FORM 10-Q
SECURlTlES AND EXCHANGE COMMlSSlON
WASHINGTON, D. C. 20549
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended
June 30, 1997 Commission File Number 1-8644
IPALCO ENTERPRISES, INC.
(Exact name of Registrant as specified in its charter)
Indiana 35-1575582
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
One Monument Circle
Indianapolis, Indiana 46204
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 317-261-8261
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to the
filing requirements for at least the past 90 days. Yes X No
---- ----
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding At June 30, 1997
----- ----------------------------
Common (Without Par Value) 44,564,916 Shares
<PAGE>1
IPALCO ENTERPRISES, INC. AND SUBSIDIARIES
-----------------------------------------
INDEX
-----
Page No.
--------
PART I. FINANCIAL INFORMATION
- ------- ---------------------
Statements of Consolidated Income - Three Months Ended and
Six Months Ended June 30, 1997 and 1996 2
Consolidated Balance Sheets - June 30, 1997 and
December 31, 1996 3
Statements of Consolidated Cash Flows -
Six Months Ended June 30, 1997 and 1996 4
Notes to Consolidated Financial Statements 5-7
Management's Discussion and Analysis of
Financial Condition and Results of Operations 8-12
PART II. OTHER INFORMATION 13-15
- -------- -----------------
<PAGE>2
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 Six Months Ended
June 30 June 30
1997 1996 1997 1996
------------- -------------- -------------- -------------
<S> <C> <C> <C> <C>
UTILITY OPERATING REVENUES:
Electric $ 170,096 $ 169,163 $ 358,612 $ 353,101
Steam 8,620 8,458 20,390 20,966
------------- -------------- -------------- -------------
Total operating revenues 178,716 177,621 379,002 374,067
------------- -------------- -------------- -------------
UTILITY OPERATING EXPENSES:
Operation:
Fuel 37,506 40,360 79,122 84,783
Other 35,622 33,354 68,255 66,311
Power purchased 1,131 4,285 5,290 9,015
Purchased steam 1,684 1,499 3,903 3,651
Maintenance 17,613 16,112 33,311 29,926
Depreciation and amortization 26,504 23,973 52,244 47,679
Taxes other than income taxes 8,067 8,373 16,999 17,334
Income taxes - net 14,601 13,543 36,297 34,402
------------- -------------- -------------- -------------
Total operating expenses 142,728 141,499 295,421 293,101
------------- -------------- -------------- -------------
UTILITY OPERATING INCOME 35,988 36,122 83,581 80,966
------------- -------------- -------------- -------------
OTHER INCOME AND (DEDUCTIONS):
Allowance for equity funds used during construction 1,124 1,769 2,281 3,620
Other - net (1,577) (2,602) (2,774) (1,859)
Income taxes - net 3,184 1,044 3,919 872
------------- -------------- -------------- -------------
Total other income - net 2,731 211 3,426 2,633
------------- -------------- -------------- -------------
INCOME BEFORE INTEREST AND OTHER CHARGES 38,719 36,333 87,007 83,599
------------- -------------- -------------- -------------
INTEREST AND OTHER CHARGES:
Interest 17,064 12,663 28,696 25,311
Allowance for borrowed funds used during construction (226) (1,585) (472) (3,310)
Preferred dividend requirements of subsidiary 796 796 1,591 1,591
------------- -------------- -------------- -------------
Total interest and other charges - net 17,634 11,874 29,815 23,592
------------- -------------- -------------- -------------
NET INCOME $ 21,085 $ 24,459 $ 57,192 $ 60,007
============= ============== ============== =============
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 45,507 56,906 51,272 56,885
============= ============== ============== =============
(Note 2)
EARNINGS PER SHARE OF COMMON STOCK $ 0.46 $ 0.43 $ 1.12 $ 1.05
============= ============== ============== =============
(Note 2)
DIVIDENDS DECLARED PER SHARE OF COMMON STOCK $ 0.25 $ 0.37 $ 0.50 $ 0.74
============= ============== ============== =============
(Note 2)
See notes to consolidated financial statements.
</TABLE>
<PAGE>3
<TABLE>
IPALCO ENTERPRISES, INC. and SUBSIDIARIES
Consolidated Balance Sheets
(In Thousands)
(Unaudited)
<CAPTION>
June 30 December 31
ASSETS 1997 1996
------
----------------- ------------------
<S> <C> <C>
UTILITY PLANT:
Utility plant in service $ 2,774,554 $ 2,763,305
Less accumulated depreciation 1,086,614 1,048,492
----------------- ------------------
Utility plant in service - net 1,687,940 1,714,813
Construction work in progress 73,461 63,243
Property held for future use 10,074 9,913
----------------- ------------------
Utility plant - net 1,771,475 1,787,969
----------------- ------------------
OTHER ASSETS:
Nonutility property - at cost, less accumulated depreciation 107,263 108,290
Other investments 5,524 5,371
----------------- ------------------
Other assets - net 112,787 113,661
----------------- ------------------
CURRENT ASSETS:
Cash and cash equivalents 15,052 19,317
Accounts receivable (less allowance for doubtful
accounts - 1997, $1,272 and 1996, $1,159) 4,284 11,099
Fuel - at average cost 27,085 30,625
Materials and supplies - at average cost 51,616 52,727
Prepayments and other current assets 5,746 9,931
----------------- ------------------
Total current assets 103,783 123,699
----------------- ------------------
DEFERRED DEBITS:
Regulatory assets 132,462 137,974
Miscellaneous 28,289 19,766
----------------- ------------------
Total deferred debits 160,751 157,740
----------------- ------------------
TOTAL $ 2,148,796 $ 2,183,069
================= ==================
CAPITALIZATION AND LIABILITIES
------------------------------
CAPITALIZATION:
Common shareholders' equity:
Common stock $ 392,190 $ 389,966
Premium on 4% cumulative preferred stock 1,363 1,363
Retained earnings 498,192 466,397
Treasury Stock (401,262) -
----------------- ------------------
Total common shareholders' equity 490,483 857,726
Cumulative preferred stock of subsidiary 51,898 51,898
Long-term debt (less current maturities and
sinking fund requirements) 1,033,416 662,591
----------------- ------------------
Total capitalization 1,575,797 1,572,215
----------------- ------------------
CURRENT LIABILITIES:
Notes payable - banks and commercial paper 6,000 46,000
Current maturities and sinking fund requirements 30,200 11,250
Accounts payable and accrued expenses 57,083 62,222
Dividends payable 12,229 22,212
Taxes accrued 22,937 23,159
Interest accrued 15,399 13,354
Other current liabilities 11,601 14,519
----------------- ------------------
Total current liabilities 155,449 192,716
----------------- ------------------
DEFERRED CREDITS AND OTHER LONG-TERM LIABILITIES:
Accumulated deferred income taxes - net 307,355 303,473
Unamortized investment tax credit 46,243 47,722
Accrued postretirement benefits 20,435 23,635
Accrued pension benefits 39,448 37,283
Miscellaneous 4,069 6,025
----------------- ------------------
Total deferred credits and other long-term liabilities 417,550 418,138
----------------- ------------------
COMMITMENTS AND CONTINGENCIES
TOTAL $ 2,148,796 $ 2,183,069
================= ==================
See notes to consolidated financial statements.
</TABLE>
<PAGE>4
<TABLE>
IPALCO ENTERPRISES, INC. and SUBSIDIARIES
Statements of Consolidated Cash Flows
(In Thousands)
(Unaudited)
<CAPTION>
Six Months Ended
June 30
1997 1996
---------------- ----------------
<S> <C> <C>
CASH FLOWS FROM OPERATIONS:
Net income before preferred dividend requirements of subsidiary $ 58,783 $ 61,598
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 52,146 47,390
Amortization of regulatory assets 7,825 8,104
Deferred income taxes and investment tax credit adjustments - net (153) (1,039)
Allowance for funds used during construction (2,753) (6,930)
Change in certain assets and liabilities:
Accounts receivable 6,815 2,938
Fuel, materials and supplies 4,651 (2,925)
Accounts payable (5,139) (11,154)
Taxes accrued (222) 4,156
Accrued pension benefits 2,165 2,634
Other - net 213 2,447
---------------- ----------------
Net cash provided by operating activities 124,331 107,219
---------------- ----------------
CASH FLOWS FROM INVESTING:
Proceeds from maturities of marketable securities - 3,810
Construction expenditures - utility (30,569) (45,441)
Construction expenditures - nonutility (1,187) (3,547)
Other (9,241) (8,676)
---------------- ----------------
Net cash used in investing activities (40,997) (53,854)
---------------- ----------------
CASH FLOWS FROM FINANCING:
Issuance of long-term debt 451,000 1,600
Retirement of long-term debt (61,250) (17,900)
Short-term debt - net (40,000) 9,278
Dividends paid (36,954) (43,095)
Issuance of common stock related to incentive compensation plans 1,794 1,909
Reacquired common stock (401,262) -
Other (927) 176
---------------- ----------------
Net cash used in financing activities (87,599) (48,032)
---------------- ----------------
Net increase (decrease) in cash and cash equivalents (4,265) 5,333
Cash and cash equivalents at beginning of period 19,317 11,554
---------------- ----------------
Cash and cash equivalents at end of period $ 15,052 $ 16,887
================ ================
- ----------------------------------------------------------------------------------------------------------------
Supplemental disclosures of cash flow information: Cash paid during the period
for:
Interest (net of amount capitalized) $ 25,622 $ 22,431
================ ================
Income taxes $ 29,089 $ 31,054
================ ================
See notes to consolidated financial statements.
</TABLE>
<PAGE>5
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.
The preparation of financial statements in conformity with generally
accepted accounting principles requires that management make certain
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements. The reported amounts of revenues and
expenses during the reporting period may also be affected by the
estimates and assumptions management is required to make. Actual results
may differ from those estimates.
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' 1996 Annual
Report on Form 10-K.
<TABLE>
2. COMMON STOCK
<CAPTION>
Shares Amount
----------- ------------
<S> <C> <C>
Balance at December 31, 1996 57,034,912 $389,966,251
Restricted stock issued (1st Quarter) 1,628 44,363
Exercise of stock options (1st Quarter) 2,500 55,986
Adjustment for restricted stock (1st Quarter) - 300,784
Exercise of stock options (2nd Quarter) 65,304 1,738,332
Adjustment for restricted stock (2nd Quarter) - 84,220
------------
Balance at June 30, 1997 $392,189,936
============
Less shares reacquired by Treasury (2nd Quarter) (12,539,428)
-----------
Shares issued and outstanding at June 30, 1997 44,564,916
===========
</TABLE>
On February 25, 1997, the Board of Directors authorized the repurchase
of up to 12 million shares of IPALCO's common stock through a "Dutch
auction" self-tender offer. On March 27, the Dutch Auction ended with
12,539,428 shares of common stock having been tendered to the Company
and not withdrawn at or below $32 dollars per share. The Board of
Directors subsequently elected to purchase all shares tendered at or
below $32 per share. The shares were purchased on April 8, 1997, through
the issuance of long term debt in the amount of $401 million (see Note
3, Long-term debt). All 12,539,428 shares remain in Treasury stock.
<PAGE>6
3. LONG-TERM DEBT
On April 4, 1997 IPALCO Enterprises, Inc. entered into a $401 million
Revolving Credit Facility (the "Revolver") with Bank One, Indiana,
National Association, National City Bank of Indiana, and The First
National Bank of Chicago with a maturity of March 31, 2002. The proceeds
of this Revolver were used to purchase, through a self-tender offer,
shares of IPALCO's outstanding common capital stock. Interest is payable
monthly and is based on a spread over LIBOR. In conjunction with the
issuance of the Revolver, IPALCO entered into an interest rate swap
agreement which fixed the interest rate on $300 million of the Revolver.
Pursuant to the swap agreement which matures April 1, 2001, IPALCO will
pay interest at a fixed rate of 6.3575% to a swap counter party and will
receive a variable rate of interest in return based on one month LIBOR.
The result is to effectively establish a 6.6825% fixed rate of interest
on $300 million of the Revolver. During June, 1997, IPALCO retired
$50,000,000 of the $401,000,000 debt issued in April, 1997.
On May 1 ,1997, IPL retired First Mortgage Bonds, 5 5/8% Series, due May
1, 1997, in the amount of $11,250,000.
On June 13, 1997, Mid-America Energy Resources issued $50 million in
long-term notes payable at a fixed rate of 8.03% with the first
principal payment due September 1, 1998. The average life of the debt is
10 years with a final maturity on June 13, 2012, and with an initial
required escrow balance of $6.95 million.
4. NEW ACCOUNTING STANDARDS
Effective December 1997, Statement of Financial Accounting Standards
(SFAS) No. 128, relating to the computation and presentation of earnings
per share, becomes effective. SFAS 128 replaces the presentation of
primary EPS with a presentation of basic EPS, requires dual presentation
of basic and diluted EPS for all entities with complex capital
structures and requires a reconciliation of the numerator and
denominator of the basic EPS computation to the numerator and
denominator of the diluted EPS computation. SFAS 128 is effective for
financial statements issued for periods ending after December 15, 1997;
earlier adoption is not permitted. Management has determined that the
adoption of SFAS 128 will not have a material effect on the accompanying
consolidated financial statements.
In June, 1997, SFAS No. 130, "Comprehensive Income," was issued and
becomes effective in 1998 and requires reclassification of earlier
financial statements for comparative purposes. SFAS No. 130 requires
that changes in the amounts of certain items, including foreign currency
translation adjustments and gains and losses on certain securities be
shown in the financial statements. SFAS No. 130 does not require a
specific format for the financial statement in which comprehensive
income is reported, but does require that an amount representing total
comprehensive income be reported in that statement. Management has not
yet determined the effect, if any, of SFAS No. 130 on the consolidated
financial statements.
