SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No.)
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Check the appropriate box:
[ ] Preliminary Proxy Statement
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
IPALCO Enterprises, Inc.
- ---------------------------------------------------------------------
(Name of Registrant As Specified in Charter)
IPALCO Enterprises, Inc.
- ---------------------------------------------------------------------
(Name of Person(s) Filing the Proxy Statement)
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6(j)(2).
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14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-
11.
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__________________________________________________________________
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state how it was determined.
[ ] Check box if any part of the fee is offset as provided by Exchange
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offsetting fee was paid previously. Identify the previous filing
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<PAGE>
IPALCO ENTERPRISES, INC.
One Monument Circle
P. O. Box 1595
Indianapolis, Indiana 46206-1595
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 17, 1996
TO THE SHAREHOLDERS OF
IPALCO ENTERPRISES, INC.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
IPALCO Enterprises, Inc. will be held at the office of the corporation,
One Monument Circle, Indianapolis, Indiana on Wednesday, April 17, 1996,
at 11 o`clock A.M. (Eastern Standard Time), for the following purposes:
1. To elect six directors in Class I to hold office for terms of
three years each and until their successors are duly elected
and qualified; and
2. To transact such other business as may properly come before
the meeting or any adjournment thereof.
The Board of Directors fixed the close of business on Wednesday,
February 28, 1996 as the record date for determining the shareholders
entitled to notice of, and to vote at, the Annual Meeting and at any
adjournment thereof.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THIS MEETING.
Whether or not you expect to be present at the meeting, you are urged to
fill in, date and sign the enclosed proxy and return it immediately in
the accompanying postage guaranteed envelope.
By order of the Board of Directors.
IPALCO ENTERPRISES, INC.
By: BRYAN G. TABLER, Secretary
Indianapolis, Indiana
March 8, 1996
<PAGE>
TABLE OF CONTENTS
ANNUAL MEETING INFORMATION ------------------------------------------ 1
Date, Time and Place of Annual Meeting ------------------------- 1
Proxy Revocable ------------------------------------------------ 1
Solicitation of Proxies ---------------------------------------- 1
Other Business ------------------------------------------------- 1
Date of Receipt of Shareholder Proposals ----------------------- 2
RELATIONSHIP WITH AUDITOR ------------------------------------------- 2
VOTING SECURITIES AND BENEFICIAL OWNERS ----------------------------- 2
Beneficial Owners of 5% or More of Common Stock ---------------- 2
Beneficial Ownership of Common Stock By Directors,
Nominees and Executive Officers --------------------------- 3
ELECTION OF SIX DIRECTORS ------------------------------------------- 4
Nominees For Directors To Be Elected At the 1996
Annual Meeting -------------------------------------------- 4
CLASS I ---------------------------------------------- 4
Current Directors Whose Terms Expire in 1997 (Class II)
and in 1998 (Class III) ----------------------------------- 5
CLASS II --------------------------------------------- 5
CLASS III --------------------------------------------- 6
Vote Required For Election of Directors ------------------------ 7
Procedure To Propose Nominees For Director --------------------- 7
Number Of Board Meetings and Attendance ------------------------ 7
Committees of the Board ---------------------------------------- 7
Other Required Disclosure -------------------------------------- 8
COMPENSATION OF EXECUTIVE OFFICERS ---------------------------------- 8
Nature and Types of Compensation ------------------------------- 8
Summary Compensation - Table I --------------------------------- 9
Option Exercises - Table II ------------------------------------ 10
Subsidiary Incentive Plan -------------------------------------- 11
COMPENSATION OF DIRECTORS ------------------------------------------- 11
Standard Arrangements ------------------------------------------ 11
Certain Business Relationships --------------------------------- 11
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE
COMPENSATION -------------------------------------------------------- 12
Compensation Policies Relating Generally to Executive Officers - 12
Base Salary ----------------------------------------------- 12
Annual Incentive Plan ------------------------------------- 13
Long-Term Performance and Restricted Stock Incentive Plan ------ 13
Basis for Chief Executive Officer's Compensation --------------- 14
Deductibility of Executive Compensation ------------------------ 14
Compensation Committee Interlocks and Insider Participation ---- 14
Performance Graph - Table III ---------------------------------- 15
Performance Graph ---------------------------------------------- 16
Pension Plans -------------------------------------------------- 16
Pension Plan Table - Table IV ----------------------------- 16
Employment Contracts and Termination of Employment and
Change-in-Control Arrangements ------------------------------- 17
<PAGE>
IPALCO ENTERPRISES, INC.
One Monument Circle P. O. Box 1595
Indianapolis, Indiana 46206-1595
PROXY STATEMENT
For Annual Meeting of Shareholders
To Be Held April 17, 1996
(Mailed on or about March 8, 1996)
ANNUAL MEETING INFORMATION
Date, Time and Place of Annual Meeting
The information set forth in this Proxy Statement is furnished in
connection with the solicitation of the enclosed proxy by and on behalf
of the Board of Directors of IPALCO Enterprises, Inc. (``IPALCO'') for
use at its Annual Meeting of Shareholders to be held April 17, 1996, at
11:00 o'clock A.M. (EST) at the principal office of IPALCO, One Monument
Circle, Indianapolis, Indiana, 46204, pursuant to the foregoing Notice of
Annual Meeting, and at any adjournment of such meeting.
Proxy Revocable
A shareholder executing and delivering the enclosed proxy has the
unconditional right to revoke it at any time before the authority granted
thereby is exercised.
Solicitation of Proxies
This solicitation of proxies is being made by IPALCO and the
expenses thereof will be borne by IPALCO. The principal solicitation is
being made by mail. However, additional solicitation may be made by
telephone, telegraph or personal contact by officers and other employees
of IPALCO and its subsidiaries, who will not be additionally compensated
therefor. IPALCO expects to reimburse broker-dealers and others for
reasonable expenses of forwarding proxy material to beneficial owners.
Other Business
Management is not aware of any business to be presented at the 1996
Annual Meeting other than the election of six directors. The minutes of
the Annual Meeting of Shareholders held April 19, 1995, will be presented
for approval at the 1996 Annual Meeting; however, such action is not
intended to constitute approval or disapproval of any matter referred to
in such minutes. If other matters are properly brought before the
meeting, or any adjournment thereof, the enclosed proxy gives
discretionary authority to the persons named therein to act in accordance
with their best judgment on such matters.
Date of Receipt of Shareholder Proposals
If a shareholder intends to present a proposal at the Annual
Meeting of Shareholders to be held April 16, 1997, the proposal must be
received by the Corporate Secretary for inclusion in IPALCO's proxy
statement and form of proxy not later than November 9, 1996.
RELATIONSHIP WITH AUDITOR
Deloitte & Touche LLP, with offices at Market Tower, Suite 3000, 10
West Market Street, Indianapolis, Indiana, has been the auditor of IPALCO
since its inception. Upon the recommendation of the Audit Committee, that
firm was again appointed by IPALCO's Board of Directors to serve as
auditor for IPALCO and its subsidiaries for the current year. A
representative of Deloitte & Touche LLP will be present at the Annual
Meeting of Shareholders to be held April 17, 1996, and will be given the
opportunity to make a statement and to respond to appropriate
shareholders' questions.
