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
March 31, 1998 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 March 31, 1998
----- -----------------------------
Common (Without Par Value) 44,928,802 shares
IPALCO ENTERPRISES, INC. AND SUBSIDIARIES
-----------------------------------------
INDEX
-----
Page No.
--------
PART I. FINANCIAL INFORMATION
Statements of Consolidated Income -
Three Months Ended March 31, 1998 and 1997 2
Consolidated Balance Sheets - March 31, 1998 and
December 31, 1997 3
Statements of Consolidated Cash Flows -
Three Months Ended March 31, 1998 and 1997 4
Notes to Consolidated Financial Statements 5-7
Management's Discussion and Analysis of
Financial Condition and Results of Operations 8-10
PART II. OTHER INFORMATION 11-12
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
IPALCO ENTERPRISES, INC. and SUBSIDIARIES
Statements of Consolidated Income
(In Thousands Except Per Share Amounts)
(Unaudited)
<CAPTION>
Three Months Ended
March 31
1998 1997
-------------- -------------
<S> <C> <C>
UTILITY OPERATING REVENUES:
Electric $ 178,909 $ 183,666
Steam 11,412 11,633
-------------- -------------
Total operating revenues 190,321 195,299
-------------- -------------
UTILITY OPERATING EXPENSES:
Operation:
Fuel 41,040 41,616
Other 34,921 32,633
Power purchased 1,007 4,159
Purchased steam 1,890 2,219
Maintenance 19,740 15,698
Depreciation and amortization 25,285 25,740
Taxes other than income taxes 8,822 8,873
Income taxes - net 17,474 19,827
-------------- -------------
Total operating expenses 150,179 150,765
-------------- -------------
UTILITY OPERATING INCOME 40,142 44,534
-------------- -------------
OTHER INCOME AND (DEDUCTIONS):
Allowance for equity funds used during construction 265 1,157
Other - net (426) (1,197)
Income taxes - net 2,852 735
-------------- -------------
Total other income - net 2,691 695
-------------- -------------
INCOME BEFORE INTEREST AND OTHER CHARGES 42,833 45,229
-------------- -------------
INTEREST AND OTHER CHARGES:
Interest 16,991 11,632
Allowance for borrowed funds used during construction (204) (246)
Preferred dividend requirements of subsidiary 709 795
-------------- -------------
Total interest and other charges - net 17,496 12,181
-------------- -------------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE 25,337 33,048
CUMULATIVE EFFECT OF ACCOUNTING CHANGE -
NET OF TAXES (Note 4) - 18,347
-------------- -------------
NET INCOME $ 25,337 $ 51,395
============== =============
BASIC EARNINGS PER SHARE (Note 2)
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $ 0.57 $ 0.58
CUMULATIVE EFFECT OF ACCOUNTING CHANGE (Note 4) - 0.32
-------------- -------------
NET INCOME $ 0.57 $ 0.90
============== =============
DILUTED EARNINGS PER SHARE (Note 2)
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $ 0.56 $ 0.58
CUMULATVE EFFECT OF ACCOUNTING CHANGE (Note 4) - 0.32
-------------- -------------
NET INCOME $ 0.56 $ 0.90
============== =============
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
IPALCO ENTERPRISES, INC. and SUBSIDIARIES
Consolidated Balance Sheets
(In Thousands)
(Unaudited)
<CAPTION>
March 31 December 31
ASSETS 1998 1997
------
-------------- -------------
<S> <C> <C>
UTILITY PLANT:
Utility plant in service $ 2,810,550 $ 2,800,446
Less accumulated depreciation 1,143,484 1,121,317
-------------- -------------
Utility plant in service - net 1,667,066 1,679,129
Construction work in progress 78,233 77,030
Property held for future use 10,224 10,224
-------------- -------------
Utility plant - net 1,755,523 1,766,383
-------------- -------------
OTHER ASSETS:
Nonutility property - at cost, less accumulated 72,443 72,865
depreciation
Other investments 13,508 13,023
-------------- -------------
Other assets - net 85,951 85,888
-------------- -------------
CURRENT ASSETS:
Cash and cash equivalents 46,938 17,293
Accounts receivable and unbilled revenue
(less allowance for doubtful accounts
1998, $1,227 and 1997, $1,202) 38,057 47,033
Fuel - at average cost 33,193 35,257
Materials and supplies - at average cost 49,015 48,416
Prepayments and other current assets 7,238 9,100
-------------- -------------
Total current assets 174,441 157,099
-------------- -------------
DEFERRED DEBITS:
Regulatory assets 124,634 126,784
Miscellaneous 24,022 19,404
-------------- -------------
Total deferred debits 148,656 146,188
-------------- -------------
TOTAL $ 2,164,571 $ 2,155,558
============== =============
CAPITALIZATION AND LIABILITIES
------------------------------
CAPITALIZATION:
Common shareholders' equity:
Common stock $ 407,751 $ 395,851
Unearned compensation - restricted stock awards (7,713) 1,209
Premium on 4% cumulative preferred stock 649 649
Retained earnings 545,714 532,730
Treasury stock, at cost (403,101) (403,101)
-------------- -------------
Total common shareholders' equity 543,300 527,338
Cumulative preferred stock of subsidiary (Note 2) 59,135 9,135
Long-term debt (less current maturities and
sinking fund requirements) 952,660 1,032,846
-------------- -------------
Total capitalization 1,555,095 1,569,319
-------------- -------------
CURRENT LIABILITIES:
Notes payable - banks and commercial paper 8,000 33,700
Current maturities and sinking fund requirements 42,294 3,094
Accounts payable and accrued expenses 55,320 66,105
Dividends payable 13,329 11,523
Taxes accrued 43,850 22,126
Interest accrued 11,443 15,493
Other current liabilities 13,737 12,555
-------------- -------------
Total current liabilities 187,973 164,596
-------------- -------------
DEFERRED CREDITS AND OTHER LONG-TERM LIABILITIES:
Accumulated deferred income taxes - net 316,885 314,869
Unamortized investment tax credit 44,085 44,783
Accrued postretirement benefits 15,544 17,144
Accrued pension benefits 40,287 39,821
Miscellaneous 4,702 5,026
-------------- -------------
Total deferred credits and other long-term 421,503 421,643
liabilities
-------------- -------------
COMMITMENTS AND CONTINGENCIES
TOTAL $ 2,164,571 $ 2,155,558
============== =============
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
IPALCO ENTERPRISES, INC. and SUBSIDIARIES
Statements of Consolidated Cash Flows
(In Thousands)
(Unaudited)
<CAPTION>
Three Months Ended
March 31
1998 1997
-------------- --------------
<S> <C> <C>
CASH FLOWS FROM OPERATIONS:
Net income $ 25,337 $ 51,395
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 25,856 25,632
Amortization of regulatory assets 2,591 3,913
Deferred income taxes and investment tax credit adjustments - net 465 9,185
Allowance for funds used during construction (469) (1,403)
Cumulative effect of accounting change - before taxes - (29,915)
Change in certain assets and liabilities:
Accounts receivable - excluding cumulative effect of accounting 8,976 6,581
change
Fuel, materials and supplies 1,465 6,756
Accounts payable and accrued expenses (10,785) (10,188)
Taxes accrued 21,724 28,820
Accrued pension benefits 466 830
Other - net (2,164) (1,740)
-------------- --------------
Net cash provided by operating activities 73,462 89,866
-------------- --------------
CASH FLOWS FROM INVESTING:
Construction expenditures - utility (13,297) (13,390)
Construction expenditures - nonutility (210) (177)
Other (5,426) (1,118)
-------------- --------------
Net cash used in investing activities (18,933) (14,685)
-------------- --------------
CASH FLOWS FROM FINANCING:
Retirement of long-term debt (41,000) -
Short-term debt - net (25,700) (38,000)
Common dividends paid (11,162) (21,103)
Issuance of preferred stock (Note 2) 50,000 -
Issuance of common stock related to incentive compensation plans 3,180 56
Other (202) 354
-------------- --------------
Net cash used in financing activities (24,884) (58,693)
-------------- --------------
Net increase in cash and cash equivalents 29,645 16,488
Cash and cash equivalents at beginning of period 17,293 19,317
-------------- --------------
Cash and cash equivalents at end of period $ 46,938 $ 35,805
============== ==============
- ----------------------------------------------------------------------------------------------------------
Supplemental disclosures of cash flow information: Cash paid during the period
for:
Interest (net of amount capitalized) $ 20,489 $ 14,372
============== ==============
Income taxes $ (2,652) $ (2,595)
============== ==============
See notes to consolidated financial statements.
</TABLE>
<PAGE>
IPALCO ENTERPRISES, INC. AND SUBSIDIARIES
-----------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
1. GENERAL
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.
Certain amounts have been restated due to the change to the unbilled
revenue method of accounting (see note 4). These financial statements
and notes should be read in conjunction with the audited consolidated
financial statements included in Enterprises' 1997 Annual Report on Form
10-K.
2. CAPITAL STOCK
Common Stock
Shares Amount
------ ------
Balance at December 31, 1997 44,649,844 $395,851,016
Compensation plans 189,554 8,910,351
Exercise of stock options 93,947 3,180,262
Restricted stock canceled (4,543) (190,397)
---------- ------------
Balance at March 31, 1998 44,928,802 $407,751,232
========== ============
The following is a reconciliation of the weighted average common shares for
the basic and diluted earnings per share computations in accordance with
Statement of Financial Accounting Standard (SFAS) No. 128:
For the Quarter Ended March 31,
-------------------------------
1998 1997
---- ----
(In thousands)
Weighted average common shares 44,839 57,037
Dilutive effect of stock options 672 167
-------- --------
Weighted average common
and incremental shares 45,511 57,204
======== ========
<PAGE>
Preferred Stock
On January 13, 1998, Indianapolis Power & Light Company issued $50
million of cumulative preferred stock with a rate of 5.65%. 500,000
shares were issued at $100 par value each. The stock will be redeemable
at par value, subject to certain restrictions, in whole or in part, at
any time on or after January 1, 2008, at the option of IPL.
3. LONG-TERM DEBT
IPALCO's Revolving Credit Facility was issued in April 1997 in the
amount of $401 million. The proceeds were used to purchase, through a
self-tender offer, shares of IPALCO's outstanding common capital stock.
During the first quarter of 1998, IPALCO reduced the debt amount by a
net of $41 million resulting in a debt balance under the Revolving
Credit Facility of $282 million as of March 31, 1998.