Also in June, 1997, SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information," was issued. The Statement will
change the way public companies report information about segments of
their business in their annual financial statements and requires them to
report selected segment information in their quarterly reports issued to
shareholders. It also requires entity-wide disclosures about the
products and services an entity provides, the material countries in
which it holds assets and reports revenues, and its major customers.
SFAS No. 131 is effective for fiscal years beginning after December 15,
1997. Management has not yet determined the effect, if any, of SFAS No.
131 on the consolidated financial statements.
<PAGE>7
5. SALE OF ACCOUNTS RECEIVABLE
In December 1996, IPL entered into an agreement to sell, on a revolving
basis, undivided percentage interests in certain of its accounts
receivable, including accounts receivable for KWH delivered but not
billed, up to an aggregate maximum at any one time of $50 million.
Accounts receivable on the Consolidated Balance Sheets are net of the
$50 million interest sold under the IPL agreement. The gross amount of
receivables sold was $55.6 million, of which $5.6 million was replaced
with a receivable from the purchasing party.
6. STOCK-BASED COMPENSATION
On May 21, 1997, the IPALCO Enterprises, Inc. 1997 Stock Option Plan for
officers and other key employees was approved by the shareholders of
IPALCO. Two million shares of common stock were authorized for issuance
under the 1997 Plan. As of June 30, 1997, grants representing 1,067,250
shares have been made from this plan. The maximum period for exercising
an option may not exceed 10 years and one day after the grant, provided
however, that the incentive stock options shall have terms not in excess
of 10 years.
A summary of options issued under IPALCO's stock option plans is as
follows:
<TABLE>
<CAPTION>
Weighted Average Range of Option Number of
Price per Share Price per Share Shares
---------------- ----------------- ---------
<S> <C> <C> <C>
Outstanding, December 31, 1996................ 24.12 16.8317 - 25.3725 1,023,570
Granted..................................... 31.38 31.375 1,132,500
Granted..................................... 30.50 30.50 42,000
Exercised................................... 24.33 16.8317 - 25.3308 (67,804)
---------
Outstanding, June 30, 1997.................... 28.09 16.8317 - 31.375 2,130,266
=========
</TABLE>
Accounting Principles Board (APB) Opinion No. 25, "Accounting for Stock
Issued to Employees," and related interpretations in accounting for the
stock based plan have been applied by IPALCO. No compensation cost has
been recognized for the plans because the stock options price is equal
to fair value at the grant date. Had compensation cost for the plans
been determined based on the fair value at the grant dates for awards
under the plans consistent with the method of SFAS No. 123, "Accounting
for Stock-Based Compensation," IPALCO's net income for the six months
ended June 30, 1997, would have decreased from $57.2 million ($1.12 per
share) to the pro forma amount of $53.7 million ($1.05 per share).
IPALCO's net income and earnings per share for the similar period in
1996 would not change. IPALCO estimated the SFAS No. 123 fair value by
utilizing the binomial options pricing model with the following
assumptions: dividend yields of 3.19% to 6.88%, risk-free rates of 6.38%
to 6.88%, volatility of 12% to 13% and expected lives of 5 years.
7. SUBSEQUENT EVENT
IPALCO filed preliminary documents with the Securities and Exchange
Commission on August 8, 1997, describing a contemplated offer to
purchase for cash any and all outstanding shares of the cumulative
preferred stock of IPL. The offer is conditioned upon IPL's
shareholders' approval of an amendment to IPL's Amended Articles of
Incorporation (the "Articles") which would remove a provision of the
Articles limiting IPL's ability to issue unsecured debt. In addition,
preferred shareholders who wish to tender their shares pursuant to the
offer must vote in favor of the Articles Amendment. In conjunction with
the filing, IPL filed a preliminary Proxy Statement for potential use in
soliciting proxies for a special meeting of shareholders of IPL to
consider the Articles Amendment.
<PAGE>8
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 May 27, 1997, declared a
quarterly dividend on common stock of 25 cents per share compared to 37 cents
per share declared in the second quarter of 1996. The dividend was paid July 15,
1997, to shareholders of record June 20, 1997.
IPL's capital requirements are primarily related to construction
expenditures needed to meet customers' needs for electricity and steam, as well
as expenditures for compliance with the federal Clean Air Act. Enterprises'
construction expenditures (excluding allowance for funds used during
construction) totaled $18.2 million during the second quarter ended June 30,
1997, representing a $5.2 million decrease from the comparable period in 1996.
This decrease is mostly related to reduced construction spending in the second
quarter of 1997 compared to 1996 for the scrubbers at IPL's Petersburg
Generating Station as this construction project was completed in June 1996.
Internally generated cash provided by IPL's operations was used for construction
expenditures during the second quarter of 1997. Enterprises' construction
expenditures (excluding allowance for funds used during construction) totaled
$31.8 million during the six months ended June 30, 1997, representing a $17.2
million decrease from the comparable period in 1996. This difference is mostly
related to reduced construction spending in 1997 compared to 1996 for the
scrubbers at IPL's Petersburg Generating Station that went into service in June
1996. This reduction also reflects reduced capital spending on chilled water
systems at two of the unregulated subsidiaries. Internally generated cash
provided by IPL's operations was used for construction expenditures during the
first six months of 1997. As a result of IPL's new basic electric rates and
charges and reduced capital spending, IPL anticipates continued improving
liquidity.
The five-year construction program has not changed from that previously
reported in IPALCO's 1996 Form 10-K report. (See "Future Performance" in Item 7
of Management's Discussion and Analysis of Financial Condition and Results of
Operations in IPALCO's 1996 Form 10-K report for further discussion).
On April 4, 1997 IPALCO Enterprises, Inc. entered into a $401 million
Revolving Credit Facility (the "Revolver") with Bank One, Indiana, National
Association, National City Bank of Indiana, and The First National Bank of
Chicago with a maturity of March 31, 2002. The proceeds of this Revolver were
used to purchase, through a self-tender offer, shares of IPALCO's outstanding
common capital stock. Interest is payable monthly and is based on a spread over
LIBOR. In conjunction with the issuance of the Revolver, IPALCO entered into an
interest rate swap agreement which fixed the interest rate on $300 million of
the Revolver. Pursuant to the swap agreement which matures April 1, 2001, IPALCO
will pay interest at a fixed rate of 6.3575% to a swap counter party and will
receive a variable rate of interest in return based on one month LIBOR. The
result is to effectively establish a 6.6825% fixed rate of interest on $300
million of the Revolver. During June, 1997, IPALCO retired $50,000,000 of the
$401,000,000 debt issued in April, 1997.
On May 1, 1997, IPL retired First Mortgage Bonds, 5 5/8% Series, due
May 1, 1997, in the amount of $11,250,000.
On June 13, 1997, Mid-America Energy Resources issued $50 million in
long-term notes payable at a fixed rate of 8.03% with the first principal
payment due September 1, 1998. The average life of the debt is 10 years with the
final maturity on June 13, 2012, and with an initial required escrow balance of
$6.95 million.
<PAGE>9
Rate Relief
- -----------
The Indiana Utility Regulatory Commission approved a two-step rate
increase for IPL electric retail customers in August 1995. The initial step
increase was effective September 1, 1995, and the second step increase became
effective July 1, 1996.
<PAGE>10
RESULTS OF OPERATIONS
Comparison of Second Quarter and Six Months Ended June 30, 1997
---------------------------------------------------------------
with Second Quarter and Six Months Ended June 30, 1996
------------------------------------------------------
Earnings per share during the second quarter of 1997 were $0.46, or
$0.03 above the $0.43 attained in the comparable 1996 period. Earnings per share
during the six months ended June 30, 1997, were $1.12, or $0.07 above the $1.05
attained in the comparable 1996 period. The following discussion highlights the
factors contributing to the second quarter and six months ended results.
Operating Revenues
- ------------------
Operating revenues during the second quarter and six months ended of 1997
increased from the comparable 1996 periods by $1.1 million and $4.9 million,
respectively. The increases in revenues resulted from the following:
<TABLE>
<CAPTION>
Increase (Decrease) from Comparable Period
------------------------------------------
Three Months Ended Six Months Ended
------------------ ----------------
(Millions of Dollars)
<S> <C> <C>
Increase in base electric rates $ 5.9 $ 12.7
Decreased Kilowatt-hour (KWH) sales - net of fuel (5.5) (8.0)
Fuel revenues (2.2) (5.0)
Steam revenues 0.1 (0.6)
Sales for resale 2.1 4.2
Other revenues 0.7 1.6
------- -------
Total change in operating revenues $ 1.1 $ 4.9
======= =======
</TABLE>
The increases in base rate electric revenues are the result of new
tariffs, effective July 1, 1996, designed to produce $25-million additional
annual revenues. The decrease in retail KWH sales was due to milder weather.
During the second quarter of 1997 cooling degree days decreased 38%, and in the
first quarter of 1997, heating degree days decreased 12%, compared to the same
periods in 1996. The changes in fuel revenues in 1997 from the prior year
reflect changes in total fuel costs billed customers. The increased wholesale
sales during the second quarter and six months ended of 1997, as compared to the
same periods in 1996, reflect energy requirements of other utilities and
increased wholesale marketing efforts.
Operating Expenses
- ------------------
Fuel expenses in the second quarter and six months ended of 1997
decreased from the same periods a year ago by $2.9 million and $5.7 million,
respectively. The primary reason for the decrease in the second quarter was a
decrease in deferred fuel cost of $2.7 million. A deferred fuel cost decrease of
$4.8 million contributed to the six months ended decrease. Additional factors
contributing to the six month ended decrease were a decrease of $2.1 million in
unit costs of coal and oil and a $1.2 million increase in fuel consumption.
Other operation expenses in the second quarter and six months ended of
1997 increased from the same periods a year ago by $2.3 million and $1.9
million, respectively. The second quarter increase is comprised of increased
outside services of $1.1 million, $0.7 million for increased employee benefits
and $0.5 million for other administrative and general expenses. The increase in
the second quarter was also due to increased electric distribution expense of
$0.7 million and other increased operating expenses which net to an increase of
$0.3 million. Partially offsetting these increases to operating expenses in the
second quarter was the gain from the sale of emission allowances of $1.0
million. The six months ended variance is primarily related to an increase in
outside services of $1.9 million, increases to salaries of $0.9 million and
customer accounts expenses of $0.8 million offset by the gain from the sale of
emission allowances of $1.2 million.
<PAGE>11
Power purchased decreased by $3.2 million and $3.7 million from the
comparable periods in 1996 during the second quarter and six months ended of
1997, respectively. The decrease in the second quarter was due to a decrease in
demand charges of $3.5 million partially offset by an increase in energy
purchases of $0.3 million. The six months ended variance was due also to the
decreased demand charges of $3.5 million as well as decreased energy purchases
of $0.2 million. The decreased demand charges in both periods are a result of a
new power purchase contract taking effect in May of 1997.
Maintenance expense increased by $1.5 million and $3.4 million during
the second quarter and six months ended of 1997 compared to the same periods
last year. The second quarter increase was primarily due to the repair of a
production unit at the Stout plant. The six month ended increase resulted from a
$1.6 million increase for expenses at the Stout plant primarily related to the
repair of a production unit. Increased maintenance expenses of $0.8 million for
station equipment in transmission, $0.6 million for the Petersburg plant and
$0.4 million for other maintenance also contributed to the six month ended
increase in expenses.
Depreciation and amortization expense in the second quarter and six
months ended of 1997 increased from the same periods a year ago by $2.5 million
and $4.6 million, respectively. These increases primarily resulted from
increased depreciable plant balances.
Income taxes - net for the second quarter and six months ended of 1997
increased from the same periods in 1996 by $1.1 million and $1.9 million,
respectively. These increases were primarily due to increased pretax operating
income.
As a result of the foregoing, utility operating income during the
second quarter of 1997 decreased 0.4% from the comparable 1996 period, to $36.0
million. Utility operating income during the six months ended of 1997 increased
3.2% from the comparable 1996 period, to $83.6 million.
Other Income and Deductions
- ---------------------------
Allowance for equity funds used during construction in the second
quarter and six months ended of 1997 decreased from the same periods in 1996 by
$0.6 million and $1.3 million, respectively, primarily due to a decreased
construction base partially offset by an increased equity rate which resulted in
a $0.1 million increase for both of the comparable periods.
Other - net, which includes the pretax operating and investment income
from operations other than IPL as well as non-operating income from IPL
increased by $1.0 million in the second quarter of 1997 while decreasing by $0.9
million for the six months ended of 1997, compared to the same periods in 1996.
The increase for the second quarter of 1997 was due to increased net revenues
from contract work at IPL of $0.4 million, increased district cooling revenues
of $0.3 million and increases to other subsidiaries amounting to $0.3 million.
The six months ended decrease was primarily due to a gain on the sale of
investment securities realized during 1996. Partially offsetting this decrease
was an increase at IPL of $0.6 million resulting from contract work, an increase
at IPALCO of $0.3 million due to decreased operating costs as well as a net
increase to other subsidiaries of $0.2 million.
Income taxes - net, which includes taxes on operations other than IPL,
in the second quarter and six months ended of 1997 decreased from the same
periods in 1996 by $2.1 million and $3.0 million, respectively, primarily due to
increased interest expense at IPALCO. The six month ended decrease also reflects
the sale of investment securities in 1996.
