December 22, 1994
Office of Applications and Report Services
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
We are transmitting herewith Indiana Energy, Inc.'s
Annual Report on Form 10-K for the fiscal year ended
September 30, 1994, pursuant to the requirements of Section
13 of the Securities Exchange Act of 1934.
The $250.00 filing fee was transmitted via FEDWIRE on
December 21, 1994.
Sincerely,
/s/Kathleen S. Morris
Kathleen S. Morris
KSM:rs
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended September 30, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________
Commission File No. 1-9091
INDIANA ENERGY, INC.
(Exact name of Registrant as specified in its charter)
INDIANA 35-1654378
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1630 North Meridian Street, Indianapolis, Indiana 46202
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 317-926-3351
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
Indiana Energy, Inc.
Common Stock - Without Par Value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the Registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes X No
As of November 30, 1994, the aggregate market value of Common
Stock held by nonaffiliates was $346,533,463.
Indicate the number of shares outstanding of each of the
Registrant's classes of common stock, as of the latest practicable
date.
Common Stock-Without par value 22,556,942 November 30, 1994
Class Number of shares Date
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K ( 229.405 of this
chapter) is not contained herein, and will not be contained,
to the best of the Registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K. [X]
DOCUMENTS INCORPORATED BY REFERENCE
List hereunder the following documents if incorporated by
reference and the Part of the Form 10-K into which the
document is incorporated.
PART III - Definitive Proxy Statement for Annual
Meeting of Shareholders to be held on January 9,
1995, electronically filed with the Commission on
December 2, 1994, is incorporated by reference
into Part III of this report.
Table of Contents
Page
Part I
Business
Property
Legal Proceedings
Submission of Matters to a Vote of Security Holders
Executive Officers of the Company
Part II
Market for the Registrant's Common Equity and Related
Stockholders Matters
Selected Financial Data
Management's Discussion and Analysis of Results of Operations and
Financial Condition
Financial Statements and Supplementary Data
Changes in and Disagreements with Accountants
Part III
Directors and Executive Officers of the Registrant
Executive Compensation
Securities Ownership of Certain Beneficial Owners and Management
Certain Relationships and Related Transactions
Part IV
Exhibits, Financial Statements Schedules, and Reports on Form 8-K
Part I
Item 1. Business
(a) General Development of the Business.
Indiana Energy, Inc. (Indiana Energy or the company) is
a publicly owned holding company with subsidiaries in the
natural gas distribution business and related services. It
was incorporated under the laws of the state of Indiana on
October 24, 1985, and has seven direct and indirect
subsidiaries.
Indiana Gas Company, Inc. (Indiana Gas), the principal
subsidiary and business entity of the holding company, is an
operating public utility engaged in the business of
providing gas utility service in the state of Indiana.
All of the outstanding capital stock of Terre Haute Gas
Corporation (Terre Haute) and Richmond Gas Corporation
(Richmond) was acquired by Indiana Energy on July 31, 1990.
Both companies were operating public utilities engaged in
the business of providing gas distribution services in
Indiana. On January 21, 1991, Indiana Gas acquired from
Indiana Energy all the outstanding capital stock of Terre
Haute and Richmond. While these companies technically exist
as separate corporate entities, their business operations
have been combined with Indiana Gas' operations and the
companies do business under the name of Indiana Gas.
Indiana Energy has a wholly-owned subsidiary, IEI
Investments, Inc., which was formed to group the operations
and financing of nonregulated businesses and segregate them
from the regulated businesses. IEI Investments has two
subsidiaries, IGC Energy, Inc., and Energy Realty, Inc. On
December 29, 1992, IGC Energy, Inc. sold its majority
interest in EnTrade Corporation to Tenneco Gas. EnTrade was
a natural gas marketing and related services company with
industrial and utility customers primarily in the eastern
and midwestern United States. On November 1, 1994, IGC
Energy formed a new natural gas marketing subsidiary,
Indiana Energy Services, Inc. (IES), which will provide
natural gas services to large-volume industrial and
commercial customers, as well as to small local distribution
companies in Indiana. IES will initially focus it services
within Indiana, assisting its customers with the acquisition
of gas supply, pipeline transportation services and gas
management services including nomination services, balancing
services and load forecasting. IGC Energy also has an
investment in Loggins, Inc., a distributor of flexible gas
pipe and of products for distributing and using natural gas.
The other subsidiary of IEI Investments is Energy Realty,
Inc., a real estate company that owns a warehouse facility
which is leased to Indiana Gas. Energy Realty also is a
limited partner in an affordable housing complex.
(c) Narrative Description of the Business.
At September 30, 1994, Indiana Gas supplied gas to
about 442,000 customers in 281 communities in 48 of the 92
counties in the state of Indiana. The service area has a
population of approximately 2 million and contains
diversified manufacturing and agriculture-related
enterprises. The principal industries served include
automotive parts and accessories, feed, flour and grain
processing, metal castings, aluminum products, gypsum
products, electrical equipment, metal specialties and glass.
The largest communities served include Muncie,
Anderson, Lafayette-West Lafayette, Bloomington, Terre
Haute, Marion, New Albany, Columbus, Jeffersonville, New
Castle and Richmond. Indiana Gas does not serve in
Indianapolis, although its general office is located in that
city.
For the fiscal year ended September 30, 1994,
residential customers provided 59 percent of revenues,
commercial 25 percent and industrial 16 percent. At such
date, approximately 98 percent of Indiana Gas' customers
used gas for space heating, and space heating revenues from
these customers for the fiscal year were 79 percent of total
operating revenues. Sales of gas are seasonal and strongly
affected by variations in weather conditions. During the
fiscal year ended September 30, 1994, Indiana Gas added
approximately 10,400 residential and commercial customers.
Indiana Gas sells gas directly to residential,
commercial and industrial customers at approved rates.
Indiana Gas also transports gas through its pipelines at
approved rates to commercial and industrial customers which
have purchased gas directly from producers, or through
brokers and marketers. The total volumes of gas provided to
both sales and transportation customers is referred to as
throughput.
Gas transported on behalf of end-use customers in
fiscal 1994 represented 26 percent (30,125 MDth) of
throughput compared to 11 percent (12,307 MDth) in 1993 and
13 percent (13,438 MDth) in 1992. Although revenues are
lower, rates for transportation generally provide the same
margins as would have been earned had the gas been sold
under normal sales tariffs.
As a result of a series of FERC orders, including Order
No. 636, Indiana Gas now purchases all of its natural gas
from producers, brokers and marketers on both short-term and
medium-term contracts. Indiana Gas also has contracts with
pipelines for storage and transportation of natural gas.
Rates for gas services purchased from interstate
pipeline suppliers are governed by tariffs which are subject
to adjustment and approval by the Federal Energy Regulatory
Commission (FERC) in accordance with the Natural Gas Act.
Prices for gas purchased from gas producers and marketers
are determined by market conditions. Indiana Gas' rates and
charges, terms of service, accounting matters, issuance of
securities, and other operational matters are regulated by
the Indiana Utility Regulatory Commission (IURC).
Adjustments to Indiana Gas' rates and charges related
to the cost of gas are made through gas cost adjustment
(GCA) procedures established by Indiana law and administered
by the IURC. The IURC has applied the statute authorizing
the GCA procedures to reduce rates when necessary so as to
limit net operating income, after adjusting to normal
weather, to the level provided in the last general rate
order. On October 26, 1994, the IURC approved a stipulation
and settlement agreement which provided, among other things,
an increase in Indiana Gas' authorized utility operating
income from $47.1 million to $51.1 million beginning in
fiscal 1995. (See Item 7, 1995 Settlement Agreement.)
Information regarding environmental matters affecting
the company is incorporated herein by reference to Item 7,
Environmental Matters.
Indiana Gas had 1,129 full-time employees and 25 part-
time employees as of September 30, 1994.
Item 2. Property
Indiana Energy owns no properties.
The properties of Indiana Gas are used for the
purchase, production, storage and distribution of gas and
are located primarily within the state of Indiana. As of
September 30, 1994, such properties included approximately
9,798 miles of distribution mains; 458,576 meters; seven
reservoirs currently being used for the underground storage
of purchased gas with approximately 108,354 acres of land
held under storage easements; 10,671,831 Dth of gas in
company-owned underground storage with a daily
deliverability of 138,860 Dth; 20,617,050 Dth of gas in
contract storage with a daily deliverability of 234,618 Dth;
and five liquefied petroleum (propane) air-gas manufacturing
plants with a total daily capacity of 36,700 Dth of gas.
Indiana Gas' capital expenditures during the fiscal
year ended September 30, 1994, amounted to $57.1 million.
Item 3. Legal Proceedings
None
Item 4. Submission of Matters to a Vote of Security Holders
No matter was submitted during the fourth quarter of
the fiscal year ended September 30, 1994, to a vote of
security holders.
Item 4a. Executive Officers of the Company
As of September 30, 1994, the following individuals were
Executive Officers of the company:
<TABLE>
Family
Relation- Office or Date Elected
Name Age ship Position Held Or Appointed(1)
<S> <C> <C> <C> <C>
Lawrence A. Ferger 60 None Indiana Energy, Inc.
President and Chief
Executive Officer July 1, 1987
Indiana Gas Company, Inc.
President and Chief
Executive Officer July 1, 1987
IEI Investments, Inc.
President and Chief
Executive Officer July 1, 1987
Niel C. Ellerbrook 45 None Indiana Energy, Inc.
Vice President and
Treasurer and Chief
Financial Officer Oct. 25, 1985
Indiana Gas Company, Inc.
Senior Vice President and
Chief Financial Officer July 1, 1987
IEI Investments, Inc.
Vice President and
Treasurer May 5, 1986
Paul T. Baker 54 None Indiana Gas Company, Inc.
Senior Vice President
and Chief Operating
Officer Aug. 1, 1991
Senior Vice President -
Gas Supply and
Customer Services July 1, 1987
Anthony E. Ard 53 None Indiana Gas Company, Inc.
Vice President -
Corporate Affairs Jan. 11, 1993
Vice President and
Secretary Sep. 30, 1988
Carl L. Chapman 39 None Indiana Energy, Inc.
Assistant Treasurer Jan. 9, 1989
Indiana Gas Company, Inc.
Vice President -
Planning July 1, 1987
(1) Each of the officers has served continuously since the
dates indicated.
