SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
QUARTERLY REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended March 31, 1994
--------------
Commission file number 1-8644
------
IPALCO ENTERPRISES, INC.
------------------------
(Exact name of Registrant as specified in its charter)
Indiana 35-1575582
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
25 Monument Circle, P. O. Box 1595, Indianapolis, Indiana 46206
(Address of principal executive offices) (Zip Code)
317-261-8261
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
------- -------
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding At March 31, 1994
----- -----------------------------
Common (Without Par Value) 37,725,966 Shares
IPALCO ENTERPRISES, INC. AND SUBSIDIARIES
INDEX
Page No.
--------
PART I. FINANCIAL INFORMATION
Statements of Consolidated Income -
Three Months Ended March 31, 1994 and 1993 2
Consolidated Balance Sheets - March 31, 1994 and
December 31, 1993 3
Statements of Consolidated Cash Flows -
Three Months Ended March 31, 1994 and 1993 4
Notes to Consolidated Financial Statements 5
Management's Discussion and Analysis of
Financial Condition and Results of Operations 6-7
PART II. OTHER INFORMATION 8-9
-1-
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
IPALCO ENTERPRISES, INC. and SUBSIDIARIES
Statements of Consolidated Income
(In Thousands Except Per Share Amounts)
(Unaudited)
<CAPTION>
Three Months Ended
March 31
1994 1993
------------ ------------
<S> <C> <C>
UTILITY OPERATING REVENUES:
Electric $ 168,902 $ 157,867
Steam 12,276 11,175
------------ ------------
Total operating revenues 181,178 169,042
------------ ------------
UTILITY OPERATING EXPENSES:
Operation:
Fuel 44,588 40,547
Other 26,630 24,763
Power purchased 5,168 3,157
Purchased steam 2,200 2,358
Maintenance 15,015 13,593
Depreciation and amortization 20,221 19,369
Taxes other than income taxes 7,987 7,811
Income taxes - net 17,849 17,376
------------ ------------
Total operating expenses 139,658 128,974
------------ ------------
UTILITY OPERATING INCOME 41,520 40,068
------------ ------------
OTHER INCOME AND (DEDUCTIONS):
Allowance for equity funds used during construction 863 366
Other - net (905) 336
Income taxes - net 668 (25)
------------ ------------
Total other income and (deductions) - net 626 677
------------ ------------
INCOME BEFORE INTEREST AND OTHER CHARGES 42,146 40,745
------------ ------------
INTEREST AND OTHER CHARGES:
Interest 12,136 10,822
Allowance for borrowed funds used during construction (1,150) (740)
Preferred dividend requirements of subsidiary 795 795
------------ ------------
Total interest and other charges - net 11,781 10,877
------------ ------------
NET INCOME $ 30,365 $ 29,868
============ ============
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 37,702 37,664
============ ============
EARNINGS PER SHARE OF COMMON STOCK $ 0.81 $ 0.79
============ ============
DIVIDENDS DECLARED PER SHARE OF COMMON STOCK $ 0.53 $ 0.51
============ ============
See notes to consolidated financial statements.
</TABLE>
-2-
<TABLE>
IPALCO ENTERPRISES, INC. and SUBSIDIARIES
Consolidated Balance Sheets
(In Thousands)
(Unaudited)
<CAPTION>
March 31 December 31
ASSETS 1994 1993
------ -------------- --------------
<S> <C> <C>
UTILITY PLANT:
Utility plant in service $ 2,322,171 $ 2,300,682
Less accumulated depreciation 889,852 876,054
-------------- --------------
Utility plant in service - net 1,432,319 1,424,628
Construction work in progress 170,079 168,480
Property held for future use 15,762 15,763
-------------- --------------
Utility plant - net 1,618,160 1,608,871
-------------- --------------
OTHER PROPERTY:
Nonutility property - at cost, less accumulated depreciation 69,764 69,322
Other investments 6,717 8,722
-------------- --------------
Other property - net 76,481 78,044
-------------- --------------
CURRENT ASSETS:
Cash and cash equivalents 40,519 10,713
Marketable securities - -
Financial investments 10,755 10,088
Accounts receivable (less allowance for doubtful
accounts - 1994, $987 and 1993, $672) 52,533 49,766
Fuel - at average cost 34,148 35,213
Materials and supplies - at average cost 56,285 57,567
Prepayments and other current assets 5,045 5,557
-------------- --------------
Total current assets 199,285 168,904
-------------- --------------
DEFERRED DEBITS:
Unamortized Petersburg Unit #4 carrying charges 31,062 30,587
Unamortized redemption premiums and expenses on
debt and preferred stock 28,233 25,674
Other regulatory assets 36,077 32,954
Miscellaneous 20,590 20,989
-------------- --------------
Total deferred debits 115,962 110,204
-------------- --------------
TOTAL $ 2,009,888 $ 1,966,023
============== ==============
CAPITALIZATION AND LIABILITIES
------------------------------
CAPITALIZATION:
Common shareholders' equity:
Common stock $ 380,396 $ 379,460
Premium on 4% cumulative preferred stock 1,363 1,363
Retained earnings 415,507 406,388
-------------- --------------
Total common shareholders' equity 797,266 787,211
Cumulative preferred stock 51,898 51,898
Long-term debt (less current maturities and
sinking fund requirements) 643,952 541,760
-------------- --------------
Total capitalization 1,493,116 1,380,869
-------------- --------------
CURRENT LIABILITIES:
Notes payable - banks and commercial paper 1,500 90,000
Current maturities and sinking fund requirements 7,779 8,729
Accounts payable 73,878 77,501
Dividends payable 21,092 20,299
Payrolls accrued 3,736 4,505
Taxes accrued 43,714 22,973
Interest accrued 12,347 11,208
Other current liabilities 5,603 5,316
-------------- --------------
Total current liabilities 169,649 240,531
-------------- --------------
DEFERRED CREDITS:
Accumulated deferred income taxes - net 268,107 268,849
Unamortized investment tax credit 56,212 57,029
Accrued postretirement benefits 21,947 17,840
Miscellaneous 857 905
-------------- --------------
Total deferred credits 347,123 344,623
-------------- --------------
TOTAL $ 2,009,888 $ 1,966,023
============== ==============
See notes to consolidated financial statements.