<PAGE>12
Interest and Other Charges
- --------------------------
Interest expense in the second quarter and six months ended of 1997
increased from the same periods in 1996 by $4.4 million and $3.4 million,
respectively. Interest expense of $5.9 million at IPALCO for the $401 million
debt issued in April of 1997 contributed to both of the variances. Other factors
contributing to the second quarter increase include an increase of $0.4 million
at Mid-America for increased long-term debt and a decrease in interest expense
at IPL of $1.9 million due to the retirement of long-term debt in 1996 and 1997
as well as decreased short-term debt. Other factors contributing to the six
month ended variance include increased expense at Mid-America of $0.6 million
and decreased expense at IPL of $3.1 million. IPL's decrease was due to the
redemption of $15 million and $50 million debt issues during 1996 and $11.3
million in 1997 as well as decreased short-term debt.
Allowance for borrowed funds used during construction for the second
quarter and six months ended of 1997 decreased from the comparable periods in
1996 by $1.4 million and $2.8 million, respectively, due to a decreased
construction base.
<PAGE>13
PART II - OTHER INFORMATION
---------------------------
Item 4. Submission of Matters to a Vote of Security Holders
- ------------------------------------------------------------
The Annual Meeting of shareholders of IPALCO Enterprises, Inc. was held
on May 21, 1997. At the Annual Meeting, an amendment to the Articles of
Incorporation was approved that increased the number of authorized shares of
IPALCO's common stock from 145 million to 290 million. The vote was 32,428,359
in favor, and 4,081,008 against, with 680,354 abstaining. At the same meeting,
approval of the IPALCO Enterprises, Inc. 1997 Stock Option Plan occurred. The
vote was 33,169,046 in favor and 2,974,503 against, with 1,046,172 abstaining.
At the same meeting the following five directors in Class II were
elected to terms of three years each which expire in April, 2000. Each director
received the following numbers of votes as shown opposite his or her name:
Director Votes For Votes Withheld
-------- --------- --------------
Joseph D. Barnette, Jr. 36,377,536 812,185
Max L. Gibson. 36,376,851 812,870
Ramon L. Humke 36,287,580 902,141
Andrew J. Paine 35,954,076 1,235,645
Sallie W. Rowland 36,285,274 904,447
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits. Copies of documents listed below which are identified
with an asterisk (*) are incorporated herein by reference and made a
part hereof. The management contracts or compensatory plans are marked
with a double asterisk (**) after the description of the contract or
plan.
3.1 Articles of Incorporation of IPALCO Enterprises, Inc., as amended.
3.2* Bylaws of IPALCO Enterprises, Inc., as amended. (Exhibit 3.2 to the
Form 10-Q dated 3-31-97.)
4.1* IPALCO Enterprises, Inc. IPALCO PowerInvest Dividend Reinvestment and
Direct Stock Purchase Plan.(Exhibit 4.1 to the Form 10-Q dated
9-30-96.)
4.2* IPALCO Enterprises, Inc. and First Chicago Trust Company of New York
(Rights Agreement). (Exhibit 4.2 to the Form 10-K for the year ended
12-31-94.)
10.1 IPALCO Enterprises, Inc. 1997 Stock Option Plan. **
11.1 Computation of Per Share Earnings.
21.1* Subsidiaries of the Registrant. (Exhibit 21.1 to the Form 10-K dated
12-31-96.)
27.1 Financial Data Schedule.
<PAGE>14
99.1 First Amendment to Credit Agreement by and among IPALCO Enterprises,
Inc., Bank One, Indiana, National Association, National City Bank
of Indiana, The First National Bank of Chicago, The Bank of Tokyo--
Mitsubishi, Ltd., Keybank National Association, The Sanwa Bank,
Limited, Chicago Branch, Wachovia Bank of Georgia, N. A. The Bank of
Nova Scotia, Dai-ichi Kangyo Bank, Ltd., Chicago Branch, The
Industrial Bank of Japan, Limited, Morgan Guaranty Trust Company of
New York,The Sumitomo Bank, Ltd.,and Suntrust Bank,Central Florida,N.A.
(b) Reports on Form 8-K.
None.
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: August 13, 1997 /s/ John R. Brehm
---------------------------------- -------------------------------
John R. Brehm
Vice President and Treasurer
Date: August 13, 1997 /s/ Stephen J. Plunkett
---------------------------------- -------------------------------
Stephen J. Plunkett
Controller
EXHIBIT 3.1
AMENDED
ARTICLES OF INCORPORATION
OF
IPALCO ENTERPRISES, INC.
Dated April 16, 1986
As Amended By
ARTICLES OF AMENDMENT
Dated April 18, 1990
As Amended By
ARTICLES OF AMENDMENT
Dated May 21, 1997
AMENDED
ARTICLES OF INCORPORATION
OF
IPALCO ENTERPRISES, INC.
The undersigned officers of IPALCO ENTERPRISES, INC.
(hereinafter referred to as the "Corporation"), existing
pursuant to the provisions of The Indiana General Corporation
Act, as amended (hereinafter referred to as the "Act"),
desiring to give notice of corporate action effectuating
certain amendments of its Articles of Incorporation by the
adoption of Amended Articles of Incorporation to supersede and
take the place of its heretofore existing Articles of
Incorporation approved and filed in accordance with the Act on
September 14, 1983, certifying the following facts:
SUBDIVISION A
AMENDED ARTICLES
1. Text of Amended Articles
The exact text of the entire Amended Articles of
Incorporation of the Corporation (hereinafter referred to as
the "Amended Articles"), now is as follows:
AMENDED
ARTICLES OF INCORPORATION
OF
IPALCO ENTERPRISES, INC.
ARTICLE 1
Identification
Section 1.01. Name. The name of the Corporation is
IPALCO ENTERPRISES, INC.
ARTICLE 2
Purpose and Powers
Section 2.01. Purpose. The purpose for which the
Corporation is formed is the transaction of any or all lawful
business for which corporations may be incorporated under The
Indiana General Corporation Act, as amended (herein referred
to as the "Act").
Section 2.02. Powers. The Corporation shall have the
capacity to act possessed by natural persons and, subject to
any limitations or restrictions imposed by the Act, other law
or these Amended Articles of Incorporation (herein referred to
as the "Amended Articles"), shall have the power to do all
acts and things necessary, convenient or expedient to carry
out the purposes for which it is formed.
Section 2.03. Limitations. Nothing in these Amended
Articles shall be construed to authorize the conduct by the
Corporation of the business of rural loan and savings
associations, credit unions, or corporations for the conduct
of banking, railroad, insurance, surety, trust, safe deposit,
mortgage guarantee, or building and loan business, or to
authorize the Corporation to carry on the business of
receiving deposits of money, bullion, or foreign coins, or
issuing bills, notes or other evidences of debt for
circulation as money.
ARTICLE 3
Period of Existence
Section 3.01. Period. The Period during which the
Corporation shall continue is perpetual.
ARTICLE 4
Principal Office and Resident Agent
Section 4.01. Principal Office. The post office address
of the principal office of the Corporation is:
25 Monument Circle
Indianapolis, Indiana 46204
Section 4.02. Resident Agent. The name and post office
address of its Resident Agent in charge of such office are:
Marcus E. Woods
25 Monument Circle
Indianapolis, Indiana 46204
ARTICLE 5
Terms of Shares
Section 5.01. Amount and Par Value. The total number of
shares which the Corporation shall have authority to issue is
forty-five million (45,000,000) shares, without par value.
(Amended by Articles of Amendment, see Page 15)
Section 5.02. Designations of Classes and Relative Rights
of Shares. All shares of the Corporation shall be of one class
and shall be known as shares of Common Stock. All shares of
Common Stock shall have the same relative rights, preferences,
limitations and restrictions.
Section 5.03. Issue and Consideration for Common Stock.
Shares of Common Stock may be issued by the Corporation for
such amount of consideration as may be fixed from time to time
by the Board of Directors and may be paid, in whole or in
part, in money, in other property, tangible or intangible, or
in labor actually performed for or services actually rendered
to the Corporation.
Section 5.04. Voting Rights. Every holder of shares of
Common Stock of the Corporation shall have the right, at every
shareholders' meeting, to one (1) vote for each share of
Common Stock standing in the shareholder's name on the books
of the Corporation, unless otherwise provided in the Act.
Section 5.05. Dividends. The Board of Directors shall
have the power to declare and pay dividends on the outstanding
shares of Common Stock out of the unreserved and unrestricted
earned and/or capital surplus available therefor and payable
in cash, in property or in shares of the Corporation, but no
dividend shall be paid (i) out of surplus due to or arising
from unrealized appreciation in value, or from a revaluation
of assets; (ii) if the Corporation is, or is thereby rendered,
insolvent; or (iii) if the stated capital of the Corporation
is thereby impaired.
Section 5.06. Redemption. The Corporation shall have the
power to acquire, hold and dispose of (but not to vote) its
own shares to the extent permitted by the Act, but purchases
of its own shares, whether direct or indirect, shall be made
only to the extent of unreserved and unrestricted earned
and/or capital surplus available therefor, provided that no
purchase of or payment for its own shares shall be made at a
time when the Corporation is insolvent or when such purchase
or payment would make it insolvent.
Section 5.07. Liquidation, etc. In event of any voluntary
or involuntary liquidation, dissolution, or winding up of the
Corporation, the holders of the shares of Common Stock shall
be entitled, after due payment or provision for payment of the
debts and other liabilities of the Corporation, to share
ratably in the remaining net assets of the Corporation.
Section 5.08. No Pre-emptive Rights. Shareholders shall
have no pre-emptive rights to subscribe to or purchase any
shares of Common Stock or other securities of the Corporation.
Section 5.09. Equitable Interests in Shares or Rights.
The Corporation, to the extent permitted by law, shall be
entitled to treat the person in whose name any share or right
is registered on the books of the Corporation as the owner
thereof, for all purposes, and shall not be bound to recognize
any equitable or other claim to, or interest in, such share or
right on the part of any other person, whether or not the
Corporation shall have notice thereof.
ARTICLE 6
Capital
Section 6.01. Amount. The stated capital of the
Corporation at the time these Amended Articles were filed was
at least One Thousand Dollars ($1,000).
ARTICLE 7
Directors
Section 7.01. Number and Qualifications. The number of
directors of the Corporation shall be not less than nine (9),
the exact number to be fixed from time to time by amendment to
the By-Laws of the Corporation. Directors shall be citizens of
the United States of America, but need not be shareholders of
the Corporation.
Section 7.02. Names, Addresses and Residences. The names
and post office addresses of the Board of Directors of the
Corporation on the date these Amended Articles were filed are
as follows:
<TABLE>
<CAPTION>
Name Post Office Address
<S> <C>
Charles A. Barnes 7951 Morning Side Drive
Indianapolis, Indiana
Thomas W. Binford One Indiana Square
Indianapolis, Indiana
Harriet H. Capehart 445 Pine Drive
Indianapolis, Indiana
Otto N. Frenzel III One Merchants Plaza
Indianapolis, Indiana
Earl B. Herr, Jr. Lilly Corporate Center
Indianapolis, Indiana
Robert W. Hill 25 Monument Circle
Indianapolis, Indiana
John R. Hodowal 25 Monument Circle
Indianapolis, Indiana
Sam H. Jones 850 North Meridian Street
Indianapolis, Indiana
Andre B. Lacy One Indiana Square
Indianapolis, Indiana
Frank E. McKinney, Jr. 111 Monument Circle
Indianapolis, Indiana
Zane G. Todd 25 Monument Circle
Indianapolis, Indiana
</TABLE>
Section 7.03. Classes. The Board of Directors shall be
divided into three classes, each class being as nearly as
possible equal in number to each other class. At the annual
meeting of shareholders to be held in 1986, approximately one-
third of the directors constituting the first class (Class I)
shall be elected to hold office for a term expiring at the
1987 annual meeting, approximately one-third of the directors
constituting the second class (Class II) shall be elected to
hold office for a term expiring at the 1988 annual meeting,
and the remaining directors constituting the third class
(Class III) shall be elected to hold office for a term
expiring at the 1989 annual meeting. Commencing with the
annual meeting of shareholders in 1987, the respective
directors assigned to Class I, Class II and Class III shall be
elected to hold office for three-year terms. Directors shall
be assigned to classes by resolution of the Board of Directors
adopted by not less than a majority of the directors then in
office and at least two-thirds (2/3) of the Continuing
Directors (as defined in Article 10 hereof).
Section 7.04. Vacancies. In the case of any vacancy on
the Board of Directors, including a vacancy created by an
increase in the number of directors, the vacancy shall be
filled for a period equal to the remainder of the term of the
class in which the vacancy occurs, by a majority vote of all
directors then in office and at least two-thirds (2/3) of the
Continuing Directors. All directors shall continue as
directors until the election and qualification of their
successors.
Section 7.05. Removal of Directors. Any director or the
entire Board of Directors may be removed from office at any
time, but only for cause and only by the affirmative vote of
the holders of eighty percent (80%) of the Voting Stock (as
defined in Article 10 hereof) at a meeting of shareholders
called expressly for that purpose.
Section 7.06. Amendments, etc. of this Article.
Notwithstanding any other provision of the Act, the Amended
Articles or the By-Laws of the Corporation to the contrary
(and notwithstanding the fact that a lesser percentage may be
specified by law, the Amended Articles or such By-Laws), the
affirmative vote of the holders of eighty percent (80%) of the
Voting Stock, voting together as a single class, shall be
required to amend, modify or repeal any provision of this
Article 7.
ARTICLE 8
President and Secretary
Section 8.01. Name and Post Office Address. The name
and post office address of the President of the Corporation is
Zane G. Todd, 25 Monument Circle, Indianapolis, Indiana, and
the name and address of its Secretary is Marcus E. Woods, 25
Monument Circle, Indianapolis, Indiana.