</TABLE>
Part II
Item 5. Market for the Registrant's Common Equity and Related
Stockholder Matters
The common stock of the company is listed on the New
York Stock Exchange. The ranges of high and low sales prices
reported in the New York Stock Exchange composite tape and
dividends paid on these shares for fiscal 1993 and 1994 are
shown in the following table:
Fiscal Year 1993 High Low Dividend
First Quarter $19.83 $18.58 $.24 2/3
Second Quarter $23.17 $18.83 $.24 2/3
Third Quarter $22.50 $19.67 $.24 2/3
Fourth Quarter $24.83 $20.50 $.25 1/2
Fiscal Year 1994 High Low Dividend
First Quarter $23 5/8 $19 1/2 $.25 1/2
Second Quarter $23 1/4 $ 19 $.25 1/2
Third Quarter $20 7/8 $ 18 $.25 1/2
Fourth Quarter $20 1/8 $18 3/8 $.26 1/2
Cash dividends on common stock are considered quarterly
by the board of directors and historically have been paid on
March 1, June 1, September 1 and December 1 of each year. At
the end of fiscal 1994, there were 11,369 individual and
institutional investors who were shareholders of record.
Item 6. Selected Financial Data
<TABLE>
INDIANA ENERGY, INC.
AND SUBSIDIARY COMPANIES
(Thousands)
Year Ended September 30 1994 1993(4) 1992 1991 1990(3)
<S> <C> <C> <C> <C> <C>
Utility operating revenues $475,297 $499,278 $411,260 $389,550 $353,078
Margin 194,309 185,725 160,333 153,037 142,821
Utility operating expenses 146,466 141,452 122,206 117,421 111,326
Utility operating income 47,843 44,273 38,127 35,616 31,495
Interest and other 13,247 15,739 12,384 12,330 9,238
Utility income 34,596 28,534 25,743 23,286 22,257
Nonutility income (loss) (155) 6,329 (64) 1,475 1,202
Preferred dividend requirement
of subsidiary - 285 1,710 1,710 1,710
Net income $ 34,441 $ 34,578 $ 23,969 $ 23,051 $ 21,749
Earnings per average share
of common stock (1) $ 1.53 $ 1.62 $ 1.16 $ 1.12 $ 1.26
Dividends per share of
common stock (1) $ 1.03 $.99 1/2 $.95 2/3 $.91 2/3 $.86 2/3
Common shareholders' equity $271,245 $258,647 $212,310 $206,026 $201,117
Redeemable preferred
shareholders' equity - - 20,000 20,000 20,000
Long-term debt (2) 158,979 184,901 150,311 164,635 129,011
$430,224 $443,548 $382,621 $390,661 $350,128
Total throughput (MDth) 116,285 111,354 101,985 97,503 90,219
Annual heating degree days as
a percent of normal 102% 99% 90% 87% 95%
Utility customers served
at end of period 441,765 431,334 420,665 411,855 402,875
Total Assets at Year-End $666,813 $631,280 $627,719 $556,008 $544,094
(1) Adjusted to reflect the three-for-two stock split October 1, 1993.
(2) Includes current maturities, excludes sinking fund requirements.
(3) Includes consolidation of EnTrade Corporation, a majority-owned subsidiary,
beginning January 1990, and Richmond Gas Corporation and Terre Haute Gas
Corporation beginning August 1990.
(4) Reflects the sale by IGC Energy, Inc. of its interest in EnTrade Corporation
on December 29, 1992.
</TABLE>
Item 7. Management's Discussion and Analysis of Results
of Operations and Financial Condition
Results of Operations
The majority of Indiana Energy, Inc.'s (the company)
consolidated earnings are from the operations of its
gas distribution subsidiary, Indiana Gas Company, Inc.
Though Indiana Energy will continue to consider
nonutility opportunities for investment, its principal
business is expected to continue to be gas
distribution. The following discussion of operating
results relates primarily to the operations of Indiana
Gas.
Earnings
While net income for fiscal 1994 remained approximately
the same when compared to fiscal 1993, utility income
increased 21 percent ($6.1 million) when compared to
last year. The increase reflects weather that was 4
percent colder than last year, additional residential
and commercial customers and a decrease in operation
and maintenance expenses. Net income for fiscal 1993
includes the net gain on the sale of EnTrade of $7.1
million, or 33 cents per average share.
Net income increased in fiscal 1993, when compared to
fiscal 1992, due to an 11 percent ($2.8 million)
increase in utility income and the gain associated with
the sale of EnTrade. The increase in utility income was
due to implementation of the October 1992 general rate
increase and weather that was 9 percent colder than the
previous year, partially offset by increased operation
and maintenance expenses.
Utility income, net income and earnings per average
share of common stock for the last three fiscal years
are summarized below:
1994 1993 1992
Utility income (millions of dollars) $34.6 $28.5 $25.7
Net income (millions of dollars) $34.4 $34.6 $24.0
Earnings per average share of common stock $1.53 $1.62 $1.16
Dividends
On July 29, 1994, the board of directors of the company
increased the quarterly dividend on common stock to 26
1/2 cents per share from 25 1/2 cents per share. This
resulted in total dividends paid in 1994 of $1.03
compared to 99 1/2 cents in 1993. This is the 22nd
consecutive year that the company's dividends paid on
common stock increased over the previous year.
Margins (Revenues Less Cost of Gas)
In 1994, margins increased 5 percent ($8.6 million)
when compared to 1993. The increase reflects weather
that was 4 percent colder than last year and 2 percent
colder than normal, as well as additional residential
and commercial customers.
In 1993, margins increased 16 percent ($25.4 million)
when compared to 1992. The increase reflects a general
rate increase implemented in October 1992, volume
increases driven by additional customers and weather 9
percent colder than the previous year but 1 percent
warmer than normal.
Total system throughput (combined sales and
transportation) increased 4 percent (4.9 MMDth) in 1994
compared to 1993 and increased 9 percent (9.4 MMDth) in
1993 compared to 1992. Indiana Gas' rates for
transportation generally provide the same margins as
are earned on the sale of gas under its sales tariffs.
Approximately one-half of total system throughput
represents gas used for space heating and is affected
by weather.
Total average cost per dekatherm of gas purchased
(average commodity and demand) remained about the same
for 1994 as compared to 1993. Increased fixed costs per
dekatherm associated with pipeline rate cases and the
restructuring prescribed by Federal Energy Regulatory
Commission (FERC) Order No. 636 were offset by lower
commodity costs (see Federal Energy Regulatory
Commission Matters).
Total average cost per dekatherm of gas purchased
increased to $2.90 in 1993 from $2.65 in 1992. The
increase can be attributed to higher commodity costs in
1993 than in the previous year, slightly offset by
increased purchases from producers and marketers.
Operating Expenses
Operation and maintenance expenses decreased
approximately $2.3 million in 1994 when compared to
1993. The decrease is primarily attributable to labor
and related costs which are lower than the levels in
1993 when additional operation and maintenance projects
were in progress.
Operation and maintenance expenses increased
approximately $13.4 million in 1993 compared to 1992.
During 1992 and 1991, Indiana Gas intensified cost
containment programs and also postponed a number of non-
critical operating and maintenance projects in an
effort to partially offset the impact of very warm
weather during those years. With the colder weather of
1993 and the general rate increase came the necessary
financial resources to significantly increase the
expenditures on operations and maintenance, including
those projects previously deferred. Increased
throughput volumes and revenues, better financial
results and higher levels of operation and maintenance
activity resulted in cost increases for labor and
related benefits, including performance-based
compensation, services, materials and supplies,
advertising, collection costs and bad debt expenses.
Depreciation and amortization expense increased in 1994
and 1993 as the result of additions to utility plant to
serve new customers and to maintain dependable service
to existing customers.
Federal and state income taxes increased in 1994 and
1993 due to higher taxable utility income and an
increase in the federal tax rate resulting from the
Omnibus Budget Reconciliation Act of 1993 (see Income
Taxes).
Taxes other than income taxes increased in 1994 and
1993 as the result of increased property tax expense,
due to higher property tax rates and higher assessed
values, and as the result of higher gross receipts tax
expenses.
Interest Expense
Interest expense decreased in 1994 due to slightly
lower interest rates. Interest expense increased in
1993 as the result of increases in average debt
outstanding slightly offset by decreases in interest
rates.
Sale of EnTrade
On December 29, 1992, IGC Energy sold its interest in
EnTrade, a marketer of gas supplies to industrial and
utility customers, for approximately $13.9 million. The
transaction resulted in a net gain after tax of $7.1
million, or 33 cents per average common share, and has
been included in nonutility income in fiscal 1993.
Other Operating Matters
Gas Cost Adjustment
Adjustments to Indiana Gas' rates and charges related
to the cost of gas are made through gas cost adjustment
(GCA) procedures established by Indiana law and
administered by the Indiana Utility Regulatory
Commission (IURC). The GCA passes through increases and
decreases in cost of gas to Indiana Gas' customers
dollar for dollar.
In addition, the IURC has applied the statute
authorizing the GCA procedures to reduce rates when
necessary so as to limit utility operating income,
after adjusting to normal weather, to the level
provided in the last general rate order.
1995 Settlement Agreement
During 1994, Indiana Gas, the Office of Utility
Consumer Counselor (OUCC) and a group of large-volume
users entered a series of negotiations designed to
increase Indiana Gas' opportunity to earn on its recent
capital investments while avoiding the necessity of a
general rate filing. As a result of these negotiations,
the IURC approved on October 26, 1994, a stipulation
and settlement agreement which provided, among other
things, for the following: (1) an increase in Indiana
Gas' authorized utility operating income from $47.1
million to $51.1 million beginning in fiscal 1995; (2)
with certain specified exceptions, Indiana Gas may not
file a petition to increase its base rates until
September 1, 1995; and (3) an agreement to a number of
operational and other service enhancements for large-
volume customers.
Furthermore, as part of the agreement, the OUCC agreed
to perform another investigation during fiscal year
1995 to consider an additional increase to Indiana Gas'
authorized utility operating income.
Environmental Matters
In the past, Indiana Gas and others, including its
predecessors, former affiliates and/or previous
landowners, operated facilities for the manufacturing
of gas and storage of manufactured gas. These
facilities are no longer in operation and have not been
operated for many years. In the manufacture and storage
of such gas, various byproducts were produced, some of
which may still be present at the sites where these
manufactured gas plants and storage facilities were
located. While management believes those operations
were conducted in accordance with the then-applicable
industry standards, under currently applicable
environmental laws and regulations, Indiana Gas, and
the others, may now be required to take remedial action
if certain materials are found at these sites.
Indiana Gas has identified the existence, location and
certain general characteristics of 26 gas manufacturing
and storage sites. Various stages of investigation and
remediation activities are under way at these sites.
Indiana Gas has deferred all environmental costs
previously paid or accrued. These costs are
approximately $12 million (including assessment,
remediation and related costs) as of September 30,
1994.
The impact of complying with federal, state and local
environmental regulations related to former
manufactured gas plant sites on Indiana Gas' financial
position and results of operations is contingent upon
several uncertainties. These include the cost of
compliance, the impact of joint and several liability
upon the magnitude of the contingency, the ratemaking
treatment authorized for these items by the IURC, as
well as the recovery of environmental and related costs
from insurance carriers.
