellation stated in the notice. Delivery of such notice
either by the COMPANY or by the INSURER shall be equivalent
to mailing.
With respect to all cancellations, the premium earned and
retained by the INSURER shall be the sum of (a) the Minimum
Premium stated in Item 4B of the Declarations plus (b) the
pro-rata proportion, for the period this POLICY has been in
force, of the difference between (i) the Policy Premium
stated in Item 4A of the Declarations and (ii) the Minimum
Premium stated in Item 4B of the Declarations.
The offer by the INSURER of renewal on terms, conditions or
premiums different from those in effect during the POLICY
PERIOD shall not constitute cancellation or refusal to renew
this POLICY.
(N) Currency
All amounts stated herein are expressed in United States
Dollars and all amounts payable hereunder are payable in
United States Dollars.
(O) Sole Agent
The COMPANY first named in Item 1 of the Declarations shall
be deemed the sole agent of each DIRECTOR and OFFICER for the
purpose of requesting any endorsement to this POLICY, making
premium payments and adjustments, receipting for payments of
INDEMNITY and receiving notifications, including notice of
cancellation from the INSURER.
(P) Acts, Omissions or Warranties
The acts, omissions or warranties of any DIRECTOR or OFFICER
shall not be imputed to any other DIRECTOR or OFFICER with
respect to the coverages applicable under this POLICY.
(Q) Arbitration and Service of Suit
Any controversy or dispute arising out of or relating to an
interpretation or breach of this POLICY, shall be settled by
binding arbitration in accordance with the Rules of the
American Arbitration Association and judgment upon the award
rendered by the arbitrator(s) may be entered in any court
having jurisdiction thereover. The arbitration process shall
be governed by and conducted in accordance with the laws of
the State of New York. The terms of this POLICY are to be
construed in an evenhanded fashion as between the DIRECTORS,
OFFICERS or COMPANY and the INSURER in accordance with the
laws of the jurisdiction in which the situation forming the
basis for this controversy arose. Where the language of this
POLICY is deemed to be ambiguous or otherwise unclear, the
issue shall be resolved in a manner most consistent with the
relevant terms of the POLICY without regard to authorship of
the language and without any presumption or arbitrary
interpretation or construction in favor of either the
DIRECTORS, OFFICERS or COMPANY or the INSURER. In reaching
any decision the arbitrators shall give due consideration for
the customs and usages of the insurance industry.
In the event of a judgment entered against the INSURER on an
arbitration award, the INSURER at the request of the
DIRECTORS, OFFICERS or COMPANY, shall submit to the
jurisdiction of any court of competent jurisdiction within
the United States of America, and shall comply with all
requirements necessary to give such court jurisdiction and
all matters relating to such judgment and its enforcement
shall be determined in accordance with the law and practice
of such court.
Service of process in such suit or any other suit against the
INSURER, may be made upon Messrs. LeBoeuf, Lamb, Greene &
MacRae, 125 West 55th Street, New York, New York 10019, and,
in any suit instituted against it under this POLICY, the
INSURER will abide by the final decision of such court or of
any appellate court in the event of any appeal.
Messrs. LeBoeuf, Lamb, Greene & MacRae are authorized and
directed to accept service of process on behalf of the
INSURER in any such suit and, upon the DIRECTORS, OFFICERS or
COMPANY'S request, to give a written undertaking to the
DIRECTORS, OFFICERS or COMPANY that they will enter a general
appearance on the INSURER'S behalf in the event such suit is
instituted.
(R) Severability
In the event that any provision of this POLICY shall be
declared or deemed to be invalid or unenforceable under any
applicable law, such invalidity or unenforceability shall not
affect the validity or enforceability of the remaining
portion of this POLICY.
(S) Non-assessability
The COMPANY (and, accordingly, any DIRECTOR or OFFICER for
whom the COMPANY acts as agent) shall only be liable under
this POLICY for the premium stated in Item 4 of the
Declarations. Neither the COMPANY nor any DIRECTOR or
OFFICER for whom the COMPANY acts as agent shall be subject
to any contingent liability or be required to pay any dues or
assessments in addition to the premium described above.
IN WITNESS WHEREOF, Associated Electric & Gas Insurance Services Limited
has caused this POLICY to be signed by its Chairman at Hamilton, Bermuda.
However, this POLICY shall not be binding upon the INSURER unless
countersigned on the Declaration Page by a duly authorized representative
of the INSURER.
/s/ Bernard J. Kennedy /s/ J.E. Bachman
Bernard J. Kennedy, Chairman J.E. Bachman, President
and Chief Executive Officer
<PAGE>
ASSOCIATED ELECTRIC & GAS INSURANCE SERVICES LIMITED
Endorsement No. 1 Effective Date of Endorsement June 1, 1994
Attached to and forming part of POLICY No. D0392B1A94
COMPANY IPALCO Enterprises, Inc.
It is understood and agreed that this POLICY is hereby amended as
indicated. All other terms and conditions of this POLICY remain
unchanged.
NUCLEAR ENERGY LIABILITY EXCLUSION (BROAD FORM)
It is agreed that:
I. This POLICY does not apply:
(A) Under any Liability Coverage, to bodily injury or property
damage:
(1) with respect to which the DIRECTORS, OFFICERS or
COMPANY under this POLICY is also an insured under a
nuclear energy liability policy issued by Nuclear
Energy Liability Insurance Association, Mutual Atomic
Energy Liability Underwriters, Nuclear Insurance
Association of Canada or any of their successors, or
would be an insured under any such policy but for its
termination upon exhaustion of its limit of liability;
or
(2) resulting from hazardous properties of nuclear material
and with respect to which (a) any person or
organization is required to maintain financial
protection pursuant to the Atomic Energy Act of 1954,
or any law amendatory thereof, or (b) the DIRECTORS,
OFFICERS or COMPANY is, or had this POLICY not been
issued would be, entitled to indemnity from the United
States of America, or any agency thereof, under any
agreement entered into by the United States of America,
or any agency thereof, with any person or organization.
(B) Under any Medical Payments Coverage, or under any
Supplementary Payments provision relating to immediate
medical or surgical relief, to expenses incurred with respect
to bodily injury resulting from the hazardous properties of
nuclear material and arising out of the operation of a
nuclear facility by any person or organization.
(C) Under any Liability Coverage, to bodily injury or property
damage resulting from the hazardous properties of nuclear
material if:
(1) the nuclear material (a) is at any nuclear facility
owned by, or operated by or on behalf of the COMPANY or
(b) has been discharged or dispersed therefrom;
(2) the nuclear material is contained in spent fuel or
waste at any time possessed, handled, used, processed,
sorted, transported or disposed of by or on behalf of
the COMPANY; or
(3) the bodily injury or property damage arises out of the
furnishing by the COMPANY of services, materials, parts
or equipment in connection with the planning,
NUCLEAR ENERGY LIABILITY EXCLUSION (BROAD FORM)
continued
construction, maintenance, operation or use of any
nuclear facility, but if such facility
is located within the United States of America, its
territories or possessions or Canada, this exclusion
(3) applies only to property damage to such nuclear
facility and any property thereat.