4. CUMULATIVE EFFECT OF ACCOUNTING CHANGE
Effective January 1, 1997, IPL adopted the unbilled revenue method of
accounting for all electric and steam sales to more closely match
revenues with expenses. Under this method, IPL accrues revenues for all
electric and steam energy delivered to customers during the period,
whether billed or not. Previously IPL recognized these revenues only as
customers were billed, with the service rendered after monthly meter
reading dates through the end of a calendar month recognized as revenues
in the following month. The cumulative effect of accounting change, net
of taxes, was a one-time increase of $18.3 million ($0.32 per share),
reported as a separate component of net income in the restated first
quarter earnings of 1997. The change had the effect of decreasing income
before cumulative effect of accounting change in the first quarter of
1997 by $3.1 million ($.05 per share). The results of 1997 were restated
for the accounting change.
5. COMPREHENSIVE INCOME
On January 1, 1998, IPALCO adopted SFAS No. 130, "Comprehensive Income,"
which 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. It has been determined
that IPALCO has no amounts which require classification under
comprehensive income.
6. STOCK-BASED COMPENSATION
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, 1997................ 28.27 16.8317 - 31.375 2,045,338
Exercised.................................. 29.55 16.8317 - 31.375 (93,947)
---------
Outstanding, March 31, 1998................... 28.21 16.8317 - 31.375 1,951,391
=========
</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 three months
ended March 31, 1998 and 1997 would not have changed. 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.
IPALCO has a Long-Term Performance and Restricted Stock Incentive Plan.
On January 5, 1998, an additional 9,432 shares were issued to reflect
participants' actual base salaries during the three-year performance
period from 1995 through 1997.
On January 15, 1998, an additional 33,712 shares of restricted stock,
and 33,719 shares of unrestricted stock, were issued due to Enterprises'
performance during the three-year performance period. The 33,719 shares
of unrestricted stock represent the vesting of one-third of the shares
following the end of the performance period.
On January 27, 1998, the Board of Directors amended the 1995 Plan as the
Long Term Performance and Restricted Stock Incentive Plan (As Amended
and Restated effective January 1, 1998) (1998 Plan). Pursuant to the
1998 Plan, an additional 900,000 shares of common stock of IPALCO have
been authorized and reserved for issuance, for a total of 1.5 million
shares. Initial awards of 112,691 shares of restricted common stock were
made to participating employees on January 27, 1998. These initial
grants were made subject to shareholder approval of the 1998 Plan, which
approval was received on April 15, 1998. Awards are made on established
targets for the participants to reflect the participant's actual base
salary. The shares remain restricted and non-transferable throughout
each three-year performance period, vesting in one-third increments in
each of the three years following the end of the performance period. At
the end of a performance period, awards are subject to adjustment to
reflect Enterprises' performance compared to companies in the S&P 500
Index with regard to cumulative total return to shareholders during the
three-year performance period. Depending on Enterprises' performance,
final awards may range from 400% of the initial awards to zero.
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Material changes in the consolidated financial condition and results of
operations of IPALCO Enterprises, Inc. (Enterprises), except where noted, are
attributed to the operations of Indianapolis Power & Light Company (IPL).
Consequently, the following discussion is centered on IPL.
LIQUIDITY AND CAPITAL RESOURCES
Overview
- --------
The Board of Directors of Enterprises on February 24, 1998, declared a
quarterly dividend on common stock of 27.5 cents per share compared to 25 cents
per share declared in the first quarter of 1997. The dividend was paid April 15,
1998, to shareholders of record March 20, 1998.
IPL's capital requirements are primarily related to construction
expenditures needed to meet customers' needs for electricity and steam, for
environmental compliance and for the implementation of an integrated information
system. Enterprises' construction expenditures (excluding allowance for funds
used during construction) totaled $13.5 million during the first quarter ended
March 31, 1998, representing a $0.1 million decrease from the comparable period
in 1997. Internally generated cash provided by operations was used for
construction expenditures during the first quarter of 1998.
The three-year construction program has not changed from that
previously reported in IPALCO's 1997 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 1997 Form 10-K report for further discussion).
IPALCO's Revolving Credit Facility was issued in April 1997 in the
amount of $401 million. The proceeds were used to purchase, through a
self-tender offer, shares of IPALCO's outstanding common capital stock. During
the first quarter of 1998, IPALCO reduced the debt amount by a net of $41
million resulting in a debt balance under the Revolving Credit Facility of $282
million as of March 31, 1998.
<PAGE>
RESULTS OF OPERATIONS
Comparison of Quarters Ended March 31, 1998 and March 31, 1997
--------------------------------------------------------------
Diluted earnings per share during the first quarter of 1998 was $0.56,
or $0.34 below the $0.90 attained in the comparable 1997 period. Net income for
the first quarter of 1997 included a one-time positive after-tax increase of
$18.3 million ($0.32 per share) See "Cumulative Effect of Accounting Change"
below. Also, weighted average, diluted shares for the 1998 first quarter were
45.5 million compared to 57.2 million for the same period in 1997 due to
IPALCO's repurchase of 12.5 million common shares in April 1997. The following
discussion highlights the factors contributing to the first quarter results.
Operating Revenues
- ------------------
Operating revenues during the first quarter of 1998 decreased $5.0
million from the comparable 1997 period. The decrease in revenues resulted from
the following:
Increase (Decrease)
-------------------
from Comparable Period
----------------------
Three Months Ended March 31
---------------------------
(Millions of Dollars)
Electric:
Change in retail KWH sales - net of fuel (6.6)
Fuel revenue 0.9
Wholesale revenue 0.7
DSM tracker revenue 0.4
Steam revenue (0.2)
Other revenue (0.2)
---------
Total change in operating revenues $ (5.0)
=========
The first quarter decrease in retail KWH sales compared to the same
period in 1997 was due to milder weather. Heating degree days decreased 17%
during the first quarter compared to the same period in 1997. The changes in
fuel revenues in 1998 from the prior year reflect changes in total fuel costs
billed to customers. The increased wholesale sales during the first quarter of
1998, as compared to the same period in 1997, reflect increased wholesale
marketing efforts and energy requirements of other utilities.
Operating Expenses
- ------------------
Other increased by $2.3 million in the first quarter compared to the
same period in 1997. This increase was due primarily to increased electric
distribution expense of $0.9 million, increased administrative and general
expenses of $0.6 million and increased amortization of demand-side management
costs.
Power purchased decreased by $3.2 million in the first quarter compared
to the same period in 1997 primarily due to decreased demand charges.
Maintenance expenses increased $4.0 million in the first quarter of
1998 compared to the same period in 1997. The increase reflects the timing of
costs associated with the overhaul of unit 6 at the Pritchard plant of $2.2
million, as well as increased boiler and electric plant maintenance at the
Petersburg plant of $1.9 million. Due to the mild weather, overhaul maintenance
was advanced to the first quarter in 1998, compared to the more conventional
timing of performing overhaul maintenance in the second quarter.
Income taxes - net, decreased $2.4 million in the first quarter of 1998
compared to the same period in 1997 due to a decrease in pretax operating
income.
As a result of the foregoing, utility operating income decreased 9.9%
from the comparable 1997 period, to $40.1 million.
Other Income and Deductions
- ---------------------------
Allowance for equity funds used during construction decreased by $0.9
million in the first quarter of 1998 compared to the same period last year. In
August 1997, the amortization of some deferred carrying charges on a plant asset
ended resulting in this decrease.
Other - net, which includes the pretax operating and investment income
from operations other than IPL, as well as non-operating income from IPL,
increased $0.8 million. This increase was primarily due to decreased operating
expenses at Mid-America.
Income taxes - net, which includes taxes on operations other than IPL,
as well as taxes on non-operating income from IPL, decreased in the first
quarter of 1998 compared to the same period in 1997 by $2.1 million primarily
due to decreased nonutility income as a result of increased interest expense.
Interest and Other Charges
- --------------------------
Interest expense increased $5.4 million in the first quarter of 1998
compared to the same period in 1997. This increase is primarily a result of
interest on the recapitalization debt facility of IPALCO issued in April 1997.
The interest on the recapitalization debt facility during the first quarter of
1998 was $5.1 million.
Cumulative Effect of Accounting Change
- --------------------------------------
A cumulative effect of accounting change in the amount of $18.3 million,
net of taxes, was effectively recorded during the first quarter of 1997.
Effective January 1, 1997, IPL adopted the unbilled revenues method of
accounting for electricity and steam delivered during the period. Revenues are
accrued for services provided but unbilled at the end of each month.
<PAGE>
PART II - OTHER INFORMATION
- ---------------------------
Item 1. Legal Proceedings
- ------- -----------------
In February 1998, Region V of the U.S. Environmental Protection Agency
issued to Cleveland Energy Resources a Notice of Violation (NOV) under the Clean
Air Act. (Cleveland Thermal Energy Corporation conducts business under the name
Cleveland Energy Resources.) The NOV alleged that particulate matter emissions
from four of Cleveland's five boilers exceeded applicable limits on five dates
during the period 1993 through 1996, and that the opacity limit was exceeded on
one date in 1997 based on a visible emission reading. The alleged violations
during the period 1993 through 1996 were .01-.02 lb/MMBtu above the applicable
limit, and the visible emission rating was not statistically significant at
1.7-2.7% opacity above the applicable limit. Representatives of Cleveland met
with the Agency on March 16, 1998, in an attempt to resolve the matter.
Additional stack testing is scheduled for the fall of 1998. If Cleveland were
adjudged to have violated applicable emission limits, it could be subject to
maximum penalties of $27,500 per day of violation. While the results of this
proceeding cannot be predicted with certainty, management, based on advice of
counsel, believes that the final outcome will not have a material adverse effect
on the consolidated financial statements.
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.
(Exhibit 3.1 to the Form 10-Q dated 6-30-97.)
3.2 Bylaws of IPALCO Enterprises, Inc.
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 as amended and restated). (Exhibit B to the Form 8-K
dated 4-28-98.)
10.1 IPALCO Enterprises, Inc. Long-Term Performance and Restricted Stock
Incentive Plan (as amended and restated effective January 1, 1998).**
11.1 Computation of Per Share Earnings.
21.1* Subsidiaries of the Registrant. (Exhibit 21.1 to the Form 10-K dated
12-31-97.)
27.1 Financial Data Schedule.
(b) Reports on Form 8-K.
None
<PAGE>
Signatures
----------
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
IPALCO ENTERPRISES, INC.
------------------------
(Registrant)
Date: May 14, 1998 /s/ John R. Brehm
-------------- -----------------------
John R. Brehm
Vice President and
Treasurer
Date: May 14, 1998 /s/ Stephen J. Plunkett
-------------- ------------------------
Stephen J. Plunkett
Controller
EXHIBIT 3.2
BY-LAWS
OF
IPALCO ENTERPRISES, INC.