Indiana Gas believes it will be successful in
recovering the costs which it has incurred and may
incur through rates, from other potentially responsible
parties and from insurance carriers. However, there can
be no assurance as to the amount or timing of any such
recoveries.
For further information regarding the status of
investigation and remediation of the sites, financial
reporting, ratemaking and other potentially responsible
parties, see Item 8, Note 11.
Federal Energy Regulatory Commission Matters
In accordance with FERC Order No. 636, Indiana Gas'
pipeline service providers have made a number of
filings to restructure services. On May 1, 1993,
Panhandle Eastern Pipe Line Company implemented a
restructured services tariff. Texas Eastern
Transmission Corporation's restructured tariff was
implemented June 1, 1993. Indiana Gas' remaining
pipeline service providers implemented restructured
services on November 1, 1993. Indiana Gas' pipeline
service providers have begun to seek from customers,
including Indiana Gas, recovery of certain costs
related to the transition to restructured services.
Those costs will include certain gas supply realignment
costs and are not currently expected to exceed $10
million.
In a recent order involving another gas utility in
Indiana, the IURC determined that FERC Order No. 636
transition costs are recoverable as gas costs through
the quarterly GCA process. Given this determination,
Indiana Gas expects that transition costs it is
assessed by its pipeline suppliers will be recovered
through the quarterly GCA process.
Indiana Gas continues to monitor developments
concerning these and other pipeline issues, to
participate in related negotiations and to represent
its interest in pipeline matters before FERC.
Postretirement Benefits Other Than Pensions
Effective October 1, 1993, Indiana Gas adopted
Statement of Financial Accounting Standards No. 106,
Employers' Accounting for Postretirement Benefits Other
Than Pensions (SFAS 106). SFAS 106 requires accounting
for the costs of postretirement health care and life
insurance benefits on the accrual basis. This means the
costs of benefits paid in the future are recognized
during the years that an employee provides service to
Indiana Gas rather than the "pay-as-you-go" (cash)
basis (see Item 8, Note 8).
In January 1992, Indiana Gas filed a petition with the
IURC seeking regulatory authority for, among other
matters, rate recovery of implementation of SFAS 106.
Through a generic order issued on December 30, 1992,
Indiana Gas received authority from the IURC to employ
deferred accounting for these costs. This authorization
will extend until the IURC rules upon Indiana Gas'
pending request to adopt SFAS 106 for ratemaking
purposes. Indiana Gas' order is not expected until
later in calendar 1994, however, recent orders for
other public utilities regulated by the IURC have
authorized SFAS 106 to be adopted for ratemaking
purposes.
Postemployment Benefits
In November 1992, the Financial Accounting Standards
Board issued Statement of Financial Accounting
Standards No. 112, Employers' Accounting for
Postemployment Benefits (SFAS 112). The statement will
be adopted by Indiana Gas effective October 1, 1994.
SFAS 112 requires employers to adopt accrual accounting
for workers' compensation, disability, severance pay
and other benefits provided to former or inactive
employees after employment but before retirement.
Adoption of the statement will not materially affect
Indiana Gas' financial position or results of
operations.
Income Taxes
A federal corporate tax rate of 35 percent, resulting
from the Omnibus Budget Reconciliation Act of 1993, was
in effect for all of the company's fiscal year of 1994
as compared to a weighted average federal corporate tax
rate of 34.75 percent in 1993. The federal corporate
tax rate in effect for fiscal 1992 was 34 percent.
Effective October 1, 1993, Indiana Gas adopted
Statement of Financial Accounting Standards No. 109,
Accounting for Income Taxes (SFAS 109). Indiana Gas
previously used the deferred method of accounting for
income taxes as prescribed by Accounting Principles
Bulletin Opinion No. 11. SFAS 109 requires the use of
the liability method, which effectively results in a
reduction in previously provided deferred income taxes
to reflect the current statutory corporate tax rate.
Due to the effects of regulation, Indiana Gas is not
permitted to recognize the effect of a tax rate change
as income but is required to reduce tariff rates to
return the "excess" deferred income taxes to ratepayers
over the remaining life of the properties that give
rise to the taxes. Therefore, the cumulative effect of
a change in accounting principle upon the initial
application of SFAS 109 resulted in no impact on
earnings.
Investment in Real Estate
On March 31, 1994, Energy Realty, Inc. invested $2.1
million in an affordable housing partnership in
Lafayette, Indiana. Certain tax benefits, including low-
income housing tax credits and tax deductions for
operating losses of the housing project, will accrue to
Energy Realty as a result of this investment. Energy
Realty holds an 84-percent limited partner interest in
this partnership. As a limited partner, Energy Realty
does not control the operations of the partnership.
Accordingly, this investment is being accounted for
using the equity method. It is reflected in "Nonutility
Plant and Other Investments - Net" on the Consolidated
Balance Sheet at September 30, 1994.
Liquidity and Capital Resources
New construction to provide service to a growing
customer base and normal system maintenance and
improvements will continue to require substantial
capital expenditures. Indiana Gas' goal is to
internally fund approximately 75 percent of its capital
expenditure program. This will help Indiana Gas to
maintain its high creditworthiness. The long-term debt
of Indiana Gas is currently rated Aa3 by Moody's
Investors Service and AA- by Standard & Poor's
Corporation and Duff & Phelps.
Total capital required to fund both capital
expenditures and refinancing requirements for 1993 and
1994, along with estimated amounts for 1995 through
1997, are as follows:
Thousands 1993 1994 1995 1996 1997
Capital expenditures $57,000 $57,100 $54,700 $56,600 $61,600
Refinancing requirements 20,000 28,100 200 200 200
$77,000 $85,200 $54,900 $56,800 $61,800
In 1994, 75 percent of Indiana Gas' capital
expenditures was provided by funds generated internally
(utility income less dividends plus charges to utility
income not requiring funds). In 1993, 62 percent of
capital expenditures was provided by funds generated
internally. This percentage was lower than the target
as a result of completing significant upgrades to the
gas distribution system to allow for greater operating
flexibility in the FERC Order 636 environment.
Capitalization objectives for Indiana Gas are 55-65
percent common equity and preferred stock and 35-45
percent long-term debt. Consolidated capitalization
ratios are generally expected to be similar to those of
Indiana Gas, but may vary from time to time, depending
on particular business opportunities. The company's
common equity component was 63 percent of total
capitalization at September 30, 1994.
In 1994, externally funded capital expenditures and the
redemptions discussed below were financed primarily
through short-term debt and changes in working capital.
No significant permanent financing was done during the
year.
On October 1, 1993, Indiana Energy split its common
stock three-for-two as authorized by the company's
board of directors on July 30, 1993.
On October 15, 1993, $10 million of 9.30% medium-term
notes were redeemed.
On September 15, 1994, $10 million of 6.80% Notes,
Series C, were redeemed.
During September 1994, $8.05 million of the outstanding
9 3/8% Series M, First Mortgage Bonds were retired.
Indiana Gas received an order on August 17, 1994, from
the IURC for authorization to issue up to $125 million
in the aggregate in the form of debt securities and
common stock or a combination thereof. Indiana Gas
intends to implement a medium-term note program during
fiscal 1995.
The nature of Indiana Gas' business creates large short-
term cash working capital requirements primarily to
finance customer accounts receivable, unbilled utility
revenues resulting from cycle billing, gas in
underground storage and capital expenditures until
permanently financed. Short-term borrowings tend to be
greatest during the heating season when accounts
receivable and unbilled utility revenues are at their
highest. Depending on cost, commercial paper or bank
lines of credit are used as sources of short-term
financing. Indiana Gas' commercial paper is rated P-1
by Moody's and A-1+ by Standard & Poor's. Long-term
financial strength and flexibility require maintaining
throughput volumes, controlling costs and, if
absolutely necessary, securing timely increases in
rates to recover costs and provide a fair and
reasonable return to shareholders.
Item 8. Financial Statements and Supplementary Data
Management's Responsibility for Financial Statements
The management of the company is responsible for the
preparation of the consolidated financial statements
and the related financial data contained in this
report. The financial statements are prepared in
conformity with generally accepted accounting
principles and follow accounting policies and
principles applicable to regulated public utilities.
The integrity and objectivity of the data in this
report, including required estimates and judgements,
are the responsibility of management. Management
maintains a system of internal controls and utilizes an
internal auditing program to provide reasonable
assurance of compliance with company policies and
procedures and the safeguard of assets.
The board of directors pursues its responsibility for
these financial statements through its audit committee,
which meets periodically with management, the internal
auditors and the independent auditors, to assure that
each is carrying out its responsibilities. Both the
internal auditors and the independent auditors meet
with the audit committee, with and without management
representatives present, to discuss the scope and
results of their audits, their comments on the adequacy
of internal accounting controls and the quality of
financial reporting.
/s/Niel C. Ellerbrook
Niel C. Ellerbrook
Vice President and Treasurer
and Chief Financial Officer
Report of Independent Public Accountants
To the Shareholders and Board of Directors of Indiana
Energy, Inc.:
We have audited the accompanying consolidated balance
sheets and schedules of long-term debt of Indiana
Energy, Inc. (an Indiana corporation) and subsidiary
companies as of September 30, 1994, and 1993, and the
related consolidated statements of income, common
shareholders' equity and cash flows for each of the
three years in the period ended September 30, 1994.
These financial statements are the responsibility of
the company's management. Our responsibility is to
express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require
that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are
free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles
used and significant estimates made by management, as
well as evaluating the overall financial statement
presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to
above present fairly, in all material respects, the
financial position of Indiana Energy, Inc. and
subsidiary companies, as of September 30, 1994, and
1993, and the results of their operations and their
cash flows for each of the three years in the period
ended September 30, 1994, in conformity with generally
accepted accounting principles.
/s/Arthur Andersen LLP
Arthur Andersen LLP
Indianapolis, Indiana
October 28, 1994
<TABLE>
Indiana Energy, Inc. and Subsidiary Companies
CONSOLIDATED STATEMENTS OF INCOME
Year Ended September 30
(Thousands except per share amounts) 1994 1993 1992
<S> <C> <C> <C>
UTILITY INCOME
Utility Operating Revenues $ 475,297 $ 499,278 $ 411,260
Cost of gas 280,988 313,553 250,927
Margin 194,309 185,725 160,333
Utility Operating Expenses
Other operation and maintenance 81,982 84,302 70,866
Depreciation and amortization 29,177 26,806 25,136
Income taxes 19,467 15,816 13,892
Taxes other than income taxes 15,840 14,528 12,312
146,466 141,452 122,206
Utility Operating Income 47,843 44,273 38,127
Interest Expense 16,037 16,640 14,556
Other (2,790) (901) (2,172)
13,247 15,739 12,384
Utility Income 34,596 28,534 25,743
NONUTILITY OPERATIONS
EnTrade's Operations
Gas marketing revenues - 213,771 394,097
Costs and expenses - (215,594) (395,378)
Interest expense - (180) (68)
Income taxes - 51 (306)
Other - net - 1,474 2,002
Minority interest - 137 (95)
Net EnTrade Operations - (341) 252
Gain on sale of EnTrade - 11,863 -
Income tax on sale of EnTrade - (4,745) -
Other - net (155) (448) (316)
Nonutility Income (Loss) (155) 6,329 (64)
Income Before Preferred Dividends 34,441 34,863 25,679
Preferred Dividend Requirement of Subsidiary - 285 1,710
Net Income $ 34,441 $ 34,578 $ 23,969
Average Common Shares Outstanding (1) 22,554 21,376 20,706
Earnings per Average Share of Common Stock (1) $1.53 $1.62 $1.16
(1) Adjusted to reflect the three-for-two stock split October 1, 1993.