VOTING SECURITIES AND BENEFICIAL OWNERS
On January 15, 1996, IPALCO had outstanding 37,873,051 shares of
common stock. In addition, there are a total of 41,529,253 authorized but
unissued shares of common stock reserved for issuance in accordance with
the provisions of the Shareholder Rights Plan, the Automatic Dividend
Reinvestment and Stock Purchase Plan, the 1991 Directors Stock Option
Plan, the 1990 (Officers) Stock Option Plan, and the Long-Term
Performance and Restricted Stock Incentive Plan all of which are IPALCO
Plans and of the Employees' Thrift Plan (the ``Thrift Plan'') of
Indianapolis Power & Light Company (``IPL''), a subsidiary of IPALCO.
Each share of common stock entitles its owner to one (1) vote upon each
matter to come before the meeting. Only shareholders of record at the
close of business on Wednesday, February 28, 1996, will be entitled to
vote at the meeting or at any adjournment thereof.
<TABLE>
Beneficial Owners of 5% or More of Common Stock
On January 15, 1996, the following beneficial owners held more than
5% of IPALCO's voting securities:
<CAPTION>
- -------------------------------------------------------------------------
Name and Address of Amount and Nature Percent
Title of Class Beneficial Owner of Beneficial Ownership of Class
- -------------------------------------------------------------------------
<S> <C> <C> <C>
Common Stock Employees' Thrift Plan 3,647,589 shares<F1> 9.63%
of Indianapolis Power
& Light Company
c/o Merrill Lynch
Trust Company of America,
Trustee
265 Davidson Avenue, 4th Floor
Somerset, NJ 08873
- -----------------------
<FN>
<F1> Trustee, under a continuing agreement, has discretion to vote
shares as to which no voting instructions are received.
- ------------------------------------------------------------------------
</TABLE>
<TABLE>
Beneficial Ownership of Common Stock By Directors, Nominees and Executive
Officers
On January 15, 1996, the following-named directors, nominees and
executive officers of IPALCO, individually and as a group, beneficially
owned equity securities of IPALCO as follows:
- -----------------------------------------------------------------------------------------
Name of Amount and Nature Percent
Title of Class Beneficial Owner of Beneficial Ownership<F1> of Class
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Stock Joseph D. Barnette, Jr. 7,078 shares<F3>
Robert A. Borns 25,457 shares<F3>
John R. Brehm 37,513 shares<F4>
Mitchell E. Daniels, Jr. 10,200 shares<F3>
Rexford C. Early 3,679 shares
Otto N. Frenzel III 18,800 shares<F3>
Max L. Gibson 5,400 shares
Edwin J. Goss 7,518 shares<F3>
Earl B. Herr, Jr. 7,173 shares
John R. Hodowal 155,241 shares<F4>
Ramon L. Humke 136,013 shares<F4>
Sam H. Jones 10,240 shares<F3>
Andre B. Lacy 23,044 shares<F5>
L. Ben Lytle 6,472 shares
Michael S. Maurer 5,307 shares
Thomas M. Miller 6,381 shares
Sallie W. Rowland 10,784 shares<F3>
Thomas H. Sams 13,334 shares<F6>
Bryan G. Tabler 9,297 shares<F3>, <F4>
Gerald D. Waltz 70,846 shares<F4>
Other Executive Officers 198,067 shares
All 27 directors and
executive officers,
as a group 767,844 shares<F3>, <F4> 2.03%
- --------------------------------
<FN>
<F1> Except as otherwise noted below, each person named in the table has
sole voting and investment power with respect to all shares of
common stock listed as owned by such person. Shares beneficially
owned include shares that may be acquired pursuant to exercise of
outstanding options that are exercisable within 60 days as follows:
Mr. Barnette-4,000; Mr. Borns-6,000; Mr. Brehm-25,000; Mr.
Daniels-10,000; Mr. Early-2,000; Mr. Frenzel-10,000; Mr.
Gibson-2,000; Mr. Goss-6,000; Dr. Herr-6,000; Mr. Hodowal-120,000;
Mr. Humke-105,000; Mr. Jones-10,000; Mr. Lacy-10,000; Mr.
Lytle-6,000; Mr. Maurer-4,000; Mr. Miller-6,000; Mrs.
Rowland-10,000; Mr. Sams-10,000; Mr. Waltz-45,000; other executive
officers-141,667; directors and executive officers as a
group-538,667.
<F2> Percentages less than 1% of total common stock outstanding are not
indicated.
<F3> Includes 18,781 shares owned by or with family members sharing
their home and shares held in trust or other arrangements with
family members.
<F4> Includes vested and contingent interests in shares of common stock
held by the Trustee in the Thrift Plan (stated in whole shares) of:
Mr. Brehm-8,078; Mr. Hodowal-17,965; Mr. Humke-4,253; Mr.
Tabler-163; Mr. Waltz-21,795; other executive officers-40,071; and
all executive officers as a group-92,325.
<F5> Includes 8,000 shares owned by LDI, Ltd. and 1,800 shares owned by
the Lacy Foundation of which Mr. Lacy is a partner and a director,
respectively, and 400 shares representing his vested interest in a
self-employment retirement plan, totaling 10,200 shares, 7,800 of
which he disclaims beneficial ownership.
<F6> Mr. Sams disclaims beneficial ownership of 1,000 shares of the
total shares shown opposite his name.
</TABLE>
ELECTION OF SIX DIRECTORS
At a meeting held January 30, 1996, the Executive Committee of
IPALCO's Board of Directors nominated 6 directors to stand for election
as Class I directors of IPALCO at its Annual Meeting of Shareholders to
be held April 17, 1996, for terms of three years each and until their
successors are duly elected and qualified.
Proxies representing shares held on the record date which are
returned duly executed, will be voted, unless otherwise specified, in
favor of the 6 nominees for the Board of Directors named below in Class
I. All such nominees are members of IPALCO's present Board of Directors
and all nominees have consented to serve if elected. However, if any
nominee becomes unavailable to serve, the persons named as proxies may
exercise their discretion to vote for a substitute nominee.
The nominees for directors in Class I, the current directors in
Class II and Class III, as assigned by the Board of Directors, and the
names, ages (as of April 17, 1996), business experience and directorships
of such nominees and directors are as follows:
Nominees For Directors To Be Elected At The 1996 Annual Meeting:
CLASS I
Robert A. Borns, 60, Chairman of Borns Management Corporation (real
estate management), Indianapolis, Indiana. Mr. Borns has held his
present position since 1961 and serves on numerous boards,
including the Board of Trustees of Indianapolis Museum of Art,
Indianapolis Symphony Orchestra and St. Vincent Hospital. He is
also a director of IPL, Indianapolis Water Company, IWC Resources
Corporation, and of Heritage Partners Management, Inc. He has been
a director of IPALCO since April, 1987 (excluding the period March
15 to August 23, 1993).
Mitchell E. Daniels, Jr., 47, President, North American Pharmaceutical
Operations, Eli Lilly and Company, (pharmaceuticals manufacturer),
Indianapolis, Indiana since April 1, 1993. Prior to that time, he
was Vice President, Corporate Affairs of Eli Lilly and Company and
President and Chief Executive Officer of Hudson Institute, Inc.