--------------------------------
As Amended and Restated
April 29, 1986,
And Further Amended
November 13, 1989,
June 26, 1990,
June 29, 1993,
April 26, 1994,
February 27, 1996
February 25, 1997, and
April 28, 1998
--------------------------------
BY-LAWS
OF
IPALCO ENTERPRISES, INC.
----------------------------
As Amended and Restated
April 29, 1986,
And Further Amended
November 13, 1989,
June 26, 1990,
June 29, 1993,
April 26, 1994,
February 27, 1996
February 25, 1997, and
April 28, 1998
----------------------------
ARTICLE I.
Offices
SECTION 1. Principal Office. The principal office of the
Corporation shall be in the City of Indianapolis, County of Marion, State
of Indiana.
SECTION 2. Other Offices. The Corporation may also have an
office in the City of Chicago, Illinois, and in the City of New York, New
York, and also offices at such other places as the Board of Directors may
from time to time appoint or the business of the Corporation may require.
ARTICLE II.
Shareholders Meetings
SECTION 1. Place of Meeting. Meetings of the shareholders of
the Corporation shall be held at such place within or without the State
of Indiana as may be specified from time to time in the respective
notices, waivers of notice thereof, or by resolution of the Board of
Directors or the shareholders.
SECTION 2. Annual Meeting. The annual meeting of shareholders
shall be held on the third Wednesday of April of each year at the hour of
11:00 o`clock A.M., unless such day shall be a legal holiday, in which
event the meeting shall be held on the next succeeding business day at
the same hour, or unless the Board of Directors shall by resolution set
another date for such meeting within ninety days of the third Wednesday
of April, in which event the meeting shall be held on the date and at the
time specified in such resolution.
(As Amended February 25, 1997)
SECTION 3. Special Meetings. Special meetings of the
shareholders for any purpose or purposes may be called by the Chairman of
the Board, the President or by a majority of the Board of Directors.
Business transacted at any such meeting shall be confined to the objects
stated in the call and matters germane thereto.
(As Amended June 29, 1993)
SECTION 4. Notice of Meetings; Waiver. Written or printed
notice, stating the place, day and hour of the annual and/or special
meetings of the shareholders, and in case of a special meeting, the
purpose or purposes for which the meeting is called, shall be delivered
or mailed by the Secretary, or by the officer or persons entitled to call
the meeting, to each shareholder of record entitled by the Amended
Articles of Incorporation (hereinafter referred to as the ``Amended
Articles'') and by law to vote at such meeting, at such address as
appears upon the records of the Corporation, at least ten (10) days
before the date of the meeting.
Notice of any shareholders meeting may be waived in writing by
any shareholder, if the waiver sets forth in reasonable detail the
purposes for which the meeting is called and the time and place thereof.
Attendance at any meeting, in person or by proxy, shall constitute a
waiver of notice of such meeting.
(As Amended June 29, 1993)
SECTION 5. Quorum. The holders of a majority of the shares
issued and outstanding and then entitled to vote, present in person or
represented by proxy, shall be requisite and sufficient to constitute a
quorum at all meetings of the shareholders for the transaction of
business, except as otherwise provided by law, by the Amended Articles,
or by these By-Laws. If, however, such majority shall not be present or
represented at any meeting of the shareholders, the shareholders present
in person or by proxy shall have power to adjourn the meeting from time
to time without notice, other than announcement at the meeting, until a
quorum shall attend, when any business may be transacted which might have
been transacted at the meeting as originally called.
SECTION 6. Voting. At each meeting of the shareholders, every
shareholder entitled to vote may vote in person or by proxy appointed by
an instrument in writing subscribed by such shareholder or by his duly
authorized attorney and delivered to the Secretary of the meeting. Each
shareholder shall have one vote for each share of common stock registered
in his name at the time of the closing of the transfer books or taking
the record for said meeting. The vote for directors, and, upon the demand
of any shareholder, the vote upon any question before the meeting, shall
be by ballot. All elections shall be had by plurality vote and all other
questions shall be decided by a majority vote, except as otherwise
provided by law, by the Amended Articles or by these By-Laws.
SECTION 7. New Business. At an annual meeting of shareholders
only such new business shall be conducted, and only such proposals shall
be acted upon, as shall have been properly brought before the annual
meeting. For any new business proposed by the Board of Directors to be
properly brought before the annual meeting, such new business shall be
approved by the Board of Directors and shall be stated in writing and
filed with the Secretary of the Corporation at least five (5) business
days before the date of the annual meeting, and all business so approved,
stated and filed shall be considered at the annual meeting. Any
shareholder may make any other proposal at the annual meeting, but unless
properly brought before the annual meeting, such proposal shall not be
acted upon at the annual meeting. For a proposal to be properly brought
before an annual meeting by a shareholder, the shareholder must have
given timely notice thereof in writing to the Secretary of the
Corporation. To be timely, a shareholder's notice must be delivered to or
mailed and received at the principal executive offices of the Corporation
not less than 30 days nor more than 60 days prior to the annual meeting;
provided, however, that if less than 40 days' notice or prior public
disclosure of the date of the annual meeting is given or made, notice by
the shareholder to be timely must be so delivered or received not later
than the close of business on the 10th calendar day following the earlier
of (1) the day on which such notice of the date of the annual meeting was
mailed or (2) the day on which such public disclosure was made. A
shareholder's notice to the Secretary of the Corporation shall set forth
as to each matter the shareholder proposes to bring before the annual
meeting (a) a brief description of the proposal desired to be brought
before the annual meeting and the reasons for conducting such business at
the annual meeting, (b) the name and address, as they appear on the
Corporation's books, of the shareholder proposing such business and any
other shareholders known by such shareholder to be supporting such
proposal, (c) the class and/or series and number of shares that are
beneficially owned by the shareholder on the date of such shareholder
notice and by any other shareholders known by such shareholder to be
supporting such proposal on the date of such shareholder notice, and (d)
any financial interest of the shareholder and any supporting shareholders
in such proposal.
The Board of Directors may reject any shareholder proposal not
made in accordance with the terms of this Section 7. Alternatively, if
the Board of Directors fails to consider the validity of any shareholder
proposal, the presiding officer of the annual meeting shall, if the facts
warrant, determine and declare at the annual meeting that the shareholder
proposal was not made in accordance with the terms of this Section and,
if he should so determine, he shall so declare at the annual meeting and
any such business or proposal not properly brought before the annual
meeting shall not be acted upon at the annual meeting. This provision
shall not prevent the consideration and approval or disapproval at the
annual meeting of reports of officers, directors and committees of the
Board of Directors, but, in connection with such reports, no new business
shall be acted upon at such annual meeting unless stated, filed and
received as herein provided.
(As added June 26, 1990)
ARTICLE III.
Directors
SECTION 1. Number and Term. The number of directors of this
Corporation shall be fourteen (14). Such directors shall be elected for
such terms as may be specified in the Amended Articles.
(As Amended April 28, 1998)
SECTION 2. Powers and Duties. In addition to the powers and
duties expressly conferred upon it either by law, by the Amended
Articles, or by these By-Laws, the Board of Directors may exercise all
such powers of the Corporation as are conferred upon the Corporation by
law and by the Amended Articles, and do all such lawful acts and things
as are not inconsistent with the law or the Amended Articles.
Subject to the provisions of law and the Amended Articles, the
Board of Directors shall have absolute discretion in the declaration of
dividends and in fixing the date for the declaration and payment of
dividends.
SECTION 3. Annual and Regular Meetings; Notice. The annual
meeting of the Board of Directors shall be held on the last Tuesday of
the month in which the annual meeting of shareholders is held, and other
regular meetings of the Board of Directors shall be held on the last
Tuesday of each month. If the day fixed pursuant to this Section for the
annual or any regular meeting shall be a legal holiday, then such annual
or regular meeting shall be held on the next succeeding business day.
The annual meeting and all regular meetings of the Board of
Directors shall be held immediately following the Board of Directors
meeting of Indianapolis Power & Light Company, or if there is no such
meeting, at 1:30 P.M., at the principal office of the Corporation, unless
notice of a different time and/or place is given with respect to any such
meeting at least seven days prior thereto by mail or three days prior
thereto by telegraph. No notice of the annual or any regular meeting of
the Board of Directors shall be required unless such meeting is to be
held at a time and/or place other than the principal office of the
Corporation.
SECTION 4. Special Meetings. Special meetings of the Board of
Directors may be called by the Chairman of the Board, the President, or
by two-thirds (2/3) of the directors on two days' notice by mail or by
one day's notice by telephone or telegraph to each director, which notice
shall state the time, place and purpose of the holding of such meetings.
Any special meeting of the Board of Directors may be held either within
or without the State of Indiana.
SECTION 5. Quorum. At all meetings of the Board of Directors a
majority of the directors shall be necessary and sufficient to constitute
a quorum for the transaction of business, and the affirmative vote of a
majority of the directors present shall be the act of the Board of
Directors, except as otherwise may be provided specifically by statute,
by the Amended Articles or by these By-Laws. If at any meeting of the
Board of Directors there shall be less than a quorum present, a majority
of those directors present may adjourn the meeting to another day and
thereupon the Secretary shall mail, telephone, or telegraph to each director,
notice of the time and place of the holding of such adjourned meeting.
At any such adjourned meeting at which there is a quorum present, any
business may be transacted which might have been transacted at the meeting
as originally scheduled or
called.
SECTION 6. Resignations. Any director of the Corporation may
resign at any time by giving written notice to the Board of Directors or
to the Chairman of the Board, the President or the Secretary of the
Corporation. Any such resignation shall take effect at the time specified
therein, or if the time is not specified, upon receipt thereof. Unless
otherwise specified in the notice, the acceptance of such resignation
shall not be necessary to make it effective.
SECTION 7. Vacancies. Except as otherwise provided in the
Amended Articles, any vacancy occurring in the Board of Directors caused
by resignation, death or other incapacity, or increase in the number of
directors may be filled by a majority vote of the remaining members of
the Board, until the next annual or special meeting of the shareholders
or, at the discretion of the Board of Directors, such vacancy may be
filled by vote of the shareholders at a special meeting called for that
purpose. Shareholders shall be notified of any increase in the number of
directors in the next mailing sent to shareholders following any such
increase.
SECTION 8. Nominations of Directors. The Executive Committee of
the Board of Directors of the Corporation shall serve as the nominating
committee for the nomination of directors of the Corporation. In case a
person is to be elected to the Board by the Board of Directors because of
a vacancy existing on the Board, nomination shall be made only by the
Executive Committee pursuant to the affirmative vote of the majority of
its entire membership. The Executive Committee shall also make
nominations for directors to be elected by the shareholders of the
Corporation at an annual meeting of shareholders as provided in the
remainder of this Section 8.