The accompanying notes are an integral part of these statements.
</TABLE>
<TABLE>
Indiana Energy, Inc. and Subsidiary Companies
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended September 30
(Thousands) 1994 1993 1992
<S> <C> <C> <C>
Cash Flows From Operating Activities
Net Income $ 34,441 $ 34,578 $ 23,969
Adjustments to reconcile net income to cash
provided from operating activities
Gain on sale of EnTrade - (11,863) -
Depreciation and amortization 29,404 27,386 26,395
Deferred income taxes 3,273 2,931 2,073
Investment tax credit (930) (1,007) (929)
Undistributed earnings of unconsolidated affiliates (81) (94) 163
31,666 17,353 27,702
Changes in assets and liabilities net of effects
from the sale of EnTrade
Receivables - net 4,062 (33,997) (27,048)
Inventories (5,093) (10,638) (19,116)
Accounts payable, customer deposits, advance
payments and other current liabilities (7,206) 49,607 39,476
Accrued taxes and interest (11,782) 11,064 4,709
Recoverable/refundable gas costs 39,048 (17,123) 6,805
Other - net 4,179 (5,191) (1,976)
Total adjustments 54,874 11,075 30,552
Net cash flows from operations 89,315 45,653 54,521
Cash Flows From (Required For) Financing Activities
Issuance of common stock - net (95) 33,460 1,699
Redemption of preferred stock of subsidiary - (20,932) -
Sale of long-term debt 2,128 35,000 -
Reduction in long-term debt (28,050) (721) (14,544)
Net change in short-term borrowings 24,098 (19,986) 28,088
Dividends on common stock (23,086) (21,050) (19,713)
Net cash flows from (required for) financing activities (25,005) 5,771 (4,470)
Cash Flows Required For Investing Activities
Capital expenditures (57,138) (56,945) (59,060)
Net change in nonutility plant and other investments
net of effects from the sale of EnTrade (2,172) (4,099) (10)
Cash of subsidiary sold - (4,936) -
Sale of Tenneco stock - 13,864 -
Net cash flows required for investing activities (59,310) (52,116) (59,070)
Net Increase (Decrease) in Cash 5,000 (692) (9,019)
Cash and Cash Equivalents at Beginning of Period 5,188 5,880 14,899
Cash and Cash Equivalents at End of Period $ 10,188 $ 5,188 $ 5,880
The accompanying notes are an integral part of these statements.
</TABLE>
<TABLE>
Indiana Energy, Inc. and Subsidiary Companies
CONSOLIDATED BALANCE SHEETS
(Thousands)
September 30 1994 1993
<S> <C> <C>
Assets
UTILITY PLANT
Original cost $ 824,839 $ 773,174
Less - Accumulated depreciation and amortization 291,823 267,629
533,016 505,545
NONUTILITY PLANT AND OTHER INVESTMENTS - NET 6,905 4,733
CURRENT ASSETS
Cash and cash equivalents 10,188 5,188
Accounts receivable, less reserves of
$1,238 and $2,055, respectively: 14,251 14,172
Accrued unbilled revenues 6,607 10,748
Materials and supplies - at average cost 3,663 3,710
Liquefied petroleum gas - at average cost 940 1,019
Gas in underground storage - at last-in,
first-out cost 64,753 59,534
Recoverable gas costs - 7,453
Prepayments and other 244 296
100,646 102,120
DEFERRED CHARGES
Unamortized debt discount and expense 6,892 6,614
Environmental costs (See Note 11) 11,925 9,045
Other 7,429 3,223
26,246 18,882
$ 666,813 $ 631,280
Shareholders' Equity and Liabilities
CAPITALIZATION
Common stock (no par value) - authorized 64,000,000
shares - issued and outstanding
22,556,942 and 22,459,916 shares,
respectively (1) $ 145,777 $ 143,476
Less unearned compensation - restricted
stock grants 1,262 299
144,515 143,177
Retained earnings 126,730 115,470
Total common shareholders' equity 271,245 258,647
Long-term debt (see schedule) 158,766 164,901
430,011 423,548
CURRENT LIABILITIES
Maturities and sinking fund requirements
of long-term debt 213 20,000
Notes payable 34,350 10,252
Accounts payable 34,633 41,602
Refundable gas costs 31,595 -
Customer deposits and advance payments 12,594 13,466
Accrued taxes 20,291 31,579
Accrued interest 2,848 3,342
Other current liabilities 14,150 13,515
150,674 133,756
DEFERRED CREDITS
Deferred income taxes (See Note 12) 59,887 56,911
Unamortized investment tax credit 13,033 13,963
Regulatory income tax liability (See Note 12) 4,787 -
Other 8,421 3,102
86,128 73,976
COMMITMENTS AND CONTINGENCIES (See Notes 10 & 11) - -
$ 666,813 $ 631,280
(1) Restated to reflect the three-for-two stock split October 1, 1993.
The accompanying notes are an integral part of these statements.
</TABLE>
<TABLE>
Indiana Energy, Inc. and Subsidiary Companies
CONSOLIDATED STATEMENTS OF COMMON SHAREHOLDERS' EQUITY
(Thousands except shares)
Common Stock
Restricted Retained
Shares (1) Amount Stock Grants Earnings Total
<S> <C> <C> <C> <C> <C>
Balance at September 30, 1991 20,672,376 $106,844 ($694) $99,876 $206,026
Net Income 23,969 23,969
Common stock dividends ($.95 2/3 per share) (19,713) (19,713)
Dividend reinvestment and stock purchase plan 89,718 1,699 1,699
Common stock issuances for Executives' and
Directors' stock plans net of amortization 6,534 122 207 329
Balance at September 30, 1992 20,768,628 108,665 (487) 104,132 212,310
Net Income 34,578 34,578
Common stock dividends ($.99 1/2 per share) (21,050) (21,050)
Issuance of common stock 1,581,900 32,561 32,561
Common stock issuance expense (1,258) (1,258)
Premium on redemption of preferred stock (932) (932)
Dividend reinvestment and stock purchase plan 104,562 2,157 2,157
Common stock issuances for Executives' and
Directors' stock plans net of amortization 4,826 93 188 281
Balance at September 30, 1993 22,459,916 143,476 (299) 115,470 258,647
Net Income 34,441 34,441
Common stock dividends ($1.03 per share) (23,086) (23,086)
Common stock issuances for Executives' and
Directors' stock plans net of amortization 97,502 2,301 (963) 1,338
Other (476) (95) (95)
Balance at September 30, 1994 22,556,942 $145,777 ($1,262) $126,730 $271,245
(1) Adjusted to reflect the three-for-two stock split October 1, 1993.
The accompanying notes are an integral part of these statements.
</TABLE>
<TABLE>
Indiana Energy, Inc. and Subsidiary Companies
CONSOLIDATED SCHEDULES OF LONG-TERM DEBT
(Thousands)
September 30 1994 1993
<S> <C> <C>
First Mortgage Bonds - Utility
9 3/8% Series M, due July 15, 2016 $ 21,950 $ 30,000
Unsecured Notes Payable - Utility
9.30%, due October 15, 1993 - 10,000
6.80% Series C, due September 15, 1994 - 10,000
6 5/8% Series D, due December 1, 1997 35,000 35,000
8.90%, due July 15, 1999 10,000 10,000
9 3/8%, due January 15, 2021 25,000 25,000
9 1/8% Series A, due February 15, 2021 40,000 40,000
8 1/2% Series B Debentures, due September 15, 2021 24,901 24,901
134,901 154,901
Unsecured Note Payable - Nonutility
Variable rate term loan, due May 10, 2004 2,128 -
158,979 184,901
Less - Maturities and sinking fund requirements 213 20,000
$ 158,766 $ 164,901
The accompanying notes are an integral part of these statements.
</TABLE>
Notes to Consolidated Financial Statements
1. Summary of Significant Accounting Practices
A. Consolidation
The consolidated financial statements include the
accounts of Indiana Energy, Inc. (the company) and its
wholly and majority-owned subsidiaries, after
elimination of intercompany transactions. The
consolidated financial statements separate the regulated
utilities, which consist of Indiana Gas Company, Inc.,
Terre Haute Gas Corporation and Richmond Gas
Corporation, from nonutility operations. These regulated
utilities, which are doing business as Indiana Gas,
provide natural gas and transportation services to a
diversified base of customers in 281 communities in 48
of Indiana's 92 counties. The nonutility income includes
EnTrade Corporation's operations through December 29,
1992, as well as the fiscal 1993 gain on the sale of
EnTrade (see Note 2). IGC Energy, Inc. and Energy
Realty, Inc., indirect wholly-owned subsidiaries of
Indiana Energy, are also included in nonutility income.
Investments in limited partnerships and in the common
stock of less than majority-owned affiliates are
accounted for on the equity method.
B. Utility Plant and Depreciation
Except as described below, utility plant is stated at
the original cost and includes allocations of payroll-
related costs and administrative and general expenses,
as well as an allowance for the cost of funds used
during construction. When a depreciable unit of property
is retired, the cost is credited to utility plant and
charged to accumulated depreciation together with the
cost of removal, less any salvage. No gain or loss is
recognized upon normal retirement.
Provisions for depreciation of utility property are
determined by applying straight-line rates to the
original cost of the various classifications of
property. The average depreciation rate was
approximately 4.1 percent for 1994, 1993 and 1992.
Cost in excess of underlying book value of acquired gas
distribution companies is reflected as a component of
utility plant and is being amortized primarily over 40
years.
C. Unamortized Debt Discount and Expense
As part of an August 17, 1994, order from the Indiana
Utility Regulatory Commission (IURC), Indiana Gas
received authority to amortize over a 15-year period the
debt discount and expense related to new debt issues and
future premiums paid for debt reacquired in connection
with refinancing. Debt discount and expense for issues
in place prior to this order are being amortized over
the lives of the related issues. Premiums paid prior to
this order for debt reacquired in connection with
refinancing are being amortized over the life of the
refunding issue. Gains or losses realized from
reacquisition of debt for sinking fund purposes are
included in "Other" on the Consolidated Statements of
Income.