(March, 1987 to August, 1990). He is a director of IPL, Acordia,
Inc. and NBD Bank, N.A. and has been a director of IPALCO since
November, 1989.
Rexford C. Early, 61, President of Carlisle Insurance Agency, Inc.,
Indianapolis, Indiana, a position he has held for more than five
years. Mr. Early was Chairman of the Indiana Republican Party from
March, 1991 to March, 1993. He is a director of IPL and has been a
director of IPALCO since August, 1993.
John R. Hodowal, 51, Chairman of the Board and President of IPALCO and
Chairman of the Board and Chief Executive Officer of IPL. Except
for the Chairmanship of IPL which he assumed in February, 1990, Mr.
Hodowal has held his current positions since May, 1989. For some
years prior to that time, he was Vice President and Treasurer of
IPALCO and Executive Vice President of IPL. He is a director of
IPL, Bank One, Indianapolis, NA and Associated Insurance Companies,
Inc. He has been a director of IPALCO since April, 1984.
Michael S. Maurer, 53, Chairman of the Board of MyStar Communications
Corporation (radio station operations), a position he has held for
more than five years; Chairman of the Board of IBJ Corporation
(newspaper publisher), since December, 1990; Chairman of the Board
of The National Bank of Indianapolis since December, 1993. Mr.
Maurer is Chair, United Way of Central Indiana. He has been a
director of IPL and IPALCO since January, 1993.
Thomas H. Sams, 54, President and Chief Executive Officer, Waldemar
Industries, Inc. (an investment holding company), Indianapolis,
Indiana and an officer of various subsidiary and affiliated
corporations thereof. Mr. Sams has held these positions since 1966.
He is a director of IPL, NBD Bank, N.A., Meridian Insurance Group,
Inc. and State Life Insurance Company. He has been a director of
IPALCO since April, 1987.
Current Directors Whose Terms Expire in 1997 (Class II) and in 1998
(Class III):
CLASS II
Joseph D. Barnette, Jr., 56, Chairman and Chief Executive Officer of Banc
One Indiana Corporation (a bank holding company) since January,
1993 and Chairman and Chief Executive Officer of Bank One,
Indianapolis, NA, since October, 1994. Prior to that, Mr. Barnette
was President and Chief Executive Officer of Banc One Indiana
Corporation (July, 1990 - January, 1993) and President and Chief
Executive Officer of Bank One, Indianapolis, NA (January, 1990 -
October, 1994). He is a director of IPL, IWC Resources Corporation,
Indianapolis Water Company and Meridian Insurance Group, Inc. He
has been a director of IPALCO since January, 1993.
Max L. Gibson, 55, Retired July, 1989. For more than five years prior to
retirement, Mr. Gibson was President of Victory Services
Corporation (waste disposal), Terre Haute, Indiana. He is a
director of IPL, First Financial Corporation, Terre Haute First
National Bank and First State Bank of Clay County. He has been a
director of IPALCO since August, 1993.
Edwin J. Goss, 69, Retired, March, 1990. For more than five years prior
to his retirement, Mr. Goss was the Chairman and Chief Executive
Officer of American States Insurance Company and its subsidiaries,
Indianapolis, Indiana. Mr. Goss continues as a director of these
companies. He also is a director of IPL, National City Bank,
Indiana, and has been a director of IPALCO since July, 1986
(excluding the period March 15 to August 23, 1993).
Ramon L. Humke, 63, Vice Chairman of IPALCO and President and Chief
Operating Officer of IPL. Prior to February, 1990 when he assumed
his present position with IPL, Mr. Humke was President and Chief
Executive Officer of Ameritech Services and Senior Vice President
of Ameritech Bell Group (September, 1989 - February, 1990) and
President and Chief Executive Officer of Indiana Bell Telephone
Company (October, 1983 - September, 1989). He is a director of IPL,
NBD Bank, N.A., LDI Management, Inc. and is Chairman of the Boards
of Meridian Mutual Insurance Company and Meridian Insurance Group,
Inc. He has been a director of IPALCO since February, 1990.
Sallie W. Rowland, 63, Chairman and Chief Executive Officer of Rowland
Design, Inc. (an architectural, interiors and graphic design firm),
Indianapolis, Indiana, positions she has held for more than 5
years. Mrs. Rowland serves on various community boards including
The Indianapolis Chamber of Commerce of which she is Vice Chairman.
She is a director of IPL, NBD Bank, N.A., and Meridian Mutual
Insurance Company. She has been a director of IPALCO since April,
1988.
CLASS III
Otto N. Frenzel III, 65, Chairman, Executive Committee National City
Bank, Indiana, Indianapolis, Indiana. Mr. Frenzel has held his
present position since January, 1996. For more than 3 years prior
to that time, Mr. Frenzel was Chairman of the Board of National
City Bank, Indiana. Prior to May, 1992, Mr. Frenzel was Chairman of
the Board of Merchants National Bank & Trust Company of
Indianapolis and Chairman of the Board of Merchants National
Corporation. He is a director of IPL, National City Corporation,
American United Life Insurance Company, Indiana Energy, Inc.,
Indiana Gas Company, Inc., Indianapolis Water Company, Baldwin &
Lyons, Inc. and IWC Resources Corporation. He has been a director
of IPALCO since September, 1983.
Dr. Earl B. Herr, Jr., 68, Retired. For more than five years prior to his
retirement in December, 1992, Dr. Herr was Executive Vice President
of Eli Lilly and Company (pharmaceuticals manufacturer),
Indianapolis, Indiana. He is a director of IPL and Lilly Endowment
and has been a director of IPALCO since April, 1986 (excluding the
period March 15 to August 23, 1993).
Sam H. Jones, 68, President, Indianapolis Urban League, Inc.,
Indianapolis, Indiana. Mr. Jones has held his present position for
more than 5 years and serves on numerous educational, social and
cultural boards, including the Advisory Board of Indiana
University-Purdue University at Indianapolis, Methodist Health
Foundation, Board of One Hundred Black Men of Indianapolis and the
Administrative Board of Riverside Park United Methodist Church. He
is a director of IPL and has been a director of IPALCO since
September, 1983.
Andre B. Lacy, 56, General Partner and Chief Executive of LDI, Ltd. (an
industrial and investment limited partnership), Chairman of the
Board, Chief Executive Officer and President of LDI Management,
Inc., the managing general partner of LDI, Ltd., and Chairman and
Chief Executive Officer of all subsidiaries and divisions thereof.
He has held his present positions for more than 5 years. He is a
director of IPL, Ethyl Corporation, Tredegar Industries, Inc.,
Albemarle Corporation, Patterson Dental Co., Herff Jones and The
National Bank of Indianapolis. He has been a director of IPALCO
since April, 1985.
L. Ben Lytle, 49, Chairman, President and Chief Executive Officer,
Associated Insurance Companies, Inc. (insurance and financial
services), Indianapolis, Indiana. He assumed the title of Chairman
in March, 1994, and has held the remaining positions for more than
five years. He is a director of IPL, Bank One, Indianapolis, NA,
and Associated Insurance Companies, Inc. and its subsidiaries. He
has been a director of IPALCO since April, 1992.