</TABLE>
-3-
<TABLE>
IPALCO ENTERPRISES, INC. and SUBSIDIARIES
Statements of Consolidated Cash Flows
(In Thousands)
(Unaudited)
<CAPTION>
Three Months Ended
March 31
1994 1993
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATIONS:
Net income before preferred dividend requirements
of subsidiary $ 31,160 $ 30,663
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 21,335 20,002
Income from financial investments (667) (1,739)
Deferred income taxes and investment tax
credit adjustments - net (1,559) (686)
Allowance for funds used during construction (2,013) (1,106)
Decrease (increase) in certain assets:
Accounts receivable (2,767) 3,196
Fuel, materials and supplies 2,347 4,641
Other current assets 512 776
Increase (decrease) in certain liabilities:
Accounts payable (3,623) 551
Taxes accrued 20,741 18,114
Other current liabilities 629 (598)
------------ ------------
Net cash provided by operating activities 66,095 73,814
------------ ------------
CASH FLOWS FROM INVESTING:
Purchase of marketable securities - (1,408)
Proceeds from maturities of marketable securities - 3,223
Purchase of financial investments - -
Withdrawals from financial investments - 15,172
Construction expenditures - utility (27,448) (28,151)
Construction expenditures - nonutility (1,005) (6,696)
Other 1,353 (13,744)
------------ ------------
Net cash used in investing activities (27,100) (31,604)
------------ ------------
CASH FLOWS FROM FINANCING:
Issuance of long-term debt 180,000 -
Retirement of long-term debt - including premiums (79,513) (843)
Short-term debt - net (88,500) (26,700)
Dividends paid (20,018) (19,240)
Exercise of stock options including related tax benefit 936 29
Other (2,094) (2)
------------ ------------
Net cash used in financing activities (9,189) (46,756)
------------ ------------
Net increase (decrease) in cash and cash equivalents 29,806 (4,546)
Cash and cash equivalents at beginning of period 10,713 13,249
------------ ------------
Cash and cash equivalents at end of period $ 40,519 $ 8,703
============ ============
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest (net of amount capitalized) $ 10,242 $ 10,355
============ ============
Income taxes $ 821 $ 4,203
============ ============
See notes to consolidated financial statements.
</TABLE>
-4-
IPALCO ENTERPRISES, INC. AND SUBSIDIARIES
-----------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
1. IPALCO Enterprises, Inc. (IPALCO) owns all of the outstanding common
stock of its subsidiaries (collectively referred to as Enterprises).
The consolidated financial statements include the accounts of IPALCO,
its utility subsidiary, Indianapolis Power & Light Company (IPL) and
its unregulated subsidiary, Mid-America Capital Resources, Inc. (Mid-
America). Mid-America is the parent company of nonutility energy-
related businesses.
In the opinion of management these statements reflect all adjustments,
consisting of only normal recurring accruals, including elimination of
all significant intercompany balances and transactions, which are
necessary to a fair statement of the results for the interim periods
covered by such statements. Due to the seasonal nature of the electric
utility business, the annual results are not generated evenly by
quarter during the year. Certain amounts from prior year financial
statements have been reclassified to conform to the current year
presentation. These financial statements and notes should be read in
conjunction with the audited financial statements included in
Enterprises' 1993 Annual Report on Form 10-K.
2. COMMON STOCK
At March 31, 1994, there were 37,725,966 shares of No Par Common Stock
outstanding.
3. LONG-TERM DEBT
On February 3, 1994, IPL issued First Mortgage Bonds, 6.05% Series, due
2004, in the principal amount of $80 million. The net proceeds 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 101.2% 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 the remaining amount will be used to finance future
construction costs.
-5-
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Material changes in the consolidated financial condition and results
of operations of IPALCO Enterprises, Inc. (Enterprises), except where
noted, are attributed to the operations of Indianapolis Power & Light
Company (IPL). Consequently, the following discussion is centered on IPL.
LIQUIDITY AND CAPITAL RESOURCES
Overview
- - --------
The Board of Directors of Enterprises on February 22, 1994, declared a
quarterly dividend on common stock of 53 cents per share. The dividend was
paid April 15, 1994, to shareholders of record March 25, 1994.
Internally generated cash provided by IPL's operations and the
issuance of long-term debt were used primarily for utility construction
expenditures and the repayment of short-term and long-term debt during the
first three months of 1994.
On February 3, 1994, IPL issued First Mortgage Bonds, 6.05% Series,
due 2004, in the principal amount of $80 million. The net proceeds 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 101.2% 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 the remaining amount will be used to finance future construction costs.
Future Rate Relief
- - ------------------
IPL filed a petition with the Indiana Utility Regulatory Commission on
April 8, 1994, seeking approval to increase IPL's electric rates. The
specific amount of the requested rate increase will not be determined until
"test year" data is prepared. It is estimated, however, that the overall
request will probably range from 12 to 16 percent. IPL last received an
order from the IURC authorizing an increase in electric basic rates and
charges in August, 1986. A number of expenditures and investments are now
needed to supply electricity to the growing Central Indiana economy and to
meet an increasing number of federal and state laws and regulations. Among
these are: two new peaking combustion turbines, a power purchase agreement
with Indiana Michigan Power Company (IMP), new Demand Side Management
Programs, and new sulfur dioxide emission control equipment. A complete
description of these projects is included in the Management's Discussion
and Analysis of Enterprises' 1993 Annual Report on Form 10-K.