II. As used in this Endorsement:
hazardous properties include radioactive, toxic or explosive
properties;
nuclear material means source material, special nuclear material or
byproduct material;
source material, special nuclear material and byproduct material
have the meanings given them in the Atomic Energy Act of 1954 or in
any law amendatory thereof;
spent fuel means any fuel element or fuel component, solid or
liquid, which has been used or exposed to radiation in a nuclear
reactor;
waste means any waste material (1) containing byproduct material
other than the tailings or wastes produced by the extraction or
concentration of uranium or thorium from any ore processed
primarily for its source material content, and (2) resulting from
the operation by any person or organization of any nuclear facility
included under the first two paragraphs of the definition of
nuclear facility;
nuclear facility means:
(a) any nuclear reactor,
(b) any equipment or device designed or used for (i) separating
the isotopes of uranium or plutonium, (ii) processing or
utilizing spent fuel, or (iii) handling, processing or
packing waste,
(c) any equipment or device used for the processing, fabricating
or alloying of special nuclear material if at any time the
total amount of such material in the custody of the COMPANY
at the premises where such equipment or device is located
consists of or contains more than 25 grams of plutonium or
uranium 233 or any combination thereof; or more than 250
grams of uranium 235, or
(d) any structure, basin, excavation, premises or place prepared
or used for the storage or disposal of waste,
and includes the site on which any of the foregoing is located, all
operations conducted on such site and all premises used for such
operations;
nuclear reactor means any apparatus designed or used to sustain
nuclear fission in a self-supporting chain reaction or to contain a
critical mass of fissionable material;
property damage includes all forms of radioactive contamination of
property.
/s/ Karen Larson
Signature of Authorized Representative
<PAGE>
ASSOCIATED ELECTRIC & GAS INSURANCE SERVICES LIMITED
Endorsement No. 2 Effective Date of Endorsement June 1, 1994
Attached to and forming part of POLICY No. D0392B1A94
COMPANY IPALCO Enterprises, Inc.
It is understood and agreed that this POLICY is hereby amended as
indicated. All other terms and conditions of this POLICY remain
unchanged.
DELETION OF FAILURE TO MAINTAIN INSURANCE EXCLUSION
Section III, EXCLUSIONS (G) Failure to Maintain Insurance Exclusion, is
deleted in its entirety.
/s/ Karen Larson
Signature of Authorized Representative
<PAGE>
ASSOCIATED ELECTRIC & GAS INSURANCE SERVICES LIMITED
Endorsement No. 3 Effective Date of Endorsement June 1, 1994
Attached to and forming part of POLICY No. D0392B1A94
COMPANY IPALCO Enterprises, Inc.
It is understood and agreed that this POLICY is hereby amended as
indicated. All other terms and conditions of this POLICY remain
unchanged.
OUTSIDE POSITION COVERAGE - FOR-PROFIT ORGANIZATIONS
I. Definition (E) DIRECTOR and OFFICER is amended to include the
following:
(4) (a) any director, officer or trustee of the COMPANY who is
named in attachment OPC-FP1 and who is serving at the
specific written request of the COMPANY in the position
of a director, officer or trustee of the outside FOR-
PROFIT ORGANIZATION, which position and FOR-PROFIT
ORGANIZATION are named in attachment OPC-FP1, while
such director, officer or trustee is acting in such
capacity; and
(b) any present or former director, officer or trustee of
the COMPANY who has served at the specific written
request of the COMPANY in the position of a director,
officer or trustee of an outside FOR-PROFIT
ORGANIZATION in respect to WRONGFUL ACTS committed
while such director, officer or trustee was acting in
such capacity; provided, however, that such director,
officer or trustee, such outside FOR-PROFIT
ORGANIZATION and such position were named in an
endorsement (similar to this Endorsement) to the
Directors' and Officers' Policy of the INSURER in force
at the time at which such director, officer or trustee
was acting in such capacity.
II. The following Definition is added to the POLICY:
(R) FOR-PROFIT ORGANIZATION: The term "FOR-PROFIT ORGANIZATION"
shall mean an organization other than a NOT-FOR-PROFIT
ORGANIZATION.
III. Exclusion (L) is hereby deleted in its entirety and replaced with
the following:
(L) where such CLAIM(S) arises out of such DIRECTOR'S or
OFFICER'S activities as a director, officer or trustee of any
entity other than:
(1) the COMPANY; or
(2) any outside NOT-FOR-PROFIT ORGANIZATION as provided in
Section II(E)(2); or
(3) any outside FOR-PROFIT ORGANIZATION as provided in an
OUTSIDE POSITION COVERAGE - FOR-PROFIT ORGANIZATIONS
Endorsement.
IV. Notwithstanding any other provision of the POLICY to the contrary,
the insurance provided by this Endorsement is specifically in
excess of and shall not contribute with any indemnification or
insurance provided by an outside FOR-PROFIT ORGANIZATION, to any
DIRECTOR or OFFICER of the COMPANY.
OUTSIDE POSITION COVERAGE - FOR-PROFIT ORGANIZATIONS
continued
Under no circumstances shall the insurance provided by this
Endorsement apply to:
(1) any director, officer or trustee of the outside FOR-PROFIT
ORGANIZATION who is or was not a DIRECTOR or OFFICER of the
COMPANY and who is not named in attachment OPC-FP1; or
(2) the outside FOR-PROFIT ORGANIZATION.
V. The Limits of Liability stated in Item 5 of the Declarations and
the UNDERLYING LIMITS stated in Item 6 of the Declarations shall
apply to the insurance provided by this Endorsement unless a
specific Limit of Liability or UNDERLYING LIMIT is stated below:
Item 5: Limits of Liability:
A. $ Each WRONGFUL ACT
B. $ Aggregate Limit of Liability of the POLICY
PERIOD
Item 6. UNDERLYING LIMITS:
This Policy is written as insurance
A. If this POLICY is written as Primary Insurance with
respect to Insuring Agreement I(A)(2) only:
(1) $ Each WRONGFUL ACT not arising from NUCLEAR
OPERATIONS
(2) $ Each WRONGFUL ACT arising from NUCLEAR
OPERATIONS
B. If this POLICY in written as Excess Insurance:
(1) (a) $ Each WRONGFUL ACT
(b) $ In the Aggregate for all WRONGFUL
ACTS
(2) $ Each WRONGFUL ACT not covered under
Underlying Insurance
(3) In the Event of Exhaustion of the UNDERLYING
LIMIT stated in Item 6(B)(1)(b) above with
respect to Insuring Agreement I(A)(2) only:
(a) $ Each WRONGFUL ACT not arising from
NUCLEAR OPERATIONS
(b) $ Each WRONGFUL ACT arising from
NUCLEAR OPERATIONS
The Limit of Liability stated in this section is part of and not in
addition to the Limits of Liability stated in Item 5 of the
Declarations.
/s/ Karen Larson
Signature of Authorized Representative
<PAGE>
ASSOCIATED ELECTRIC & GAS INSURANCE SERVICES LIMITED
Attachment OPC-FP1 to Endorsement No. 3 Effective Date of Endorsement
June 1, 1994
Attached to and forming part of POLICY No. D0392B1A94
COMPANY IPALCO Enterprises, Inc.
Name, FOR-PROFIT ORGANIZATION and position of each director, officer or
trustee of the COMPANY covered under Endorsement No. 3
NAME FOR-PROFIT ORGANIZATION POSITION
J.R. Hodowal Tecumseh Coal Corporation Director
Dan FitzGibbon Evergreen Media Corporation Director
R.L. Humke Techumseh Coal Corporation Director
EXHIBIT 10.34
Indianapolis Power & Light Company
UNFUNDED DEFERRED
COMPENSATION PLAN
FOR
DIRECTORS
Adopted March 27, 1979
As Amended and Restated October 27, 1981
and as Further Amended February 22, 1983
and November 30, 1993)
<PAGE>
UNFUNDED DEFERRED COMPENSATION PLAN
FOR DIRECTORS
RESOLVED, that effective April 1, 1979, there be and hereby is,
established and adopted, an unfunded deferred compensation plan for
Directors of the Company (the "Plan") with respect to their retainer,
attendance and committee fees earned on or after May 1, 1979, the terms
and conditions of which are as follows:
(1) The Plan shall be unfunded so that the Company is under merely a
contractual duty to make payments when due under the Plan. The
promise to pay shall not be represented by notes and shall not be
secured in any way.