D. Cash Flow Information
For the purposes of the Consolidated Statements of Cash
Flows, the company considers cash investments with an
original maturity of three months or less to be cash
equivalents. Cash paid during the periods reported for
interest and income taxes were as follows:
Thousands 1994 1993 1992
Interest (net of amount capitalized) $15,310 $14,006 $13,699
Income taxes $23,880 $11,943 $ 8,612
During fiscal 1993, IGC Energy sold its interest in
EnTrade for approximately $13.9 million of Tenneco Inc.
common stock, which was subsequently sold for
approximately the same amount (see Note 2). There were
no other significant non-cash activities.
E. Revenues
To more closely match revenues and expenses, Indiana Gas
records revenues for all gas delivered to customers but
not billed at the end of the accounting period.
F. Gas in Underground Storage
Based on the cost of purchased gas during September
1994, the cost of replacing the current portion of gas
in underground storage was less than last-in, first-out
cost at September 30, 1994, by approximately $7,164,000.
G. Refundable or Recoverable Gas Cost
The cost of gas purchased and refunds from suppliers,
which differ from amounts recovered through rates, are
deferred and are being recovered or refunded in
accordance with procedures approved by the IURC.
H. Allowance For Funds Used During Construction
An allowance for funds used during construction (AFUDC),
which represents the cost of borrowed and equity funds
used for construction purposes, is charged to
construction work in progress during the period of
construction and included in "Other" on the Consolidated
Statements of Income. An annual AFUDC rate of 7.5
percent was used in 1994 and 1993, however, in 1992 the
rate was 10 percent due primarily to higher interest
rates.
The table below reflects the total AFUDC capitalized and
the portion of which was computed on borrowed and equity
funds for all periods reported.
Thousands 1994 1993 1992
AFUDC - borrowed funds $ 355 $ 579 $ 481
AFUDC - equity funds 290 486 617
Total AFUDC capitalized $ 645 $1,065 $1,098
I. Capital Expenditures
Indiana Gas' utility capital expenditure requirements
for 1994 were $57.1 million and are estimated to be
about $54.7 million for 1995. Capital expenditure
programs are funded by internally generated funds, short-
term borrowings and permanent financing.
J. Reclassifications
Certain reclassifications have been made in the
company's financial statements of prior years to conform
to the current year presentation. These
reclassifications have no impact on previously reported
net income.
2. Sale of EnTrade
On December 29, 1992, IGC Energy sold its interest in
EnTrade, a marketer of gas supplies to industrial and
utility customers, for approximately $13.9 million. The
transaction resulted in a net gain after tax of $7.1
million, or 33 cents per average share, and has been
included in nonutility income in fiscal 1993. EnTrade's
operations through the date of sale are reflected
separately on the income statement for all periods
reported.
Pro forma operating results for Indiana Energy, assuming
the sale of EnTrade occurred as of the beginning of
1992, are shown in the following table.
Thousands (Except Per Share Data) 1993 1992
Utility income $28,534 $25,743
Nonutility income (loss) (448) (316)
Net income $27,801 $23,717
Earnings per average share of common stock $ 1.30 $ 1.15
3. Fair Value of Financial Instruments
The estimated fair values of the company's financial
instruments were as follows:
<TABLE>
September 30, 1994 September 30, 1993
Carrying Fair Carrying Fair
Thousands Amount Value Amount Value
<S> <C> <C> <C> <C>
Cash and cash equivalents $ 10,188 $ 10,188 $ 5,188 $ 5,188
Notes payable $ 34,350 $ 34,350 $ 10,252 $ 10,252
Long-term debt (includes amounts
due within one year) $158,979 $162,570 $184,901 $212,500
</TABLE>
Certain methods and assumptions must be used to estimate
the fair value of financial instruments. Because of the
short maturity of cash and cash equivalents and notes
payable, the carrying amounts approximate fair values
for these financial instruments. The fair value of the
company's long-term debt was estimated based on the
quoted market prices for the same or similar issues or
on the current rates offered to the company for debt of
the same remaining maturities.
Under current regulatory treatment, call premiums on
reacquisition of long-term debt are generally recovered
in customer rates over the life of the refunding issue
or over a 15-year period (see Note 1C). Accordingly, any
reacquisition would not be expected to have a material
effect on the company's financial position or results of
operations.
4. Short-Term Borrowings
Indiana Gas has board of director approval to borrow up
to $100 million under bank lines of credit. Indiana Gas
has available committed lines of credit up to $60
million with approximately $31 million outstanding at
September 30, 1994. These lines of credit are renewable
annually and require fees based on the amounts of the
lines. In addition, Indiana Gas has available
uncommitted lines of credit with similar arrangements
which allow it to borrow up to its board approved
amount. Notes payable to banks bore interest at rates
negotiated with the bank at the time of borrowing.
Bank loans outstanding during the reported periods were
as follows:
<TABLE>
Thousands 1994 1993 1992
<S> <C> <C> <C>
Outstanding at year end $30,550 $10,252 $30,238
Weighted average interest rates at year end 4.9% 3.6% 3.5%
Weighted average interest rates during the year 3.3% 3.6% 4.2%
Weighted average total outstanding during the year $14,891 $12,533 $ 8,594
Maximum total outstanding during the year $56,500 $77,379 $30,238
</TABLE>
In addition, Energy Realty had a $3.8 million bank loan
outstanding at year end related to the purchase of a
warehouse facility that is leased to Indiana Gas.
5. Long-Term Debt
During the year the following activity took place with
respect to long-term debt.
On October 15, 1993, $10 million of 9.30% medium-term
notes were redeemed.
On September 15, 1994, $10 million of 6.80% Notes,
Series C, were redeemed.
During September 1994, $8.05 million of the outstanding
9 3/8% Series M, First Mortgage Bonds were retired. A
premium of $641,000 was paid for this retirement and
will be amortized over a 15-year period.
Energy Realty entered into a term loan agreement on May
10, 1994, to borrow $2.1 million. This loan is
guaranteed by Indiana Energy. The principal is to be
repaid in 10 equal annual installments with the last
installment due on May 10, 2004. Interest is payable at
a variable rate not to exceed 7.75 percent. The proceeds
from this loan were used to finance Energy Realty's
investment in an affordable housing partnership (see
Note 13).
Consolidated maturities and sinking fund requirements on
long-term debt subject to mandatory redemption during
the five years following 1994 are $200,000 in 1995,
$200,000 in 1996, $1,300,000 in 1997, $36,300,000 in
1998 and $11,300,000 in 1999.
6. Common Stock
On May 3, 1993, a registration statement was filed by
Indiana Energy with the Securities and Exchange
Commission with respect to the issuance of common stock
without par value. During May and June of 1993, 1.6
million shares were issued under this registration
statement. The net proceeds of approximately $31.4
million were reinvested in Indiana Gas during July 1993
and used for a portion of the preferred stock redemption
(see Note 7) and to finance its ongoing construction
program, as well as for other corporate purposes.
On July 30, 1993, the board of directors of Indiana
Energy authorized a three-for-two stock split of the
outstanding shares of its common stock to shareholders
of record on September 17, 1993. The shares were issued
on October 1, 1993. All share and per share amounts have
been restated for all periods reported to reflect the
stock split. In addition, the common stock share
purchase rights, as discussed below, were adjusted from
$52.50 to $35 per share and the redemption price was
adjusted from $.025 to $.017 per share.
On July 25, 1986, the board of directors of the company
declared a dividend distribution of one common share
purchase right for each outstanding share of common
stock of the company. The distribution was made to
shareholders of record August 11, 1986. In addition, one
right has been and will be distributed for each share
issued following August 11, 1986. Each right entitles
the registered holder to purchase from the company one
share of common stock at a price of $35 per share,
subject to certain adjustments described in the rights
agreement. The rights become exercisable only when a
person or group acquires beneficial ownership of 20
percent or more of the company's common stock or
announces a tender or exchange offer for 30 percent or
more of the company's common stock.
If this happens, each holder of a right, except the
acquiring group or person, will have the right to
receive, upon exercise, that number of shares of the
company's common stock having a market value of two
times the exercise price if:
1. any person or group becomes the beneficial
owner of 30 percent or more of the company's common
stock;
2. a 20 percent or more acquiring person engages
in one of a number of self-dealing transactions
specified in the rights agreement; or
3. the company were acquired in a merger in which
the company were the surviving corporation and
its common stock were not changed or exchanged.
In addition, if the company is involved in a merger or
other business combination transaction, in which more
than 50 percent of its assets or earning power is sold,
each holder of a right will have the right to receive,
upon exercise at the current exercise price of the
right, that number of shares of common stock of the
acquiring company having a market value of two-times the
exercise price of the right. The company may redeem the
rights in whole, but not in part, at a price of $.017
per right at any time prior to the time an acquiring
person has acquired a 20 percent beneficial ownership of
the company's outstanding common stock. The rights
expire on August 11, 1996.
Common stock dividends of the company may be reinvested
under a Dividend Reinvestment and Stock Purchase Plan.
Common shares purchased in connection with the plan are
currently being acquired through the open market.
The company has an Executive Restricted Stock Plan for
the principal officers of the company and its subsidiary
companies. Shares issued are original issue shares of
the company, carry transferability restrictions and are
subject to forfeiture provisions according to the terms
of the plan.
The company also has a Directors' Restricted Stock Plan
through which non-employee directors receive one-third
of their combined compensation (exclusive of attendance
fees) as directors of the company and Indiana Gas in
shares of the company's common stock subject to certain
restrictions on transferability. They may also elect to
receive the remaining two-thirds of their combined
compensation (exclusive of attendance fees) in cash or
in shares of the company's common stock which are not
subject to restrictions on transferability other than
those imposed by federal and state laws.
At September 30, 1994, the shares of the company's
common stock reserved for issuance under each of those
plans were as follows:
Dividend Reinvestment and Stock Purchase Plan 223,251
Executive Restricted Stock Plan 375,026
Directors' Restricted Stock Plan 59,709
Dividends on the common stock of Indiana Gas are payable
out of the unreserved and unrestricted retained earnings
of Indiana Gas. There are certain provisions in the
Indiana Gas Indenture, under which the first mortgage
bonds of Indiana Gas have been created and issued,
restricting the payment of dividends on the Indiana Gas
common stock. Such restrictions could affect the
company's ability to pay dividends on its common stock.
None of the retained earnings of Indiana Gas are
presently subject to any such restrictions.
7. Cumulative Preferred Stock
On December 1, 1992, Indiana Gas redeemed all 200,000
shares of its issued and outstanding 8.55% Cumulative
Preferred Stock at $104.66 per share with accrued
dividends. The redemption premium of $932,000 was
charged to retained earnings. Indiana Gas and Indiana
Energy have authorized and unissued shares of preferred
stock of 4.2 million and 4 million, respectively.