RESULTS OF OPERATIONS
Comparison of Quarters Ended March 31, 1994 and March 31, 1993
--------------------------------------------------------------
Earnings per share during the first quarter of 1994 were $.81 or $.02
above the $.79 attained in the comparable 1993 period. The following
discussion highlights the factors contributing to the first quarter
results.
-6-
Operations
- - ----------
The increase in electric operating revenues of $11.0 million was
primarily a result of the colder weather during this quarter compared to
the same period one year ago. Contributing to the higher revenues was an
increase in retail electric kilowatthour (KWH) sales of $9.1 million,
partially offset by lower fuel cost adjustment recoveries of $.3 million.
Sales for resale also increased $2.2 million, due to increased energy sales
to neighboring utilities. The following table is a summary of KWH sales to
each customer class:
Retail KWH Sales By Customer Class
In Millions of KWHs
Three Months Ended March 31,
1994 1993 % Change
-------- -------- --------
Residential 1,283.6 1,170.3 9.7%
Commercial 639.6 597.3 7.1
Industrial 1,504.0 1,442.8 4.2
Other 21.2 20.7 2.4
-------- --------
Total Retail 3,448.4 3,231.1 6.7
======== ========
Fuel costs increased $4.0 million due to an increase in fuel
consumption of $3.1 million -- as a result of the colder weather -- as well
as increased prices of $.7 million and increased deferred fuel costs of $.2
million. Other operating expenses increased $1.9 million primarily due to
increased administrative and general expenses of $1.3 million, increased
marketing expenses of $.3 million and increased distribution expenses of
$.2 million. Power purchased increased $2.0 million due to increased
capacity payments to IMP of $1.8 million and increased purchases of short-
term energy from other utilities.
Maintenance expenses increased $1.4 million, reflecting increased
expenditures for unit overhaul costs at the Petersburg plant of $2.7
million. These expenses were partially offset by decreased expenditures at
the Stout plant of $1.4 million, for which a unit overhaul was performed
during early 1993.
As a result of the foregoing, utility operating income increased 3.6%
over last year, to $41.5 million.
Other Income and Deductions
- - ---------------------------
Allowance for equity funds used during construction increased $.5
million due to an increased construction base.
Other - net, which includes operations other than IPL, decreased $1.2
million, primarily due to decreased investment income from financial
investments and costs of district cooling operations in Cleveland, Ohio,
which did not begin operations until April, 1993.
Interest and Other Charges
- - --------------------------
Interest expense increased $1.3 million primarily due to the issuance
of $100 million long-term debt on February 3, 1994, as previously discussed
under "Liquidity and Capital Resources". The increase in interest expense
for the first quarter of 1994 was partially offset by decreased expense as
a result of refinancing certain first mortgage bonds during 1993 with more
favorable terms.
-7-
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
- - --------------------------
There were no changes to "Item 3. Legal Proceedings" as set forth in
Enterprises' Form 10-K for the year ended December 31, 1993, except as
follows:
On August 18, 1993, the Indiana Utility Regulatory Commission (IURC)
entered an order in Cause No. 39437, approving IPL's Environmental
Compliance Plan required by 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). On
April 4, 1994, the OUCC and IIG each perfected its appeal of the
Commission's order to the Indiana Court of Appeals; thereafter, CAC joined
in their appeal.
In October, 1993, IPL received a Findings of Violation from EPA,
Region V, regarding IPL's compliance with the thermal limitations of the
NPDES (water discharge) permit under which IPL operates its Petersburg
Generating Station. At a meeting held March 8, 1994, EPA acknowledged it
had misinterpreted the data IPL supplied to EPA in response to the latter's
Clean Water Act information request that preceded issuance of the Findings
of Violation. EPA continues to be concerned about the accuracy of the
river monitoring equipment operated and maintained by the United States
Geological Survey (USGS) with whom IPL contracts for such operation and
maintenance. IPL is pursing the matter with USGS and will provide EPA with
an update regarding expected improvements. IPL believes it continues to be
in compliance with the requirements of the permit. If IPL is found to be
in violation of its permit, it could be subject to maximum fines of $25,000
per day per violation.
On April 8, 1994, IPL filed a petition with the IURC for an increase
in its retail electric rates and charges. A prehearing conference to
establish a test year, and to schedule the filing of testimony, the conduct
of hearings and other related matters will be scheduled by the IURC in the
near future.
Item 6. Exhibits and Reports on Form 8-K
- - -----------------------------------------
a) Exhibits
(3) Articles of Incorporation and By-Laws
By-Laws as last amended January 25, 1994.
b) Reports on Form 8-K
None
-8-
Signatures
----------
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
IPALCO ENTERPRISES, INC.
--------------------------------
(Registrant)
Date: May 12, 1994 /s/ John R. Brehm
-------------------- -----------------------------
John R. Brehm
Vice President and Treasurer
Date: May 12, 1994 /s/ Stephen J. Plunkett
-------------------- -----------------------------
Stephen J. Plunkett
Controller
-9-
EXHIBIT 3
BY-LAWS
OF
IPALCO ENTERPRISES, INC.
------------------------------
As Amended and Restated
April 29, 1986,
And Further Amended
November 13, 1989,
June 26, 1990,
June 29, 1993, and
January 25, 1994
------------------------------
BY-LAWS
OF
IPALCO ENTERPRISES, INC.
-------------------------
As Amended and Restated
April 29, 1986,
And Further Amended
November 13, 1989,
June 26, 1990,
June 29, 1993, and
January 25, 1994
------------------------
ARTICLE I.
Offices
-------
SECTION 1. Principal Office. The principal office of the Corporation
shall be in the City of Indianapolis, County of Marion, State of Indiana.
SECTION 2. Other Offices. The Corporation may also have an office in
the City of Chicago, Illinois, and in the City of New York, New York, and
also offices at such other places as the Board of Directors may from time
to time appoint or the business of the Corporation may require.