(2) On or before December 31 of any year a Director may elect, by
written notice to the Secretary of the Company, to defer receipt of
all or a specified part of his or her fees for succeeding calendar
years. A person elected to fill a vacancy on the Board and who was
not a Director on the preceding December 31, or whose term of
office did not begin until after such date, may elect, before his
or her term begins, to defer all or a specified part of his or her
fees for the balance of the calendar year and for succeeding
calendar years.
(3) An election to defer fees shall continue from year to year
unless the Director terminates it in writing; provided, that
fees earned after the month in which a Director initially
becomes entitled to insurance benefits under the Social
Security Act (other than benefits under Section 223 or
benefits payable under Section 202(d) by reason of
disability) (hereinafter referred to as "Insurance Benefits")
may not be deferred pursuant to an election in item (c) of
this paragraph (3), although they may be deferred pursuant to
elections in items (a) and (b) of this paragraph (3) if the
Director has complied with the provisions herein relating to
the manner and time of making such deferral elections. No
amount deferred shall be paid to a Director until (a) he or
she ceases to be a Director, or (b) he or she attains that
age specified by the retirement income test of the Social
Security Act (Section 203(f)(3) as amended or its equivalent)
then in effect, or (c) his or her initial year of entitlement
to Insurance Benefits, whichever he or she may elect, and
then only at the times and in the manner specified below.
(4) The Company shall maintain an account for each Director
participating in the Plan with respect to deferred fees and credit
the account with interest at the Current Interest Rate, as later
defined. Interest credited to the account will bear interest
(compounded annually) at the same rate.
(5) Amounts deferred under items (a) or (b) of paragraph (3) above,
together with accumulated interest, shall, at the Director's
election, be distributed either in a one lump sum payment or in
substantially equal annual installments over any period of from two
to ten years, with the lump sum or first installment being payable
as soon as practicable after the first day of the calendar year
immediately following the year in which the Director (a) ceases to
be a Director, or (b) attains that age specified by the retirement
income test of the Social Security Act (Section 203(f)(3) as
amended or its equivalent) then in effect, whichever he or she
elects, and any additional installments being payable as soon as
practicable after the first day of each succeeding year thereafter.
Amounts deferred under item (c) of paragraph (3) above, together
with an accumulated interest, shall, at the Director's election, be
distributed either in one lump sum payment or in substantially
equal consecutive annual installments payable as soon as
practicable after the first day of the first, second, third, fourth
or fifth calendar year, or any of them, following the Director's
initial year of entitlement to Insurance Benefits, whichever he or
she elects. Amounts held pending distribution pursuant to this
item shall continue to accrue interest at the Current Interest Rate
as later defined.
(6) An election as to items (a), (b) or (c) of paragraph (3) above and
as to the form and timing of the payment of deferred fees under
paragraph (5) above shall be made by the Director at the time the
Director first elects to defer receipt of all or a portion of his
or her fees under paragraph (2) above, and any such election may be
changed by a Director at any time during his or her term as a
Director; provided, that no change shall be made in a prior
election after the December 31 preceding the earlier of (a) the
first year in which the deferred amounts would, but for the change
in the election, become payable to such Director, or (b) the first
year in which such Director would be eligible to receive benefits
under this Plan if his or her election were changed as permitted by
this paragraph (6); and provided further, that no change shall be
made by a Director from a prior election made pursuant to item (a)
or item (b) of paragraph (3) to an election pursuant to item (c) of
paragraph (3) after December 31 of the year such Director becomes
entitled to Insurance Benefits. Any elections made by a Director
after any such December 31, will not be given effect by the
Company. Notwithstanding the foregoin, any Director who became
entitled to Insurance Benefits prior to January 1, 1981 may, on or
before December 31, 1981, change a prior election made pursuant to
item (a) or item (b) of paragraph (3) above to an election pursuant
to item (c) of said paragraph (3); provided, that such change shall
not become effective any earlier than January 1, 1982.
(7) If a person becomes a director, proprietor, officer, partner,
employee of, or otherwise becomes affiliated with, a business that
is in competition with the Company, or if such person shall refuse
a reasonable request of the Company to perform consulting services
after retirement while receiving payments under the Plan, all
deferred fees and interest remaining payable to such person shall
be forfeited.
(8) (a) Upon the death of a Director or a person who has ceased to be
a Director, prior to the receipt by such Director of any deferred
fees and interest from his or her account, all such deferred fees
and interest in his or her account shall be payable to his or her
estate in one lump sum within ninety (90) days following his or her
death, unless a Director elects, at any time prior to his or her
death, to have such account balance paid to a beneficiary
designated in writing by such Director; in which event, such
account balance shall be payable to such beneficiary, at the
Director's election, either in one lump sum within ninety (90) days
following the date of death, or in substantially equal annual
installments over a ten year period beginning as soon as
practicable after the first day of the calendar year immediately
following the year of death.
(As amended February 22, 1983)
(b) In the event of the death of a Director or a person who has
ceased to be a Director after he or she has begun receiving
installments from the deferred compensation account under paragraph
(5) above, the remaining installments shall be paid when due to his
or her designated beneficiary, if living; otherwise, the balance in
the deferred compensation account shall be paid in one lump sum to
his or her estate within ninety (90) days following his or her
death.
(c) If a designated beneficiary has begun receiving installments
under this paragraph (8), but dies before receiving the last
installment, the balance in the deferred compensation account shall
be paid in one lump sum to such beneficiary's estate within ninety
(90) days following his or her death.
(d) Amounts held by the Company pending distribution pursuant to
this paragraph (8) shall continue to accrue interest at the Current
Interest Rate.
(9) The chief executive officer of the Company shall be empowered to
place the Plan in effect under such additional conditions and terms
as shall not be inconsistent with the terms stated above and as
shall not jeopardize the status of the Plan as a deferred
compensation plan allowing a Director of the Company not to include
deferred amounts (including interest) in gross income under Federal
income tax laws until the taxable year or years such amounts are
actually paid.
(10) The term "Current Interest Rate" shall mean the rate in effect on
December 31 of each calendar year that is equal to the Company's
cost of capital as determined by the Indiana Utility Regulatory
Commission in the Company's last general retail electric rate
order, unless otherwise determined by this Board of Directors.
(As Amended November 30, 1993)
EXHIBIT 10.35
Indianapolis Power & Light Company
UNFUNDED DEFERRED
COMPENSATION PLAN
FOR
OFFICERS
Adopted November 30, 1993
Effective as of January 1, 1994
<PAGE>
UNFUNDED DEFERRED COMPENSATION PLAN
FOR OFFICERS
RESOLVED, that effective January 1, 1994, there be and hereby is,
established and adopted, an unfunded deferred compensation plan (the
"Plan") for Officers of Indianapolis Power & Light Company ("the
Company") with respect to all or a part of their base salary earned on or
after January 1, 1994, the terms and conditions of which are as follows:
(l) The Plan shall be unfunded so that the Company is under merely a
contractual duty to make payments when due under the Plan. The
promise to pay shall not be represented by notes and shall not be
secured in any way. The Plan shall not be construed as an
agreement, consideration or inducement of employment or as
affecting in any manner the rights or obligations of the Company or
of the Officer to continue or to terminate the employment
relationship at any time.