Only persons nominated in accordance with the procedures set
forth in this Section 8 shall be eligible for election as directors at an
annual meeting. The Executive Committee shall select the management
nominees for election as directors. Except in the case of a nominee
substituted as a result of the death, incapacity, disqualification or
other inability to serve of a management nominee, the Executive Committee
shall deliver written nominations to the Secretary of the Corporation at
least fifty (50) days prior to the date of the annual meeting. Management
nominees substituted as a result of the death, incapacity,
disqualification or other inability to serve of a management nominee
shall be delivered to the Secretary of the Corporation as promptly as
practicable. At the request of the Executive Committee, any person
nominated by that Committee for election as a director at an annual
meeting shall furnish to the Secretary of the Corporation that
information, described below, required to be set forth in a shareholder's
notice of nomination which pertains to the nominee. Provided the
Executive Committee selects the management nominees, no nominations for
directors except those made by the Executive Committee shall be voted
upon at the annual meeting unless other nominations by shareholders are
made in accordance with the provisions of this Section 8. Ballots bearing
the names of all the persons nominated for election as directors at an
annual meeting in accordance with the procedures sete forth in this
Section 8 by the Executive Committee and by shareholders shall be
provided for use at the annual meeting. However, except in the case of a
management nominee substituted as a result of the death, incapacity,
disqualification or other inability to serve of a management nominee, if
the Executive Committee shall fail or refuse to nominate a slate of
directors at least fifty (50) days prior to the date of the annual
meeting, nominations for directors may be made at the annual meeting by
any shareholder entitled to vote and shall be voted upon. No person shall
be elected as a director of the Corporation unless nominated in
accordance with the terms set forth in this Section 8.
Nominations of individuals for election to the Board of
Directors of the Corporation at an annual meeting of shareholders may be
made by any shareholder of the Corporation entitled to vote for the
election of directors at that meeting who complies with the procedures
set forth in this Section 8. Such nominations, other than those made by
the Executive Committee, shall be made pursuant to timely notice in
writing to the Secretary of the Corporation as set forth in this Section
8. To be timely, a shareholder's notice shall be delivered to or mailed
and received at the principal executive offices of the Corporation not
less than 60 days nor more than 90 days prior to the date of each annual
meeting; provided, however, that if less than 60 days' notice or prior
public disclosure of the date of the annual meeting is given or made,
notice by the shareholder to be timely must be so delivered or received
not later than the close of business on the 10th calendar day following
the earlier of (1) the day on which such notice of the date of the annual
meeting was mailed or (2) the day on which such public disclosure was
made. Such shareholder's notice shall set forth (a) as to each person
whom the shareholder proposes to nominate for election or re-election as
a director (i) the name, age, business address and residence address of
such person, (ii) the principal occupation or employment of such person,
(iii) the class and/or series and number of shares that are beneficially
owned by such person on the date of such shareholder notice and (iv) any
other information relating to such person that is required to be
disclosed in solicitations of proxies with respect to nominees for
election as directors, pursuant to Regulation 14A under the Securities
Exchange Act of 1934, as amended, and (b) as to the shareholder giving
the notice (i) the name and address, as they appear on the Corporation's
books, of such shareholder and any other shareholders known by such
shareholder to be supporting such nominee(s) and (ii) the class and/or
series and number of shares that are beneficially owned by such
shareholder on the date of such shareholder notice and by any other
shareholders known by such shareholder to be supporting such nominee(s)
on the date of such shareholder notice.
The Board of Directors may reject any nomination by a
shareholder not made in accordance with the terms of this Section 8.
Alternatively, if the Board of Directors fails to consider the validity
of any nominations by a shareholder, the presiding officer of the annual
meeting shall, if the facts warrant, determine and declare at the annual
meeting that a nomination was not made in accordance with the terms of
this Section 8, and, if he should so determine, he shall so declare at
the annual meeting and the defective nomination shall be disregarded.
(As added June 26, 1990)
ARTICLE IV.
Committees Of The Board Of Directors
SECTION 1. Executive Committee.
Number and Powers. The Board of Directors shall create an
Executive Committee consisting of the Chairman of the Board and the
President, as ex officio members, and two or more directors who shall be
elected by a majority of the whole Board of Directors, from time to time,
to hold office until the next annual meeting of the Board of Directors
and until their respective successors are duly elected and qualified. The
Board of Directors shall designate the Chairman of such Committee.
The Executive Committee shall have and exercise (except as
otherwise provided by law or by the Board of Directors and except when
the Board of Directors shall be in session) such powers and rights of the
full Board of Directors in the management of the business and affairs of
the Corporation as may be lawful, and it shall have power to authorize
the seal of the Corporation to be affixed to all papers which may require
it.
Meetings and Notice. Meetings of the Executive Committee may be
held either at the office of the Corporation in the City of Indianapolis,
Indiana, or at such other places as the Executive Committee or Chairman
thereof shall from time to time designate. Such meetings may be called by
or at the request of the Chairman or any member of the Executive
Committee by giving at least twenty-four (24) hours' advance notice to
each member of the Executive Committee. Such notice may be given
personally or by telephone or telegraph.
Quorum. A majority of the Executive Committee shall constitute
a quorum for the transaction of business, and the affirmative vote of
such majority shall be necessary to the determination of any question.
Compensation. The members of the Executive Committee, other
than ex officio members, shall be entitled to receive such compensation
as may be determined from time to time by the Board of Directors.
Minutes. Minutes of the meeting of the Executive Committee
shall be kept and read at the next meeting of the Board of Directors.
Vacancies. Vacancies occurring in the Executive Committee shall
be filled by the Board of Directors at any meeting of said Board.
SECTION 2. Audit Committee. The Board of Directors, by a
majority vote of the whole Board of Directors, may designate three (3) or
more members of such Board who shall not be officers of the Corporation
or its subsidiaries, to constitute an Audit Committee. Members of such
Committee shall serve for terms of one (1) year and until their
successors are duly elected and qualified. Such Committee shall have and
exercise such authority as shall be specified in the resolution of the
Board of Directors appointing such Committee. The Chairman of such Audit
Committee shall be designated by the Board of Directors.
SECTION 3. Compensation Committee. The Board of Directors, by a
vote of a majority of the whole Board of Directors, may designate three
(3) or more members of such Board, who are not officers of the
Corporation or its subsidiaries, to constitute a Compensation Committee.
Members of such Committee shall serve for terms of one (1) year and until
their successors are duly elected and qualified. Such Committee shall
have and exercise such authority as shall be specified in the resolution
of this Board of Directors appointing such Committee. A Chairman and a
Vice-Chairman of the Compensation Committee may be designated by the
Board of Directors.
SECTION 4. Committee on Strategies. The Board of Directors, by
majority vote of the whole Board of Directors, may designate three (3) or
more members of such Board, who are not officers of the Corporation or
its subsidiaries, to constitute a Committee on Strategies. Members of
such Committee shall serve for terms of one (1) year and until their
successors are duly elected and qualified. Such Committee shall have and
exercise such authority as shall be specified in the resolution of this
Board of Directors appointing such Committee. A Chairman and a
Vice-Chairman of the Committee on Strategies may be designated by the
Board of Directors.
(As Added April 26, 1994)
ARTICLE V.
Officers Of The Corporation
SECTION 1. Officers. The officers of the Corporation shall be a
Chairman of the Board, a Vice-Chairman of the Board, a President, one or
more Vice Presidents, a Secretary, a Treasurer, a Controller, and, if the
Board of Directors desires, one or more Assistant Vice Presidents,
Assistant Secretaries, Assistant Treasurers and Assistant Controllers,
who shall be elected by the Board of Directors at its annual meeting. Any
two or more of such offices may be held by the same person, except that
the duties of the President and the Secretary, shall not be performed by
the same person. In the election of Vice Presidents, the Board of
Directors may give each vice presidency such special designation as it
may deem appropriate. The Chairman of the Board and the President shall
be chosen from among the directors.
(As Amended November 13, 1989 to be Effective February 1, 1990)
The Board of Directors may appoint such other officers and
agents as it shall deem necessary, who shall have such authority and
perform such duties as from time to time shall be prescribed by the Board
of Directors.
SECTION 2. Salaries. The salaries of all officers of the
Corporation shall be fixed by the Board of Directors. No officer shall be
prevented from receiving such salary by reason of the fact he is also a
director of the Corporation.
SECTION 3. Terms; Removal. The officers of the Corporation
shall hold office for one year and until their successors are duly
elected and qualified; provided, however, that any officer elected or
appointed by the Board of Directors may be removed at any time by the
affirmative vote of a majority of the whole Board of Directors.
SECTION 4. Resignations. Any officer of the Corporation may
resign at any time by giving written notice to the Board of Directors, to
the Chairman of the Board, to the President, or to the Secretary of the
Corporation. Any such resignation shall take effect at the time specified
therein, or if the time be not specified, upon receipt thereof. Unless
otherwise specified in the notice, the acceptance of such resignation
shall not be necessary to make it effective.
SECTION 5. Vacancies. If the office of the Chairman of the
Board, the President, any Vice President, the Secretary, the Treasurer,
the Controller, any Assistant Vice President, Assistant Secretary,
Assistant Treasurer, or Assistant Controller, or other officer or agent,
is vacant or becomes vacant by reason of death, resignation, retirement,
disqualification, removal from office or the creation of a new office,
the Board of Directors shall elect a person to such office who shall hold
office for the unexpired term in respect of which such vacancy occurred;
provided that, in its discretion, the Board of Directors, by vote of a
majority of the whole Board, may leave unfilled for such period as it
deems appropriate any office, except the offices of President, Secretary,
Treasurer and Controller.
SECTION 6. Duties of Officers May Be Delegated. In case of the
absence of any officer of the Corporation, or for any other reason that
the Board of Directors may deem sufficient, the Board of Directors may
delegate the power or duties of such officer to any other officer, or to
any director for the time being.
SECTION 7. Chairman and Vice-Chairman of the Board. The
Chairman of the Board shall be the chief executive officer of the
Corporation. Subject to the control of the Board of Directors, he shall
have general charge of, and supervision and authority over, the business
and affairs of the Corporation. He shall preside at all meetings of the
shareholders and directors. He shall have such other duties as may be
assigned to him by the Board of Directors.
The Vice-Chairman of the Board shall assist the Chairman of the
Board in the discharge of the latter's duties in the manner and to the
extent designated by the Board of Directors or the Chairman of the Board.
In the absence of the Chairman of the Board, the Vice-Chairman of the
Board shall preside at all meetings of shareholders and directors. He
shall perform such other duties as are incident to his office or as are
assigned to him by the Board of Directors or the Chairman of the Board.