8. Retirement Plans and Other Postretirement Benefits
Effective October 1, 1994, Indiana Gas merged its
retirement savings plan for bargaining employees into
its retirement savings plan for non-bargaining
employees. The primary objective for this action is to
reduce the level of resources required to administer two
plans. The combined retirement savings plan is a defined
contribution plan which is qualified under sections
401(a) and 401(k) of the Internal Revenue Code. Under
the terms of the retirement savings plan, eligible
participants may direct a specified percentage of their
compensation to be invested in shares of the company's
common stock, a fixed income fund, an equity fund or a
balanced fund. Participants in the retirement savings
plan have, subject to prescribed limitations, matching
company contributions made to the plan on their behalf,
plus a year-end lump sum company contribution. During
1994, 1993 and 1992, Indiana Gas made contributions of
$2,386,000, $2,270,000 and $2,072,000, respectively.
Indiana Gas also has two non-contributory defined
benefit retirement plans that cover all employees
meeting certain minimum age and service requirements.
Benefits are determined by a formula based on the
employee's base earnings (highest five consecutive years
out of the last 10 consecutive years prior to actual
retirement date), years of participation in the plan and
the employee's age at retirement.
Indiana Gas has an unfunded supplemental retirement plan
for certain management employees. Benefits are
determined by a formula based on 65 percent of the
participant's average monthly earnings, less benefits
received under the company's pension and savings plans
and the participant's primary Social Security benefits.
The Indiana Gas defined benefit retirement plan assets
are under custody of trustees and consist of actively
managed stock and bond portfolios, as well as short-term
investments. It is Indiana Gas' funding policy to
maintain the pension plans on an actuarially sound
basis. Under this policy, funding was $1,110,000 in
1994, $1,223,000 in 1993, and $1,666,000 in 1992. As
permitted by the Statement of Financial Accounting
Standards No. 71, Accounting for the Effects of Certain
Types of Regulation, the company recognizes pension
expense based on funding as allowed for ratemaking
purposes.
The calculation of pension expense follows:
<TABLE>
Thousands 1994 1993 1992
<S> <C> <C> <C>
Pension benefits earned during the period $1,436 $1,366 $1,258
Interest accrued on projected pension benefit obligation 4,752 4,713 4,543
Actual return on pension plan assets 9 (3,563) (6,152)
Net amortization and deferral (6,056) (2,392) 369
SFAS 87 pension expense 141 124 18
Adjustment to reflect amount included in rates 492 1,877 3,640
Total pension expense $ 633 $2,001 $3,658
</TABLE>
The following table reconciles the plans' SFAS 87 funded
status at September 30 with amounts recorded in the
company's financial statements. Certain assets and
obligations of the plans are deferred and recognized in
the financial statements in subsequent periods.
<TABLE>
Thousands 1994 1993
<S> <C> <C>
Actuarial present value of pension benefits:
Vested benefits $52,127 $51,753
Nonvested benefits 248 204
Effect of future salary increases 6,751 10,478
Projected pension benefit obligation 59,126 62,435
Plan assets at fair value 64,099 67,347
Plan assets in excess of projected
pension benefit obligation at September 30 4,973 4,912
Unrecognized adjusted prior service costs 2,136 2,616
Unrecognized net assets at date of initial application (2,393) (2,701)
Unrecognized net (gain) loss (3,007) (4,153)
Adjustment to reflect amount included in rates (1,806) (1,313)
Prepaid (accrued) pension cost at September 30 $ (97) $ (639)
</TABLE>
The weighted-average discount rate used in determining
the actuarial present value of the SFAS 87 projected
benefit obligation was 8 percent. The expected long-term
rate of return on assets was 9 percent. These rates were
used for all years reported. The average rate of
increase in future compensation levels used ranged from
5 to 5.5 percent for 1994, and from 5.5 to 8 percent for
1993. The average future service of plan participants
used to compute amortization of the net assets existing
at the date of initial application of SFAS 87 is
approximately 17 years.
In addition to providing pension benefits, Indiana Gas
presently provides postretirement health care and life
insurance benefits to full-time employees who have
completed 10 years of service and retire from the
company. The plan pays stated percentages of most
reasonable and necessary medical expenses incurred by
retirees, after subtracting payments by other providers
and after a stated deductible has been met. These
benefits are principally self-insured. Currently,
Indiana Gas does not fund this postretirement plan.
Effective October 1, 1993, Indiana Gas adopted Statement
of Financial Accounting Standards No. 106, Employers'
Accounting for Postretirement Benefits Other Than
Pensions (SFAS 106). SFAS 106 requires accounting for
the costs of postretirement health care and life
insurance benefits on the accrual basis. This means the
costs of benefits paid in the future are recognized
during the years that an employee provides service to
Indiana Gas rather than the "pay-as-you-go" (cash)
basis. Indiana Gas has elected to amortize the unfunded
transition obligation as of October 1, 1993, of
approximately $55 million over a period of 20 years.
Net postretirement benefit cost for 1994 consisted of
the following components:
Thousands 1994
Service cost - benefits attributed to service during
the period $1,490
Interest cost on accumulated postretirement
obligation 3,915
Amortization of transition obligation 2,772
Net postretirement benefit cost 8,177
Amounts deferred pending rate recognition 5,436
Actual cash payments $2,741
Prior to fiscal 1994, Indiana Gas recognized
postretirement benefit costs on the pay-as-you-go (cash)
basis. Postretirement benefit costs recognized for
fiscal years 1993 and 1992 were approximately $2,855,000
and $2,653,000, respectively.
The following table reconciles the plan's funded status
to the accrued postretirement benefit cost as reflected
on the balance sheet as of September 30, 1994:
Thousands 1994
Accumulated postretirement benefit obligation:
Retirees and dependents $28,328
Other fully eligible participants 7,323
Other active participants 18,113
Total accumulated postretirement benefit obligation 53,764
Fair value of plan assets -
Accumulated postretirement benefit obligation in excess
of plan assets (53,764)
Unrecognized net gain (4,340)
Unrecognized transition obligation 52,668
Accrued postretirement benefit cost at September 30 $(5,436)
The assumed health care cost trend rate for medical
gross eligible charges used in measuring the accumulated
postretirement benefit obligation as of September 30,
1994, was 10.2 percent for fiscal 1995. This rate is
assumed to decrease gradually through fiscal 2003 to 5.5
percent and remain at that level thereafter. A 1 percent
increase in the assumed health cost trend rates for each
future year produces approximately a $6.4 million
increase in the accumulated postretirement benefit
obligation as of September 30, 1994, and approximately
an $884,000 increase in the annual aggregate of the
service and interest cost components of net
postretirement benefit cost. The weighted-average
discount rate used in determining the accumulated
postretirement benefit obligation was 8 percent.
In January 1992, Indiana Gas filed a petition with the
IURC seeking regulatory authority for, among other
matters, rate recovery of implementation of SFAS 106
relating to postretirement benefits other than pensions.
Through a generic order issued on December 30, 1992,
Indiana Gas received authority from the IURC to employ
deferred accounting for these costs. This authorization
will extend until the IURC rules upon Indiana Gas'
pending request to adopt SFAS 106 for ratemaking
purposes. Indiana Gas' order is not expected until later
in calendar 1994, however, recent orders for other
public utilities regulated by the IURC have authorized
SFAS 106 to be adopted for ratemaking purposes.
9. Postemployment Benefits
In November 1992, the Financial Accounting Standards
Board issued Statement of Financial Accounting Standards
No. 112, Employers' Accounting for Postemployment
Benefits (SFAS 112). The statement will be adopted by
Indiana Gas effective October 1, 1994. SFAS 112 requires
employers to adopt accrual accounting for workers'
compensation, disability, severance pay and other
benefits provided to former or inactive employees after
employment but before retirement. Adoption of the
statement will not materially affect Indiana Gas'
financial position or results of operations.
10. Commitments
Estimated capital expenditures for 1995 are $54.7
million. Total lease expense was $2,595,000 in 1994,
$2,846,000 in 1993 and $3,360,000 in 1992.
Lease commitments are $2,497,000 in 1995, $1,797,000 in
1996, $1,220,000 in 1997, $1,166,000 in 1998, $515,000
in 1999 and $1,005,000 in total for all later years.
Included in these amounts is an operating lease between
Indiana Gas and Energy Realty with payments of
approximately $464,000 annually that extends through
August 1998. There are no leases that extend beyond
2002. Indiana Gas has storage and supply contracts that
range from one month to eight years.
11. Contingencies
A. Environmental Costs
In the past, Indiana Gas and others, including its
predecessors, former affiliates and/or previous
landowners, operated facilities for the manufacturing of
gas and storage of manufactured gas. These facilities
are no longer in operation and have not been operated
for many years. In the manufacture and storage of such
gas, various byproducts were produced, some of which may
still be present at the sites where these manufactured
gas plants and storage facilities were located. While
management believes those operations were conducted in
accordance with the then-applicable industry standards,
under currently applicable environmental laws and
regulations, Indiana Gas, and the others, may now be
required to take remedial action if certain materials
are found at these sites.
Indiana Gas has identified the existence, location and
certain general characteristics of 26 gas manufacturing
and storage sites. Indiana Gas conducted remediation at
two sites and is nearing completion of the remedial
investigation/feasibility study (RI/FS) at one of the
sites under an agreed order between Indiana Gas and the
Indiana Department of Environmental Management.
Indiana Gas is assessing, on a site-by-site basis,
whether any of the remaining 24 sites require
remediation, to what extent it is required and the
estimated cost of such action. Indiana Gas has completed
preliminary assessments (PAs) on the majority of these
sites and has completed site investigations (SIs) at 15
of these sites. Based upon the site work completed to
date, Indiana Gas believes that some level of
contamination may be present at a number of the
remaining sites. Indiana Gas has not begun an RI/FS at
any of the remaining sites but anticipates beginning
more in the near future and completing the remaining
SIs.
Based upon the work performed to date, Indiana Gas has
accrued remediation and related costs for the two sites
where remediation has taken place. Indiana Gas has
accrued the PA/SI and groundwater monitoring costs for
the remaining 24 sites. Indiana Gas has further accrued
estimated RI/FS costs and the costs of certain remedial
actions at a number of the remaining sites where, based
upon available information, these actions likely will be
required. The total costs which may be incurred in
connection with the remediation of all sites cannot be
determined at this time.
Indiana Gas has nearly completed the process of
identifying all potentially responsible parties (PRPs)
for each site. Indiana Gas, with the help of outside
counsel, has prepared estimates for its share of
environmental liabilities which may exist at each of the
sites. Indiana Gas has accrued only its proportionate
share of the estimated costs, as described above, based
on equitable principles derived from case law or applied
by parties in achieving settlements.
Indiana Gas accrues for costs associated with
environmental remediation obligations when such costs
are probable and reasonably estimable. Indiana Gas does
not believe it can provide an estimate of the reasonably
possible total remediation costs for any site prior to
completion of the RI/FS and the development of some
sense of the timing for implementation of the resulting
potential remedial alternatives.