ARTICLE II.
Shareholders Meetings
---------------------
SECTION 1. Place of Meeting. Meetings of the shareholders of the
Corporation shall be held at such place within or without the State of
Indiana as may be specified from time to time in the respective notices,
waivers of notice thereof, or by resolution of the Board of Directors or
the shareholders.
SECTION 2. Annual Meeting. The annual meeting of shareholders shall be
held on the third Wednesday of April of each year at the hour of 11:00
o`clock A.M., unless such day shall be a legal
holiday, in which event the meeting shall be held on the next succeeding
business day at the same hour.
SECTION 3. Special Meetings. Special meetings of the shareholders for
any purpose or purposes may be called by the Chairman of the Board, the
President or by a majority of the Board of Directors. Business transacted
at any such meeting shall be confined to the objects stated in the call and
matters germane thereto.
(As Amended June 29, 1993)
SECTION 4. Notice of Meetings; Waiver. Written or printed notice,
stating the place, day and hour of the annual and/or special meetings of
the shareholders, and in case of a special meeting, the purpose or purposes
for which the meeting is called, shall be delivered or mailed by the
Secretary, or by the officer or persons entitled to call the meeting, to
each shareholder of record entitled by the Amended Articles of
Incorporation (hereinafter referred to as the ``Amended Articles'') and by
law to vote at such meeting, at such address as appears upon the records of
the Corporation, at least ten (10) days before the date of the meeting.
Notice of any shareholders meeting may be waived in writing by any
shareholder, if the waiver sets forth in reasonable detail the purposes for
which the meeting is called and the time and place thereof. Attendance at
any meeting, in person or by proxy, shall constitute a waiver of notice of
such meeting.
(As Amended June 29, 1993)
SECTION 5. Quorum. The holders of a majority of the shares issued and
outstanding and then entitled to vote, present in person or represented by
proxy, shall be requisite and sufficient to constitute a quorum at all
meetings of the shareholders for the transaction of business, except as
otherwise provided by law, by the Amended Articles, or by these By-Laws.
If, however, such majority shall not be present or represented at any
meeting of the shareholders, the shareholders present in person or by proxy
shall have power to adjourn the meeting from time to time without notice,
other than announcement at the meeting, until a quorum shall attend, when
any business may be transacted which might have been transacted at the
meeting as originally called.
SECTION 6. Voting. At each meeting of the shareholders, every
shareholder entitled to vote may vote in person or by proxy appointed by an
instrument in writing subscribed by such shareholder or by his duly
authorized attorney and delivered to the Secretary of the meeting. Each
shareholder shall have one vote for each share of common stock registered
in his name at the time of the closing of the transfer books or taking the
record for said meeting. The vote for directors, and, upon the demand of
any shareholder, the vote upon any question before the meeting, shall be by
ballot. All elections shall be had by plurality vote and all other
questions shall be decided by a majority vote, except as otherwise provided
by law, by the Amended Articles or by these By-Laws.
SECTION 7. New Business. At an annual meeting of shareholders only
such new business shall be conducted, and only such proposals shall be
acted upon, as shall have been properly brought before the annual meeting.
For any new business proposed by the Board of Directors to be properly
brought before the annual meeting, such new business shall be approved by
the Board of Directors and shall be stated in writing and filed with the
Secretary of the Corporation at least five (5) business days before the
date of the annual meeting, and all business so approved, stated and filed
shall be considered at the annual meeting. Any shareholder may make any
other proposal at the annual meeting, but unless properly brought before
the annual meeting, such proposal shall not be acted upon at the annual
meeting. For a proposal to be properly brought before an annual meeting by
a shareholder, the shareholder must have given timely notice thereof in
writing to the Secretary of the Corporation. To be timely, a shareholder's
notice must be delivered to or mailed and received at the principal
executive offices of the Corporation not less than 30 days nor more than 60
days prior to the annual meeting; provided, however, that if less than 40
days' notice or prior public disclosure of the date of the annual meeting
is given or made, notice by the shareholder to be timely must be so
delivered or received not later than the close of business on the 10th
calendar day following the earlier of (1) the day on which such notice of
the date of the annual meeting was mailed or (2) the day on which such
public disclosure was made. A shareholder's notice to the Secretary of the
Corporation shall set forth as to each matter the shareholder proposes to
bring before the annual meeting (a) a brief description of the proposal
desired to be brought before the annual meeting and the reasons for
conducting such business at the annual meeting, (b) the name and address,
as they appear on the Corporation's books, of the shareholder proposing
such business and any other shareholders known by such shareholder to be
supporting such proposal, (c) the class and/or series and number of shares
that are beneficially owned by the shareholder on the date of such
shareholder notice and by any other shareholders known by such shareholder
to be supporting such proposal on the date of such shareholder notice, and
(d) any financial interest of the shareholder and any supporting
shareholders in such proposal.
The Board of Directors may reject any shareholder proposal not made in
accordance with the terms of this Section 7. Alternatively, if the Board of
Directors fails to consider the validity of any shareholder proposal, the
presiding officer of the annual meeting shall, if the facts warrant,
determine and declare at the annual meeting that the shareholder proposal
was not made in accordance with the terms of this Section and, if he should
so determine, he shall so declare at the annual
--2--
meeting and any such business or proposal not properly brought before the
annual meeting shall not be acted upon at the annual meeting. This
provision shall not prevent the consideration and approval or disapproval
at the annual meeting of reports of officers, directors and committees of
the Board of Directors, but, in connection with such reports, no new
business shall be acted upon at such annual meeting unless stated, filed
and received as herein provided.
(As added June 26, 1990)
ARTICLE III.
Directors
---------
SECTION 1. Number and Term. The number of directors of this
Corporation shall be seventeen (17). Such directors shall be elected for
such terms as may be specified in the Amended Articles.