Thomas M. Miller, 66, Retired. For more than 5 years prior to his
retirement, Mr. Miller was Chairman of the Board and Chief
Executive Officer of NBD Indiana, Inc. (a bank holding company) and
NBD Bank, N.A., Indianapolis, Indiana, and predecessor companies.
Mr. Miller is a director of IPL, NBD Indiana, Inc., NBD Bank, N.A.,
Indianapolis Water Company and IWC Resources Corporation. He has
been a director of IPALCO since April, 1992.
Vote Required For Election of Directors
Under Indiana law, directors are elected by plurality vote at a
meeting where a quorum (a majority of shares issued and outstanding) is
present. Shares represented for any purpose are deemed present for quorum
purposes; thus, withheld votes are counted for quorum purposes.
Abstentions and broker non-votes are not counted for any purpose.
Procedure To Propose Nominees For Director
IPALCO will accept timely notice by shareholders of proposed
nominees for directors. Any such notice must be received by the Corporate
Secretary of IPALCO not less than 60 days nor more than 90 days prior to
the date of each annual meeting. Such shareholder's notice shall set
forth (a) as to each proposed nominee for director (i) the name, age,
business address and residence address of such nominee, (ii) the
principal occupation or employment of such nominee, (iii) the class
and/or series and number of shares that are beneficially owned by such
nominee on the date of such shareholder notice and (iv) any other
information relating to such nominee that is required to be disclosed
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 IPALCO's books, of such shareholder and any
shareholders known to be supporting such nominee and (ii) the class
and/or series and number of shares beneficially owned by such shareholder
and by any shareholders known to be supporting such nominee on the date
of such shareholder notice. The Board of Directors may reject any
nomination for director not made in accordance with the foregoing
provisions.
Number of Board Meetings and Attendance
During 1995, the Board of Directors of IPALCO held 11 meetings and
committees of the Board held a total of 17 meetings. Each director
attended more than 75% of the aggregate of Board meetings and assigned
committee meetings, except for Mr. Thomas M. Miller, who attended 73.3%
of such meetings. All directors, on average, attended over 92% of the
Board meetings and assigned committee meetings held in 1995.
Committees of the Board
The Board of Directors of IPALCO has four standing committees, the
Executive Committee, the Audit Committee, the Compensation Committee, and
the Committee on Strategies. The Board does not have a nominating
committee as such, but the Executive Committee performs the functions of
such committee. It reviews, among other things, the qualifications and
suitability of candidates to stand for election to IPALCO's Board of
Directors and makes specific recommendations with respect thereto. In
addition, the Executive Committee considers and recommends the
declaration of dividends and acts on matters when the full Board is not
in session. The Executive Committee held six meetings in 1995. Currently,
Mr. John R. Hodowal is Chairman and Messrs. Robert A. Borns, Otto N.
Frenzel III, Earl B. Herr, Jr., Ramon L. Humke, and Sam H. Jones are
members.
The Audit Committee recommends the appointment of the auditor for
the ensuing year for IPALCO and its subsidiaries, reviews the scope of
the audit, examines the auditor's reports, makes appropriate
recommendations to the Board of Directors as a result of such review and
examination, and inquires into the effectiveness of the financial and
accounting functions and controls. The Audit Committee first approves all
non-audit services and gives appropriate consideration to the effect, if
any, such services may have on the independence of the auditor, except
that management advisory and tax services which do not exceed $50,000 per
project or $150,000 in the aggregate per calendar year may be approved by
the Chairman of the Board without such Committee's consent. The Audit
Committee held three meetings in 1995. Currently, Mrs. Sallie W. Rowland
is Chairman and its members are Messrs. Rexford C. Early, Edwin J. Goss,
Sam H. Jones, and Andre B. Lacy.
The Compensation Committee reviews current and proposed
compensation levels of all officers of IPALCO and its subsidiaries,
obtains advice of independent consultants, and makes specific
recommendations as to the compensation each officer should receive on an
annual basis. It also reviews and makes recommendations with respect to
other forms of compensation for such officers, including supplemental
pension benefits, bonuses and restricted stock. (See ``Board Compensation
Committee Report on Executive Compensation'' below.) The Compensation
Committee held four meetings in 1995. Currently, Mr. Otto N. Frenzel III
is Chairman and Messrs. Robert A. Borns, Earl B. Herr, Jr., Thomas M.
Miller, and Thomas H. Sams are members.
The Committee on Strategies considers and makes recommendations
with respect to issues and processes involving dynamic planning, matters
affecting the allocation of corporate resources among regulated and
non-regulated subsidiaries, and other components of overall corporate
strategy. The Committee on Strategies held four meetings in 1995.
Currently, Mr. Joseph D. Barnette, Jr. is Chairman and Messrs. Mitchell
E. Daniels, Jr., Max L. Gibson, L. Ben Lytle, and Michael S. Maurer are
members.
Other Required Disclosure
Under the federal securities laws, IPALCO's directors, certain
officers, and 10% shareholders are required to report to the Securities
and Exchange Commission, by specific due dates, transactions and holdings
in IPALCO's stock. IPALCO believes that during 1995 all these filing
requirements were satisfied on a timely basis.
COMPENSATION OF EXECUTIVE OFFICERS
Nature and Types of Compensation
The two tables that follow on succeeding pages disclose all plan
and non-plan compensation awarded to, earned by, or paid to the Chairman
of the Board and President of IPALCO, who is its chief executive officer
(``CEO''), and to the four named executive officers other than the CEO
who are the most highly compensated key policy-making executive officers
of IPALCO and its subsidiaries. The tables include a Summary Compensation
Table (Table I) and an Aggregated Option/SAR Exercises In Last Fiscal
Year and Fiscal Year-End Option/SAR Values Table (Table II). No table is
presented for Option/SAR Grants in last fiscal year since no stock
options were granted during 1995. No table is presented for Long-Term
Incentive Plans since the issuance of restricted stock under the
Long-Term Performance and Restricted Stock Incentive Plan is included in
the Summary Compensation Table (Table I).
<PAGE>
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long-Term Compensation
---------------------------------------
Annual Compensation Awards Awards Payouts
--------------------------------------------------------------------------
Other Securities
Annual Restricted Underlying All Other
Compen- Stock Options/ LTIP Compen-
Name and sation<F1> Awards<F2> SARs<F3> Payouts<F4> sation<F5>
Principal Position Year Salary ($) Bonus ($) ($) ($) (#) ($) ($)
- ------------------ ---- ---------- --------- ----------- ---------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
John R. Hodowal 1993 $424,459 $209,672 $ 45,851 -0- 105,000 $82,350 $8,624
Chairman & President 1994 461,051 214,566 41,471 -0- -0- 76,250 8,955
Chairman & CEO of IPL 1995 476,012 206,425 43,721 $491,790 -0- 75,488 8,310
Ramon L. Humke 1993 $351,889 $173,827 $112,425 -0- 60,000 $68,250 $8,624
Vice Chairman; 1994 382,221 177,881 130,141 -0- -0- 63,646 8,955
President & COO of IPL 1995 394,591 171,120 157,606 $407,700 -0- 62,975 8,310
John R. Brehm 1993 $199,822 $ 65,839 $ 6,717 -0- 30,000 $27,844 $7,993
Vice President &
Treasurer; 1994 218,304 67,728 3,678 -0- -0- 25,781 8,199
Senior Vice President
of IPL 1995 225,315 89,513 6,301 $133,050 -0- 24,228 8,310
Bryan G. Tabler<F6> 1993 -0- -0- -0- -0- -0- -0- -0-
Vice President, Secre-
tary & General Counsel; 1994 $ 46,157 $ 15,785 $ 1,360 -0- -0- -0- -0-
Senior Vice President
of IPL 1995 202,931 58,650 14,471 $121,350 -0- -0- $5,589
Gerald D. Waltz 1993 $193,415 $ 63,684 $23,757 -0- 30,000 $28,125 $7,735
Senior Vice President
of IPL 1994 202,955 62,887 4,465 -0- -0- 26,042 7,731
1995 201,930 58,353 11,178 $121,530 -0- 24,228 8,310
- -----------------------
<FN>
<F1> Represents taxes paid by IPALCO and/or IPL on accrued interest and
contributions of principal under the Funded Supplemental Plan (See
``Pension Plans''). Includes $5,463 for taxes and gross-up paid on
deferred compensation and $3,864 earned in above market interest on
deferred compensation for Mr. Humke.