ARTICLE 9
Provisions for Regulation of Business
and Conduct of Affairs of the Corporation
Section 9.01. Location of Meetings. Meetings of
shareholders, the Board of Directors or any committees of the
Board of Directors may be held at such place, within or
without the State of Indiana, as may be specified in the
respective notices or waivers of notice thereof.
Section 9.02. By-Laws. The Board of Directors of the
Corporation shall have power, without the assent or vote of
the shareholders, to make, alter, amend or repeal the By-Laws
of the Corporation by the affirmative vote of a majority of
the directors then in office and at least two-thirds (2/3) of
the Continuing Directors. Notwithstanding any provision of
the Act, the Amended Articles or the By-Laws of the
Corporation, any amendment, modification or repeal of this
Section 9.02 shall require the approval of a majority of the
directors then in office and at least two-thirds (2/3) of the
Continuing Directors and by such vote of shareholders as may
be required by law.
Section 9.03. Provisions for Working Capital. The Board
of Directors of the Corporation shall have power, from time to
time, to fix and determine and to vary the amount to be
reserved as working capital of the Corporation and, before the
payment of any dividends, it may set aside out of the net
profits of the Corporation such sum or sums as it may from
time to time in its absolute discretion determine to be
proper, whether as a reserve fund to meet contingencies or for
the equalizing of dividends, or for repairing or maintaining
any property of the Corporation, or for an addition to
surplus, or for any corporate purposes that the Board of
Directors shall think conducive to the best interest of the
Corporation, subject only to such limitations as the By-Laws
of the Corporation may from time to time impose.
Section 9.04. Interest of Directors in Contracts. Any
contract or other transaction between the Corporation and one
or more of its directors, or between the Corporation and any
firm of which one or more of its directors are members or
employees, or in which they are interested, or between the
Corporation and any corporation, partnership or association of
which one or more of its directors are shareholders, members,
directors, officers, or employees, or in which they are
interested, or in which the Corporation is a member,
shareholder, or otherwise interested, shall be valid for all
purposes, notwithstanding the presence of such director or
directors at the meeting of the Board of Directors of the
Corporation which acts upon, or in reference to, such contract
or transaction and notwithstanding his or their participation
in such action, if the fact of such interest shall be
disclosed or known to the Board of Directors and the Board of
Directors shall, nevertheless, authorize, approve or ratify
such contract or transaction by a vote of a majority of the
disinterested directors present, notwithstanding the fact that
such majority of the disinterested directors present may not
constitute a quorum, a majority of the Board of Directors, or
a majority of the directors present at the meeting at which
the contract or transaction is considered. This Section shall
not be construed to invalidate any contract or other
transaction which would otherwise be valid under the common
and statutory law applicable thereto.
Section 9.05. Indemnification. The Corporation shall
indemnify any person who is or was a director, officer or
employee of the Corporation or who serves as a director,
officer or employee of a corporation, employee benefit plan or
other entity at the request of the Corporation (herein
collectively referred to as "Other Entity") against expenses
reasonably incurred by such person, including without
limitation, attorneys' fees and disbursements, amounts paid in
settlement, judgments, fines, penalties and court costs, in
the defense (through final disposition) of any actual or
threatened claim, action, suit or proceeding of a civil,
criminal or administrative nature; provided, that such person
(a) is wholly successful with respect thereto, or (b) has been
found in a legal opinion of independent counsel or by a
majority of the directors of the Corporation not involved in
the claim, action, suit or proceeding for which indemnity is
sought, to have acted in good faith in what such person
reasonably believed to be in, or not opposed to, the best
interests of the Corporation or Other Entity he or she was
serving, and, in the case of criminal matters, had not
reasonable cause to believe that his or her conduct was
unlawful; and provided further, that no such person shall be
so indemnified in relation to matters as to which he or she
shall be adjudged in any such claim, action, suit or
proceeding to be liable for reckless disregard or willful
misconduct in the performance of duty. The termination of any
claim, action, suit or proceeding by a judgment, settlement
(whether with or without court approval), consent decree or
conviction or upon a plea of guilty or of nolo contendere, or
its equivalent, shall not create a presumption that such
person did not meet the standard of conduct set forth in this
paragraph. The indemnification provided hereunder shall be in
addition to any rights to which any person concerned may
otherwise be entitled by contract or as a matter of law and
shall inure to the benefit of the heirs, executors and
administrators of any such person.
The Corporation may advance expenses to or, where
appropriate, assume the defense of any such person at the
Corporation's expense upon receipt of an undertaking, in form
and substance approved by the Board of Directors, by or on
behalf of such person to repay such expenses if it is
ultimately determined that he or she is not entitled to
indemnification hereunder.
The Corporation may purchase and maintain insurance on
behalf of any person why is or was a director, officer or
employee of the Corporation or is or was serving at the
request of the Corporation as a director, officer or employee
of an Other Entity against any liability asserted against such
person in any capacity or arising out of his or her status as
such, whether or not the Corporation would have the power to
indemnify such person against such liability under the
provisions of the Act, these Amended Articles or otherwise.
Section 9.06. Direction of Purposes and Exercise of
Powers by Directors. The Board of Directors, subject to any
specific limitations or restrictions imposed by the Act or
these Amended Articles, shall direct the carrying out of the
purpose and exercise the powers of the Corporation, without
previous authorization or subsequent approval by the
shareholders of the Corporation.
Section 9.07. Amendments of Articles of Incorporation.
The Corporation reserves the right to amend, alter, change or
repeal any provision contained in the Amended Articles, or in
any amendment hereto, or to add any provision to the Amended
Articles or to any amendment hereto, in any manner now or
hereafter prescribed or permitted by the provisions of the Act
or any amendment thereto, or by the provisions of any other
applicable statute of the State of Indiana; and all rights
conferred upon shareholders in the Amended Articles or any
amendment hereto are granted subject to this reservation.
ARTICLE 10
Approval of Certain Business Transactions
Section 10.01. Vote Required. In addition to any
affirmative vote of the Board of Directors and shareholders of
the Corporation prescribed by law or by the Amended Articles,
the affirmative vote of the holders of not less than eighty
percent (80%) of the Voting Stock shall be required to approve
and authorize any Business Transaction unless,
(a) such Business Transaction shall have first been
approved and authorized by a majority of the directors
then in office and at least two-thirds (2/3) of the
Continuing Directors after having given due consideration
to, and having made specific written findings with
respect to, the social, legal and economic effects such
Business Transaction may have on shareholders, employees,
customers and suppliers of the Corporation and any
Subsidiary (as hereinafter defined) and on the community
in which the Corporation conducts its businesses; or
(b) the Fair Price Provisions set forth in Section 10.03
of this Article 10 shall have been fully met.
Section 10.02. Definitions. For the purpose of this
Article 10, the following terms shall have the meanings set
forth below:
(a) An "Affiliate" of, or a Person (as hereinafter
defined) "affiliated" with, a specified Person, shall
mean a Person that directly or indirectly through one or
more intermediaries, controls, or is controlled by, or is
under common control with, the Person specified.
(b) An "Associate" when used to indicate a relationship
with a Person, shall mean
(i) any corporation or organization, other than the
Corporation or any Subsidiary, of which a Person is
an officer or partner or is, directly or indirectly,
the beneficial owner of ten percent (10%) or more of
any class of equity securities;
(ii) any trust or other estate in which a Person
has a substantial beneficial interest or as to which
a Person serves as trustee or in a similar fiduciary
capacity; and
(iii) any relative or spouse of a Person, or any
relative of such spouse, who has the same home as a
Person or who is a director or officer of the
Corporation or any Subsidiary.
(c) A "beneficial owner" of Voting Stock shall mean a
Person or any Affiliate or Associate thereof who:
(i) owns, directly or indirectly any Voting Stock;
(ii) has (A) the right to acquire any Voting Stock
(whether such right is exercisable immediately or
only after the passage of time), pursuant to any
agreement, arrangement or understanding or upon the
exercise of conversion rights, exchange rights,
warrants or options, or otherwise, or (B) the right
to vote any Voting Stock pursuant to any agreement,
arrangement or understanding; or
(iii) has any agreement, arrangement or
understanding with any other Person or any Affiliate
or Associate thereof, which is the beneficial owner
of Voting Stock, for the purpose of acquiring,
holding, voting or disposing of such Stock.
(d) "Business Transaction" shall mean
(i) any merger, consolidation or plan of exchange
of the Corporation or any Subsidiary with or into
(A) any Interested Shareholder (as hereinafter
defined), or (B) any other corporation (whether or
not itself an Interested Shareholder) which is, or
after such merger, consolidation or plan of exchange
would be, an Affiliate of an Interested Shareholder;
or
(ii) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition (in one transaction or
a series of transactions) of any assets of the
Corporation or any Subsidiary having an aggregate
Fair Market Value (as hereinafter defined) of
$5,000,000 or more to or with any Interested
Shareholder or any Affiliate of any Interested
Shareholder; or
(iii) the issuance or transfer by the Corporation
or any Subsidiary (in one transaction or a series of
transactions) of any securities of the Corporation
or of any Subsidiary to any Interested Shareholder
or to any Affiliate of any Interested Shareholder in
exchange for cash, securities or other property (or
a combination thereof) having an aggregate Fair
Market Value of $5,000,000 or more; or
(iv) the adoption of any plan or proposal for the
liquidation or dissolution of the Corporation
proposed by or on behalf of an Interested
Shareholder or any Affiliate of any Interested
Shareholder; or
(v) any reclassification of securities (including
any reverse stock split), or recapitalization of the
Corporation, or any merger or consolidation of the
Corporation with any Subsidiary or any other
transaction (whether or not with or into or
otherwise involving an Interested Shareholder) which
has the effect, directly or indirectly, of
increasing the proportionate share of the
outstanding shares of any class of equity or
convertible securities of the Corporation or any
Subsidiary which is directly or indirectly owned by
an Interested Shareholder or any Affiliate of any
Interested Shareholder.
(e) "Continuing Director" shall mean any member of the
Board of Directors of the Corporation who is unaffiliated
with an Interested Shareholder and was a member of the
Board of Directors prior to the time that an Interested
Shareholder became an Interested Shareholder, and any
successor of a Continuing Director who is unaffiliated
with an Interested Shareholder and is recommended to
succeed a Continuing Director by a two-thirds (2/3) vote
of the Continuing Directors then on the Board of
Directors.
(f) "Fair Market Value" shall mean
(i) in the case of cash, the amount of such cash;
(ii) in the case of stock, the highest closing sale
price during the thirty-day period immediately
preceding the date in question of a share of such
stock on the Composite Tape for New York Stock
Exchange-Listed Stocks, or, if such stock is not
quoted on such Composite Tape, or listed on such
Exchange, on the principal United States securities
exchange registered under the Securities Exchange
Act of 1934 on which such stock is listed, or, if
such stock is not listed on any such exchange, the
highest closing bid quotation for a share of such
stock during the thirty-day period preceding the
date in question on the National Association of
Securities Dealers, Inc. Automated Quotations System
or any similar system then in use, or if no such
quotations are available, the fair market value on
the date in question of a share of such stock as
determined in good faith by a two-thirds (2/3) vote
of the Continuing Directors; and
(iii) in the case of property other than cash or
stock, the fair market value of such property on the
date in question as determined in good faith by a
two-thirds (2/3) vote of the Continuing Directors.
(g) "Interested Shareholder" shall mean a Person (other
than the Corporation, a Subsidiary or any agent or
trustee of an employee stock ownership plan, employee
thrift plan or a dividend reinvestment and stock purchase
plan of the Corporation or a Subsidiary) who or which
(i) is the beneficial owner, directly or
indirectly, of more than ten percent (10%) of the
outstanding Voting Stock; or
(ii) is an Affiliate of the Corporation and at any
time within the two-year period immediately prior to
the date in question was the beneficial owner,
directly or indirectly, of ten percent (10%) or more
of the then outstanding Voting Stock; or
(iii) is an assignee of or has otherwise succeeded
to the beneficial ownership of any Voting Stock
which was at any time within the two-year period
immediately prior to the date in question
beneficially owned by any Interested Shareholder, if
such assignment or succession shall have occurred in
the course of a transaction or series of
transactions not involving a public offering within
the meaning of the Securities Act of 1933.
(h) A "Person" is any individual, firm, corporation or
other entity. When two or more Persons act as a
partnership, limited partnership, syndicate, or other
group for the purpose of acquiring Voting Stock of the
Corporation, such partnership, syndicate or group shall
be deemed a "Person".
(i) "Subsidiary" shall mean any corporation of which a
majority of any class of its equity securities is owned,
directly or indirectly, by the Corporation; provided,
however, that for the purposes of the definition of
Interested Shareholders set forth above, the term
"Subsidiary" shall mean only a corporation of which a
majority of each class of its equity securities is owned,
directly or indirectly, by the Corporation.
(j) "Voting Stock" shall mean all the then outstanding
shares of capital stock of the Corporation entitled to
vote generally in the election of directors.