(As Amended January 25, 1994 to be Effective April 20, 1994)
SECTION 2. Powers and Duties. In addition to the powers and duties
expressly conferred upon it either by law, by the Amended Articles, or by
these By-Laws, the Board of Directors may exercise all such powers of the
Corporation as are conferred upon the Corporation by law and by the Amended
Articles, and do all such lawful acts and things as are not inconsistent
with the law or the Amended Articles.
Subject to the provisions of law and the Amended Articles, the Board
of Directors shall have absolute discretion in the declaration of dividends
and in fixing the date for the declaration and payment of dividends.
SECTION 3. Annual and Regular Meetings; Notice. The annual meeting of
the Board of Directors shall be held on the last Tuesday of the month in
which the annual meeting of shareholders is held, and other regular
meetings of the Board of Directors shall be held on the last Tuesday of
each month. If the day fixed pursuant to this Section for the annual or any
regular meeting shall be a legal holiday, then such annual or regular
meeting shall be held on the next succeeding business day.
The annual meeting and all regular meetings of the Board of Directors
shall be held immediately following the Board of Directors meeting of
Indianapolis Power & Light Company, or if there is no such meeting, at 1:30
P.M., at the principal office of the Corporation, unless notice of a
different time and/or place is given with respect to any such meeting at
least seven days prior thereto by mail or three days prior thereto by
telegraph. No notice of the annual or any regular meeting of the Board of
Directors shall be required unless such meeting is to be held at a time
and/or place other than the principal office of the Corporation.
SECTION 4. Special Meetings. Special meetings of the Board of
Directors may be called by the Chairman of the Board, the President, or by
two-thirds (2/3) of the directors on two days' notice by mail or by one
day's notice by telephone or telegraph to each director, which notice shall
state the time, place and purpose of the holding of such meetings. Any
special meeting of the Board of Directors may be held either within or
without the State of Indiana.
SECTION 5. Quorum. At all meetings of the Board of Directors a
majority of the directors shall be necessary and sufficient to consitute a
quorum for the transaction of business, and the affirmative vote of a
majority of the directors present shall be the act of the Board of
Directors, except as otherwise may be provided specifically by statute, by
the Amended Articles or by these By-Laws.
--3--
If at any meeting of the Board of Directors there shall be less than a
quorum present, a majority of those directors present may adjourn the
meeting to another day and thereupon the Secretary shall mail, telephone,
or telegraph to each director, notice of the time and place of the holding
of such adjourned meeting. At any such adjourned meeting at which there is
a quorum present, any business may be transacted which might have been
transacted at the meeting as originally scheduled or called.
SECTION 6. Resignations. Any director of the Corporation may resign at
any time by giving written notice to the Board of Directors or to the
Chairman of the Board, the President or the Secretary of the Corporation.
Any such resignation shall take effect at the time specified therein, or if
the time is not specified, upon receipt thereof. Unless otherwise specified
in the notice, the acceptance of such resignation shall not be necessary to
make it effective.
SECTION 7. Vacancies. Except as otherwise provided in the Amended
Articles, any vacancy occurring in the Board of Directors caused by
resignation, death or other incapacity, or increase in the number of
directors may be filled by a majority vote of the remaining members of the
Board, until the next annual or special meeting of the shareholders or, at
the discretion of the Board of Directors, such vacancy may be filled by
vote of the shareholders at a special meeting called for that purpose.
Shareholders shall be notified of any increase in the number of directors
in the next mailing sent to shareholders following any such increase.
SECTION 8. Nominations of Directors. The Executive Committee of the
Board of Directors of the Corporation shall serve as the nominating
committee for the nomination of directors of the Corporation. In case a
person is to be elected to the Board by the Board of Directors because of a
vacancy existing on the Board, nomination shall be made only by the
Executive Committee pursuant to the affirmative vote of the majority of its
entire membership. The Executive Committee shall also make nominations for
directors to be elected by the shareholders of the Corporation at an annual
meeting of shareholders as provided in the remainder of this Section 8.
Only persons nominated in accordance with the procedures set forth in
this Section 8 shall be eligible for election as directors at an annual
meeting. The Executive Committee shall select the management nominees for
election as directors. Except in the case of a nominee substituted as a
result of the death, incapacity, disqualification or other inability to
serve of a management nominee, the Executive Committee shall deliver
written nominations to the Secretary of the Corporation at least fifty (50)
days prior to the date of the annual meeting. Management nominees
substituted as a result of the death, incapacity, disqualification or other
inability to serve of a management nominee shall be delivered to the
Secretary of the Corporation as promptly as practicable. At the request of
the Executive Committee, any person nominated by that Committee for
election as a director at an annual meeting shall furnish to the Secretary
of the Corporation that information, described below, required to be set
forth in a shareholder's notice of nomination which pertains to the
nominee. Provided the Executive Committee selects the management nominees,
no nominations for directors except those made by the Executive Committee
shall be voted upon at the annual meeting unless other nominations by
shareholders are made in accordance with the provisions of this Section 8.
Ballots bearing the names of all the persons nominated for election as
directors at an annual meeting in accordance with the procedures sete forth
in this Section 8 by the Executive Committee and by shareholders shall be
provided for use at the annual meeting. However, except in the case of a
management nominee substituted as a result of the death, incapacity,
disqualification or other inability to serve of a management nominee, if
the Executive Committee shall fail or refuse to nominate a slate of
directors at least fifty (50) days prior to the date of the annual meeting,
nominations for directors may be made at the annual meeting by any
shareholder entitled to vote and shall be voted upon. No person shall be
elected as a director of the Corporation unless nominated in accordance
with the terms set forth in this Section 8.