<F2> Restricted common stock awards are valued at the closing market
price as of the date of grant. Restricted common stock holdings and
the value thereof based on the closing price of the common stock at
year end are as follows: Mr. Hodowal - 16,393 shares ($624,983);
Mr. Humke - 13,590 shares ($518,119); Mr. Brehm - 4,435 shares
($169,084); Mr. Tabler - 4,045 shares ($154,216); and Mr. Waltz -
4,051 shares ($154,444). Dividends on the restricted common stock
are payable to the named officers. Shares awarded in 1995 represent
a cumulative 3-year award for years 1995, 1996, and 1997. Under the
terms of the Plan, no additional shares will be awarded to the
named officers before 1998.
<F3> No options have stock appreciation rights.
<F4> Payouts shown were made in 1995 for the 4-year LTIP Program ended
December 31, 1994.
<F5> Represents 1995 contributions made by IPL to the Trustee of the
Employees' Thrift Plan.
<F6> Mr. Tabler started his employment on October 1, 1994, and became an
officer of both IPALCO and IPL on January 1, 1995.
TABLE I
</TABLE>
<PAGE>
<TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs at
FY-End (#) FY-End ($)*
Shares
Acquired On Value Exercisable/ Exercisable/
Name Exercise (#) Realized ($) Unexercisable Unexercisable
- ---------------- ------------ ------------ ---------------- ----------------
<S> <C> <C> <C> <C>
John R. Hodowal -0- -0- 120,000(e) $517,500(e)
35,000(u) 4,375(u)
Ramon L. Humke -0- -0- 105,000(e) $751,875(e)
20,000(u) 2,500(u)
John R. Brehm -0- -0- 25,000(e) $ 21,875(e)
10,000(u) 1,250(u)
Bryan G. Tabler -0- -0- ---- ----
---- ----
Gerald D. Waltz 5,000 $48,750 45,000(e) $324,375(e)
10,000(u) 1,250(u)
- -------------------------
(e) Exercisable.
(u) Unexercisable.
* Based upon year-end closing market price of $38.125 per share of
common stock.
TABLE II
</TABLE>
<PAGE>
Subsidiary Incentive Plan
In early 1995, the Board of Directors of Mid-America Capital
Resources, Inc. (``Mid-America''), a wholly owned subsidiary of IPALCO,
approved the implementation of an incentive compensation plan that will
provide for payment of incentive compensation in the year 2000 or later
to key employees of Mid-America, its subsidiaries, and certain executive
employees of IPALCO if certain objective performance measures are met.
COMPENSATION OF DIRECTORS
Standard Arrangements
Non-employee directors serving on the Board of IPALCO are paid an
annual fee of $8,500 plus $450 for each meeting attended; however,
directors of IPALCO and its subsidiaries are limited to two annual fees.
Non-employee members of the Executive Committee of the Board are paid
annual fees of $10,000, but no meeting fees. Members of the Audit
Committee, Compensation Committee and the Committee on Strategies of the
Board, all of whom are non-employee directors, are paid annual fees of
$4,000 plus $450 for each meeting attended. The Chairman of each of the
latter three committees receives an additional fee of $1,500 annually.
Members of the Executive and Audit Committees of both IPALCO and IPL are
limited to one annual fee. Only one meeting fee is paid to members of the
Audit Committees of both such companies when meetings are held jointly or
follow one another. Directors who are also officers of IPALCO or one of
its subsidiaries receive no director fees.
Certain Business Relationships
During 1995, Acordia, Inc. (``Acordia'') and Anthem Companies, Inc.
(``Anthem'') administered health care programs for IPALCO and its
subsidiaries under contracts that involve payments to Acordia and Anthem
aggregating approximately $16 Million. Mr. L. Ben Lytle is Chairman and
Chief Executive Officer of Acordia and Anthem, which are subsidiaries of
Associated Insurance Companies, Inc. of which Mr. Lytle is Chairman,
President and Chief Executive Officer.
IPALCO subsidiaries IPL and Mid-America Capital Resources, Inc.
(``Mid-America'') each maintained a line of credit during 1995 with
National City Bank, Indiana (``NCB'') of which Mr. Otto N. Frenzel III is
Chairman of the Executive Committee. During 1995, the maximum principal
amount outstanding at any time on IPL's $30 million line of credit with
NCB was approximately $11 million, and IPL had no outstanding balance
with NCB as of December 31, 1995. An unutilized long-term revolving
credit facility was also maintained by IPL with NCB. Mid-America's $6
million line of credit with NCB had a maximum principal amount of $2.6
million outstanding at any time, and a principal balance of $800,000
outstanding as of December 31, 1995.
IPALCO subsidiary IPL maintained a long-term revolving credit
facility during 1995 with Bank One, Indianapolis, NA, (``Bank One'') of
which Mr. Joseph D. Barnette, Jr. is Chairman and Chief Executive
Officer. IPL did not utilize the credit facility during 1995. Mid-America
maintained a $6 million line of credit with Bank One during 1995 and had
a maximum principal amount of $2.6 million outstanding at any time, and
an outstanding principal balance of $800,000 as of December 31, 1995.
An unutilized credit line and an unutilized long-term revolving
credit facility were also maintained by IPL with NBD Bank, N.A.
(``NBD''), of which Mr. Thomas M. Miller is a Director, and of which
Mr. Ramon L. Humke is a director. IPALCO subsidiary Mid-America
maintained a line of credit during 1995 with NBD, had a maximum principal
amount outstanding of $2.6 million, and a principal balance of $800,000
outstanding as of December 31, 1995. IPALCO subsidiary, Indianapolis
Campus Energy (``ICE''), established an $18 million project loan with
NBD, and the outstanding principal balance as of December 31, 1995 was
approximately $13 million.
IPALCO subsidiary IPL engaged Rowland Design, Inc. for
architectural and design services for certain improvements to IPALCO's
corporate offices located at One Monument Circle. During 1995, IPL paid
fees of approximately $238,000 under such agreement. Mrs. Sallie W.
Rowland is Chairman and CEO of Rowland Design, Inc.