Section 10.03. Fair Price Provisions. A Business
Transaction shall require only the affirmative vote of the
Board of Directors and shareholders of the Corporation
prescribed by law, if all of the conditions specified below
are met:
(a) The aggregate amount of cash and the Fair Market
Value as of the date of the consummation of the Business
Transaction of consideration other than cash to be
received per share in such Business Transaction by
holders of any class of Voting Stock, shall be at least
equal to the highest of the following:
(i) the highest per share price (including any
brokerage commissions, transfer taxes and soliciting
dealers' fees) paid by the Interested Shareholder
for any shares of the same class of Voting Stock
acquired by it (A) within the two-year period
immediately prior to the first public announcement
of the proposed Business Transaction (the
"Announcement Date"), or (B) in the transaction in
which the Interested Shareholder became an
Interested Shareholder, whichever is higher;
(ii) The Fair Market Value per share of any shares
of the same class of any Voting Stock on the
Announcement Date or on the date on which the
Interested Shareholder became an Interested
Shareholder (the "Determination Date"), whichever is
higher;
(iii) the price per share equal to the Fair Market
Value per share of any shares of the same class of
any Voting Stock determined pursuant to subparagraph
(a) (ii) of this Section 10.03, multiplied by the
ratio of (A) the highest per share price (including
any brokerage commissions, transfer taxes and
soliciting dealers' fees) paid by the Interested
Shareholder for any shares of the same class of any
Voting Stock acquired by it within the two-year
period immediately before the Announcement Date to
(B) the Fair Market Value per share of any shares of
the same class of Voting Stock on the first day in
such two-year period the Interested Shareholder
acquired any such shares of Voting Stock; and
(iv) in the case of Voting Stock other than Common
Stock, the highest preferential amount per share to
which the holders of shares of such class of Voting
Stock are entitled in the event of any voluntary or
involuntary liquidation, dissolution or winding up
of the Corporation.
(b) The consideration to be received by holders of a
particular class of Voting Stock (including Common Stock)
shall be in cash or in the same form as the Interested
Shareholder previously paid for shares of such class of
Voting Stock. If the Interested Shareholder has paid for
shares of any class of Voting Stock with varying forms of
consideration, the form of consideration for such class
of Voting Stock shall be either cash or the form used to
acquire the largest number of shares of such class of
Voting Stock previously acquired by it.
(c) After the Interested Shareholder has become an
Interested Shareholder and prior to the consummation of
such Business Transaction, unless otherwise approved by a
two-thirds (2/3) vote of the Continuing Directors,
(i) there shall not have been a failure to declare
and pay at the regular date therefor any full
quarterly dividends (whether or not cumulative) on
any outstanding preferred stock of the Corporation;
(ii) there shall not have been a reduction in the
annual rate of dividends paid on the Common Stock
(except as necessary to reflect any subdivision of
the Common Stock), and such annual rate of dividends
shall have been increased as necessary to reflect
any reclassification (including any reverse stock
split), recapitalization, reorganization or any
similar transaction which has the effect of reducing
the number of outstanding shares of the Common
Stock; and
(iii) the Interested Shareholder shall not have
become the beneficial owner of any Voting Stock in
addition to that acquired as part of the transaction
which resulted in the Interested Shareholder
becoming an Interested Shareholder.
(d) After the Interested Shareholder has become an
Interested Shareholder, such Interested Shareholder shall
not have received the benefit, directly or indirectly
(except proportionately as a shareholder), of any loans,
advances, guarantees, pledges or other financial
assistance or any tax credits or other tax advantages
provided by the Corporation, whether in anticipation of
or in connection with such Business Transaction or
otherwise.
(e) A proxy or information statement describing the
proposed Business Transaction and complying with the
requirements of the Securities Exchange Act of 1934 and
the rules and regulations thereunder (or any subsequent
provisions replacing such act, rules or regulations)
shall be mailed to all shareholders of the Corporation at
least thirty (30) days prior to the consummation of such
Business Transaction (whether or not such proxy or
information statement is required to be mailed pursuant
to such Act or subsequent provisions).
Section 10.04. Powers of the Board of Directors. Not
less than two-thirds (2/3) of the Continuing Directors shall
have the power and duty to determine for the purposes of this
Article 10, on the basis of information known to them after
reasonable inquiry, (a) whether a person is an Interested
Shareholder, (b) the amount of Voting Stock beneficially owned
by a Person, (c) whether a Person is an Affiliate or Associate
of another Person, and (d) whether the assets which are the
subject of any Business Transaction have, or the consideration
to be received for the issuance or transfer of securities by
the Corporation or any Subsidiary in any Business Transaction
has, an aggregate Fair Market Value of $5,000,000 or more.
Section 10.05. No Effect on Fiduciary Obligations of
Interested Shareholders. Nothing contained in this Article 10
shall be construed to relieve any Interested Shareholder of
any fiduciary obligation imposed by law.
Section 10.06. Amendment, Repeal, etc. Notwithstanding
any other provision of the Act or the Amended Articles or By-
Laws of the Corporation to the contrary (and notwithstanding
the fact that a lesser percentage may be specified by law, the
Amended Articles or such By-Laws), the affirmative vote of the
holders of not less than eighty percent (80%) of the Voting
Stock, voting together as a single class, shall be required to
amend, modify or repeal, or to adopt provisions inconsistent
with, this Article 10 of the Amended Articles.
2. Effect of Amended Articles of Incorporation
These Amended Articles effectuate certain amendments of
(see Subdivision B below), and shall supersede and take the
place of, the heretofore existing Articles of Incorporation of
the Corporation approved and filed in accordance with the Act
on September 14, 1983.
SUBDIVISION B
MANNER OF ADOPTION AND VOTE
1. Action by Directors
The Board of Directors of the Corporation, at a meeting
thereof, duly called, constituted and held on January 28,
1986, at which a quorum of such Board of Directors was
present, duly adopted resolutions proposing to the
shareholders of the Corporation entitled to vote in respect
thereof that Section 5.01 of Article 5 be amended; Sections
7.01 and 7.03 of Article 7 be amended; Sections 7.04, 7.05 and
7.06 of Article 7 be added; Sections 9.02 and 9.05 of Article
9 be amended and Article 10 be added to the Articles of
Incorporation of the Corporation approved and filed on
September 14, 1983, to read as set forth in these Amended
Articles of Incorporation and directed the submission of such
amendments and additions to vote of such shareholders at the
annual meeting of shareholders held on April 16, 1986, to
adopt or reject the same.
2. Action by Shareholders
The shareholders of the Corporation entitled to vote in
respect of the amendments and additions described above under
the caption "Action by Directors", at the annual meeting of
shareholders of the Corporation, duly noticed, constituted and
held on April 16, 1986, at which the holders of more than a
majority of the outstanding shares of the Common Stock (the
only class of stock authorized) of the Corporation were
present in person or by proxy, adopted such amendments.
The number of shares entitled to vote in respect of such
amendments and additions, the number of shares voted in favor
of the adoption of such amendments and additions, the number
of shares voted against such adoption, and the percentage of
the total outstanding shares voted in favor of the adoption of
such amendments and additions, and the percentage of the total
outstanding shares voted against such adoption, are as
follows:
<TABLE>
<CAPTION>
Shares of Common Stock
Entitled Voted Voted Percent Percent
To Vote In Favor Against In Favor Against
<S> <C> <C> <C> <C> <C>
Amendment of
Section 5.01 18,774,483 14,585,300 1,257,000 77.7 6.7
Amendment of
Section 9.05 18,774,483 15,448,002 325,770 82.3 1.7
Amendment of
Sections 7.01,
7.03 and 9.02,
and Additions
of Sections
7.04, 7.05
and 7.06 18,774,483 12,661,622 1,720,152 67.4 9.2
Addition of
Article 10 18,774,483 12,797,838 1,690,578 68.2 9.0
</TABLE>
3. Compliance with Legal Requirements
The manner of adoption of the amendments and additions
effectuated by these Amended Articles of Incorporation and the
vote by which such amendments and additions were adopted,
constitute full legal compliance with the provisions of the
Act, the Articles of Incorporation of the Corporation in
effect at the time of such adoption, and the By-Laws of the
Corporation.
SUBDIVISION C
STATEMENT OF CHANGES MADE WITH RESPECT TO THE
SHARES HERETOFORE AUTHORIZED
The total number of shares of which the Corporation had
authority to issue immediately prior to adoption of the
amendments and additions effectuated by these Amended Articles
of Incorporation was as follows:
<TABLE>
<CAPTION>
Number of
Class Authorized Shares
<S> <C>
Common Stock, without par value 25,000,000
</TABLE>
The additional number of shares authorized by the
aforesaid amendments is 20,000,000 shares of Common Stock,
without par value, so that the total number of authorized
shares of the Corporation following the effectiveness of such
amendments and additions is as follows:
<TABLE>
<CAPTION>
Number of
Class Authorized Shares
<S> <C>
Common Stock, without par value 45,000,000
</TABLE>
IN WITNESS WHEREOF, the undersigned officers of the
Corporation have executed these Amended Articles of
Incorporation and Certify that the facts herein stated are
true, this 16th day of April, 1986.
/s/ ZANE G. TODD
ZANE G. TODD, President
/s/ MARCUS E. WOODS
MARCUS E. WOODS, Secretary
STATE OF INDIANA )
: SS.:
COUNTY OF MARION )
I, the undersigned, a Notary Public duly commissioned to
take acknowledgements and administer oaths in the State of
Indiana, certify that Zane G. Todd, President, and Marcus E.
Woods, Secretary, of IPALCO Enterprises, Inc., an Indiana
corporation, the officers executing the foregoing Amended
Articles of Incorporation, personally appeared before me,
acknowledged the execution thereof and swore to the truth of
the facts therein stated.
WITNESS my hand and Notarial Seal this 16th day of April,
1986.
/s/ KATHLEEN M. TUCKER
KATHLEEN M. TUCKER, Notary
Public
My Commission Expires: My County of Residence:
March 29, 1990 Hendricks
(SEAL)
This instrument prepared by Marcus E. Woods, Attorney at Law
25 Monument Circle, Indianapolis, Indiana 46204
FILED AND APPROVED
April 16, 1986
EDWIN J. SIMCOX,
Secretary of State of Indiana
[THIS PAGE INTENTIONALLY LEFT BLANK]
Provided by EVAN BAYH
Secretary of State
Room 155 State House
Indianapolis, Indiana 46204
(317) 232-6576
Indiana Code 23-1-38-1 et seq.
FILING FEE $30.00
ARTICLES OF AMENDMENT OF THE
ARTICLES OF INCORPORATION
State Form 38333 (R 3/1-88)
"Approved by State Board of Accounts, (Revised) 1988"
INSTRUCTIONS: Use 8 1/2 x 11 inch white paper for inserts.
Filing requirements - Present original and
one copy to address in upper right corner
of this form.
ARTICLES OF AMENDMENT OF THE AMENDED
ARTICLES OF INCORPORATION OF:
IPALCO Enterprises, Inc.
The undersigned officers of:
IPALCO Enterprises, Inc.
(hereinafter referred to as the "Corporation") existing
pursuant to the provisions of:
(Indicate appropriate act)
x Indiana Business ____ Indiana Professional
Corporation Law Corporation Act
of 1983
as amended (hereinafter referred to as the "Act"), desiring to
give notice of corporate action effectuating amendment of
certain provisions of its Amended Articles of Incorporation,
certify the following facts:
ARTICLE I Amendment(s)
SECTION 1 The date of incorporation of the corporation is:
September 14, 1983
SECTION 2 The name of the corporation following this
amendment to the Amended Articles of Incorporation is:
IPALCO Enterprises, Inc.
SECTION 3
The exact text to Article 5, Section 5.01 of the Amended
Articles of Incorporation is now as follows:
"Section 5.01. Amount and Par Value. The total
number of shares which the Corporation shall have
authority to issue is one hundred forty-five million
(145,000,000) shares, without par value."
ARTICLE II Manner of Adoption and Vote
SECTION 1 Action by Directors:
The Board of Directors of the Corporation duly adopted a
resolution proposing to amend the terms and provisions of
Article 5, Section 5.01 of the Amended Articles of
Incorporation and directing a meeting of the Shareholders, to
be held on April 18, 1990, allowing such Shareholders to vote
on the proposed amendment.
The resolution was adopted by: (Select appropriate paragraph)
(a) Vote of the Board of Directors at a meeting held on
December 18, 1989, at which a quorum of such Board was
present.
(b) Written consent executed on _________________,
19____, and signed by all members of the Board of Directors.
SECTION 2 Action by Shareholders:
The Shareholders of the Corporation entitled to vote in
respect of the Articles of Amendment adopted the proposed
amendment. The amendment was adopted by: (Select appropriate
paragraph)
(a) Vote of such Shareholders during the meeting called
by the Board of Directors. The result of such vote is as
follows:*
<TABLE>
<CAPTION>
TOTAL
<S> <C>
SHAREHOLDERS ENTITLED TO VOTE: 33,355,128
SHAREHOLDERS VOTED IN FAVOR: 29,384,204
SHAREHOLDERS VOTED AGAINST: 3,495,708
</TABLE>
(b) Written consent executed on ____________________,
19___, and signed by all such Shareholders.
SECTION 3 Compliance with Legal Requirements.
The manner of the adoption of the Articles of Amendment
and the vote by which they were adopted constitute full legal
compliance with the provisions of the Act, the Amended
Articles of Incorporation, and the By-Laws of the Corporation.
I hereby verify subject to the penalties of perjury that the
statements contained are true this 18th day of April, 1990.
Current Officer's Signature Officer's Name Printed
/s/ Marcus E. Woods Marcus E. Woods
Officer's Title
Secretary and General Counsel
* Of the 37,548,966 shares of Common Stock outstanding on the
record date for the above-referenced meeting, 33,355,128 were
present in person and by proxy and entitled to vote,
constituting a quorum. Each share is entitled to one (1)
vote. No other voting shares of the Corporation are issued or
outstanding. In addition to the shares voted in favor of and
against the proposed amendment, 475,216 shares were withheld
from voting thereon.