Indiana Gas has notified insurance carriers of potential
claims where policies may provide coverage for these
environmental costs. Indiana Gas has not recorded any
receivables related to probable recovery from insurance
carriers at this time.
In January 1992, Indiana Gas filed a petition with the
IURC seeking regulatory authority for, among other
matters, recovery through rates of all costs Indiana Gas
incurs in complying with federal, state and local
environmental regulations in connection with past gas
manufacturing activities. On February 26, 1992, Indiana
Gas received authority from the IURC to employ deferred
accounting for these costs. This authorization will
extend until the IURC rules upon Indiana Gas' pending
request to establish and implement an ongoing ratemaking
mechanism that will be designed and intended to provide
for the recovery of these costs. An order is not
expected until later in calendar 1994. Indiana Gas has
deferred all environmental costs previously paid or
accrued. These costs are approximately $12 million
(including assessment, remediation and related costs) as
of September 30, 1994.
The impact of complying with federal, state and local
environmental regulations related to former manufactured
gas plant sites on Indiana Gas' financial position and
results of operations is contingent upon several
uncertainties. These include the cost of compliance, the
impact of joint and several liability upon the magnitude
of the contingency, the ratemaking treatment authorized
for these items by the IURC, as well as the recovery of
environmental and related costs from insurance carriers.
Indiana Gas believes it will be successful in recovering
the costs which it has incurred and may incur through
rates, from other potentially responsible parties and
from insurance carriers. However, there can be no
assurance as to the amount or timing of any such
recoveries.
B. Order No. 636 Transition Costs
In accordance with Federal Energy Regulatory Commission
(FERC) Order No. 636, Indiana Gas' pipeline service
providers have made a number of filings to restructure
services.
Indiana Gas' pipeline service providers have begun to
seek from customers, including Indiana Gas, recovery of
certain costs related to the transition to restructured
services. Those costs will include certain gas supply
realignment costs and are not currently expected to
exceed $10 million.
In a recent order involving another gas utility in
Indiana, the IURC determined that FERC Order No. 636
transition costs are recoverable as gas costs through
the quarterly GCA process. Given this determination,
Indiana Gas expects that transition costs it is assessed
by its pipeline suppliers will be recovered through the
quarterly GCA process.
12. Income Taxes
The components of consolidated income tax expense,
including tax on the gain on the sale of EnTrade in 1993
and amounts in "Other" on the Consolidated Statements of
Income, were as follows:
Thousands 1994 1993 1992
Current:
Federal $13,153 $16,181 $ 9,868
State 2,285 2,576 1,762
15,438 18,757 11,630
Deferred:
Federal 2,987 2,667 1,870
State 286 264 203
3,273 2,931 2,073
Amortization of Investment Tax Credits (930) (1,007) (929)
Consolidated Income Tax Expense $17,781 $20,681 $12,774
Effective income tax rates were 34.08 percent, 37.23
percent and 33 percent of pretax income for 1994, 1993
and 1992, respectively. This compares with a combined
federal and state income tax statutory rate of 37.93
percent for 1994, 37.69 percent for 1993 and 36.97
percent for 1992. Individual components of these rate
differences are not significant except investment tax
credit which amounted to (1.8%) in 1994 and 1993, and
(2.4%) in 1992.
Deferred income taxes reflect the net tax effect of
temporary differences between the carrying amounts of
assets and liabilities for financial reporting purposes
and the amounts used for income tax purposes. Deferred
income taxes are provided for taxes not currently
payable due to, among other things, the use of various
accelerated depreciation methods, shorter depreciable
lives and the deduction of certain construction costs
for tax purposes. Taxes deferred in prior years are
being charged and income credited as these tax effects
reverse. The provisions for the deferred tax effects
relating to the excess of tax-over-book depreciation
amounted to $2,852,000 in 1994, $2,073,000 in 1993 and
$1,504,000 in 1992.
Effective October 1, 1993, Indiana Gas adopted Statement
of Financial Accounting Standards No. 109, Accounting
for Income Taxes (SFAS 109). Indiana Gas previously used
the deferred method of accounting for income taxes as
prescribed by Accounting Principles Bulletin Opinion No.
11. SFAS 109 requires the use of the liability method,
which effectively results in a reduction in previously
provided deferred income taxes to reflect the current
statutory corporate tax rate.
Due to the effects of regulation, Indiana Gas is not
permitted to recognize the effect of a tax rate change
as income but is required to reduce tariff rates to
return the "excess" deferred income taxes to ratepayers
over the remaining life of the properties that give rise
to the taxes. Therefore, the cumulative effect of a
change in accounting principle upon the initial
application of SFAS 109 resulted in no impact on
earnings. Under SFAS 109, Indiana Gas has recorded a net
regulatory liability for approximately $4.8 million on
its balance sheet as of September 30, 1994, related to
deferred taxes.
Significant components of Indiana Gas' net deferred tax
liability as of September 30, 1994, are as follows:
Thousands 1994
Deferred tax liabilities:
Accelerated depreciation $41,652
Property basis differences 18,140
Acquisition adjustment 6,853
Other 2,654
Deferred tax assets:
Deferred investment tax credit (4,943)
Regulatory income tax liability (1,815)
Less deferred income taxes related
to current assets and liabilities (2,654)
Balance at September 30 $59,887
Investment tax credits have been deferred and are being
credited to income over the life of the property giving
rise to the credit. The Tax Reform Act of 1986
eliminated investment tax credits for property acquired
after January 1, 1986.
13. Investment in Real Estate
On March 31, 1994, Energy Realty invested $2.1 million
in an affordable housing partnership in Lafayette,
Indiana. Certain tax benefits, including low-income
housing tax credits and tax deductions for operating
losses of the housing project, will accrue to Energy
Realty as a result of this investment. Energy Realty
holds an 84-percent limited partner interest in this
partnership. As a limited partner, Energy Realty does
not control the operations of the partnership,
accordingly, this investment is being accounted for
using the equity method. It is reflected in "Nonutility
Plant and Other Investments - Net" on the Consolidated
Balance Sheet at September 30, 1994.
14. Summarized Financial Data (Unaudited)
Summarized quarterly financial data (in thousands of
dollars except per share amounts) for 1994 and 1993 are
as follows:
<TABLE>
1994: Three Months Ended Dec. 31 Mar. 31 June 30 Sep. 30
<S> <C> <C> <C> <C>
Utility operating revenues $151,892 $195,672 $ 77,827 $ 49,906
Utility operating income (loss) 18,894 24,630 5,551 (1,232)
Nonutility income (loss) 44 (68) 21 (152)
Net income (loss) 15,200 21,672 2,435 (4,866)
Earnings (loss) per average
share of common stock $ .67 $ .96 $ .11 $ (.21)
1993: Three Months Ended Dec. 31 Mar. 31 June 30 Sep. 30
Utility operating revenues $155,537 $178,256 $101,249 $ 64,236
Utility operating income (loss) 18,421 21,618 4,541 (307)
Nonutility income (loss) 6,671 (52) (114) (176)
Net income (loss) 20,688 17,556 647 (4,313)
Earnings (loss) per average
share of common stock (1) $ 1.00 $ .84 $ .03 $ (.19)
</TABLE>
(1) Due to the cyclical nature of earnings available for
common stock and the issuance of additional common shares
in the third quarter, the sum of quarterly earnings per
share varies from annual earnings per share.
Note: Because of the seasonal factors that significantly
affect the companies' operations, the results of operations
for interim periods within fiscal years are not comparable.
Item 9. Changes in and Disagreements with Accountants
None.
Part III
Item 10. Directors and Executive Officers of the Registrant
Except for the list of the executive officers, which can be
found in Part I, Item 4(a) of this report, the information
required to be shown in this part for Item 10, Directors and
Executive Officers of the Registrant is incorporated by
reference here from the registrant's definitive proxy
statement. That statement was prepared according to
Regulations 14A and S-K and filed electronically with the
Securities and Exchange Commission on December 2, 1994.
Item 11. Executive Compensation
The information required to be shown in this part for Item 11,
Executive Compensation, is incorporated by reference here from
the registrant's definitive proxy statement. That statement
was prepared according to Regulations 14A and S-K and filed
electronically with the Securities and Exchange Commission on
December 2, 1994.
Item 12. Securities Ownership of Certain Beneficial Owners and
Management
The information required to be shown in this part for Item 12,
Securities Ownership of Certain Beneficial Owners and
Management is incorporated by reference here from the
registrant's definitive proxy statement. That statement was
prepared according to Regulations 14A and S-K and filed
electronically with the Securities and Exchange Commission on
December 2, 1994.
Item 13. Certain Relationships and Related Transactions
The information required to be shown in this part for Item 13,
Certain Relationships and Related Transactions is incorporated
by reference here from the registrant's definitive proxy
statement. That statement was prepared according to
Regulations 14A and S-K and filed electronically with the
Securities and Exchange Commission on December 2, 1994.
Part IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K
The following documents are filed as part of this report:
(a)-1 Financial Statements
Location in 10-K
Report of Independent Public Accountants Item 8
Consolidated Statements of Income - 1994,
1993 and 1992 Item 8
Consolidated Statements of Cash Flows - 1994,
1993 and 1992 Item 8
Consolidated Balance Sheets at September 30,
1994 and 1993 Item 8
Consolidated Statements of Common Shareholders'
Equity - 1994, 1993 and 1992 Item 8
Consolidated Schedules of Long-Term Debt
as of September 30, 1994 and 1993 Item 8
Notes to Financial Statements Item 8
(a)-2 Financial Statement Schedules
Report of Independent Public Accountants on Schedules
Schedule V. Property, Plant and Equipment -
1994, 1993 and 1992
Schedule VI. Accumulated Depreciation, Depletion
and Amortization of Property, Plant
and Equipment - 1994, 1993, 1992
Schedule VIII. Valuation and Qualifying Accounts -
1994, 1993 and 1992
Schedule X. Supplementary Income Statement
Information - 1994, 1993 and 1992
Other schedules are omitted as not applicable or the required
information is shown in the consolidated financial statements
or notes to consolidated financial statements.
(a)-3 Exhibits
See Exhibit Index
(b) Reports on Form 8-K
None filed during the fourth quarter of fiscal 1994.
EXHIBIT INDEX
Exhibit No. Description Reference
2-A Amended and Restated Exhibit 2-A to
Agreement and Plan of Indiana
Reorganization, dated Energy's 1989
as of November 6, Annual Report
1989, and amended as on Form 10-K.
of December 1, 1989,
among Indiana Energy,
Inc., IEI Acquisition
Corporation and
Richmond Gas
Corporation.