--4--
Nominations of individuals for election to the Board of Directors of
the Corporation at an annual meeting of shareholders may be made by any
shareholder of the Corporation entitled to vote for the election of
directors at that meeting who complies with the procedures set forth in
this Section 8. Such nominations, other than those made by the Executive
Committee, shall be made pursuant to timely notice in writing to the
Secretary of the Corporation as set forth in this Section 8. To be timely,
a shareholder's notice shall be delivered to or mailed and received at the
principal executive offices of the Corporation not less than 60 days nor
more than 90 days prior to the date of each annual meeting; provided,
however, that if less than 60 days' notice or prior public disclosure of
the date of the annual meeting is given or made, notice by the shareholder
to be timely must be so delivered or received not later than the close of
business on the 10th calendar day following the earlier of (1) the day on
which such notice of the date of the annual meeting was mailed or (2) the
day on which such public disclosure was made. Such shareholder's notice
shall set forth (a) as to each person whom the shareholder proposes to
nominate for election or re-election as a director (i) the name, age,
business address and residence address of such person, (ii) the principal
occupation or employment of such person, (iii) the class and/or series and
number of shares that are beneficially owned by such person on the date of
such shareholder notice and (iv) any other information relating to such
person that is required to be disclosed in solicitations of proxies with
respect to nominees for election as directors, pursuant to Regulation 14A
under the Securities Exchange Act of 1934, as amended, and (b) as to the
shareholder giving the notice (i) the name and address, as they appear on
the Corporation's books, of such shareholder and any other shareholders
known by such shareholder to be supporting such nominee(s) and (ii) the
class and/or series and number of shares that are beneficially owned by
such shareholder on the date of such shareholder notice and by any other
shareholders known by such shareholder to be supporting such nominee(s) on
the date of such shareholder notice.
The Board of Directors may reject any nomination by a shareholder not
made in accordance with the terms of this Section 8. Alternatively, if the
Board of Directors fails to consider the validity of any nominations by a
shareholder, the presiding officer of the annual meeting shall, if the
facts warrant, determine and declare at the annual meeting that a
nomination was not made in accordance with the terms of this Section 8,
and, if he should so determine, he shall so declare at the annual meeting
and the defective nomination shall be disregarded.
(As added June 26, 1990)
ARTICLE IV.
Committees Of The Board Of Directors
------------------------------------
SECTION 1. Executive Committee.
Number and Powers. The Board of Directors shall create an Executive
Committee consisting of the Chairman of the Board and the President, as ex
officio members, and two or more directors who shall be elected by a
majority of the whole Board of Directors, from time to time, to hold office
until the next annual meeting of the Board of Directors and until their
respective successors are duly elected and qualified. The Board of
Directors shall designate the Chairman of such Committee.
The Executive Committee shall have and exercise (except as otherwise
provided by law or by the Board of Directors and except when the Board of
Directors shall be in session) such powers and rights of the full Board of
Directors in the management of the business and affairs of the Corporation
as may be lawful, and it shall have power to authorize the seal of the
Corporation to be affixed to all papers which may require it.
--5--
Meetings and Notice. Meetings of the Executive Committee may be held
either at the office of the Corporation in the City of Indianapolis,
Indiana, or at such other places as the Executive Committee or Chairman
thereof shall from time to time designate. Such meetings may be called by
or at the request of the Chairman or any member of the Executive Committee
by giving at least twenty-four (24) hours' advance notice to each member of
the Executive Committee. Such notice may be given personally or by
telephone or telegraph.
Quorum. A majority of the Executive Committee shall constitute a
quorum for the transaction of business, and the affirmative vote of such
majority shall be necessary to the determination of any question.
Compensation. The members of the Executive Committee, other than ex
officio members, shall be entitled to receive such compensation as may be
determined from time to time by the Board of Directors.
Minutes. Minutes of the meeting of the Executive Committee shall be
kept and read at the next meeting of the Board of Directors.
Vacancies. Vacancies occurring in the Executive Committee shall be
filled by the Board of Directors at any meeting of said Board.
SECTION 2. Audit Committee. The Board of Directors, by a majority vote
of the whole Board of Directors, may designate three (3) or more members of
such Board who shall not be officers of the Corporation or its
subsidiaries, to constitute an Audit Committee. Members of such Committee
shall serve for terms of one (1) year and until their successors are duly
elected and qualified. Such Committee shall have and exercise such
authority as shall be specified in the resolution of the Board of Directors
appointing such Committee. The Chairman of such Audit Committee shall be
designated by the Board of Directors.
SECTION 3. Compensation Committee. The Board of Directors, by a vote
of a majority of the whole Board of Directors, may designate three (3) or
more members of such Board, who are not officers of the Corporation or its
subsidiaries, to constitute a Compensation Committee. Members of such
Committee shall serve for terms of one (1) year and until their successors
are duly elected and qualified. Such Committee shall have and exercise such
authority as shall be specified in the resolution of this Board of
Directors appointing such Committee. A Chairman and a Vice-Chairman of the
Compensation Committee may be designated by the Board of Directors.
ARTICLE V.
Officers Of The Corporation
---------------------------
SECTION 1. Officers. The officers of the Corporation shall be a
Chairman of the Board, a Vice-Chairman of the Board, a President, one or
more Vice Presidents, a Secretary, a Treasurer, a Controller, and, if the
Board of Directors desires, one or more Assistant Vice Presidents,
Assistant Secretaries, Assistant Treasurers and Assistant Controllers, who
shall be elected by the Board of Directors at its annual meeting. Any two
or more of such offices may be held by the same person, except that the
duties of the President and the Secretary, shall not be performed by the
same person. In the election of Vice Presidents, the Board of Directors may
give each vice presidency such special designation as it may deem
appropriate. The Chairman of the Board and the President shall be chosen
from among the directors.
(As Amended November 13, 1989 to be Effective February 1, 1990)
--6--
The Board of Directors may appoint such other officers and agents as
it shall deem necessary, who shall have such authority and perform such
duties as from time to time shall be prescribed by the Board of Directors.