(As Amended November 13, 1989 to be Effective February 1, 1990)
SECTION 8. President. The President shall be the chief
operating officer of the Corporation. Subject to the supervision of the
Chairman of the Board and the Board of Directors, itself, he shall have
general charge of, and supervision and authority over, the operations of
the Corporation. He shall perform such other duties as are incident to
his office or as may be assigned to him by the Board of Directors or the
Chairman of the Board.
(As Amended November 13, 1989 to be Effective February 1, 1990)
SECTION 9. Vice-Presidents. Subject to the control of the Board
of Directors, the Chairman of the Board and the President, the Vice
Presidents and the Assistant Vice Presidents shall have such power, and
perform such duties, as the Board of Directors, the Chairman of the
Board, or the President, from time to time shall assign to them, and, in
the case of Assistant Vice Presidents, such powers and duties as may be
assigned to them by the respective Vice Presidents whom they assist.
SECTION 10. Secretary and Assistant Secretaries. The Secretary
shall attend all meetings of the shareholders and Board of Directors, and
shall record all votes and other proceedings in a book to be kept for
that purpose. He shall give, or cause to be given, all required notices
of meetings of the shareholders and Board of Directors. He shall have
custody of the seal of the Corporation and of its records (other than
accounting records) and shall perform such other duties as usually
appertain to the office of Secretary and as may be prescribed by the
Board of Directors, the Chairman of the Board or the President.
The Assistant Secretaries shall perform such other duties as
shall be delegated to them by the Board of Directors, the Chairman of the
Board, the President or the Secretary.
SECTION 11. Treasurer and Assistant Treasurers. The Treasurer
shall have custody of the corporate funds and securities, and shall keep
full and accurate accounts of receipts and disbursements in books of the
Corporation to be kept for that purpose. He shall deposit all moneys and
other valuable effects in the name and to the credit of the Corporation
in such depositaries as may be designated by authority of the Board of
Directors, and shall disburse the funds of the Corporation as may be
ordered by the Board of Directors, taking proper vouchers for such
disbursements. He shall render to the Board of Directors, whenever it may
so require, an account of all his transactions as Treasurer and of the
financial condition of the Corporation. He shall have such other powers
and duties as may be assigned to him by the Board of Directors, the
Chairman of the Board or the President.
The Assistant Treasurers shall perform such duties as shall be
delegated to them by the Board of Directors, the Chairman of the Board,
the President or the Treasurer.
SECTION 12. Controller and Assistant Controllers. The
Controller shall be the chief accounting officer of the Corporation. He
shall keep or cause to be kept all books of account and accounting
records of the Corporation, and shall render appropriate financial
statements to the Board of Directors and to the shareholders. He shall
perform such other duties as usually appertain to the office of the
Controller and as may be prescribed by the Board of Directors, the
Chairman of the Board or the President.
The Assistant Controllers shall perform such other duties as
shall be delegated to them by the Board of Directors, the Chairman of the
Board, the President or the Controller.
ARTICLE VI.
Shares
SECTION 1. Certificates. The certificates for shares in the
Corporation shall be consecutively numbered in the order of their issue,
and each certificate shall state the name of the registered holder, the
number of shares represented thereby, the par value of each share or a
statement that such shares have no par value, whether such shares have
been fully paid and are non-assessable, the kind and class of shares
represented thereby, and a statement or summary of the relative rights,
interests, preferences and restrictions of all classes of such shares;
provided, that if the Board of Directors so authorizes, such statement or
summary may be omitted from the certificate if it shall be set forth upon
the face or back of the certificate that such statement, in full, will be
furnished by the Corporation to any shareholder upon written request and
without charge.
Certificates for shares shall be in such form, consistent with
the Amended Articles, as the Board of Directors shall approve. Such
certificates shall be signed by the President, or a Vice President, and
the Secretary, or an Assistant Secretary, and shall be sealed with the
corporate seal, which seal may be an original impression or a facsimile
thereof. The signature of the above named officers, the registrar, and
transfer agent on the certificates for shares in the Corporation may be
an original signature or a facsimile thereof.
(As Amended February 27, 1996)
SECTION 2. Record of Shareholders. The Corporation shall keep
at its principal office a complete and accurate list of the shareholders
of each class of shares issued and outstanding setting forth the names
and addresses of the shareholders of each class and the number of shares
held by each such shareholder.
The Corporation shall be entitled to treat the holder of record
of any share or shares as the owner in fact thereof and accordingly shall
not be bound to recognize any equitable or other claim to or interest in
such shares on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise expressly provided
by the laws of the State of Indiana.
SECTION 3. Transfers of Shares. The transfer of shares may be
made on the books of the Corporation only by the holder thereof or his
duly authorized attorney and upon surrender of the certificate
representing the same, properly endorsed and/or assigned; title to
certificates and to the shares represented thereby can be transferred
only as provided by the laws of the State of Indiana.
SECTION 4. Transfer Books; Record Date. The books for the
transfer of the shares of the Corporation may be closed for such period,
in anticipation of shareholders' meetings, the payment of dividends or
the allotment of rights, as the Board of Directors from time to time may
determine. In lieu of providing for the closing of the transfer books,
the Board of Directors may, in its discretion, fix a date as prescribed
by the laws of the State of Indiana, for any such meeting, payment, or
allotment as a record date for such purpose.
SECTION 5. Transfer Agents and Registrars. The Board of
Directors may appoint one or more transfer agents and registrars for its
shares or appoint qualified agents to perform both the functions of
transfer agent and registrar. The Board of Directors may require all
certificates for shares to bear the manual signature of either a transfer
agent or of a registrar, or both.
SECTION 6. Lost or Destroyed Certificates. Any person claiming
a certificate for shares to be lost or destroyed shall make an affidavit
or affirmation of that fact and shall give the Corporation and/or the
transfer agents and/or the registrars, if they shall so require, a bond
of indemnity, in form and with one or more sureties satisfactory to the
officers of the Corporation, and/or the transfer agents, and/or the
registrars, whereupon a new certificate may be issued of the same tenor
and for the same number of shares as the one alleged to be lost or
destroyed; or in lieu of the foregoing procedure, such person may proceed
in accordance with the laws of the State of Indiana.
ARTICLE VII.
Checks, Notes, Contracts, Etc.
SECTION 1. Checks; Notes. All checks, notes, drafts,
acceptances, or other demands or orders for the payment of money of the
Corporation shall be signed by such officer or officers, or person or
persons, as the Board of Directors may from time to time designate. When
so authorized by the Board of Directors, the signatures of such officers
on any bonds, notes, debentures, or other evidences of indebtedness may
be facsimiles and such facsimiles on such instruments shall be deemed the
equivalent of and constitute the written signatures of such officers for
all purposes including, but not limited to, the full satisfaction of any
signature requirements of the laws of the State of Indiana on the
negotiable bonds, notes, debentures, and other evidence of indebtedness
of the Corporation.
SECTION 2. Contracts Requiring Seal. All contracts, deeds,
mortgages, leases or instruments that require the seal of the Corporation
shall be signed by the President, or a Vice President, and by the
Secretary, or an Assistant Secretary, or by such officer or officers, or
person or persons, as the Board of Directors may by resolution prescribe,
except as provided in Section 1 of this Article VII. Such seal may be an
original impression or an engraved or imprinted facsimile thereof.
ARTICLE VIII.
Seal
The corporate seal shall have inscribed thereon the name of the
Corporation and the word "SEAL".
ARTICLE IX.
Fiscal Year
The fiscal year shall be the calendar year.
ARTICLE X.
Miscellaneous Provisions
SECTION 1. Inspection of Books. The Board of Directors shall
determine from time to time whether, and, if allowed, when and under what
conditions and regulations, the accounts and books of the Corporation
(except such as by statute may be specifically open to inspection), or
any of them, shall be open to the inspection of the shareholders, and the
shareholders' rights in this respect are and shall be restricted and
limited accordingly.
SECTION 2. Notices. Whenever under the provisions of these
By-Laws notice is required to be given to any director, officer, or
shareholder, it may be given by depositing the same with the United
States Postal Service, in a postpaid sealed wrapper, addressed to such
director, officer, or shareholder at such address as appears on the books
of the Corporation, or in default of other address, to such director,
officer or shareholder at the General Post Office in the City of
Indianapolis, Indiana, and such notice shall be deemed to be given at the
time of such mailing.
SECTION 3. Waiver. Any director, officer or shareholder may
waive any notice required to be given under these By-Laws either before,
at, or after any meeting, and such waiver shall be equally as effective
as the due service of notice.
ARTICLE XI.
Amendments and Repeal
SECTION 1. Amendments. These By-Laws may be altered, amended or
repealed, and new By-Laws may be made at any annual, regular, or special
meeting of the Board of Directors by the affirmative vote of a majority
of the whole Board of Directors at the time of such action.
SECTION 2. Repeal. All By-Laws of the Corporation, and
amendments thereto, heretofore made and adopted by the shareholders
and/or the Board of Directors of the Corporation are hereby expressly
repealed.
EXHIBIT 10.1
IPALCO ENTERPRISES, INC.
LONG-TERM PERFORMANCE AND
RESTRICTED STOCK INCENTIVE PLAN
As Amended and Restated Effective January 1, 1998)
Pursuant to Section 22 of the IPALCO Enterprises,
Inc. Long-Term Performance and Restricted Stock Incentive
Plan (the "Plan"), IPALCO Enterprises, Inc. ("IPALCO")
amends the Plan, effective as of January 1, 1998, to
provide, in its entirety, as follows:
SECTION 1
PURPOSE
The purpose of the amended Plan (as such term is
described below) is to provide an incentive to selected
key executives of the Company (as such term is described
below), by providing an opportunity to earn long-term
incentive compensation, based upon the attainment of
Company performance goals. In addition, the restricted
stock component of the Plan is intended to provide the
key executives with a means of acquiring or increasing a
proprietary interest in IPALCO so that they shall have an
increased incentive to work toward the attainment of the
long term growth and profit objectives of IPALCO and its
affiliated companies. Specifically, the Plan is designed
to:
A. Link, directly and indirectly, executive
and shareholder interests.
B. Attract and retain individuals of
outstanding ability.
C. Encourage key Company officers to render
superior performance.