SUE ANNE GILROY
SECRETARY OF STATE
CORPORATIONS DIVISION
302 W. Washington St., Rm. E018
Indianapolis, IN 46204
Telephone: (317) 232-6576
Indiana Code 23-1-38-1 et seq.
Filing Fee: $30.00
ARTICLES OF AMENDMENT OF THE
ARTICLES OF INCORPORATION
State Form 38333 (R7/4-95)
Approved by State Board of Accounts 1995
INSTRUCTIONS: Use 8 1/2" x 11" white paper for inserts.
Present original and one copy to address in
upper right hand corner of this form.
Please TYPE or PRINT.
ARTICLES OF AMENDMENT OF THE
ARTICLES OF INCORPORATION OF:
Name of Corporation
IPALCO Enterprises, Inc.
The undersigned officers of:
IPALCO Enterprises, Inc.
(hereinafter referred to as the "Corporation") existing
pursuant to the provisions of: (indicate appropriate act)
x Indiana Business ____ Indiana Professional
Corporation Law Corporation Act of 1983
as amended (hereinafter referred to as the "Act"), desiring to
give notice of corporate action effectuating amendment of
certain provisions of its Amended Articles of Incorporation,
certify the following facts:
ARTICLE I Amendment(s)
SECTION 1 The date of incorporation of the Corporation is:
September 14, 1983
SECTION 2 The name of the Corporation following this amendment
to the Amended Articles of Incorporation is:
IPALCO Enterprises, Inc.
SECTION 3
The exact text of Article 5, Section 5.01 of the Amended
Articles of Incorporation is now as follows:
"Section 5.01. Amount and Par Value. The total
number of shares which the Corporation shall have
authority to issue is two hundred ninety million
(290,000,000) shares, without par value."
SECTION 4 Date of each amendment's adoption:
Board of Directors - 01-28-97 Shareholders - May 21, 1997
ARTICLE II Manner of Adoption and Vote
Strike inapplicable section:
SECTION 1 This amendment was adopted by the Board of
Directors or incorporators and shareholder
action was not required.
x SECTION 2 The shareholders of the Corporation entitled to
vote in respect to the amendment adopted the
proposed amendment. The amendment was adopted
by:
A. Vote of such shareholders during a meeting
called by the Board of Directors. The
result of such vote is as follows:
<TABLE>
<S> <C>
Shares entitled to vote. 44,499,612
Number of shares represented 37,189,721
at the meeting.
Shares voted in favor. 32,428,359
Shares voted against. 4,081,008
Shares abstained. 680,354
</TABLE>
B. Written consent executed on
________________, 19___ and signed by all
such shareholders.
ARTICLE III Compliance with Legal Requirements
The manner of the adoption of the Articles of Amendment and
the vote by which they were adopted constitute full legal
compliance with the provisions of the Act, the Amended
Articles of Incorporation, and the By-Laws of the Corporation.
I hereby verify, subject to the penalties of perjury, that the
statements contained herein are true, this 21st day of May,
1997.
Signature of current officer Printed name of officer
/s/ Bryan G. Tabler Bryan G. Tabler
Officer's title
Vice President, Secretary and General Counsel
EXHIBIT 10.1
IPALCO ENTERPRISES, INC.
1997 STOCK OPTION PLAN
1. Purpose. The purpose of the IPALCO Enterprises,
Inc. 1997 Stock Option Plan (the "Plan") is to provide to
certain officers (including officers who are members of the
Board of Directors) and other key executive employees of
IPALCO Enterprises, Inc. (the "Corporation") and of any of the
eighty percent (80%) or greater owned, direct or indirect,
subsidiaries of the Corporation (individually a "Subsidiary
and collectively the "Subsidiaries") who are materially
responsible for the management or operation of the business of
the Corporation or a Subsidiary, a favorable opportunity to
acquire Common Stock, without par value, of the Corporation
("Common Stock"), thereby providing them with an increased
incentive to work for the success of the Corporation and the
Subsidiaries and better enabling the Corporation and the
Subsidiaries to attract and retain capable executive
personnel.
2. Administration of the Plan. The Plan shall be
administered, construed and interpreted by the Compensation
Committee (the "Committee") of the Board of Directors of the
Corporation. The Committee must be composed of two or more
persons who qualify as "Non-Employee Directors" within the
meaning of Rule 16b-3(b)(3) promulgated under the Securities
Exchange Act of 1934, as amended (the "1934 Act") and as
"outside directors" as defined in Treasury Reg. Section
1.162-27(e)(3). The decision of a majority of the members
of the Committee shall constitute the decision of the
Committee, and the Committee may act (a) at a meeting at which
a majority of the members of the Committee is present, (b)
unless prohibited by the Corporation's Articles of
Incorporation or Bylaws, by simultaneous telephonic
communication as authorized by IND. CODE Section 23-1-34-1, or (c)
by a written consent signed by all members of the Committee.
The Committee shall have the sole, final and conclusive
authority to determine, consistent with and subject to the
provisions of the Plan:
(a) the individuals (the "Optionees") to whom options or
successive options shall be granted under the Plan;
(b) the time when options shall be granted hereunder;
(c) the number of shares of Common Stock of the
Corporation to be covered under each option;
(d) the option price to be paid upon the exercise of
each option;
(e) the period within which each option may be
exercised;
(f) the extent to which an option is an incentive stock
option or a non-qualified stock option; and
(g) the terms and conditions of the respective
agreements by which options granted shall be
evidenced.
The Committee shall also have authority to prescribe, amend
and rescind rules and regulations relating to the Plan, and to
make all other determinations necessary or advisable in the
administration of the Plan.
3. Eligibility. The Committee may, consistent with the
purposes of the Plan, grant options to officers and other key
employees of the Corporation or of a Subsidiary who in the
opinion of the Committee are from time to time materially
responsible for the management or operation of the business of
the Corporation or of a Subsidiary; provided, however, that in
no event may any employee who owns (after application of the
ownership rules in Section 424(d) of the Internal Revenue Code of
1986, as amended (the "Code")) shares of stock possessing more
than 10% of the total combined voting power of all classes of
stock of the Corporation be granted an incentive stock option
hereunder unless at the time such option is granted the option
price is at least 110% of the fair market value of the Common
Stock subject to the option and such incentive stock option by
its terms is not exercisable after the expiration of five (5)
years from the date such option is granted. Subject to the
provisions of Section 4 hereof, an individual who has been
granted an option under the Plan, if he is otherwise eligible,
may be granted an additional option or options if the
Committee shall so determine. The maximum number of shares of
the Corporation's Common Stock with respect to which options
may be granted in any calendar year to any individual shall
not exceed two hundred and fifty thousand (250,000).
4. Stock Subject to the Plan. There shall be reserved
for issuance upon the exercise of options granted under the
Plan, two million (2,000,000) shares of the Corporation's
Common Stock which may be authorized but unissued shares of
the Corporation. Subject to Section 6 hereof, the shares for
which options may be granted under the Plan shall not exceed
that number. If any option shall expire or terminate for any
reason without having been exercised in full, the unpurchased
shares subject thereto shall (unless the Plan shall have
terminated) become available for other options under the Plan.
5. Terms of Option. Each option granted under the Plan
shall be subject to the following terms and conditions and to
such other terms and conditions not inconsistent therewith as
the Committee may deem appropriate in each case:
(a) Option Price. The price to be paid for shares of
Common Stock upon the exercise of each option shall be
determined by the Committee at the time such option is
granted, but such price in the case of an incentive stock
option in no event shall be less than the fair market value,
as determined by the Committee consistent with the requirements
of Section 422 of the Code, of such Common Stock on the
date on which such option is granted.
(b) Period for Exercise of Option. An option shall not
be exercisable after the expiration of such period as shall be
fixed by the Committee at the time such option is granted, but
such period in no event shall exceed ten (10) years and one
day from the date on which such option is granted; provided,
however, that incentive stock options shall have terms not in
excess of ten (10) years; provided, further, that no option
shall be exercisable prior to the date on which the Plan is
approved by the shareholders of the Corporation as required by
Section 422 of the Code.
(c) Exercise of Options. The option price of each share
of Common Stock purchased upon exercise of an option shall be
paid in full (1) in cash at the time of such exercise, (2) if
the Optionee may do so in conformity with Regulation T (12
C.F.R. Section 220.3(e)(4)) and without violating
Section 16(b) or (c) of the 1934 Act (to the extent
applicable) and subject to approval by the Committee, by
delivering a properly executed exercise note together with
irrevocable instructions to a broker to deliver promptly to
the Corporation the total option price in cash and, if
desired, the amount of any taxes to be withheld from the
Optionee's compensation as a result of any withholding tax
obligation of the Corporation or any of its Subsidiaries, as
specified in such notice, or (3) subject to the approval of
the Committee, by tendering to the Corporation whole shares of
Common Stock owned by him or any combination of whole shares
of Common Stock owned by him and cash, having a fair market
value equal to the cash exercise price of the shares with
respect to which the option is being exercised. For this
purpose, the fair market value of the shares tendered by the
Optionee shall be computed as of the exercise date in such
manner as determined by the Committee, consistent with the
requirements of Section 422 of the Code. The Committee shall have
the authority to grant options exercisable in full at any time
during their term, or exercisable in such quotas as the
Committee shall determine. An option may be exercised at any
time or from time to time during the term of the option as to
any or all whole shares which have become subject to purchase
pursuant to the terms of the option (including, without
limitation, any quotas with respect to option exercise) or the
Plan.
(d) Termination of Option. If an Optionee ceases to be
an employee of the Corporation or one of the Subsidiaries for
any reason other than retirement, permanent and total disability
(within the meaning of Section 105(d)(4) of the Code), or
death, any option granted to him shall forthwith terminate.
Leave of absence approved by the Committee shall not
constitute cessation of employment. If an Optionee ceases to
be an employee of the Corporation or one of the Subsidiaries
by reason of permanent and total disability (within the meaning
of Section 105(d)(4) of the Code), any option granted to him
may be exercised by him in whole or in part within one (1)
year after the date of his termination of employment by reason
of such disability whether or not the option was otherwise
exercisable at the date of such termination of employment. If
an Optionee ceases to be an employee of the Corporation or one
of the Subsidiaries by reason of retirement, any option
granted to him may be exercised by him in whole or in part
during the period fixed by the Committee under subsection (b)
of this Section 5, provided that the option was otherwise
exercisable at the date of such termination of employment.
The term "retirement" as used herein means an Optionee's
termination of employment on or after meeting the requirements
for early or normal retirement benefits under any then
existing Indianapolis Power & Light Company pension plan. In
the event of the death of an Optionee while in the employ of
the Corporation or the Subsidiaries or within one (1) year
after the termination of his employment by reason of
retirement or permanent and total disability (within the
meaning of Section 105(d)(4) of the Code), any option granted
to him may be exercised in whole or in part at any time after the
date of such death by the executor or administrator of his
estate or by the person or persons entitled to the option by
will or by applicable laws of descent and distribution until
the expiration of the option term as fixed by the Committee,
whether or not the option was otherwise exercisable at the
date of his death. Notwithstanding the foregoing provisions of
this subsection (d), no option shall in any event be
exercisable after the expiration of the period fixed by the
Committee in accordance with subsection (b) above. An option
shall also terminate if this Plan is not approved by the
shareholders of the Corporation within the requisite time
period set forth in Section 422 of the Code.
(e) Nontransferability of Option. An Option may not be
transferred by the Optionee otherwise than by will or the laws
of descent and distribution, and during the lifetime of the
Optionee shall be exercisable only by him.
(f) Investment Representations. Unless the shares of
Common Stock subject to an option are registered under
applicable federal and state securities laws, each Optionee by
accepting an option shall be deemed to agree for himself and
his legal representatives that any option granted to him and
any and all shares of Common Stock purchased upon the exercise
of the option shall be acquired for investment and not with a
view to, or for the sale in connection with, any distribution
thereof, and each notice of the exercise of any portion of an
option shall be accompanied by a representation in writing,
signed by the Optionee or his legal representatives, as the
case may be, that the shares of Common Stock are being
acquired in good faith for investment and not with a view to,
or for sale in connection with, any distribution thereof
(except in case of the Optionee's legal representatives for
distribution, but not for sale, to his legal heirs, legatees
and other testamentary beneficiaries). Any shares issued
pursuant to an exercise of an option may, but need not, bear a
legend evidencing such representations and restrictions. In
addition, if the options and shares of Common Stock issued
pursuant to this Plan are issued in reliance upon Rule 147,
promulgated under the Securities Act of 1933, as amended, the
written representations required by such rule shall be
obtained from the Optionees prior to or at the time they are
granted options, any and all legends required by Rule 147
shall be set forth on the certificates representing shares of
Common Stock issued pursuant to the exercise of such options,
and stop transfer instructions shall be issued to the
Corporation's recordkeeping transfer agent with respect to
such shares.
(g) Maximum Incentive Stock Options. The aggregate fair
market value (determined as of the time the option is granted)
of Common Stock subject to incentive stock options that are
exercisable for the first time by an employee during any
calendar year under the Plan or any other plan of the
Corporation or any Subsidiary shall not exceed $100,000. For
this purpose, the fair market value of such shares shall be
determined as of the date the option is granted and shall be
computed in such manner as shall be determined by the Committee,
consistent with the requirements of Section 422 of the
Code. If the immediate exercisability of incentive stock
options arising from the death or permanent and total
disability of an Optionee pursuant to Section 5(d) above or
arising from any change of control of the Corporation would
cause this $100,000 limitation to be exceeded for an Optionee,
the Committee shall convert as of the date on which such
incentive stock options become exercisable all or a portion of
the outstanding incentive stock options held by such Optionee
to non-qualified stock options to the extent necessary to
comply with the $100,000 limitation.