IPALCO subsidiary IPL engaged Schenkel & Associates, LLC, for
consulting services in the areas of community affairs, public relations,
and communication, and paid fees of approximately $27,000 during 1995.
Mr. Thomas M. Miller is majority owner of Schenkel & Associates, LLC.
BOARD COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
Compensation Policies Relating Generally to Executive Officers
The Compensation Committee (``Committee'') of the Board of
Directors (``Board''), in consultation with its outside advisor,
establishes the compensation policies of IPALCO Enterprises, Inc. and its
subsidiaries (``IPALCO'') with regard to all officers. The Committee
recommends to the Board the adoption or amendment of compensation plans
for officers, including the named executive officers. On authority of the
full Board, the Committee administers all such plans, including
establishing officers' base salary levels, reviewing and approving
performance measures and goals for both annual and long-term incentive
plans, and approving incentive awards.
The Committee is made up of five non-employee directors whose
philosophy is to attract, retain, and motivate a high quality management
team by providing a strong and direct link between IPALCO performance and
officer compensation, with a significant portion of total compensation
being dependent upon measurable performance objectives. The compensation
program for executive and other selected officers had three basic
components in 1995: base salary, a performance-based annual incentive
plan, and a long-term performance and restricted stock incentive plan. It
is the policy of the Committee that the compensation program should
directly link executive and shareholder interests.
Base Salary
The Committee targeted 1995 base salaries for officers, including
the named executive officers, at the median level for similar positions
within comparably performing utilities, and where such positions are also
found in general industry, at a level approximately one-half the
difference between the utility industry and general industry medians. The
Committee considered the analysis which was provided by the outside
advisor that IPALCO salaries are within the median range of comparable
utilities and below those of general industry. The Committee also
considered both company and individual performance in approving the range
of salary increases and the salary for each officer, including the named
executive officers. 1995 base salary increases for all officers averaged
3.7%, somewhat below the utility industry average, even though company
performance was comparable with other high-performing utilities. The
Committee determined that constraining base salary increases was an
appropriate step to place a higher percentage of total compensation at
risk through the use of incentive compensation.
The comparative compensation data for electric utilities used by
the Committee were derived from companies with comparable revenues as
reported in the annual Edison Electric Institute Executive
Compensation Survey. Data for general industry were drawn from four
national executive compensation surveys provided by the outside
consultant.
Annual Incentive Plan
The IPALCO Annual Incentive Plan is a performance-based plan which
measures company performance in four equally weighted criteria: Net
Income, Customer Satisfaction, Productivity, and Budget Compliance.
Target awards are set approximately half-way between general industry and
utility medians. Participants in the plan are approved in advance of the
plan year by the Committee. All participants, including the named
executive officers, are measured against performance goals which are
established by the Committee and announced at the beginning of the year.
Goals are set at Threshold, Target, and Maximum levels, with Threshold
performance required for any award in each criteria; however, if the
Threshold goal for Net Income is not met, no payout is made regardless of
the performance in any other criteria. Each performance level is assigned
an award value, with interpolation for performance between levels. For
named executive officers, performance at Threshold, Target, and Maximum
levels respectively warrants a payout of 10%, 22.5%, and 35% of base
salary. Factors ranging from .75 to 1.5 are applied to the award
percentage based upon the participant's position.
The plan permits the reduction or elimination of an award should an
individual participant's performance be below expectations. No awards
were reduced in 1995.
For 1995, the Company met the Maximum performance goals in three of
the four performance measures: Net Income, Productivity, and Budget
Compliance. Customer Satisfaction performance was at the Threshold level.
Long-Term Performance and Restricted Stock Incentive Plan
The performance-based restricted stock plan, approved at the last
Annual Meeting of Shareholders, is designed to focus the attention of
prospective participants on long-term company objectives and performance.
Participation is subject to Committee approval and is limited to key
employees (including non-officers) who contribute on a continuing basis
to the strategic and long-term growth of the company.
The plan continues to measure company performance in Total Return
to Shareholders and in Cost Effective Service (net income as a percent of
operating revenues plus other income) compared with the performance of a
Peer Group of 15 comparable utilities. Criteria for selection of peer
companies included revenue size and sources, market-to-book ratio, fuel
source, and dividend yield among other criteria. Target awards are set
approximately half-way between general industry and utility medians.
Conditional restricted stock grants, at Target levels, ranging from 10%
to 35% of base salary, are awarded at the beginning of each three-year
performance period. Final awards are based upon IPALCO's ranking within
the Peer Group over the performance period, with one-third of the shares
to be vested during each of the fourth, fifth, and sixth years after the
beginning of the performance period. The performance period for Program 1
covers 1995-1997, with final restricted stock awards made July 1, 1998.
Performance in Total Return to Shareholders and Cost Effective
Service continues also to be measured over the four-year performance
periods specified in the original Long-Term Incentive Plan for those
programs begun prior to 1995. For Program 4, for the years 1991-1994,
IPALCO ranked first among peers in Cost Effective Service and eleventh
among peers in Total Return to Shareholders. Using the schedule specified
in the plan for that level of performance, the named executive officers
received incentive payments totaling $186,919 in 1995.
Basis For Chief Executive Officer's Compensation
The Chief Executive Officer's (``CEO'') compensation continues to
be directly and explicitly linked to IPALCO performance with
consideration given to the Committee's assessment of his individual
performance. The Committee thoroughly reviews the CEO's performance,
including strategic direction, leadership and management team
development, as well as overall company performance. The Committee's
review is both subjective and objective. IPALCO performance data used in
the incentive plans plus other financial, operational, service, and
administrative data are considered.
Total 1995 compensation for the CEO (including base salary, Annual
Incentive Plan payment, and Long-Term Incentive payment and the first
grant of stock associated with the 1995 Long-Term Performance and
Restricted Stock Incentive Plan), is shown in Table I. His total
compensation was slightly above the median of Peer Group CEOs, but was
slightly below the median of CEO compensation in comparably
high-performing peer companies.
At Target performance, under the current compensation program,
approximately 41% of the CEO's total direct compensation is variable and
at risk. During 1995, approximately 48% of the CEO's actual total direct
compensation was at risk.
Deductibility of Executive Compensation
Section 162(m) of the Internal Revenue Code will not permit a
public corporation to deduct, for federal income tax purposes, annual
compensation in excess of $1 million paid to certain top executives,
unless that compensation qualifies as ``performance based'' compensation.
This limitation does not impact IPALCO with respect to executive
compensation paid in 1995, nor does the Committee believe that this will
have an impact in 1996. The Committee continues to review this issue with
the present intent to take appropriate steps to ensure the continued
deductibility of its executive compensation.
The Compensation Committee of the
Board of Directors of IPALCO
Enterprises, Inc.
Otto N. Frenzel III, Chairman
Robert A. Borns
Earl B. Herr, Jr.
Thomas M. Miller
Thomas H. Sams
Compensation Committee Interlocks and Insider Participation
Mr. Frenzel is Chairman, and Messrs. Borns, Herr, Miller and Sams
are the members of the Compensation Committee. IPALCO's Vice Chairman,
Mr. Ramon L. Humke, is a member of the Compensation Committee of the
Board of Directors of LDI Management, Inc. Mr. Andre B. Lacy is Chairman
of the Board, Chief Executive Officer and President of LDI Management,
Inc. and is also a director of IPALCO. Mr. John R. Hodowal, Chairman of
IPALCO, is a member of the Board of Directors of Bank One, Indianapolis,
N.A. Mr. Joseph D. Barnette, Jr. is Chairman and Chief Executive Officer
of Bank One, Indianapolis, N.A. and is also a director of IPALCO.