SECTION 2
DEFINITIONS
The terms defined in this Section 2 shall, for
purposes of this Plan, have the meanings herein
specified, unless the context expressly or by necessary
implication otherwise requires:
A. Acquisition of Control: An "Acquisition of
Control" means:
(1) The acquisition by any individual, entity
or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) (a "Person") of
beneficial ownership (within the meaning of Rule 13d-
3 promulgated under the Exchange Act) of twenty
percent (20%) or more of either (A) the then
outstanding shares of common stock of IPALCO (the
"Outstanding IPALCO Common Stock") or (B) the
combined voting power of the then outstanding voting
securities of IPALCO entitled to vote generally in
the election of directors (the "Outstanding IPALCO
Voting Securities"); provided, however, that the
following acquisitions shall not constitute an
Acquisition of Control: (i) any acquisition
directly from IPALCO (excluding an acquisition by
virtue of the exercise of a conversion privilege),
(ii) any acquisition by IPALCO, (iii) any
acquisition by any employee benefit plan (or related
trust) sponsored or maintained by IPALCO, IPL or any
corporation controlled by IPALCO or (iv) any
acquisition by any corporation pursuant to a
reorganization, merger or consolidation, if,
following such reorganization, merger or
consolidation, the conditions described in clauses
(A), (B) and (C) of subsection (3) of this Section
2.A. are satisfied;
(2) Individuals who, as of the date hereof,
constitute the Board of Directors of IPALCO (the
"Incumbent Board") cease for any reason to constitute at
least a majority of the Board of Directors of IPALCO;
provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or
nomination for election by IPALCO's shareholders, was
approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any
such individual whose initial assumption of office occurs
as a result of either an actual or threatened election
contest (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) or
other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board
of Directors; or
(3) Approval by the shareholders of IPALCO of a
reorganization, merger or consolidation, in each case,
unless, following such reorganization, merger or
consolidation, (A) more than sixty percent (60%) of,
respectively, the then outstanding shares of common stock
of the corporation resulting from such reorganization,
merger or consolidation and the combined voting power of
the then outstanding voting securities of such
corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or
indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners,
respectively, of the Outstanding IPALCO Common Stock and
Outstanding IPALCO Voting Securities immediately prior to
such reorganization, merger or consolidation in
substantially the same proportions as their ownership,
immediately prior to such reorganization, merger or
consolidation, of the Outstanding IPALCO Stock and
Outstanding IPALCO Voting Securities, as the case may be,
(B) no Person (excluding IPALCO, any employee benefit
plan or related trust of IPALCO, IPL or such corporation
resulting from such reorganization, merger or
consolidation and any Person beneficially owning,
immediately prior to such reorganization, merger or
consolidation, directly or indirectly, twenty percent
(20%) or more of the Outstanding IPALCO Common Stock or
Outstanding IPALCO Voting Securities, as the case may be)
beneficially owns, directly or indirectly, twenty percent
(20%) or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from
such reorganization, merger or consolidation or the
combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally
in the election of directors and (C) at least a majority
of the members of the board of directors of the
corporation resulting from such reorganization, merger or
consolidation were members of the Incumbent Board at the
time of the execution of the initial agreement providing
for such reorganization, merger or consolidation;
(4) Approval by the shareholders of IPALCO of (A) a
complete liquidation or dissolution of IPALCO or (B) the
sale or other disposition of all or substantially all of
the assets of IPALCO, other than to a corporation, with
respect to which following such sale or other disposition
(i) more than sixty percent (60%) of, respectively, the
then outstanding shares of common stock of such
corporation and the combined voting power of the then
outstanding voting securities of such corporation
entitled to vote generally in the election of directors
is then beneficially owned, directly or indirectly, by
all or substantially all of the individuals and entities
who were the beneficial owners, respectively, of the
Outstanding IPALCO Common Stock and Outstanding IPALCO
Voting Securities immediately prior to such sale or other
disposition in substantially the same proportion as their
ownership, immediately prior to such sale or other
disposition, of the Outstanding IPALCO Common Stock and
Outstanding IPALCO Voting Securities, as the case may be,
(ii) no Person (excluding IPALCO and any employee benefit
plan or related trust of IPALCO, IPL or such corporation
and any Person beneficially owning, immediately prior to
such sale or other disposition, directly or indirectly,
twenty percent (20%) or more of the Outstanding IPALCO
Common Stock or Outstanding IPALCO Voting Securities, as
the case may be) beneficially owns, directly or
indirectly, twenty percent (20%) or more of,
respectively, the then outstanding shares of common stock
of such corporation and the combined voting power of the
then outstanding voting securities of such corporation
entitled to vote generally in the election of directors
and (iii) at least a majority of the members of the board
of directors of such corporation were members of the
Incumbent Board at the time of the execution of the
initial agreement or action of the Board of Directors
providing for such sale or other disposition of assets of
IPALCO; or
(5) The closing, as defined in the documents
relating to, or as evidenced by a certificate of any
state or federal governmental authority in connection
with, a transaction approval of which by the shareholders
of IPALCO would constitute an "acquisition of control"
under subsection (3) or (4) of this Section 2.A. of this
Plan.
Notwithstanding anything contained in this Plan to the
contrary, if a Participant's employment is terminated
before an "Acquisition of Control" as defined in this
subsection (A) and the Participant reasonably
demonstrates that such termination (i) was at the request
of a third party who has indicated an intention or taken
steps reasonably calculated to effect an Acquisition of
Control and who effectuates an "Acquisition of Control"
or (ii) otherwise occurred in connection with, or in
anticipation of, an Acquisition of Control which actually
occurs, then for all purposes of this Plan, the date of
an Acquisition of Control with respect to such
Participant shall mean the date immediately prior to the
date of such termination of the Participant's employment.
B. Administrative Guidelines: The guidelines
established for each Program used to administer this Plan
as now in effect or as modified from time to time by the
Committee.
C. Base Salary: The aggregate base salary paid to
a Participant in a Fiscal Year.
D. Board of Directors: The Board of Directors of
IPALCO.
E. Committee: The Compensation Committee of the
Board of Directors.
F. Company: IPALCO and its subsidiaries, or
successors.
G. Cost Effective Service: The three (3) year
average, as applicable, of net income of the Company as a
percentage of the sum of the Company's total operating
revenues and other income. The Company's net income,
total operating revenues and other income shall be as
reported in the Company's Uniform Statistical Report;
provided, however, that the total operating revenues and
other income shall include gross IPL revenues but, with
respect to the non-utility businesses, shall only include
their net income. Cost Effective Service shall cease to
be a Performance Measure effective January 1, 1998.
H. Fiscal Year: The calendar year.
I. IPALCO: IPALCO Enterprises, Inc. or its
successor.
J. IPL: Indianapolis Power & Light Company or its
successor.
K. Market Price: For a Fiscal Year, the prices of
a company's common stock on the New York Stock Exchange,
or other appropriate exchange, if the company's common
stock is not traded on the New York Stock Exchange, as
published in The Wall Street Journal, at the close of
trading on the last trading date in such Fiscal Year.
L. Participant: The employees of the Company
designated by the Committee to receive an award under the
Plan. The employees eligible for designation include
officers of the Company and other employees who the
Committee expect to contribute to the strategic growth of
the Company.
M. Peer Group: The entities included as part of
the S&P 500 Index.
N. Performance Incentive Award: The incentive
award amount for a Performance Period established by the
Committee and expressed as a number of Shares determined
in relation to a Participant's average annual Base Salary
for the entire three (3) year period or, if lesser, the
portion of such three (3) year period that he was
employed; provided, however, that for purposes of making
the Share grants at the beginning of each Performance
Period, the Share grants shall be based on the
Participant's rate of base compensation in effect on the
first (1st) calendar day of the Performance Period;
provided, further, that the number of Shares awarded
shall be increased or decreased as soon as practicable
after the end of the Performance Period to reflect the
actual annual Base Salary paid to the Participant in such
Performance Period. The maximum number of Shares
(including any additional Shares awarded in accordance
with Section 16 based on Performance Period Performance
Measure results) shall not exceed the lesser of:
(1) the annualized Base Salary of a
Participant in effect on the first (1st) calendar
day of the Performance Period divided by four (4),
or
(2) the average annual Base Salary of the
Participant during the Performance Period divided by
five (5);
provided, however, that in applying these share limits,
dividends paid on restricted Shares shall be disregarded.
Notwithstanding anything contained in this Paragraph to
the contrary, the Committee may establish the Performance
Incentive Awards for various groups of Participants by
job title or officer class. To the extent the Committee
establishes Performance Incentive Awards by job title or
officer groups and a Participant's job title or officer
group provides for a lower or higher number of Shares as
the Participant's Performance Incentive Award, the
Participant's Performance Incentive Award shall be
automatically adjusted at the end of the Performance
Period to reflect the different number of Shares
applicable for such new job title or officer class based
on the number of full calendar months remaining in the
Performance Period at the effective date on which such
Participant's job title or officer class is modified.
For example, if a Participant's job title is changed to a
title which results in an increase of the number of
Shares to be included as the Participant's Performance
Incentive Award from twenty (20) to twenty-five (25)
Shares with eighteen (18) full calendar months remaining
in the Performance Period at the time of the change, the
Participant shall have the number of Shares included as
his Performance Incentive Award adjusted at the end of
the Performance Period to twenty-two and one-half (22
1/2).
O. Performance Incentive Award Schedule: The
schedule, attached hereto as Appendix A, containing the
ranking of Total Return to Shareholders versus the Peer
Group, and a percent of the Performance Incentive Award
for each of the levels of achievement listed.
P. Performance Measures: The measures used in
determining the amount of any Program Incentive Payment.
Effective January 1, 1998, Total Return to Shareholders
shall be the only Performance Measure.
Q. Performance Period: A period of three (3)
consecutive Fiscal Years, commencing on the first (1st)
day of the first (1st) Fiscal Year of a Program, over
which the Performance Measures are to be taken. A new
Performance Period shall begin on January 1, 2001 and
January 1, 2004. Performance Periods shall not overlap.
R. Period of Restriction: The period during which
the transfer of shares are restricted pursuant to the
Plan.
S. Plan: This Long-Term Performance and
Restricted Stock Incentive Plan, as now in effect and as
amended from time to time.
T. President: The President of IPALCO.
U. Program: One (1) Performance Period with its
respective Performance Incentive Awards, Performance
Incentive Award Schedule, and Participants.
V. Shares: Shares of common stock of IPALCO.
W. Total Return to Shareholders: The average
return on investment to shareholders from stock price
appreciation and dividends paid during each Fiscal Year
of the Performance Period.
SECTION 3
ADMINISTRATION
The Plan shall be administered by the Committee. No
member of the Committee shall be eligible, at any time
when he or she is such a member or within one (1) year
prior to his or her appointment to the Committee, to be
granted Shares under the Plan; provided, however, that
notwithstanding the preceding clause of this sentence, a
member of the Committee shall not be precluded from
participating in, the IPALCO Enterprises, Inc. 1991
Directors' Stock Option Plan. The decision of a majority
of the members of the Committee shall constitute the
decision of the Committee, and the Committee may act
either at a meeting at which a majority of its members
are present or by a written consent signed by all of its
members. The Committee may appoint individuals to act on
its behalf in the administration of the Plan; provided,
however, that except as otherwise provided by the Plan,
the Committee shall have the sole, final and conclusive
authority to administer, construe and interpret the Plan.