(h) Agreement. Each option shall be evidenced by an
agreement between the optionee and the Corporation which shall
provide, among other things, that, with respect to incentive
stock options, the optionee shall advise the Corporation
immediately upon any sale or transfer of the shares of Common
Stock received upon exercise of the option to the extent such
sale or transfer takes place prior to the later of (a) two (2)
years from the date of grant or (b) one (1) year from the date
of exercise.
(i) Tax Benefit. The Committee may, in its sole
discretion, include a provision in any non-qualified stock
option agreement that provides for an additional cash payment
from the Corporation to the grantee of such non-qualified
option as soon as practicable after the exercise date of such
non-qualified stock option equal to all or a portion of the
tax benefit to be received by the Corporation attributable to
its federal income tax deduction resulting from the exercise
of such non-qualified stock option.
(j) Certificates. The certificate or certificates for
the shares issuable upon an exercise of an option shall be
issued as promptly as practicable after such exercise. An
Optionee shall not have any rights of a shareholder in respect
to the shares of Common Stock subject to an option until the
date of issuance of a stock certificate to him for such
shares. In no case may a fraction of a share be purchased or
issued under the Plan, but if, upon the exercise of an option,
a fractional share would otherwise be issuable, the
Corporation shall pay cash in lieu thereof.
(k) No Right to Continued Service. Nothing in this Plan
or in any agreement entered into pursuant hereto shall confer
on any person any right to continue in the employ of the
Corporation or its Subsidiaries or affect any rights of the
Corporation, a Subsidiary, or the shareholders of the
Corporation may have to terminate his service at any time.
(l) Incentive Stock Options and Non-Qualified Stock
Options. Options granted under the Plan may be incentive
stock options under Section 422 of the Code or non-qualified stock
options. All options granted hereunder shall be clearly
identified as either incentive stock options or non-qualified
stock options. In no event shall the exercise of an incentive
stock option affect the right to exercise any non-qualified
stock option, nor shall the exercise of any non-qualified
stock option affect the right to exercise any incentive stock
option. Nothing in this Plan shall be construed to prohibit
the grant of incentive stock options and non-qualified stock
options to the same person; provided, however, that incentive
stock options and non-qualified stock options shall not be
granted in a manner whereby the exercise of one non-qualified
stock option or incentive stock option affects the
exercisability of the other.
6. Adjustment of Shares. In the event of any change
after the effective date of the Plan in the outstanding stock
of the Corporation by reason of any reorganization,
recapitalization, stock split, stock dividend, combination of
shares, exchange of shares, merger or consolidation,
liquidation, or any other change after the effective date of
the Plan in the nature of the shares of stock of the
Corporation, the Committee shall determine what changes, if
any, are appropriate in the number and kind of shares reserved
under the Plan, and in the option price under and the number
and kind of shares covered by outstanding options granted
under the Plan. Any determination of the Committee hereunder
shall be conclusive.
7. Tax Withholding. Whenever the Corporation proposes
or is required to issue or transfer shares of Common Stock
under the Plan, the Corporation shall have the right to
require the Optionee or his or her legal representative to
remit to the Corporation an amount sufficient to satisfy any
federal, state and/or local withholding tax requirements prior
to the delivery of any certificate or certificates for such
shares, and whenever under the Plan payments are to be made in
cash, such payments shall be net of an amount sufficient to
satisfy any federal, state and/or local withholding tax
requirements.
8. Amendment. The Board of Directors of the
Corporation may amend the Plan from time to time and, with the
consent of the Optionee, the terms and provisions of his
option, except that without the approval of the Corporation's
shareholders:
(a) the number of shares of Common Stock which may be
reserved for issuance under the Plan may not be increased
except as provided in Section 6 hereof;
(b) the period during which an option may be exercised
may not be extended beyond ten (10) years and one (1) day from
the date on which such option was granted;
(c) the class of employees to whom options may be
granted under the Plan shall not be modified materially; and
(d) no other amendment to the Plan may be made which
requires the approval of the Corporation's shareholders under
applicable law or under the rules and regulations of the New
York Stock Exchange.
No amendment of the Plan, however, may, without the
consent of the Optionees, make any changes in any outstanding
options theretofore granted under the Plan which would
adversely affect the rights of such Optionees.
9. Termination. The Board of Directors of the
Corporation may terminate the Plan at any time and no option
shall be granted thereafter. Such termination, however, shall
not affect the validity of any option theretofore granted
under the Plan. In any event, no incentive stock option may be
granted after the conclusion of a ten (10) year period
commencing on the date the Plan is adopted or, if earlier, the
date the Plan is approved by the Corporation's shareholders.
10. Successors. The Plan shall be binding upon the
successors and assigns of the Corporation.
11. Governing Law. The terms of any options granted
hereunder and the rights and obligations hereunder of the
Corporation, the Optionees and their successors in interest
shall, except to the extent governed by federal law, be
governed by Indiana law.
12. Government and Other Regulations. The obligations
of the Corporation to issue or transfer and deliver shares
under options granted under the Plan shall be subject to
compliance with all applicable laws, governmental rules and
regulations, and administrative action.
13. Effective Date. The Plan shall become effective
when it shall have been approved by the Corporation's Board of
Directors; provided, however, that the granting of any options
under the Plan is conditional upon the approval of the Plan by
the Corporation's shareholders within twelve (12) months after
the adoption of the Plan by the Corporation's Board of
Directors and the options granted pursuant to the Plan may not
be exercised until the Board of Directors of the Corporation
has been advised by counsel that such approval has been
obtained and all other applicable legal requirements have been
met; provided, further, that if shareholder approval does not
occur within the required twelve (12) month period, the Plan
and all outstanding options shall be deemed terminated.
<TABLE>
IPALCO ENTERPRISES, INC. EXHIBIT 11.1
Exhibit 11.1 - Computation of Per Share Earnings
<CAPTION>
For the Quarter Ended June 30, 1997
QUARTER ENDED JUNE 30, 1997: Earnings Per Fully
Common Share Primary Diluted
------------ ---------- ----------
<S> <C> <C> <C>
Weighted Average Number of Shares
Average Common Shares Outstanding at 6/30/97 45,507,112 45,507,112 45,507,112
Dilutive Effect for Stock Options at 6/30/97 - 184,012 215,152
----------- ---------- ----------
Weighted Average Shares at 6/30/97 45,507,112 45,691,124 45,722,264
=========== ========== ==========
Net Income To Be Used To Compute Fully
Diluted Earnings Per Average Common Share (Dollars in thousands)
Net Income $21,085 $21,085 $21,085
=========== ========== ==========
Earnings Per Average Common Share $0.46 $0.46 (a) $0.46 (a)
=========== ========== ==========
For the Six Months Ended June 30, 1997
SIX MONTHS ENDED JUNE 30, 1997: Earnings Per Fully
Common Share Primary Diluted
------------ ---------- ----------
Weighted Average Number of Shares
Average Common Shares Outstanding at 6/30/97 51,272,216 51,272,216 51,272,216
Dilutive Effect for Stock Options at 6/30/97 - 121,967 215,152
----------- ---------- ----------
Weighted Average Shares at 6/30/97 51,272,216 51,394,183 51,487,368
=========== ========== ==========
Net Income To Be Used To Compute Fully
Diluted Earnings Per Average Common Share (Dollars in thousands)
Net Income $57,192 $57,192 $57,192
=========== ========== ==========
Earnings Per Average Common Share $1.12 $1.11 (a) $1.11 (a)
=========== ========== ==========
Note:
(a) This calculation is submitted in accordance with Regulation S-K item 601(b)(11) although not required
by footnote 2 to paragraph 14 of APB Opinion No. 15 because it results in dilution of less than 3%.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<CIK> 0000728391
<NAME> IPALCO ENTERPRISES, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1,771,475
<OTHER-PROPERTY-AND-INVEST> 112,787
<TOTAL-CURRENT-ASSETS> 103,783
<TOTAL-DEFERRED-CHARGES> 160,751
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 2,148,796
<COMMON> 392,190
<CAPITAL-SURPLUS-PAID-IN> 0
<RETAINED-EARNINGS> 498,192
<TOTAL-COMMON-STOCKHOLDERS-EQ> 490,483
0
51,898
<LONG-TERM-DEBT-NET> 1,033,416
<SHORT-TERM-NOTES> 6,000
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 30,200
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 536,799
<TOT-CAPITALIZATION-AND-LIAB> 2,148,796
<GROSS-OPERATING-REVENUE> 379,002
<INCOME-TAX-EXPENSE> 36,297
<OTHER-OPERATING-EXPENSES> 259,124
<TOTAL-OPERATING-EXPENSES> 295,421
<OPERATING-INCOME-LOSS> 83,581
<OTHER-INCOME-NET> 3,426
<INCOME-BEFORE-INTEREST-EXPEN> 87,007
<TOTAL-INTEREST-EXPENSE> 29,815
<NET-INCOME> 57,192
1,591
<EARNINGS-AVAILABLE-FOR-COMM> 57,192
<COMMON-STOCK-DIVIDENDS> 35,363
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 124,331
<EPS-PRIMARY> 1.11
<EPS-DILUTED> 1.11
</TABLE>
EXHIBIT 99.1
FIRST AMENDMENT TO
CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT ("First
Amendment") is made and entered into as of the 8th day of
May, 1997 (the "Amendment Date"), by and among BANK ONE,
INDIANA, NATIONAL ASSOCIATION ("Bank One"), NATIONAL CITY BANK
OF INDIANA ("National City"), THE FIRST NATIONAL BANK OF
CHICAGO ("First Chicago"), Bank One, as administrative agent
for the Banks (the "Administrative Agent"), National City, as
documentation agent for the Banks (the "Documentation Agent"),
THE BANK OF TOKYO--MITSUBISHI, LTD., KEYBANK NATIONAL
ASSOCIATION, THE SANWA BANK, LIMITED, CHICAGO BRANCH, WACHOVIA
BANK OF GEORGIA, N.A., THE BANK OF NOVA SCOTIA, DAI-ICHI
KANGYO BANK, LTD., CHICAGO BRANCH, THE INDUSTRIAL BANK OF
JAPAN, LIMITED, MORGAN GUARANTY TRUST COMPANY OF NEW YORK, THE
SUMITOMO BANK, LTD. and SUNTRUST BANK, CENTRAL FLORIDA, N.A.
(together, the "Purchasers," and individually, a "Purchaser"),
and IPALCO ENTERPRISES, INC. ("Borrower").
Recitals
1. Borrower, the Initial Banks, the Administrative
Agent and the Documentation Agent are parties to a Credit
Agreement dated as of April 4, 1997 (the "Credit Agreement").
2. The Initial Banks desire to assign to the
Purchasers, and the Purchasers desire to accept the assignment
of and to assume a portion of the Initial Banks' rights and
obligations under the Credit Agreement, pursuant to Section
8.08 of the Credit Agreement.
3. Borrower and the Administrative Agent are executing
this First Amendment for the purpose of acknowledging and
consenting to such assignment and Borrower is executing this
First Amendment to confirm its agreement to execute such
documents and instruments as may be necessary on their part to
effect such assignment.
Agreement
NOW THEREFORE, in consideration of the premises, the
mutual covenants and agreements herein, and each act performed
and to be performed hereunder, Borrower, the Initial Banks,
the Purchasers, the Administrative Agent, and the
Documentation Agent agree as follows:
1. Definitions. All terms used in the Recitals and in
this First Amendment that are defined in the Credit Agreement
and are not otherwise defined herein are used in this First
Amendment with the meanings ascribed to them in the Credit
Agreement.
2. Assignment and Transfer.
(a) Effective as of the Amendment Date, and subject to
the condition stated in subparagraph (b) below, each Initial
Bank irrevocably sells and assigns to each of the Purchasers,
without recourse to any Initial Bank, and each of the
Purchasers irrevocably purchases, accepts, and assumes from
each Initial Bank, without recourse to any Initial Bank, a
pro-rata portion of each Initial Bank's rights, interests and
obligations under the Credit Agreement, including, without
limitation, the Revolving Loans and the other Obligations
(individually as to each Initial Bank and each Purchaser, the
"Assigned Interest", and collectively as to all Initial Banks
and all Purchasers, the "Assigned Interests") consisting of a
portion of the outstanding Revolving Loans and Obligations of
Borrower and a commitment to make Revolving Loans to Borrower,
such that the aggregate of the Assigned Interests assigned to
such Purchaser is in the aggregate maximum principal sum of
the Commitment set forth opposite such Purchaser's name on
Schedule I attached to this First Amendment and incorporated
herein by reference, and all rights, interests, and
obligations of the Initial Bank under the Credit Agreement and
the other Loan Documents that relate to or arise from the
Revolving Loans and Obligations and from such commitment and
the performance thereof. Effective as of the Amendment Date,
Exhibit B to the Credit Agreement is amended to read as
Schedule I attached to this First Amendment. This First
Amendment shall constitute an assignment and transfer between
the Initial Banks and the Purchasers, as contemplated by
Section 8.08 of the Credit Agreement.
(b) The obligations of the Initial Banks to each
Purchaser under subparagraph (a) above are subject to the
condition that not later than 11 a.m., Indianapolis, Indiana
time, on the Amendment Date, such Purchaser shall have
delivered to the Administrative Agent, in United States
Dollars and in immediately available funds, for payment to the
Initial Banks in respect of the Assigned Interest to be
assigned to such Purchaser by each Initial Bank, the full
amount of its Commitment. Each Purchaser shall be obligated
to fund its Commitment regardless of the failure of any other
Purchaser to fulfill its obligations hereunder.