PERFORMANCE GRAPH
The Performance Graph on this page, Table III, plots the total
cumulative return that shareholders of IPALCO received (solid line with
dot) during the 5-year period ended December 31, 1995, compared with the
total cumulative return to shareholders of companies comprising the Dow
Jones Electric Utilities Index (solid line with triangle) and the
Standard and Poors 500 Index (solid line with square) and the Standard &
Poors Electric Companies Index (solid line with star). The Graph shows
the cumulative total return assuming dividend reinvestment and based upon
an initial investment of $100.00. The vertical portion of the Graph
indicates the dollar value ranging from $90.00 to $220.00, and the
horizontal portion of the Graph is the year, beginning in 1990 and
continuing through 1995.
The points on the Performance Graph are as follows:
<TABLE>
CUMULATIVE TOTAL RETURN ASSUMING DIVIDEND REINVESTMENT
- ----------------------------------------------------------------------------
<CAPTION>
1990 1991 1992 1993 1994 1995
--------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
IPALCO<F1> 100 133 152 158 143 194
DJ ELEC UTIL<F1> 100 130 138 155 136 178
S & P 500<F2> 100 130 140 155 157 215
S & P ELEC COMPANIES<F2> 100 130 138 155 135 177
<FN>
Source:
<F1> Dow Jones Total Return Indexes
<F2> Standard and Poors Compustat Services, Inc.
TABLE III
</TABLE>
<PAGE>
Performance Graph
The Performance Graph (Table III) on the preceding page plots the
total cumulative return that shareholders of IPALCO received (solid line
with dot) during the 5-year period ended December 31, 1995, compared with
the total cumulative return to shareholders of companies comprising the
Dow Jones Electric Utilities Index (solid line with triangle) and the
Standard and Poors 500 Index (solid line with square) and the Standard &
Poors Electric Companies Index (solid line with star). The Graph reflects
IPALCO's superior return in years 1991 through 1995 as compared to the
electric utility industry and is one of the bases for the Chief Executive
Officer's compensation disclosed in the Compensation Committee Report set
forth in this Proxy Statement.
IPALCO has elected to use the Standard & Poors Electric Companies
Index (``S&P Electric Index'') for its industry comparison this year and
will discontinue the use of the Dow Jones Electric Utilities Index next
year. The S&P Electric Index is a capitalization weighted index of all
stocks in the index, while the Dow Jones Electric Utilities Index is a
price weighted average of the 15 utility companies in the index. As a
result, changes in the S&P Electric Index reflect both the relative size
of the company as well as the change in price. In addition, the S&P
Electric Index contains a broader range of companies and IPALCO believes
it is a better indicator of the electric utility market.
Pension Plans
Table IV below illustrates the combined annual retirement benefits
computed on a straight-life annuity basis that are payable under the Base
Retirement Plan and the Funded Supplemental Plan (assuming continuous
employment to age 65) to named executive officers having the remuneration
and years of service shown.
<TABLE>
- ------------------------------------------------------------------
PENSION PLAN TABLE<F1>
<CAPTION>
Remuneration Years of Service
- ------------ ------------------------------------------------
15 20 25 30 35
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$125,000 $ 81,250 $ 81,250 $ 81,250 $ 81,250 $ 81,250
150,000 97,500 97,500 97,500 97,500 97,500
175,000 113,750 113,750 113,750 113,750 113,750
200,000 130,000 130,000 130,000 130,000 130,000
225,000 146,250 146,250 146,250 146,250 146,250
250,000 162,500 162,500 162,500 162,500 162,500
300,000 195,000 195,000 195,000 195,000 195,000
400,000 260,000 260,000 260,000 260,000 260,000
450,000 292,500 292,500 292,500 292,500 292,500
500,000 325,000 325,000 325,000 325,000 325,000
- --------------------
<FN>
<F1> This table takes into account the latest Internal Revenue Code
Section 415 benefit limitations and Internal Revenue Code Section
401(a)(17) compensation limitation applicable to the Base
Retirement Plan. Benefits for both the Base Retirement Plan portion
and Funded Supplemental Plan portion of the combined amounts have
been shown without adjustment for income taxes.
TABLE IV
- --------------------------------------------------------------------------
</TABLE>
IPL's Employees' Retirement Plan (the ``Base Retirement Plan'')
covers all permanent employees with one (1) year of service but excludes
directors unless they are also officers. It provides fixed benefits at
normal retirement age based upon compensation and length of service, the
costs of which are computed actuarially. The remuneration covered by the
Plan includes ``Salary'' but excludes ``Bonus'' and ``Other
Compensation,'' annual or otherwise, as those terms are used in the
Summary Compensation Table (Table I). Benefits are calculated on the
basis of the highest average annual salary in any 60 consecutive months
of employment. Years of service for Pension Plan purposes of named
executive officers are as follows: Mr. Hodowal - 27, Mr. Humke - 6, Mr.
Brehm - 20, Mr. Tabler - 1, and Mr. Waltz - 35.
The Funded Supplemental Plan referred to above is applicable to the
named executive officers and, at reduced benefits, to all other officers
of IPALCO and IPL. Contributions and accrued interest credited during
1995 to the accounts of Messrs. Hodowal, Humke, Brehm, Tabler and Waltz
amounted to $31,563, $140,186, $4,752, $17,781 and $6,779, respectively
(in addition to the federal, state and local income tax payments
reflected in Table I above). Contributions are based on actuarial
assessments of benefits projected to accrue to such officers under the
Funded Supplemental Plan upon termination of employment at normal
retirement age and at current salary levels.
Employment Contracts and Termination of Employment and Change-in-Control
Arrangements
IPALCO and IPL have employment contracts with Messrs. Hodowal and
Humke which provide for an indefinite term that is convertible into a
fixed 3-year term upon notice. Such contracts terminate upon death, total
disability or retirement. Should they be terminated without ``cause'' or
resign for ``good reason'' (as those terms are defined in the
contract--see below), they would continue to receive their Salary, as
that term is used in Table I above, for up to 3 years thereafter, less
any severance payments received from other agreements.
All Officers of IPALCO and its subsidiaries have Termination
Benefits Agreements, dated on or after January 1, 1993. These Agreements
provide for payment of severance benefits equal to 299.99% of the last 5
years' average annual Salary (but not exceeding the limits of Internal
Revenue Code 280G), if IPALCO undergoes an ``acquisition of control''
while the agreement is in effect and if, within 3 years after an
acquisition of control, any such officer is terminated without ``cause''
or resigns for ``good reason,'' as those terms are therein defined (see
below).