SECTION 2. Salaries. The salaries of all officers of the Corporation
shall be fixed by the Board of Directors. No officer shall be prevented
from receiving such salary by reason of the fact he is also a director of
the Corporation.
SECTION 3. Terms; Removal. The officers of the Corporation shall hold
office for one year and until their successors are duly elected and
qualified; provided, however, that any officer elected or appointed by the
Board of Directors may be removed at any time by the affirmative vote of a
majority of the whole Board of Directors.
SECTION 4. Resignations. Any officer of the Corporation may resign at
any time by giving written notice to the Board of Directors, to the
Chairman of the Board, to the President, or to the Secretary of the
Corporation. Any such resignation shall take effect at the time specified
therein, or if the time be not specified, upon receipt thereof. Unless
otherwise specified in the notice, the acceptance of such resignation shall
not be necessary to make it effective.
SECTION 5. Vacancies. If the office of the Chairman of the Board, the
President, any Vice President, the Secretary, the Treasurer, the
Controller, any Assistant Vice President, Assistant Secretary, Assistant
Treasurer, or Assistant Controller, or other officer or agent, is vacant or
becomes vacant by reason of death, resignation, retirement,
disqualification, removal from office or the creation of a new office, the
Board of Directors shall elect a person to such office who shall hold
office for the unexpired term in respect of which such vacancy occurred;
provided that, in its discretion, the Board of Directors, by vote of a
majority of the whole Board, may leave unfilled for such period as it deems
appropriate any office, except the offices of President, Secretary,
Treasurer and Controller.
SECTION 6. Duties of Officers May Be Delegated. In case of the absence
of any officer of the Corporation, or for any other reason that the Board
of Directors may deem sufficient, the Board of Directors may delegate the
power or duties of such officer to any other officer, or to any director
for the time being.
SECTION 7. Chairman and Vice-Chairman of the Board. The Chairman of
the Board shall be the chief executive officer of the Corporation. Subject
to the control of the Board of Directors, he shall have general charge of,
and supervision and authority over, the business and affairs of the
Corporation. He shall preside at all meetings of the shareholders and
directors. He shall have such other duties as may be assigned to him by the
Board of Directors.
The Vice-Chairman of the Board shall assist the Chairman of the Board
in the discharge of the latter's duties in the manner and to the extent
designated by the Board of Directors or the Chairman of the Board. In the
absence of the Chairman of the Board, the Vice-Chairman of the Board shall
preside at all meetings of shareholders and directors. He shall perform
such other duties as are incident to his office or as are assigned to him
by the Board of Directors or the Chairman of the Board.
(As Amended November 13, 1989 to be Effective February 1, 1990)
SECTION 8. President. The President shall be the chief operating
officer of the Corporation. Subject to the supervision of the Chairman of
the Board and the Board of Directors, itself, he shall have general charge
of, and supervision and authority over, the operations of the Corporation.
He shall perform such other duties as are incident to his office or as may
be assigned to him by the Board of Directors or the Chairman of the Board.
(As Amended November 13, 1989 to be Effective February 1, 1990)
--7--
SECTION 9. Vice-Presidents. Subject to the control of the Board of
Directors, the Chairman of the Board and the President, the Vice Presidents
and the Assistant Vice Presidents shall have such power, and perform such
duties, as the Board of Directors, the Chairman of the Board, or the
President, from time to time shall assign to them, and, in the case of
Assistant Vice Presidents, such powers and duties as may be assigned to
them by the respective Vice Presidents whom they assist.
SECTION 10. Secretary and Assistant Secretaries. The Secretary shall
attend all meetings of the shareholders and Board of Directors, and shall
record all votes and other proceedings in a book to be kept for that
purpose. He shall give, or cause to be given, all required notices of
meetings of the shareholders and Board of Directors. He shall have custody
of the seal of the Corporation and of its records (other than accounting
records) and shall perform such other duties as usually appertain to the
office of Secretary and as may be prescribed by the Board of Directors, the
Chairman of the Board or the President.
The Assistant Secretaries shall perform such other duties as shall be
delegated to them by the Board of Directors, the Chairman of the Board, the
President or the Secretary.
SECTION 11. Treasurer and Assistant Treasurers. The Treasurer shall
have custody of the corporate funds and securities, and shall keep full and
accurate accounts of receipts and disbursements in books of the Corporation
to be kept for that purpose. He shall deposit all moneys and other valuable
effects in the name and to the credit of the Corporation in such
depositaries as may be designated by authority of the Board of Directors,
and shall disburse the funds of the Corporation as may be ordered by the
Board of Directors, taking proper vouchers for such disbursements. He shall
render to the Board of Directors, whenever it may so require, an account of
all his transactions as Treasurer and of the financial condition of the
Corporation. He shall have such other powers and duties as may be assigned
to him by the Board of Directors, the Chairman of the Board or the
President.
The Assistant Treasurers shall perform such duties as shall be
delegated to them by the Board of Directors, the Chairman of the Board, the
President or the Treasurer.
SECTION 12. Controller and Assistant Controllers. The Controller shall
be the chief accounting officer of the Corporation. He shall keep or cause
to be kept all books of account and accounting records of the Corporation,
and shall render appropriate financial statements to the Board of Directors
and to the shareholders. He shall perform such other duties as usually
appertain to the office of the Controller and as may be prescribed by the
Board of Directors, the Chairman of the Board or the President.
The Assistant Controllers shall perform such other duties as shall be
delegated to them by the Board of Directors, the Chairman of the Board, the
President or the Controller.
ARTICLE VI.
Shares
------
SECTION 1. Certificates. The certificates for shares in the
Corporation shall be consecutively numbered in the order of their issue,
and each certificate shall state the name of the registered holder, the
number of shares represented thereby, the par value of each share or a
statement that such shares have no par value, whether such shares have been
fully paid and are non-assessable, the kind and class of shares represented
thereby, and a statement or summary of the relative rights, interests,
preferences and restrictions of all classes of such shares; provided, that
if the Board
--8--
of Directors so authorizes, such statement or summary may be omitted from
the certificate if it shall be set forth upon the face or back of the
certificate that such statement, in full, will be furnished by the
Corporation to any shareholder upon written request and without charge.