(2) On or before December 31, 1993, or December 31 of any year
thereafter, an Officer may elect annually to defer receipt of all
or a specified part of his or her base salary by submitting to the
Secretary of the Company a written election for a specified period
of years that is not less than one calendar year and does not
extend beyond the year the Officer reaches his or her 70th
birthday, the form for which election is attached hereto, made a
part hereof and marked Exhibit A. A person elected as an Officer
who was not an Officer on the preceding December 31, or whose term
of office did not begin until after such date, may elect, before
his or her term begins, to defer all or a specified part of his or
her base salary for the balance of the calendar year.
(3) The amount deferred shall be withheld in twenty-six (26)
substantially equal bi-weekly installments. No amount
deferred
hereunder shall be paid to an Officer until after the end of the
period elected.
(4) The Company shall maintain a deferred compensation account for each
Officer participating in the Plan with respect to deferred base
salary and credit the account with interest on December 31 of each
year at the Current Interest Rate, as later defined. Interest
credited to the account will bear interest (compounded annually) at
the same rate.
(5) Any amount deferred under paragraph (2) above, together with
accumulated interest, shall, at the Officer's election, be
distributed either in a one lump sum payment or in substantially
equal annual installments over any period of from two to ten years,
with the lump sum or first installment being payable as soon as
practicable after the first day of the calendar year immediately
following the period elected and with any additional installments
being payable as soon as practicable after the first day of each
succeeding year thereafter. Amounts held pending distribution
pursuant to this item shall continue to accrue interest on December
31 of each year at the Current Interest Rate, as later defined.
(6) An election under paragraphs (2) and (5) above, as to the amount
deferred and the timing of the payment of such deferred amount,
shall be made by the Officer at the time the Officer first elects
to defer receipt of all or a part of his or her base salary. A new
election may be made each year; however, no change may be made in
an election after the December 31 preceding the year in which the
base salary is to be deferred, except that beneficiaries may be
changed at any time prior to the payment of any deferred amount.
Any change in an election made by an Officer after any such
December 31, will not be given effect by the Company.
(7) (a) Upon the death of an Officer or a person who has ceased to be
an Officer, prior to the receipt by such Officer of any deferred
amounts and interest from his or her account, all such deferred
amounts and interest in such account shall be payable to his or her
estate in one lump sum within ninety (90) days following his or her
death, unless an Officer elects pursuant to this paragraph (7) to
have such account balance paid to a beneficiary designated in
writing by such Officer; in which event, such account balance shall
be payable to such beneficiary, at the Officer's election, either
in one lump sum within ninety (90) days following the date of
death, or in substantially equal annual installments over a ten
year period beginning as soon as practicable after the first day of
the calendar year immediately following the year of death.
(b) In the event of the death of an Officer or a person who has
ceased to be an Officer after he or she begins receiving
installments from the deferred compensation account under paragraph
(5) above, the remaining installments shall be paid, when due, to
his or her designated beneficiary, if living; otherwise, the
balance in the deferred compensation account shall be paid in one
lump sum to his or her estate within ninety (90) days following his
or her death.
(c) If a designated beneficiary has begun receiving installments
under this paragraph (7), but dies before receiving the last
installment, the balance in the deferred compensation account shall
be paid in one lump sum to such beneficiary's estate within ninety
(90) days following his or her death.
(d) Amounts held by the Company pending distribution pursuant to
this paragraph (7) shall continue to accrue interest at the Current
Interest Rate, as later defined.
(8) The Officer and his or her beneficiary, as determined pursuant to
paragraph (7) above, shall not have any right to anticipate,
alienate or assign any rights under this Plan, and any effort to do
so shall be null and void. The monthly benefits payable under this
Plan shall be exempt from the claims of creditors or other
claimants and from all orders, decrees, levies and executions and
any other legal process to the fullest extent permitted by law.
(9) The chief executive officer of the Company shall be empowered to
place the Plan in effect under such additional conditions and terms
as shall not be inconsistent with the terms stated above and as
shall not jeopardize the status of the Plan as a deferred
compensation plan that allows an Officer of the Company not to
include deferred amounts (including interest) in gross income under
Federal income tax laws until the taxable year or years such
amounts are actually paid.
(10) The term "Current Interest Rate" shall mean the rate in effect on
December 31 of each calendar year that is equal to the Company's
cost of capital as determined by the Indiana Utility Regulatory
Commission in the Company's last general retail electric rate
order, unless otherwise determined by this Board of Directors.
<PAGE>
To: The Corporate Secretary
Indianapolis Power & Light Company
Officer Election to Defer 1995 Compensation
The undersigned Officer of Indianapolis Power & Light Company (the
"Company"), under the Unfunded Deferred Compensation Plan for Officers
adopted November 30, 1993 by a resolution of the Board of Directors of the
Company, which becomes effective as of January 1, 1995, hereby elects under
Paragraph 2 of the Plan to defer $ of such Officer's 1995 base
salary for year(s) (not less than one year) beginning January 1, 1995
and ending December 31, (not beyond the year Officer reaches his or her
70th birthday).
The undersigned Officer understands that this annual election to defer
his or her base salary, including the method for distributing deferred
amounts, is irrevocable as to the amount and period selected and will not
continue from year to year.
Additional Elections permitted under Paragraphs (5) and (7) of the Plan:
(Select A or B)
A. Distribution to be made to me in one lump sum in accordance
with the Plan following the deferral period selected.
B. Distribution to be made to me in equal annual installments over
a period of _____ years (not less than two (2) years or more
than ten (10) years) in accordance with the Plan following the
deferral period selected.
(Select C, D or E)
C. Deferred amounts to be payable to my estate in one lump sum
within ninety (90) days following my death.
D. Deferred amounts to be payable to the beneficiary designated
below in one lump sum within ninety (90) days following my
death.
E. Deferred amounts to be payable to the beneficiary designated
below in equal annual installments over a ten (10) year period
beginning the first day of the calendar year following my
death.
Beneficiary:
Name Address
Dated this day of December, 1994
Check one:
This is a new election.
a change of beneficiary.
Officer,
Indianapolis Power & Light
Company
Exhibit A
EXHIBIT 10.39
INDIANAPOLIS POWER & LIGHT COMPANY
INTRACOMPANY CORRESPONDENCE
DATE: April 18, 1994
TO: See Distribution Below AT: Various Locations
FROM: Mr. Ramon L. Humke AT: Electric Building
SUBJECT: 1994 MANAGEMENT INCENTIVE PROGRAM
DISTRIBUTION:
Officers Superintendents
Managers Assistant Superintendents
Directors Division Supervisors
The 1994 Management Incentive Program (MIP) is established to provide
additional incentive and recognition to individuals who make above average
contributions to the achievement of organization and corporate objectives.
Awards will be based on a year-end evaluation of the Company's
performance and of each participant's performance during the year, directly
keyed to organization and department objectives through specifically
documented Performance Management "Expectations" and "Objectives" for that
participant. In 1994, the IPL Performance Standard of Net Income is being
incorporated into this program. The threshold standard is:
IPL Net Income $82.6 Million
Quarterly Company performance updates will be sent to the participants
which will allow tracking of the threshold standards compared to actual
performance. Threshold standards must be met for bonus qualification.
The Senior Vice Presidents, and Vice Presidents of Human Resources and
Corporate Affairs, will ensure that the total of awards in their area are
targeted at 5% of all eligibles' base salaries at 12/31/94. The Company's
compensation philosophy is to establish base salaries at market value;
therefore participant awards under this program are for demonstrable and
measurable contributions to organization and corporate objectives and
performance.
Guidelines for individual awards are:
Award Range
Participant's Contribution if Threshold is met
Above Expected Up to 7%
At Expected Up to 5%
Below Expected 0%
The evaluator should be able to identify demonstrable and measurable
results as the criteria for recommending an award for the participant.
Awards are not automatic; some participants may not receive an award.