The term ``without `cause''' is defined in the employment contracts
and Termination Benefits Agreements discussed above to mean in the
absence of fraud, dishonesty, theft of corporate assets or other gross
misconduct, as set out in a good faith determination of the Board of
Directors. The term ``resign for `good reason''' is defined in the same
agreements to mean generally, and subject to lengthy qualifications and
amplification, demotion; assignment of duties inconsistent with the
officer's status, position or responsibilities; reduction in base salary
or failure to grant annual increases commensurate with increases of other
officers; relocation of the headquarters of IPALCO or IPL to a location
outside Greater Indianapolis; or termination of the executive's
participation in, or the existence of, an incentive compensation,
insurance or pension program. The term ``acquisition of control'' in such
contracts means, generally and subject to lengthy amplification and
qualifications therein, acquisition by any person, entity, or group of
20% or more of the combined voting power of the outstanding securities of
IPALCO entitled to vote in the election of directors, excluding
acquisitions by or from IPALCO or any acquisition by any employee benefit
plan of IPALCO or IPL; change in majority membership of the Board of
Directors other than by normal succession; certain reorganizations,
mergers or consolidations resulting in control of the reorganized,
merged, or consolidated entity by persons not previously in control of
IPALCO; approval by the shareholders of complete liquidation or
dissolution of IPALCO, or of a sale of all or substantially all of its
assets to an entity not controlled by directors and holders of voting
securities who were directors and holders of voting securities of IPALCO
prior to the transaction.
A Benefit Protection Fund and Trust Agreement (``Fund'') is also in
effect to pay litigation expenses in the event it becomes necessary for
any officer to enforce the employment contracts and Termination Benefits
Agreements described above. The Fund is held in trust by National City
Bank, Indianapolis, and at December 31, 1995, the sum of $856,566 was
reserved in trust for such expenses.
By order of the Board of Directors.
IPALCO ENTERPRISES, INC.
By: BRYAN G. TABLER, Secretary
Indianapolis, Indiana
March 8, 1996
<PAGE>
[form of proxy/instruction card]
IPALCO ENTERPRISES, INC.
This Proxy/Instruction Card is Solicited on Behalf of the Board of
Directors
The undersigned hereby appoints John R. Hodowal and Bryan G. Tabler
as Proxies, each with the power of substitution, and authorizes them to
represent and vote and/or, in the case of shares held in the Automatic
Dividend Reinvestment and Stock Purchase Plan, instructs the agent for
such Plan to execute a proxy empowering the above-named persons to vote,
as designated below, all the shares of IPALCO Enterprises, Inc. common
stock held of record by the undersigned and/or credited to the
undersigned's account in such Plan on February 28, 1996, at the annual
meeting of the shareholders to be held April 17, 1996, or at any
adjournment thereof, with respect to the matter(s) set forth below.
1. Election of Six Nominees for Director, namely: Robert A. Borns,
Mitchell E. Daniels, Jr., Rexford C. Early, John R. Hodowal,
Michael S. Maurer, Thomas H. Sams
[ ] Vote for All Nominess
[ ] Withhold Vote from All Nominess
[ ] Vote for All Nominees, Except Nominees written below:
-------------------------------------------------------------
Please write name(s) of Nominee(s) from whom vote is
withheld)
(FOLD HERE - DO NOT TEAR)
This Proxy/Instruction Card when properly executed will be voted in the
manner directed by the undersigned shareholders. If not otherwise
indicated, this Proxy/Instruction Card will be voted FOR the six nominees
for Director listed above and confers discretionary authority to vote in
accordance with the best judgment of the named Proxies.
Receipt of the Notice of Annual Meeting and Proxy Statement dated March
8, 1996, and the 1995 Annual Report is hereby acknowledged.
Dated ___________________, 1996.
Your signature must be exactly ____________________________________
as your name appears below. (SIGNATURE)
When signing as attorney-in-fact,
executor, administrator, trustee,
guardian or corporate officer, ____________________________________
please give full title as such. (SIGNATURE IF HELD JOINTLY)
Please complete
1996 Proxy at right.
Then date, sign,
detach it from this
form at perforations,
fold it and return
immediately in
accompanying
postage guaranteed
envelope.
Account ID:
ADDRESS CHANGE
_________________________
STREET
_________________________
APT. NO./P.O. BOX
_________________________
CITY
_________________________
STATE
_________________________
ZIP CODE
_________________________
SIGNATURE
[at perforation]
(DETACH HERE)
<PAGE>
[letter soliciting voting instructions
from participants in Employees' Thrift Plan]
IPL
INDIANAPOLIS POWER & LIGHT COMPANY
March 8, 1996
TO PARTICIPANTS IN THE EMPLOYEES' THRIFT PLAN:
As a participant in the Employees' Thrift Plan, you are entitled to
direct the manner in which shares of stock of IPALCO Enterprises, Inc.,
("IPALCO") in which you have an interest, shall be voted by the Trustee
at the forthcoming Annual Meeting of Shareholders of IPALCO to be held
April 17, 1996. This right is given to you by Section 305.90 of the
Thrift Plan.
Enclosed is a copy of the Notice of the Annual Meeting and Proxy
Statement dated March 8, 1996 and an Instruction Card indicating the
number of shares with respect to which you may give voting instructions
to the Trustee. You may instruct the Trustee how you wish such shares to
be voted by placing a mark in the box which expresses your choice.
The only business to be acted upon at the meeting of which
Management is presently aware, is the election of six directors to hold
office for terms of three years each and until their successors are duly
elected and qualified.
It is important that you instruct the Trustee as to the voting of
the shares in which you have an interest. After designating how you wish
such shares to be voted, sign the instruction form and return it via
intra company mail to the Secretary of IPALCO, Room 729, IPALCO Corporate
Center, on or before April 11, 1996.
Shares with respect to which no voting instructions are given will
be voted by the Trustee in its discretion.
/s/ John D. Wilson
John D. Wilson, Secretary
Employees' Pension Committee
<PAGE>
[form to be executed by Thrift Plan participants]
IPALCO ENTERPRISES, INC.
Instruction To Thrift Plan Trustee For
Annual Meeting Of Shareholders - April 17, 1996
TO THE EMPLOYEE PENSION COMMITTEE:
I understand that in accordance with Section 305.90 of the Thrift
Plan, I may instruct the voting of the number of shares shown on this
form. Will you please direct the Turstee to execute a proxy empowering
the persons appointed therein to vote as follows:
1. Election of Six Nominees for Director, namely: Robert A. Borns,
Mitchell E. Daniels, Jr., Rexford C. Early, John R. Hodowal,
Michael S. Maurer, Thomas H. Sams
[ ] Vote for All Nominess
[ ] Withhold Vote from All Nominess
[ ] Vote for All Nominees, Except Nominees written below:
-------------------------------------------------------------
Please write name(s) of Nominee(s) from whom vote is
withheld)
(FOLD HERE - DO NOT TEAR)
The Trustee will execute the proxy as above directed, or, if no choice is
indicated, the proxy will be voted by the Trustee in its discretion.
This instruction card confers discretionary authority to vote on currently
unknown matters properly presented to the meeting.
Receipt of the Notice of Annual Meeting and Proxy Statement dated March
8, 1996, and the 1995 Annual Report is hereby acknowledged.
Dated ___________________, 1996.
Your signature must be exactly ____________________________________
as your name appears below. (SIGNATURE)
Please complete
1996 Instruction Card
at right. Then date,
sign, detach it from this
form at perforations,
fold it and return
immediately in
accompanying
interoffice envelope.
[at perforation]
(DETACH HERE)