SECTION 4
NUMBER OF SHARES SUBJECT TO THE PLAN
The total number of Shares that may be granted under
the Plan may not exceed One Million and Five Hundred
Thousand (1,500,000) Shares subject to adjustment as
provided in Section 6 hereof. Those Shares may consist,
in whole or in part, of authorized but unissued Shares or
Shares reacquired by IPALCO, including Shares purchased
in the open market, not reserved for any other purpose;
provided, however, that the Shares granted hereunder
shall be authorized and unissued unless the Committee, in
its sole discretion, takes action to utilize open market
Shares.
SECTION 5
UNUSED SHARES
In the event any Shares subject to grants made under
the Plan are forfeited pursuant to Section 16 hereof,
such forfeited Shares shall again become available for
issuance under the Plan.
SECTION 6
ADJUSTMENTS IN CAPITALIZATION
In the event of any change in the outstanding Shares
by reason of a stock dividend, stock split,
recapitalization, merger, consolidation, combination,
stock rights plan or exchange of shares or other similar
corporate change, the aggregate number of Shares issuable
under the Plan shall be appropriately adjusted by the
Committee, whose determination shall be conclusive. In
such event, the Committee shall also have discretion to
make appropriate adjustments in the number and type of
shares subject to restricted Share grants then
outstanding under the Plan pursuant to the terms of such
grants or otherwise.
SECTION 7
PARTICIPATION
A. Prior to the commencement of each Fiscal Year,
Participants shall be recommended by the President and
approved by the Committee. Participants are to be those
key employees who, in the opinion of the Committee, are
in a position to make a significant contribution to the
long-term success of the Company. Participants for each
Program shall be notified of their participation prior to
the beginning of the first (1st) Fiscal Year of a
Program. Participation in one (1) Program does not
guarantee participation in subsequent Programs.
B. The Committee, in its sole discretion, may
select additional Participants to participate in the
final one (1) or two (2) Fiscal Years of a Program. The
Committee approval shall include the establishment of the
Performance Incentive Award for any new Participant. If
a Participant is added during a Program, the first (1st)
Fiscal Year of his participation shall be substituted for
the first (1st) Fiscal Year of the Performance Period for
purposes of determining the number of Shares awarded
under Section 9.
C. The Committee, in its sole discretion, may
discontinue the participation of a Participant for the
final one (1) or two (2) Fiscal Years of a Program. If a
Participant's participation is discontinued during a
Program, he shall forfeit, as soon as practicable after
the effective date of his participation termination, two-
thirds (2/3) of the Shares granted to him for such
Program if his participation is discontinued for the
final two (2) Fiscal Years of the Program or one-third
(1/3) of the Shares granted to him for such Program if
his participation is discontinued for the final Fiscal
Year of the Program. At the end of a Program, the
reduced share grant shall be adjusted in accordance with
Section 16.
SECTION 8
PERFORMANCE INCENTIVE AWARD GRANTS
A. Each Program shall be subject to the
limitations and terms provided in the Plan. A new
Program shall commence on the third (3rd) annual
anniversary date of the preceding Program. These
Programs shall be of three (3) year duration.
B. The Committee shall determine for each
Participant his Performance Incentive Award for each
Program. Only one (1) grant shall be made to each
Participant during each Program. Participants shall
generally be notified of their individual Performance
Incentive Award before the beginning of each Program.
SECTION 9
GRANT OF SHARES
Concurrently with the beginning of each Performance
Period and subject to the limits established by Section
2.N., the Committee shall cause the Secretary of IPALCO
to issue to each Participant a number of restricted
Shares based on the Participant's Performance Incentive
Award for such Performance Period. Notwithstanding
anything contained herein to the contrary, the Share
grants for the Performance Period beginning on January 1,
1998 are conditioned upon the amended and restated Plan
being approved by IPALCO's shareholders in accordance
with Section 28 hereof. At the end of each Performance
Period, the Share grants shall be adjusted, upward or
downward, based on the Participant's actual Base Salary
and, if applicable, change in job title or officer class.
SECTION 10
ESTABLISHMENT OF PERFORMANCE MEASURES
A. The Performance Measure to be used is IPALCO's
ranking versus the Peer Group on Total Return to
Shareholders.
B. A Performance Incentive Award Schedule shall
contain various levels of performance and corresponding
Performance Incentive Award values.
C. If the Company disposes of a significant part
of the business of IPL, or acquires through purchase,
merger, or otherwise the capital assets of any other
company, the Committee may, in its sole and absolute
discretion, adjust the Total Return to Shareholder
targets of a Performance Incentive Award Schedule for a
Performance Period so as to reflect the financial impact
of the acquisition or disposition.
SECTION 11
DETERMINATION OF PERFORMANCE RESULTS
A. Upon the completion of a Performance Period,
the Shares awarded for each Participant shall be adjusted
based upon the Performance Incentive Award Schedule.
B. For each Performance Period, the Total Return
to Shareholders of IPALCO shall be compared with the
Total Return to Shareholders of the members of the Peer
Group. Total Return to Shareholders for IPALCO and each
member of the Peer Group shall be measured by the
following formula (with appropriate adjustments for
changes in capital structure due to stock dividends,
stock splits, recapitalization, mergers, or other events
having significant distorting effect on IPALCO or on any
member of the Peer Group):
1. For each Fiscal Year of the Performance
Period:
(a) Subtract the Market Price of each
company's common stock for the prior Fiscal
Year from the Market Price of the company's
common stock for the current Fiscal Year.
(b) Add to the result obtained in Step
(a) the amount of all cash dividends paid by
the company with respect to its common stock
during the current Fiscal Year.
(c) Divide the result obtained in Step
(b) by the Market Price of the company's common
stock for the prior Fiscal Year.
2. The calculated values from Step 1 for the
Fiscal Years in the Performance Period shall then be
converted to an annual average for the Performance
Period.
IPALCO's ranking shall be determined by its
performance ranking versus the Peer Group.
SECTION 12
RESTRICTIONS ON TRANSFERABILITY
Until the lifting of the restrictions on the Shares
granted hereunder, no Shares granted under the Plan may
be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated, otherwise than by will or by
the laws of descent and distribution until the
termination of the applicable Period of Restriction.
SECTION 13
CERTIFICATE LEGEND
Each certificate representing restricted Shares
granted pursuant to this Plan shall bear the following
legend:
"The sale or other transfer of the shares
represented by this certificate, whether voluntary,
involuntary, or by operation of law, is subject to
certain restrictions on transfer set forth in the
IPALCO Enterprises, Inc. Long-Term Performance and
Restricted Stock Plan and rules of administration
adopted pursuant to such Plan. A copy of the
Restricted Stock Plan and the rules of such Plan may
be obtained from the Secretary of IPALCO
Enterprises, Inc."
Once the restricted Shares are released from the
restrictions, the Participant shall be entitled to have
the legend required by this Section 13 removed from such
Share certificate(s).
SECTION 14
VOTING RIGHTS
During the Period of Restriction, Participants
holding restricted Shares granted hereunder may exercise
full voting rights with respect to those Shares.
SECTION 15
DIVIDENDS AND OTHER DISTRIBUTIONS
During the Period of Restriction, Participants
holding restricted Shares granted hereunder shall be
entitled to receive all dividends and other distributions
paid with respect to those Shares while they are so held.
If any such dividends or distributions are paid in
Shares, such Shares shall be subject to the same
restrictions on transferability as the restricted Shares
with respect to which they were paid.
SECTION 16
LIFTING OF RESTRICTIONS
The restricted Share grants under the Plan shall be
subject to restrictions as to transferability and shall
also be subject to forfeiture provisions. The lifting of
the transferability restrictions and the forfeitability
provisions shall be dependent on the Performance Measures
during each Performance Period and on the continued
employment of the Participant during the Period of
Restriction.
As soon as practicable after the end of a
Performance Period, the Committee shall determine the
adjustments, if any, that are required to be made to the
Share grants for the Performance Period based on actual
results of IPALCO under the Performance Measures for such
Performance Period. This evaluation shall be completed no
later than the July 1 immediately following the end of
the Performance Period or such earlier date established
by the Committee after it completes the required grant
adjustments for the Performance Period (the July 1 or
earlier date established by the Committee shall for each
Performance Period be referred to as the "Initial Vesting
Date"). After the adjustments are made in the Share
grants consistent with the Performance Incentive Award
Schedule for the Performance Period and after
effectuating the adjustments described above rounding up
or down any fractional share to the nearest whole share,
the restrictions on the Shares held by a Participant at
the end of the Performance Period (after adjusted as
described above) shall be lifted on one-third (1/3) of
the Shares as of the Initial Vesting Date for the
Performance Period and shall be lifted in additional one-
third (1/3) increments on the first business day of each
of the next two calendar years immediately following the
Initial Vesting Date for the Performance Period;
provided, however, that except as provided in Section 17,
18 or 19 hereof:
(1) the restriction shall be lifted on an
Initial Vesting Date or, if applicable for the other
one-third (1/3) increments, the first business day
in January only if the Participant is still employed
by the Company on such date, and
(2) if a Participant ceases to be employed by
the Company before the restrictions lapse on the
Shares held by him, the Shares still subject to
restrictions shall be immediately forfeited.
Notwithstanding anything contained in this Plan to
the contrary, the Committee shall have the complete
discretion to delay the lifting of the restrictions on
Shares under this Plan (including restrictions that lapse
under Sections 17 and 18) for a Participant to the extent
it determines such delay is necessary to avoid the non-
deductibility of the awards under Section 162(m) of the
Internal Revenue Code of 1986, as amended; provided,
however, that any decision to delay the lifting of the
restrictions shall be required to be made and
communicated to the affected Participant in writing
before the beginning of the calendar year during which
the restrictions would have been lifted but for the
delay.