<PAGE>
The Management Incentive Program participants for 1994 include
supervisors from the division head level to the manager level. Special
requests for inclusion in the program may be submitted for approval to the
Vice President of Human Resources. Documentation supporting inclusion in
the program is required. In addition, at year-end, Organizational Heads
may recommend other associates who have specific work assignments that
significantly affect the Corporate Objectives.
If a participant retires, becomes disabled, or dies during 1994, or if
a person becomes eligible after the year begins, any award payable to such
person shall be prorated. Awards will be calculated as a percent of base
annual salary as of the end of the award period.
Additionally, the Big Dollar Award Program for other associates who
deserve special recognition for making an extraordinary contribution to
Corporate Objectives or organizational assignments is being continued. A
formal Big Dollar Award Program description is attached.
RLH/rly
Attachment
<PAGE>
1994 MANAGEMENT INCENTIVE PROGRAM
The purposes of the program are to focus attention on key IPL
performance standards, to improve productivity and to control costs by
attaining the goals set out in the Corporate Objectives while maintaining
operating costs within or less than those budgeted for 1994.
The program costs are presently estimated to be about $451,000, based
on bonuses paid under the 1993 Program, (adjusted for wage increases
expected to occur during the year).
The Program also includes a separate fund for the payment of bonuses
to persons not within the group identified above who deserve special
recognition for extraordinary contributions to the Company. An additional
$38,500 is estimated for this separate fund.
Bonus awards, not to exceed 7%, will depend upon the performance of the
participants in meeting specific objectives and assignments. Awards are not
automatic; some participants may not receive an award. No bonus payments
will be made unless the 1994 IPL Net Income threshold is met.
Participant's Contribution Bonus
Above Expected Up to 7%
At Expected Up to 5%
Below Expected 0%
If a participant dies, retires or becomes disabled during the Program
Year, or if a person becomes eligible to participate in the Program after
the Program Year begins, any bonus shall be prorated based on the number of
months such person was eligible to participate in the Program.
Bonus awards will be approved by Mr. Humke and Mr. Hodowal, based upon
the recommendations of the Senior Officers for their respective
organizational participants. Progress in meeting objectives will be
reviewed with each participant periodically throughout the year.
EXHIBIT 10.40
FORM OF
TERMINATION BENEFITS AGREEMENT
AS AMENDED AND RESTATED, EFFECTIVE JANUARY 1, 1993
[See Schedule A attached hereto for a list of parties to,
and dates of, the Termination Benefits Agreements]
This Agreement, dated as of January 1, 1993, by and among IPALCO
ENTERPRISES, INC., an Indiana corporation having its principal
executive offices at 25 Monument Circle, Indianapolis, Indiana 46204
("IPALCO"), INDIANAPOLIS POWER & LIGHT COMPANY, an Indiana corporation
having its principal executive offices at 25 Monument Circle,
Indianapolis, Indiana 46204 ("IPL") (both IPALCO and IPL being
collectively referred to herein as the "Company"), and , an Indiana
resident whose mailing address is (the "Executive").
R E C I T A L S
The following facts are true:
A. The Executive is serving the Company as a key executive
officer, and is expected to continue to make a major contribution to
the profitability, growth, and financial strength of the Company.
B. The Company considers the continued services of the Executive
to be in the best interests of the Company and its shareholders, and
desires to assure itself of the availability of such continued services
in the future on an objective and impartial basis and without
distraction or conflict of interest in the event of an attempt to
obtain control of the Company.
C. The Executive is willing to remain in the employ of the
Company upon the understanding that the Company will provide him with
income security upon the terms and subject to the conditions contained
herein if his employment is terminated by the Company without cause or
if he voluntarily terminates his employment for good reason.
D. If the Company and Executive entered into one or more
Termination Benefits Agreements prior to this Agreement (the "Prior
Termination Benefits Agreements"), this Agreement is intended to
supersede and replace the Prior Termination Benefits Agreements.
A G R E E M E N T
In consideration of the premises and the mutual covenants and
agreements hereinafter set forth, the Company and the Executive agree
as follows:
1. Undertaking. The Company agrees to pay to the Executive the
termination benefits specified in paragraph 2 hereof if (a) control of
IPALCO is acquired (as defined in paragraph 3(a) hereof) during the
term of this Agreement (as described in paragraph 5 hereof) and (b)
within three (3) years after the acquisition of control occurs (i) the
Company terminates the employment of the Executive for any reason other
than Cause (as defined in paragraph 3(b) hereof), death, the
Executive's attainment of age sixty-five (65) or total and permanent
disability, or (ii) the Executive voluntarily terminates his employment
for Good Reason (as defined in paragraph 3(c) hereof).
2. Termination Benefits. If the Executive is entitled to
termination benefits pursuant to paragraph 1 hereof, the Company agrees
to pay to the Executive as termination benefits in a lump-sum payment
within five (5) calendar days of the termination of the Executive's
employment an amount to be computed by multiplying (i) the Executive's
average annual compensation (as defined in Section 280G of the Internal
Revenue Code of 1986, as amended (the "Code")) payable by the Company
which was includable in the gross income of the Executive for the most
recent five (5) calendar years ending coincident with or immediately
before the date on which control of the Company is acquired (or such
portion of such period during which the Executive was an employee of
the Company), by (ii) two hundred ninety-nine and ninety-nine one
hundredths percent (299.99%). For purposes of this Agreement,
employment and compensation paid by any direct or indirect subsidiary
of the Company will be deemed to be employment and compensation paid
by the Company.