Certificates for shares shall be in such form, consistent with the
Amended Articles, as the Board of Directors shall approve. Such
certificates shall be signed by the President, or a Vice President, and the
Secretary, or an Assistant Secretary, and shall be sealed with the
corporate seal, which seal may be an original impression or a facsimile
thereof. Where any certificate is manually signed by a registrar, the
signatures of the transfer agent and the President, Vice President,
Secretary or Assistant Secretary of the Corporation may be facsimiles.
SECTION 2. Record of Shareholders. The Corporation shall keep at its
principal office a complete and accurate list of the shareholders of each
class of shares issued and outstanding setting forth the names and
addresses of the shareholders of each class and the number of shares held
by each such shareholder.
The Corporation shall be entitled to treat the holder of record of any
share or shares as the owner in fact thereof and accordingly shall not be
bound to recognize any equitable or other claim to or interest in such
shares on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise expressly provided by
the laws of the State of Indiana.
SECTION 3. Transfers of Shares. The transfer of shares may be made on
the books of the Corporation only by the holder thereof or his duly
authorized attorney and upon surrender of the certificate representing the
same, properly endorsed and/or assigned; title to certificates and to the
shares represented thereby can be transferred only as provided by the laws
of the State of Indiana.
SECTION 4. Transfer Books; Record Date. The books for the transfer of
the shares of the Corporation may be closed for such period, in
anticipation of shareholders' meetings, the payment of dividends or the
allotment of rights, as the Board of Directors from time to time may
determine. In lieu of providing for the closing of the transfer books, the
Board of Directors may, in its discretion, fix a date as prescribed by the
laws of the State of Indiana, for any such meeting, payment, or allotment
as a record date for such purpose.
SECTION 5. Transfer Agents and Registrars. The Board of Directors may
appoint one or more transfer agents and registrars for its shares or
appoint qualified agents to perform both the functions of transfer agent
and registrar. The Board of Directors may require all certificates for
shares to bear the manual signature of either a transfer agent or of a
registrar, or both.
SECTION 6. Lost or Destroyed Certificates. Any person claiming a
certificate for shares to be lost or destroyed shall make an affidavit or
affirmation of that fact and shall give the Corporation and/or the transfer
agents and/or the registrars, if they shall so require, a bond of
indemnity, in form and with one or more sureties satisfactory to the
officers of the Corporation, and/or the transfer agents, and/or the
registrars, whereupon a new certificate may be issued of the same tenor and
for the same number of shares as the one alleged to be lost or destroyed;
or in lieu of the foregoing procedure, such person may proceed in
accordance with the laws of the State of Indiana.
ARTICLE VII.
Checks, Notes, Contracts, Etc.
------------------------------
SECTION 1. Checks; Notes. All checks, notes, drafts, acceptances, or
other demands or orders for the payment of money of the Corporation shall
be signed by such officer or officers,
--9--
or person or persons, as the Board of Directors may from time to time
designate. When so authorized by the Board of Directors, the signatures of
such officers on any bonds, notes, debentures, or other evidences of
indebtedness may be facsimiles and such facsimiles on such instruments
shall be deemed the equivalent of and constitute the written signatures of
such officers for all purposes including, but not limited to, the full
satisfaction of any signature requirements of the laws of the State of
Indiana on the negotiable bonds, notes, debentures, and other evidence of
indebtedness of the Corporation.
SECTION 2. Contracts Requiring Seal. All contracts, deeds, mortgages,
leases or instruments that require the seal of the Corporation shall be
signed by the President, or a Vice President, and by the Secretary, or an
Assistant Secretary, or by such officer or officers, or person or persons,
as the Board of Directors may by resolution prescribe, except as provided
in Section 1 of this Article VII. Such seal may be an original impression
or an engraved or imprinted facsimile thereof.
ARTICLE VIII.
Seal
----
The corporate seal shall have inscribed thereon the name of the
Corporation and the word ``SEAL''.
ARTICLE IX.
Fiscal Year
-----------
The fiscal year shall be the calendar year.
ARTICLE X.
Miscellaneous Provisions
------------------------
SECTION 1. Inspection of Books. The Board of Directors shall determine
from time to time whether, and, if allowed, when and under what conditions
and regulations, the accounts and books of the Corporation (except such as
by statute may be specifically open to inspection), or any of them, shall
be open to the inspection of the shareholders, and the shareholders' rights
in this respect are and shall be restricted and limited accordingly.
SECTION 2. Notices. Whenever under the provisions of these By-Laws
notice is required to be given to any director, officer, or shareholder, it
may be given by depositing the same with the United States Postal Service,
in a postpaid sealed wrapper, addressed to such director, officer, or
shareholder at such address as appears on the books of the Corporation, or
in default of other address, to such director, officer or shareholder at
the General Post Office in the City of Indianapolis, Indiana, and such
notice shall be deemed to be given at the time of such mailing.
SECTION 3. Waiver. Any director, officer or shareholder may waive any
notice required to be given under these By-Laws either before, at, or after
any meeting, and such waiver shall be equally as effective as the due
service of notice.
--10--
ARTICLE XI.
Amendments and Repeal
---------------------
SECTION 1. Amendments. These By-Laws may be altered, amended or
repealed, and new By-Laws may be made at any annual, regular, or special
meeting of the Board of Directors by the affirmative vote of a majority of
the whole Board of Directors at the time of such action.
SECTION 2. Repeal. All By-Laws of the Corporation, and amendments
thereto, heretofore made and adopted by the shareholders and/or the Board
of Directors of the Corporation are hereby expressly repealed.
--11--