(c) Each Initial Bank (i) represents and warrants to
each Purchaser that it is the legal and beneficial owner of
the Assigned Interest and such Assigned Interest is free and
clear of any adverse claims of persons claiming through such
Initial Bank; (ii) makes no representation or warranty and
assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with
the Credit Agreement or any other Loan Document or the
execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Credit Agreement or any of the
Loan Documents furnished pursuant thereto, other than the
representation made under clause (i) above; and (iii) makes no
representation or warranty and assumes no responsibility with
respect to the financial condition of Borrower or the
performance or observance by Borrower of any of its
obligations under the Credit Agreement or any of the Loan
Documents.
(d) Each Purchaser (i) represents and warrants that such
Purchaser is legally authorized to enter into this First
Agreement, (ii) confirms that such Purchaser has received and
reviewed a copy of the Credit Agreement and such of the Loan
Documents as it has requested, together with the copies of the
most recent available financial information regarding
Borrower, and such other documents and information as such
Purchaser has deemed appropriate to make its own analysis,
(iii) agrees that such Purchaser will, independently and
without reliance upon the Initial Banks, the Agents, or any
other Bank, and based on such documents and information as
such Purchaser shall deem appropriate at the time, continue to
make its own decisions in taking or not taking any action
under the Credit Agreement and the Loan Documents, (iv)
appoints and authorizes each of the Agents to take such action
on its behalf and to exercise such powers under the Credit
Agreement and the Loan Documents as are delegated to such
Agent by the terms thereof, together with such powers as are
reasonably incidental thereto, (v) agrees that such Purchaser
will be bound by the provisions of the Credit Agreement and
the Loan Documents and will perform in accordance with the
terms of the Credit Agreement and the Loan Documents all the
obligations which by the terms of the Credit Agreement and the
Loan Documents are required to be performed by it as a Bank,
and (vi) represents and warrants that if such Purchaser is
exempt from United States withholding taxes with respect to
all payments to be made to such Purchaser under the Credit
Agreement and the other Loan Documents, it has attached hereto
the forms prescribed by the Internal Revenue Service of the
United States certifying as to such Purchaser's exemption from
United States withholding taxes with respect to all such
payments, or such other documents as are necessary to indicate
that such payments are subject to such tax at a rate reduced
by an applicable tax treaty.
(d) From and after the Amendment Date, the
Administrative Agent shall make all payments to the Purchasers
in respect of the Assigned Interests. The Initial Banks and
the Purchasers shall make all appropriate adjustments in
payments for periods prior to the Amendment Date made by the
Administrative Agent or with respect to the making of this
assignment and transfer directly between themselves.
(e) From and after the Amendment Date, the Initial Banks
shall, to the extent provided herein, relinquish their
respective rights and be released from their respective
obligations under the Credit Agreement as they relate to or
arise from the Assigned Interests.
3. Amendment of Credit Agreement and Other Loan
Documents.
(a) Concurrently with the execution of this First
Amendment, Borrower shall duly execute and deliver to each of
the Banks First Amended and Restated Revolving Notes
substantially in the form of Exhibit A to this First
Amendment (the "Amended and Restated Notes"), which (i) amend
and restate the Revolving Notes made and delivered by Borrower
pursuant to the Credit Agreement on the Closing Date (the
"Existing Notes") with amendments thereto conforming the terms
thereof to the terms of the Credit Agreement, as amended by
this First Amendment; and (ii) upon execution and delivery
shall be the Revolving Notes which evidence the Revolving
Loans. The Existing Notes held by each Initial Bank shall be
marked by such Initial Bank to indicate that they have been
amended and restated by the Amended and Restated Notes, and
that they may be enforced only by the holders of the Amended
and Restated Notes.
(b) To correct certain scrivener's errors in the Credit
Agreement, the Credit Agreement is hereby amended as follows,
effective as of the Closing Date:
(i) the definition of "Documentation Agent" in
Section 1.01 of the Credit Agreement is deleted; and
(ii) the last sentence of the third paragraph of
Section 2.11 of the Credit Agreement is amended to read
as follows: "The facility fee for the calendar quarter
would be $54,000,000 divided by 360, or $150,000."
(c) All references to the Credit Agreement in the other
Loan Documents shall mean the Credit Agreement, as modified by
this First Amendment and as it may be further amended,
modified, extended, renewed, supplemented and/or restated from
time to time and at any time. Except as otherwise expressly
provided herein, all of the terms and provisions of the Credit
Agreement and the other Loan Documents, as modified by this
First Amendment, remain in full force and effect, and fully
binding on the parties thereto and their respective successors
and assigns.
4. Consents of Borrower and Administrative Agent.
Borrower and the Administrative Agent each expressly consent
to the execution, delivery, and performance by the Initial
Banks and the Purchasers of this First Amendment and to the
amendment of the Credit Agreement and the other Loan Documents
provided herein. Borrower agrees that neither the provisions
of this First Amendment nor any actions taken or not taken in
accordance with the terms of this First Amendment shall
constitute a termination, extinguishment, release or discharge
of the Obligations now existing or hereafter arising, or
provide a defense, set-off, or counterclaim to any of them
with respect to any of the Obligations now existing or
hereafter arising.
5. Binding on Successors and Assigns. All the terms
and provisions of this First Amendment shall be binding upon
and inure to the benefit of the parties hereto, their
respective successors, assigns and legal representatives.
Whenever in this First Amendment any of the parties hereto is
referred to, such reference shall be deemed to include the
successors and assigns of such party.
6. Further Assurances. Each of Borrower, the Initial
Banks, the Purchasers, the Administrative Agent, and the
Documentation Agent, as the case may be, shall duly execute
and deliver, or cause to be executed and delivered, such
further instruments and perform or cause to be performed such
further acts as may be necessary or proper in the reasonable
opinion of the Administrative Agent to carry out the
provisions and purposes of this First Amendment.
7. Governing Law. This First Amendment shall be
governed by, and construed in accordance with, the laws of the
State of Indiana, without regard to its principles of
conflicts or choice of law rules.
8. Survival. All covenants, Agreements, undertakings,
representations, and warranties made in this First Amendment
shall survive the execution and delivery of this First
Amendment, and shall not be affected by any investigation made
by any party.
9. Entire Agreement. This First Amendment constitutes
and expresses the entire understanding between the parties
hereto with respect to the subject matter hereof, and
supersedes all prior agreements and understandings,
commitments, inducements or conditions with respect thereto,
whether express or implied, oral or written.
10. Counterparts. This First Amendment may be signed in
any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
First Amendment to Credit Agreement to be executed and
delivered by their duly authorized officers as of the
Amendment Date.
BANK ONE, INDIANA, NATIONAL
ASSOCIATION, individually and as
Administrative Agent
By: /s/ Tracy J. Venable
Tracy J. Venable, Vice President
NATIONAL CITY BANK OF INDIANA,
individually and as Documentation Agent
By: /s/ Frank B. Meltzer
Frank B. Meltzer, V.P.
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ T. Thomas Cheng
T. Thomas Cheng, First V.P.
THE BANK OF TOKYO-MITSUBISHI, LTD.
By: /s/ Hajime Watanabe
Hajime Watanabe
Deputy General Manager
KEYBANK NATIONAL ASSOCIATION
By: /s/ Sharon Weinstein
Vice President
THE SANWA BANK, LIMITED, CHICAGO BRANCH
By: /s/ Richard H. Ault
Richard H. Ault
Vice President
WACHOVIA BANK OF GEORGIA, N.A.
By: /s/ Elizabeth Colt Schrock
Elizabeth Colt Schrock
Vice President
THE BANK OF NOVA SCOTIA
By: /s/ F.C.H. Ashby
F.C.H. Ashby
Senior Manager Loan Operations
DAI-ICHI KANGYO BANK, LTD.,
CHICAGO BRANCH
By: /s/ Seiichiro Ino
Seiichiro Ino
Vice President
THE INDUSTRIAL BANK OF JAPAN, LIMITED
By: /s/ Hiroaki Nakamura
Hiroaki Nakamura
Joint General Manager
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By: /s/ Nadine S. Taylor
Nadine S. Taylor, Associate
THE SUMITOMO BANK, LTD.
By: /s/ Hiroyuki Iwami
Hiroyuki Iwami
Joint General Manager
SUNTRUST BANK
By: /s/ Christopher A. Black
Christopher A. Black
Vice President
Suntrust Bank, Central Florida,
National Association
IPALCO ENTERPRISES, INC.
By: /s/ John R. Brehm
John R. Brehm
Vice President and Treasurer
SCHEDULE I
(COMMITMENTS)
Bank Commitment
Bank One, Indiana, National Association $47,000,000
National City Bank of Indiana $47,000,000
The First National Bank of Chicago $47,000,000
The Bank of Tokyo--Mitsubishi, Ltd. $35,000,000
Keybank National Association $35,000,000
The Sanwa Bank, Limited, Chicago Branch $35,000,000
Wachovia Bank of Georgia, N.A. $35,000,000
The Bank of Nova Scotia $20,000,000
Dai-Ichi Kangyo Bank, Ltd., Chicago Branch $20,000,000
The Industrial Bank of Japan, Limited $20,000,000
Morgan Guaranty Trust Company of New York $20,000,000
The Sumitomo Bank, Ltd. $20,000,000
SunTrust Bank, Central Florida, N.A. $20,000,000
<PAGE>
EXHIBIT "A"
REVOLVING NOTE
U.S. $ Dated as of May 8, 1997
FOR VALUE RECEIVED, on or before the Commitment
Termination Date, IPALCO ENTERPRISES, INC., an Indiana
corporation ("Maker") unconditionally promises to pay to the
order of ___________________________ ("Payee"), at the office
of the Administrative Agent located at Bank One Center/Tower,
111 Monument Circle, Suite 421, Indianapolis, Indiana 46277,
the principal sum of __________________ Million Dollars
($___________), or if less, the aggregate unpaid principal
amount of all Revolving Loans made by Payee pursuant to the
terms of the Credit Agreement, dated as of April 4, 1997,
among Maker, __________________________, as amended by a First
Amendment to Credit Agreement, dated as of May 8, 1997, among
Maker, _____________________________ (referred to herein, as
so amended and as the same hereafter may be modified, amended,
restated, and/or extended from time to time and at any time,
as the "Credit Agreement"), together with interest thereon at
the rates as provided in the Credit Agreement. Terms which
are defined in the Credit Agreement and which are not
otherwise defined in this Revolving Note (this "Note") shall
when used in this Note have the respective meanings ascribed
to such terms in the Credit Agreement.
Interest accruing on the principal balance of this Note
outstanding from time to time shall be due and payable by
Maker on such dates and in accordance with the rates and terms
specified in Article II of the Credit Agreement. All amounts
received on this Note shall be applied in accordance with the
terms of Article II of the Credit Agreement.
This Note is one of the "Revolving Notes" referred to in
the Credit Agreement, to which reference is made for the
conditions and procedures under which advances, payments,
readvances and repayments may be made prior to the maturity of
this Note, for the terms upon which Maker may make prepayments
from time to time and at any time prior to the maturity of
this Note and the terms of any prepayment premiums or
penalties which may be due and payable in connection
therewith, and for the terms and conditions upon which the
maturity of this Note may be accelerated and the unpaid
balance of principal and accrued interest thereon declared
immediately due and payable.
If any installment of principal or interest due under the
terms of this Note falls due on a day which is not a Banking
Day, the due date shall be extended to the next succeeding
Banking Day and interest will be payable at the applicable
rate for the period of such extension. All amounts payable
under this Note shall be payable without relief from valuation
and appraisement laws, and with all collection costs and
attorneys' fees.
The holder of this Note, at its option, may make
extensions of time for payment of the indebtedness evidenced
by this Note, or reduce the payments thereon, release any
collateral securing payment of such indebtedness or accept a
renewal Note or Notes therefor, all without notice to Maker or
any endorser(s) and Maker and all endorsers hereby severally
consent to any such extensions, reductions, releases and
renewals, all without notice, and agree that any such action
shall not release or discharge any of them from any liability
hereunder. Maker and endorser(s), jointly and severally,
waive demand, presentment for payment, protest, notice of
protest and notice of nonpayment or dishonor of this Note and
each of them consents to all extensions of the time of payment
thereof.
EXCEPT TO THE EXTENT PROHIBITED BY APPLICABLE LAW, MAKER,
IRREVOCABLY:
(A) AGREES THAT ANY SUIT, ACTION OR OTHER LEGAL
PROCEEDING ARISING OUT OF THIS NOTE OR ANY OTHER LOAN
DOCUMENTS OR THE REVOLVING LOANS MAY BE BROUGHT IN THE COURTS
OF RECORD OF THE STATE OF INDIANA SITTING IN INDIANAPOLIS OR
THE COURTS OF THE UNITED STATES LOCATED IN THE STATE OF
INDIANA SITTING IN INDIANAPOLIS;
(B) CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF EACH
SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING;
(C) WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LAYING
OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY OF SUCH
COURTS OR THAT ANY OF SUCH COURTS IS AN INCONVENIENT FORUM;
(D) CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED
MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR
WITHOUT THE STATE OF INDIANA; AND
(D) WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT
OR OTHERWISE) RELATED TO OR ARISING OUT OF ANY OF THE
TRANSACTIONS CONTEMPLATED BY THIS NOTE OR ANY OTHER LOAN
DOCUMENTS, OR THE PERFORMANCE AND SATISFACTION BY ANY OF THE
BANKS OR THE AGENTS HEREUNDER OR THEREUNDER.
Executed and delivered as of the 8th day of May, 1997.
IPALCO ENTERPRISES, INC.
By:
Printed:
Title:
("Maker")