3. Definitions.
(a) As used in this Agreement, the "acquisition of
control" means:
(i) The acquisition by any individual, entity or
group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of twenty percent
(20%) or more of either (A) the then outstanding shares
of common stock of IPALCO (the "Outstanding IPALCO
Common Stock") or (B) the combined voting power of the
then outstanding voting securities of IPALCO entitled
to vote generally in the election of directors (the
"Outstanding IPALCO Voting Securities"); provided,
however, that the following acquisitions shall not
constitute an acquisition of control: (A) any
acquisition directly from IPALCO (excluding an
acquisition by virtue of the exercise of a conversion
privilege), (B) any acquisition by IPALCO, (C) any
acquisition by any employee benefit plan (or related
trust) sponsored or maintained by IPALCO, IPL or any
corporation controlled by IPALCO or (D) any acquisition
by any corporation pursuant to a reorganization, merger
or consolidation, if, following such reorganization,
merger or consolidation, the conditions described in
clauses (A), (B) and (C) of subsection (iii) of this
paragraph 3(a) are satisfied;
(ii) Individuals who, as of the date hereof,
constitute the Board of Directors of IPALCO (the
"Incumbent Board") cease for any reason to constitute
at least a majority of the Board of Directors of IPALCO
(the "Board"); provided, however, that any individual
becoming a director subsequent to the date hereof whose
election, or nomination for election by IPALCO's
shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent
Board shall be considered as though such individual
were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial
assumption of office occurs as a result of either an
actual or threatened election contest (as such terms
are used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of
a Person other than the Board; or
(iii) Approval by the shareholders of IPALCO of a
reorganization, merger or consolidation, in each case,
unless, following such reorganization, merger or
consolidation, (A) more than sixty percent (60%) of,
respectively, the then outstanding shares of common
stock of the corporation resulting from such
reorganization, merger or consolidation and the
combined voting power of the then outstanding voting
securities of such corporation entitled to vote
generally in the election of directors is then
beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who
were the beneficial owners, respectively, of the
Outstanding IPALCO Common Stock and Outstanding IPALCO
Voting Securities immediately prior to such
reorganization, merger or consolidation in
substantially the same proportions as their ownership,
immediately prior to such reorganization, merger or
consolidation, of the Outstanding IPALCO Stock and
Outstanding IPALCO Voting Securities, as the case may
be, (B) no Person (excluding IPALCO, any employee
benefit plan or related trust of IPALCO, IPL or such
corporation resulting from such reorganization, merger
or consolidation and any Person beneficially owning,
immediately prior to such reorganization, merger or
consolidation and any Person beneficially owning,
immediately prior to such reorganization, merger or
consolidation, directly or indirectly, twenty percent
(20%) or more of the Outstanding IPALCO Common Stock or
Outstanding Voting Securities, as the case may be)
beneficially owns, directly or indirectly, twenty
percent (20%) or more of, respectively, the then
outstanding shares of common stock of the corporation
resulting from such reorganization, merger or
consolidation or the combined voting power of the then
outstanding voting securities of such corporation
entitled to vote generally in the election of directors
and (C) at least a majority of the members of the board
of directors of the corporation resulting from such
reorganization, merger or consolidation were members of
the Incumbent Board at the time of the execution of the
initial agreement providing for such reorganization,
merger or consolidation;
(iv) Approval by the shareholders of IPALCO of (A)
a complete liquidation or dissolution of IPALCO or (B)
the sale or other disposition of all or substantially
all of the assets of IPALCO, other than to a
corporation, with respect to which following such sale
or other disposition (1) more than sixty percent (60%)
of, respectively, the then outstanding shares of common
stock of such corporation and the combined voting power
of the then outstanding voting securities of such
corporation entitled to vote generally in the election
of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the
individuals and entities who were the beneficial
owners, respectively, of the Outstanding IPALCO Common
Stock and Outstanding IPALCO Voting Securities
immediately prior to such sale or other disposition in
substantially the same proportion as their ownership,
immediately prior to such sale or other disposition, of
the Outstanding IPALCO Common Stock and Outstanding
IPALCO Voting Securities, as the case may be, (2) no
Person (excluding IPALCO and any employee benefit plan
or related trust of IPALCO, IPL or such corporation and
any Person beneficially owning, immediately prior to
such sale or other disposition, directly or indirectly,
twenty percent (20%) or more of the Outstanding IPALCO
Common Stock or Outstanding IPALCO Voting Securities,
as the case may be) beneficially owns, directly or
indirectly, twenty percent (20%) or more of,
respectively, the then outstanding shares of common
stock of such corporation and the combined voting power
of the then outstanding voting securities of such
corporation entitled to vote generally in the election
of directors and (3) at least a majority of the members
of the board of directors of such corporation were
members of the Incumbent Board at the time of the
execution of the initial agreement or action of the
Board providing for such sale or other disposition of
assets of IPALCO; or
(v) The closing, as defined in the documents
relating to, or as evidenced by a certificate of any
state or federal governmental authority in connection
with, a transaction approval of which by the
shareholders of IPALCO would constitute an "acquisition
of control" under subsection (iii) or (iv) of this
section 3(a) of this Agreement.
Notwithstanding anything contained in this Agreement to
the contrary, if the Executive's employment is terminated
before an "acquisition of control" as defined in this section
3(a) and the Executive reasonably demonstrates that such
termination (i) was at the request of a third party who has
indicated an intention or taken steps reasonably calculated
to effect an "acquisition of control" and who effectuates an
"acquisition of control" (a "Third Party") or (ii) otherwise
occurred in connection with, or in anticipation of, an
"acquisition of control" which actually occurs, then for all
purposes of this Agreement, the date of an "acquisition of
control" with respect to the Executive shall mean the date
immediately prior to the date of such termination of the
Executive's employment.
(b) As used in this Agreement, the term "Cause" means
fraud, dishonesty, theft of corporate assets, or other gross
misconduct by the Executive. Notwithstanding the foregoing,
the Executive shall not be deemed to have been terminated for
cause unless and until there shall have been delivered to him
a copy of a resolution duly adopted by the affirmative vote
of not less than a majority of the entire membership of the
Board at a meeting of the Board called and held for the
purpose (after reasonable notice to him and an opportunity
for him, together with his counsel, to be heard before the
Board), finding that in the good faith opinion of the Board
the Executive was guilty of conduct set forth above in the
first sentence of the subsection and specifying the
particulars thereof in detail.
(c) As used in this Agreement, the term "Good Reason"
means, without the Executive's written consent, (i) a
demotion in the Executive's status, position or
responsibilities which, in his reasonable judgment, does not
represent a promotion from his status, position or
responsibilities as in effect immediately prior to the change
in control; (ii) the assignment to the Executive of any
duties or responsibilities which, in his reasonable judgment,
are inconsistent with such status, position or
responsibilities; or any removal of the Executive from or
failure to reappoint or reelect him to any of such positions,
except in connection with the termination of his employment
for total and permanent disability, death or Cause or by him
other than for Good Reason; (iii) a reduction by the Company
in the Executive's base salary as in effect on the date
hereof or as the same may be increased from time to time
during the term of this Agreement or the Company's failure to
increase (within twelve (12) months of the Executive's last
increase in base salary) the Executive's base salary after a
change in control in an amount which at least equals, on a
percentage basis, the average percentage increase in base
salary for all executive and senior officers of the Company
effected in the preceding twelve (12) months; (iv) the
relocation of the principal executive offices of IPALCO or
IPL, whichever entity on behalf of which the Executive
performs a principal function of that entity as part of his
employment services, to a location outside the Indianapolis,
Indiana metropolitan area or the Company's requiring him to
be based at any place other than the location at which he
performed his duties prior to a change in control, except for
required travel on the Company's business to an extent
substantially consistent with his business travel obligations
at the time of a change in control; (v) the failure by the
Company to continue in effect any incentive, bonus or other
compensation plan in which the Executive participates,
including but not limited to the Company's stock option and
restricted stock plans, unless an equitable arrangement
(embodied in an ongoing substitute or alternative plan), with
which he has consented, has been made with respect to such
plan in connection with the change in control, or the failure
by the Company to continue his participation therein, or any
action by the Company which would directly or indirectly
materially reduce his participation therein; (vi) the failure
by the Company to continue to provide the Executive with
benefits substantially similar to those enjoyed by him or to
which he was entitled under any of the Company's pension,
profit sharing, life insurance, medical, dental, health and
accident, or disability plans in which he was participating
at the time of a change in control, the taking of any action
by the Company which would directly or indirectly materially
reduce any of such benefits or deprive him of any material
fringe benefit enjoyed by him or to which he was entitled at
the time of the change in control, or the failure by the
Company to provide him with the number of paid vacation and
sick leave days to which he is entitled on the basis of years
of service with the Company in accordance with the Company's
normal vacation policy in effect on the date hereof; (vii)
the failure of the Company to obtain a satisfactory agreement
from any successor or assign of the Company to assume and
agree to perform this Agreement; (viii) any purported
termination of the Executive's employment which is not
effected pursuant to a Notice of Termination satisfying the
requirements of paragraph 4(c) hereof (and, if applicable,
paragraph 3(b) hereof); and for purposes of this Agreement,
no such purported termination shall be effective; or (ix) any
request by the Company that the Executive participate in an
unlawful act or take any action constituting a breach of the
Executive's professional standard of conduct.
Notwithstanding anything in this paragraph 3(c) to the
contrary, the Executive's right to terminate his employment
pursuant to this paragraph 3(c) shall not be affected by his
incapacity due to physical or mental illness.