SECTION 17
EFFECT OF PARTICIPANT'S RETIREMENT
Except as provided in the next paragraph, for
Performance Periods beginning before January 1, 1998 and
notwithstanding anything contained in Section 16 hereof
to the contrary, if a Participant attains age 65 before
his employment with the Company is terminated and before
the end of a Performance Period but after completing at
least one (1) full Fiscal Year of employment during such
Performance Period, the remaining restrictions on any
Shares attributable to such Performance Period held by
the Participant (after the number of Shares are adjusted
pursuant to the Performance Measure adjustments described
in Section 16 and Base Salary adjustment described in
Section 2.N. and Section 9 hereof are completed for such
Performance Period) shall lapse on the last calendar day
of such Performance Period; provided, however, that if a
Participant's employment with the Company is terminated,
voluntarily or involuntarily, before his completion of at
least two (2) Fiscal Years of employment, the Participant
shall only be entitled to two-thirds (2/3) of the
restricted Shares granted to him for such Performance
Period (after the Performance Measure adjustments
described in Section 16 and Base Salary adjustment
described in Section 2.N. and Section 9 hereof are
completed for such Performance Period), rounding up or
down any fractional Share to the nearest whole Share, and
the remaining one-third (1/3) of the Shares shall be
forfeited as soon as practicable after the end of the
Performance Period.
Notwithstanding anything contained in Section 16
hereof to the contrary but only to the extent expressly
approved by the Committee, the provisions contained in
the preceding paragraph of this Section 17 shall also
apply, in whole or in part, with respect to a Participant
whose employment is terminated after meeting the
requirements for early or normal retirement under the
Employees' Retirement Plan of Indianapolis Power & Light
Company (or any successor plan) to the extent the
Committee waives the continued employment requirements;
provided, however, that under no circumstances shall the
waiver affect the Performance Measures adjustments
provided in Section 11; provided, further, that until
such time, if ever, that the Committee waives the
restrictions, the retired Participant shall cease to have
voting or dividend rights with respect to the restricted
Shares.
SECTION 18
EFFECT OF TERMINATION OF EMPLOYMENT DUE TO
DEATH OR DISABILITY
Notwithstanding anything contained in Section 16
hereof to the contrary, if a Participant's employment
with the Company is terminated by reason of his death or
total and permanent disability (as such term is defined
in the Employees' Retirement Plan of Indianapolis Power &
Light Company or in any successor retirement plan
thereto) that occurs after the end of the Performance
Period but before the restrictions lapse on the Shares
granted for such Performance Period, the remaining
restrictions on any Shares attributable to such
Performance Period held by the Participant (after the
Performance Measure adjustments described in Section 16
hereof are completed for such Performance Period) shall
immediately lapse on the date of his death or total and
permanent disability, whichever is applicable.
Notwithstanding anything contained in Section 16
hereof to the contrary, if a Participant's employment
with the Company is terminated by reason of his death or
total and permanent disability that occurs before the end
of the Performance Period, the Participant shall be
entitled to a pro rata number of Shares (as determined
below) granted to him at the beginning of the Performance
Period (as adjusted for Performance Periods to reflect
the actual Base Salary paid to such Participant during
the Performance Period that he was employed), no further
adjustments shall be effected with respect to such
Shares, and such Shares shall be fully vested and
transferable by such Participant or, if deceased, his
legal representative. The number of Shares that the
disabled or deceased Participant is entitled shall be
determined by multiplying the number of Shares granted to
the Participant at the beginning of the Performance
Period or, if later, at the date as of which his
participation in the Performance Period commenced (as
adjusted to reflect the actual Base Salary paid to such
Participant during the Performance Period) by a fraction,
the numerator of which is the number of full calendar
months of the Performance Period during which he was a
Participant and employed by the Company and the
denominator of which is thirty-six (36) or, if the
Participant became a Participant after the beginning of a
Performance Period, the number of months remaining in the
Performance Period beginning with the month during which
his participation commenced.
SECTION 19
ACQUISITION OF CONTROL
In the event that there is an Acquisition of Control
and notwithstanding anything contained in Section 16 to
the contrary, the lifting of the restrictions based on
continued employment on the restricted Shares held by a
Participant who was employed by the Company immediately
preceding the date of the Acquisition of Control shall
immediately occur. In addition, the Performance Period
during which the Acquisition of Control occurs shall be
deemed terminated at the date of the Acquisition of
Control, IPALCO performance for such Performance Period
shall be measured as of the date of the Acquisition of
Control, and the Committee shall effect the adjustments
required by Section 16 as soon as practicable after the
Acquisition of Control. The restrictions on all Shares
provided to the Participants after completing the
adjustments described above shall be lifted immediately.
SECTION 20
ELECTIVE SALE OF SHARES
Participants shall also be permitted to cash-in up
to fifty percent (50%) of the Shares (after the
adjustments required by Section 16 are completed) that
cease to be subject to the continued employment
requirements under Section 16 (the "Eligible Shares") by
following the procedures established by the Committee.
SECTION 21
NO EMPLOYMENT CONTRACT
The Plan is not and is not intended to be an
employment contract with respect to any of the
Participants, and IPALCO's and IPL's rights to continue
or to terminate the employment relationship of any
Participant shall not be affected by the Plan.
SECTION 22
AMENDMENT AND TERMINATION
The Board may at any time amend, modify, alter, or
terminate the Plan; provided, however, that without the
approval of the IPALCO shareholders:
(a) the number of Shares which may be reserved for
issuance under the Plan may not be increased except as
provided in Section 6 hereof; and
(b) the class of employees to whom grants may be
granted under the Plan shall not be modified materially;
provided, further, that except for the modifications
expressly permitted by the last paragraph of Section 16
hereof, any amendment, modification, alteration or
termination to the Plan which increases the restrictions
as to transferability or forfeitability of any restricted
Shares granted hereunder to a Participant, including any
Performance Measure adjustments which occur at the end of
a Performance Period, shall not become effective until
the first (1st) Performance Period following the
Performance Period during which such amendment,
modification, alteration or termination to the Plan is
adopted without the written consent of the majority of
the Participants adversely affected by the change.
SECTION 23
INDEMNIFICATION
Each person who is or shall have been a member of
the Board of Directors or the Committee shall be
indemnified and held harmless by IPALCO against and from
any loss, cost, liability, or expense that may be imposed
upon or reasonably incurred by him in connection with or
resulting from any claim, action, suit, or proceeding to
which he may be a party or in which he may be involved by
reason of any action taken or failure to act under the
Plan and against and from any and all amounts paid by him
in settlement thereof with IPALCO's approval, or paid by
him in satisfaction of a judgment in any such action,
suit or proceeding against him, provided he shall give
IPALCO an opportunity, at its own expense, to handle and
defend the same before he undertakes to handle and defend
it on his behalf. The foregoing right of indemnification
shall not be exclusive of any other rights of
indemnification to which such persons may be entitled
under the IPALCO Articles of Incorporation or Code of By-
Laws, as a matter of law, or otherwise, or any power that
IPALCO may have to indemnify them or hold them harmless.
SECTION 24
GOVERNING LAW
The Plan, and all grants and other documents
delivered hereunder, shall be construed in accordance
with and governed by the laws of Indiana.
SECTION 25
EXPENSES OF PLAN
The expenses of administering the Plan shall be
borne by IPALCO.
SECTION 26
SUCCESSORS
The Plan shall be binding upon the successors and
assigns of the participating Employers.
SECTION 27
TAX WITHHOLDING
IPALCO or IPL, as appropriate, shall have the right
to require the Participant or other person receiving
Shares to pay to IPALCO or IPL the amount of any federal,
state or local taxes which IPALCO or IPL are required to
withhold with respect to such Shares. If permitted by
the Committee and pursuant to rules established by the
Committee, a Participant may make a written election to
have Shares having an aggregate fair market value, as
determined by the Committee, sufficient to satisfy the
applicable withholding taxes, withheld from the Shares
otherwise to be received at the end of the Period of
Restriction.
SECTION 28
EFFECTIVE DATE AND DURATION OF PLAN
This amended and restated Plan shall be effective
January 1, 1998; provided, however, that the granting of
Shares are conditioned upon the approval of the Plan by
the holders of a majority of the Shares present, or
represented, and entitled to vote at IPALCO's 1998 annual
shareholder meeting. Except for the provisions set forth
in Section 16 which are also applicable for the January
1, 1995 grants, the Performance Periods beginning before
January 1, 1998 shall be governed by the provisions of
the Plan in effect before January 1, 1998.
APPENDIX A
PERFORMANCE INCENTIVE AWARD SCHEDULE
AWARD AS A PERCENT OF TARGET
S&P 500 Index Ranking: 3 year cumulative Total Return to
Shareholder (TRS)
IPALCO Award
Ranking: TRS Percentage
1-31 400%
32-62 375%
63-93 350%
94-125 325%
126-156 300%
157-187 275%
188-218 250%
219-250 225%
251-281 200%
282-312 175%
313-343 150%
344-375 125%
376-406 100%
407-437 75%
438-468 50%
469-500 0%
<TABLE>
IPALCO ENTERPRISES, INC.
Exhibit 11.1 - Computation of Per Share Earnings
<CAPTION>
For the Quarter Ended March 31, 1998
QUARTER ENDED MARCH 31, 1998:
Basic Diluted
---------- ----------
<S> <C> <C>
Weighted Average Number of Shares
Average common shares outstanding at March 31, 1998 44,838,904 44,838,904
Dilutive Effect for stock options at March 31, 1998 - 671,912
---------- ----------
Adjusted weighted average shares at March 31, 1998 44,838,904 45,510,816
========== ==========
Net income to be used to compute
diluted earnings per share (Dollars in thousands)
Net income $25,337 $25,337
========== ==========
Earnings per share $0.57 $0.56
========== ==========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<CIK> 0000728391
<NAME> IPALCO ENTERPRISES, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1,755,523
<OTHER-PROPERTY-AND-INVEST> 85,951
<TOTAL-CURRENT-ASSETS> 174,441
<TOTAL-DEFERRED-CHARGES> 148,656
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 2,164,571
<COMMON> 407,751
<CAPITAL-SURPLUS-PAID-IN> 0
<RETAINED-EARNINGS> 545,714
<TOTAL-COMMON-STOCKHOLDERS-EQ> 543,300
0
59,135
<LONG-TERM-DEBT-NET> 952,660
<SHORT-TERM-NOTES> 8,000
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 42,294
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 559,182
<TOT-CAPITALIZATION-AND-LIAB> 2,164,571
<GROSS-OPERATING-REVENUE> 190,321
<INCOME-TAX-EXPENSE> 17,474
<OTHER-OPERATING-EXPENSES> 132,705
<TOTAL-OPERATING-EXPENSES> 150,179
<OPERATING-INCOME-LOSS> 40,142
<OTHER-INCOME-NET> 2,691
<INCOME-BEFORE-INTEREST-EXPEN> 42,833
<TOTAL-INTEREST-EXPENSE> 17,496
<NET-INCOME> 25,337
709
<EARNINGS-AVAILABLE-FOR-COMM> 25,337
<COMMON-STOCK-DIVIDENDS> 11,162
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 73,462
<EPS-PRIMARY> .57
<EPS-DILUTED> .56
</TABLE>