4. Additional Provisions.
(a) Enforcement of Agreement. The Company is aware
that upon the occurrence of a change in control the Board of
Directors or a shareholder of the Company may then cause or
attempt to cause the Company to refuse to comply with its
obligations under this Agreement, or may cause or attempt to
cause the Company to institute, or may institute, litigation
seeking to have this Agreement declared unenforceable, or may
take or attempt to take other action to deny the Executive
the benefits intended under this Agreement. In these
circumstances, the purpose of this Agreement could be
frustrated. It is the intent of the Company that the
Executive not be required to incur the expenses associated
with the enforcement of his rights under this Agreement by
litigation or other legal action, nor be bound to negotiate
any settlement of his rights hereunder, because the cost and
expense of such legal action or settlement would
substantially detract from the benefits intended to be
extended to the Executive hereunder. Accordingly, if
following a change in control it should appear to the
Executive that the Company has failed to comply with any of
its obligations under this Agreement or in the event that the
Company or any other person takes any action to declare this
Agreement void or unenforceable, or institutes any litigation
or other legal action designed to deny, diminish or to
recover from the Executive the benefits entitled to be
provided to the Executive hereunder and that the Executive
has complied with all of his obligations under this
Agreement, the Company irrevocably authorizes the Executive
from time to time to retain counsel of his choice, at the
expense of the Company as provided in this paragraph 4(a), to
represent the Executive in connection with the initiation or
defense of any litigation or other legal action, whether such
action is by or against the Company or any director, officer,
shareholder, or other person affiliated with the Company, in
any jurisdiction. Notwithstanding any existing or prior
attorney-client relationship between the Company and such
counsel, the Company irrevocably consents to the Executive
entering into an attorney-client relationship with such
counsel, and in that connection the Company and the Executive
agree that a confidential relationship shall exist between
the Executive and such counsel. The reasonable fees and
expenses of counsel selected from time to time by the
Executive as hereinabove provided shall be paid or reimbursed
to the Executive by the Company on a regular, periodic basis
upon presentation by the Executive of a statement or
statements prepared by such counsel in accordance with its
customary practices, up to a maximum aggregate amount of
$500,000. Any legal expenses incurred by the Company by
reason of any dispute between the parties as to
enforceability of or the terms contained in this Agreement,
notwithstanding the outcome of any such dispute, shall be the
sole responsibility of the Company, and the Company shall not
take any action to seek reimbursement from the Executive for
such expenses.
(b) Severance Pay; No Duty to Mitigate. The amounts
payable to the Executive under this Agreement shall not be
treated as damages but as severance compensation to which the
Executive is entitled by reason of termination of his
employment in the circumstances contemplated by this
Agreement. The Company shall not be entitled to set off
against the amounts payable to the Executive any amounts
earned by the Executive in other employment after termination
of his employment with the Company, or any amounts which
might have been earned by the Executive in other employment
had he sought such other employment.
(c) Notice of Termination. Any purported termination
by the Company or by the Executive shall be communicated by
written Notice of Termination to the other party hereto in
accordance with paragraph 4(k) hereof. For purposes of this
Agreement, a "Notice of Termination" shall mean a notice
which shall indicate the specific termination provision in
this Agreement relied upon and shall set forth in reasonable
detail the facts and circumstances claimed to provide a basis
for termination of his employment under the provision so
indicated. For purposes of this Agreement, no such purported
termination shall be effective without such Notice of
Termination.
(d) Internal Revenue Code. Anything in this Agreement
to the contrary notwithstanding, in the event that Deloitte
& Touche determines that any payment by the Company to or for
the benefit of the Executive pursuant to the terms of this
Agreement would be nondeductible by the Company for federal
income tax purposes because of Section 280G of the Code, then
the amount payable to or for the benefit of the Executive
pursuant to this Agreement shall be reduced (but not below
zero) to the maximum amount payable without causing the
payment to be nondeductible by the Company because of Section
280G of the Code. Such determination by Deloitte & Touche
shall be conclusive and binding upon the parties.
(e) Assignment. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their
respective executors, administrators, heirs, personal
representatives, successors, and assigns, but neither this
Agreement nor any right hereunder may be assigned or
transferred by either party hereto, any beneficiary, or any
other person, nor be subject to alienation, anticipation,
sale, pledge, encumbrance, execution, levy, or other legal
process of any kind against the Executive, his beneficiary or
any other person. Notwithstanding the foregoing, the Company
will assign this Agreement to any corporation or other
business entity succeeding to substantially all of the
business and assets of the Company by merger, consolidation,
sale of assets, or otherwise and shall obtain the assumption
of this Agreement by such successor.
(f) Entire Agreement. This Agreement contains the
entire agreement between the parties with respect to the
subject matter hereof. All representations, promises, and
prior or contemporaneous understandings among the parties
with respect to the subject matter hereof, including any
Prior Termination Benefits Agreements, are merged into and
expressed in this Agreement, and any and all prior agreements
between the parties with respect to the subject matter hereof
are hereby cancelled.
(g) Amendment. This Agreement shall not be amended,
modified, or supplemented without the written agreement of
the parties at the time of such amendment, modification, or
supplement.
(h) Governing Law. This Agreement shall be governed
by and subject to the laws of the State of Indiana.
(i) Severability. The invalidity or unenforceability
of any particular provision of this Agreement shall not
affect the other provisions, and this Agreement shall be
construed in all respects as if such invalid or unenforceable
provision had not been contained herein.
(j) Captions. The captions in this Agreement are for
convenience and identification purposes only, are not an
integral part of this Agreement, and are not to be considered
in the interpretation of any part hereof.
(k) Notices. Except as otherwise specifically
provided in this Agreement, all notices and other
communications hereunder shall be in writing and shall be
deemed to have been duly given if delivered in person or sent
by registered or certified mail, postage prepaid, addressed
as set forth above, or to such other address as shall be
furnished in writing by any party to the others.
(l) Waivers. Except as otherwise specifically
provided in this Agreement, no waiver by either party hereto
of any breach by the other party hereto of any condition or
provision of this Agreement to be performed by such other
party shall be deemed to be a valid waiver unless such waiver
is in writing or, even if in writing, shall be deemed to be
a waiver of a subsequent breach of such condition or
provision or a waiver of a similar or dissimilar provision or
condition at the same or at any prior or subsequent time.
(m) Gender. The use of the masculine gender
throughout this Agreement is solely for convenience; thus, in
cases where the Executive is female, the feminine gender
shall be deemed to be used in place of the masculine gender.
5. Term of this Agreement. This Agreement shall remain in effect
until January 1, 1998 or until the expiration of any extension thereof.
The term of this Agreement shall be automatically extended for one (1)
year periods without further action of the parties as of January 1,
1994 and each succeeding January 1 thereafter, unless IPALCO shall have
served written notice to the Executive prior to January 1, 1994 or
prior to January 1 of each succeeding year, as the case may be, of its
intention that the Agreement shall terminate at the end of the five (5)
year period that begins with the January 1 following the date of such
written notice.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the day and year first above written.
IPALCO ENTERPRISES, INC.
By:
Attest:
INDIANAPOLIS POWER & LIGHT COMPANY
By:
Attest:
<PAGE>
SCHEDULE A
TO
TERMINATION BENEFITS AGREEMENT
As Amended and Restated, Effective January 1, 1993
By and among IPALCO Enterprises, Inc., Indianapolis Power & Light
Company and the following individuals:
John C. Berlier, Jr.
John R. Brehm
Max Califar
Arthur G. Haan
John R. Hodowal
Ramon L. Humke
Donald W. Knight
Robert A. McKnight, Jr.
Steven L. Meyer
Stephen J. Plunkett
Robert W. Rawlings
Michael E. Shriner
Joseph A. Slash
Clark L. Snyder
Thomas A. Steiner
Gerald D. Waltz
John D. Wilson
Bryan G. Tabler (effective as of October 1, 1994)
Exhibit 21.1 List of Subsidiaries
-------------------- State in
Which
Subsidiary of Indianapolis Power & Light Company (IPL) Organized
Property and Land Company, Inc. Indiana
IPL is wholly owned by IPALCO Enterprises, Inc. as of December 31,
1994. The subsidiary listed for IPL is wholly owned.
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement Nos.
33-51737 and 33-52489 both on Form S-3 of Indianapolis Power & Light Company
and Registration Statement No. 2-88352 on Form S-8 of IPALCO Enterprises, Inc.
of our report dated January 27, 1995, appearing in the Annual Report on
Form 10-K of Indianapolis Power & Light Company for the year ended
December 31, 1994.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
Indianapolis, Indiana
March 2, 1995
<TABLE> <S> <C>
<ARTICLE> UT
<CIK> 0000050217
<NAME> INDIANAPOLIS POWER & LIGHT COMPANY
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1,711,772
<OTHER-PROPERTY-AND-INVEST> 2,898
<TOTAL-CURRENT-ASSETS> 156,792
<TOTAL-DEFERRED-CHARGES> 120,635
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 1,992,097
<COMMON> 324,537
<CAPITAL-SURPLUS-PAID-IN> 0
<RETAINED-EARNINGS> 399,862
<TOTAL-COMMON-STOCKHOLDERS-EQ> 725,762
0
51,898
<LONG-TERM-DEBT-NET> 654,121
<SHORT-TERM-NOTES> 26,400
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 350
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 533,566
<TOT-CAPITALIZATION-AND-LIAB> 1,992,097
<GROSS-OPERATING-REVENUE> 686,076
<INCOME-TAX-EXPENSE> 55,543
<OTHER-OPERATING-EXPENSES> 487,223
<TOTAL-OPERATING-EXPENSES> 542,766
<OPERATING-INCOME-LOSS> 143,310
<OTHER-INCOME-NET> 3,968
<INCOME-BEFORE-INTEREST-EXPEN> 147,278
<TOTAL-INTEREST-EXPENSE> 43,455
<NET-INCOME> 103,823
3,182
<EARNINGS-AVAILABLE-FOR-COMM> 100,641
<COMMON-STOCK-DIVIDENDS> 79,239
<TOTAL-INTEREST-ON-BONDS> 45,566
<CASH-FLOW-OPERATIONS> 207,698
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
EXHIBIT 99.2
AMENDMENT TO AGREEMENT
Exhibit A to the Agreement entered into as of October 27, 1993, by and
among IPALCO Enterprises, Inc., Indianapolis Power & Light Company, PSI
Resources, Inc., PSI Energy, Inc., The Cincinnati Gas & Electric Company,
CINergy Corp., James E. Rogers, John R. Hodowal and Ramon L. Humke is hereby
amended as follows:
I.A. p. 6 - On page 6, insert the following as the last sentence in
paragraph I.A.:
"If a definitive written agreement for the IPALCO
Transmission Merger is executed between IPALCO and its
Merger Partner within five (5) years following the date of
the Agreement, CINergy shall be obligated to provide
Integration Capacity to IPALCO even though IPALCO designates
in writing that merger as the IPALCO Transmission Merger on
a date more than five (5) years following the date of the
Agreement, as described in Section I.C. below.
I.B. p. 7 - On page 7, line 1, insert the word "applicable" before the
term "CINergy Open Access Transmission Tariff" and insert
the following on page 7, line 2 after the word "Tariff":
", as filed with FERC from time to time (the "CINergy Open
Access Transmission Tariff").
I.B. p. 7 - On page 7, insert the following as the last sentence in
paragraph I.B.:
"Any tariff transmission rights provided by CINergy to
IPALCO shall be offered for such period as IPALCO requires
to meet the Integration Requirements from the date IPALCO
requests tariff transmission rights."
I.C. p. 7 - On page 7, in the third line from the bottom, add the
following after the phrase "at its sole discretion,":
"after consultation with IPALCO and after taking into
consideration the likelihood of success at the SEC."
I.E. (new) p. 9 - On page 9, at the conclusion of paragraph I.D., add the
following new paragraph I.E., and reletter all following
paragraphs:
"E. If a regulatory body with jurisdiction over the Option
selected by CINergy imposes, in a final order, any
modifications, requirements, limitations or conditions
("Regulatory Condition") to the Option selected by CINergy
and if CINergy is unable to provide Integration Capacity by
use of the other Option, CINergy will accept such Regulatory
Condition provided compliance therewith will not have a
material adverse effect on CINergy. If compliance with a
Regulatory Condition would have a material adverse effect on
CINergy, CINergy agrees to cooperate and negotiate in good
faith with IPALCO in an effort to mitigate such adverse
effect or to otherwise carry out the intent of this
Agreement. CINergy's obligations under this section shall
not be binding if IPALCO advocates, or encourages any other
party to advocate, the imposition of any Regulatory
Condition to the Option for which regulatory approval is
being sought, except that IPALCO may protect its legitimate
business interests by advocating positions in other
regulatory proceedings."
I.F. (new) p. 9 - Re-letter paragraph I.E. to I.F.
On page 9, amend paragraph I.F. (previously paragraph I.E.)
by adding a comma after the word "Conditions" on line 3,
striking the word "and" at the beginning of line 4, and
adding the following on line 6 after the word "satisfied":
", and (C) as a result of any Regulatory Condition."
I.G. (new) p. 10 - Re-letter paragraph I.F. to I.G.
III.A. p. 14 - On page 14, line 5, insert after "IPALCO Transmission
Merger" the following:
"CINergy will inform IPALCO of the amount of Integration
Capacity and the conditions limiting the amount of such
capacity that can be provided without the physical expansion
of the CINergy Transmission System. CINergy will identify
the specific constraints that limit the Integration
Capacity, identify the duration of such constraints and
operating procedures that may resolve the identified
constraints and the incremental costs thereof. CINergy will
have no obligation to change operating procedures unless
compensated for the incremental costs of such change.
Following a written request from IPALCO,"
III.A. p.14 - On page 14, insert the following after "Available
Transmission Capacity" in the last line of paragraph 1:
"Such information shall include (to the extent available to
CINergy), but not be limited to: load forecasts for
CINergy, WVPA, IMPA, and any CINergy Merger partner native
loads (if the CINergy Merger partner creates a constraint on
available transmission capacity); planned capacity additions
within the CINergy control area; CINergy, WVPA and IMPA
obligations under then-existing firm transmission and power
sales contracts; and any regulatory agency order related to
the minimum transfer capacity between PSI, CG&E and any
CINergy Merger partner.
IV.A.3.(a) - On page 21, line 5, after the phrase "reasonable manner"
add:
p. 21
", after consultation with IPALCO,"
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
Agreement to be duly executed as of October 27, 1994.
IPALCO ENTERPRISES, INC.,
by
/s/ John R. Hodowal
John R. Hodowal
Chairman of the Board and President
INDIANAPOLIS POWER & LIGHT COMPANY,
by
/s/ Ramon L. Humke
Ramon L. Humke
President and Chief Operating Officer
PSI RESOURCES, INC.,
by
Merged into CINergy Corp. 10-24-94
PSI ENERGY, INC.,
by
/s/ Larry E. Thomas
Group Vice President, Reengineering
and Operation Services
THE CINCINNATI GAS & ELECTRIC COMPANY,
by
/s/ Terry E. Bruck
Group Vice President, Wholesale Power
and Transmission Operations
CINERGY CORP.,
by
James E. Rogers
James E. Rogers
Vice Chairman, President & COO
<PAGE>
JAMES E. ROGERS
/s/ James E. Rogers
JOHN R. HODOWAL
/s/ John R. Hodowal
RAMON L. HUMKE
/s/ Ramon L. Humke