2-B Second Amendment to Exhibit 2-B to
Agreement and Plan of Indiana
Reorganization among Energy's
Indiana Energy, Inc., Current Report
IEI Acquisition on Form 8-K
Corporation and dated July 31,
Richmond Gas 1990, and filed
Corporation dated as August 15,
of July 31, 1990. 1990.
2-C Amended and Restated Exhibit 2-B to
Agreement of Merger, Indiana
dated as of November Energy's 1989
6, 1989, and amended Annual Report
as of December 1, on Form 10-K.
1989, among Indiana
Energy, Inc., IEI
Acquisition
Corporation and
Richmond Gas
Corporation.
2-D Amended and Restated Exhibit 2-C to
Stock Exchange Indiana
Agreement, dated as of Energy's 1989
November 6, 1989, and Annual Report
amended as of December on Form 10-K.
1, 1989, between
Indiana Energy, Inc.
and Indiana Gas &
Chemical Corporation.
2-E Second Amendment to Exhibit 2(e) to
Stock Exchange Indiana
Agreement between Energy's
Indiana Energy, Inc. Current Report
and Indiana Gas & on Form 8-K
Chemical Corporation dated July 31,
dated as of July 31, 1990 and filed
1990. August 15,
1990.
2-F Acquisition Agreement Exhibit 10-N of
dated October 26, Indiana Gas
1990, between Indiana Company, Inc.'s
Energy and Indiana Gas 1990 Annual
Company, Inc. Report on Form
10-K.
2-G Acquisition Agreement Exhibit 1 to
dated as of December Indiana
28, 1992, between Energy's
Tennessee Gas Pipeline Current Report
Company, Tenneco on Form 8-K
Merger Company, dated December
EnTrade Corporation 29, 1992, and
and the filed January
Interestholders listed 13, 1993.
on Exhibit A thereto.
3-A Amended and Restated Exhibit 3-A to
Articles of Indiana
Incorporation. Energy's 1993
Annual Report
on Form 10-K.
3-B Code of By-Laws, as Filed herewith.
amended.
4-A Applicable provisions Exhibit 3-A to
of Indiana Energy's Indiana
Amended and Restated Energy's 1993
Articles of Annual Report
Incorporation, as on Form 10-K.
amended, as set forth
as Exhibit 3-A above.
4-B Amended and Restated Exhibit 1 to
Rights Agreement Indiana
between Indiana Energy Energy's
and Continental Bank, Amendment on
N.A. (Now First Form 8 to Form
Chicago Trust Company 8-A
of New York), as Registration
Rights Agent, dated as Statement filed
of July 30, 1986, and on April 16,
amended and restated 1990.
as of December 8,
1989.
4-C Indenture dated as of Indiana Gas
September 1, 1950, Company, Inc.'s
between Indiana Gas Registration
and Merchants National No. 2-77620
Bank & Trust Company (pages 6-8 of
of Indianapolis (now the Prospectus
National City Bank, on Form S-16
Indiana), as trustee contained
("Trustee"), and therein), to
twelve supplemental Registration
indentures thereto. No. 2-40825
(Exhibit Nos. 2-
A through 2-H),
to Registration
No. 2-52734
(Exhibit No. 2-
C), to
Registration
No. 2-68469
(Exhibit No. 2-
J), to
Registration
No. 2-77620
(Exhibit No. 4-
0), to
Registration
No. 33-1262
(Exhibit No.
4K), to the
1985 Annual
Report on Form
10-K (Exhibit
4) and to the
1986 Annual
Report on Form
10-K (Exhibit
No. 4-D).
4-D Indenture dated Exhibit 4(a) to
February 1, 1991, Indiana Gas
between Indiana Gas Company, Inc.'s
and Continental Bank, Current Report
National Association. on Form 8-K
dated February
1, 1991, and
filed February
15, 1991; First
Supplemental
Indenture
thereto dated
as of February
15, 1991,
(incorporated
by reference to
Exhibit 4(b) to
Indiana Gas
Company, Inc.'s
Current Report
on Form 8-K
dated February
1, 1991, and
filed February
15, 1991);
Second
Supplemental
Indenture
thereto dated
as of September
15, 1991,
(incorporated
by reference to
Exhibit 4(b) to
Indiana Gas
Company, Inc.'s
Current Report
on Form 8-K
dated September
15, 1991, and
filed September
25, 1991);
Third
Supplemental
Indenture
thereto dated
as of September
15, 1991
(incorporated
by reference to
Exhibit 4(c) to
Indiana Gas
Company, Inc.'s
Current Report
on Form 8-K
dated September
15, 1991 and
filed September
25, 1991); and
Fourth
Supplemental
Indenture
thereto dated
as of December
2, 1992,
(incorporated
by reference to
Exhibit 4(b) to
Indiana Gas
Company, Inc.'s
Current Report
on Form 8-K
dated December
1, 1992, and
filed December
8, 1992).
10-A Employment Agreement Exhibit 10-A to
among Indiana Energy, Indiana
Inc., Indiana Gas Energy's 1990
Company, Inc., and Annual Report
Lawrence A. Ferger on Form 10-K.
effective January 1,
1990.
10-B Employment Agreement Exhibit 10-C to
among Indiana Energy, Indiana
Inc., Indiana Gas Energy's 1990
Company, Inc., and Annual Report
Niel C. Ellerbrook, on Form 10-K.
effective January 1,
1990.
10-C Employment Agreement Exhibit 10-D to
between Indiana Gas Indiana
Company, Inc., and Energy's 1990
Paul T. Baker Annual Report
effective January 1, on Form 10-K.
1990.
10-D Employment Agreement Exhibit 10-E to
between Indiana Gas Indiana
Company, Inc., and Energy's 1990
Anthony E. Ard Annual Report
effective January 1, on Form 10-K.
1990.
10-E Employment Agreement Exhibit 10-F to
among Indiana Energy, Indiana
Inc., Indiana Gas Energy's 1990
Company, Inc., and Annual Report
Carl L. Chapman on Form 10-K.
effective January 1,
1990.
10-F Termination Benefits Filed herewith.
Agreement, dated July
29, 1994, among
Indiana Energy, Inc.,
Indiana Gas Company,
Inc. and Lawrence A.
Ferger.
10-G Termination Benefits Filed herewith.
Agreement, dated July
29, 1994, among
Indiana Energy, Inc.,
Indiana Gas Company,
Inc. and
Paul T. Baker.
10-H Termination Benefits Filed herewith.
Agreement, dated July
29, 1994, among
Indiana Energy, Inc.,
Indiana Gas Company,
Inc. and
Niel C. Ellerbrook.
10-I Termination Benefits Filed herewith.
Agreement, dated July
29, 1994, among
Indiana Energy, Inc.,
Indiana Gas Company,
Inc. and
Anthony E. Ard.
10-J Termination Benefits Filed herewith.
Agreement, dated July
29, 1994, among
Indiana Energy, Inc.,
Indiana Gas Company,
Inc. and
Carl L. Chapman.
10-K Executive Compensation Filed herewith.
Deferral Plan
effective December 1,
1994.
10-L Directors Compensation Filed herewith.
Deferral Plan
effective February 1,
1981.
10-M Directors Compensation Filed herewith.
Deferral Plan
effective January 1,
1995.
10-N Executive Restricted Exhibit A to
Stock Plan effective Indiana
October 1, 1987, as Energy's Proxy
amended. Statement filed
on December 4,
1987; First
Amendment to
Indiana Energy,
Inc. Executive
Restricted
Stock Plan
(incorporated
by reference to
Exhibit 10-A to
Indiana
Energy's 1991
Annual Report
on Form 10-K.)
10-O Indiana Energy, Inc. Exhibit 10-D to
Annual Management Indiana
Incentive Plan Energy's 1987
effective October 1, Annual Report
1987. on Form 10-K.
10-P Indiana Energy, Inc. Indiana
Directors' Restricted Energy's
Stock Plan, as amended Definitive
and restated on Proxy Statement
October 25, 1991. filed on
December 6,
1991.
10-Q Exhibit 10-Q schedules all material gas
contracts which are in effect between
Indiana Gas Company, Inc. and the suppliers
listed. The gas contracts within each type
are substantially identical in all material
respects and at least one of each type of
contract has been or is filed as indicated.
The schedule details all material aspects in
which a contract may differ from the
contract filed.
<TABLE>
Exh. Days of Effective Expir.
No. Type of Contract Supplier Contract No. Wthdrwl. MDth/Day Date Date Reference
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6/30/93 Form 10Q,
File 1-6494:
10-Q.1 Firm Transportation Panhandle Eastern P PLT 011715 38,572 5/1/93 3/31/98 Exh. 10-B
10-Q.2 Firm Transportation Panhandle Eastern P PLT 011716 51,431 5/1/93 3/31/99 Exh. 10-A
10-Q.3 Firm Transportation Panhandle Eastern P PLT 011718 51,431 5/1/93 2/28/97 Exh. 10-C
10-Q.4 Firm Transporation Panhandle Eastern P PLT 011721 77,144 5/1/93 3/31/97 Exh. 10-D
10-Q.5 Market Area - Panhandle Eastern P PLT 011719 50,000 5/1/93 3/31/97 1993 Form 10K, Exh.
Firm Transportation 10-I.5, File 1-6494.
10-Q.6 Market Area - Panhandle Eastern P PLT 011720 50,000 5/1/93 3/31/97 See Exhibit 10-Q.5
Firm Transporation
10-Q.7 Market Area - Texas Gas T3780 50,000 11/1/93 10/31/98 1993 Form 10K, Exh.
Firm Transporation 10-I.7, File 1-6494.
10-Q.8 No Notice Service Texas Gas N0420 41,687 11/1/93 10/31/98 1993 Form 10K, Exh.
10-I.8, File 1-6494.
10-Q.9 No Notice Service Texas Gas N0325 56,793 11/1/93 10/31/97 See Exhibit 10-Q.8
10-Q.10 No Notice Serivce Texas Gas N0325 56,794 11/1/93 10/31/98 See Exhibit 10-Q.8
10-Q.11 No Notice Serivce Texas Gas N0325 56,794 11/1/93 10/31/99 See Exhibit 10-Q.8
6/30/93 Form 10Q,
File 1-6494:
10-Q.12 Firm Storage Panhandle Eastern PLS 011713 100 50,312 5/1/93 3/31/96 Exh. 10-G
10-Q.13 Firm Storage Panhandle Eastern PLS 012044 100 25,000 5/1/93 3/31/96 Exh. 10-E
10-Q.14 Firm Storage ANR T,E & S 00087 100 29,000 3/1/73 2/28/96 1991 Form 10K, Exh.
10-N, File 1-6494.
10-Q.15 Firm Storage ANR T,E & S 05787 100 100,806 4/1/92 3/31/97 1992 Form 10K, Exh.
10-R, File 1-6494.
6/30/93 Form 10Q,
File 1-6494:
10-Q.16 Firm Storage-Related Panhandle Eastern P PLT 011714 49,515 5/1/93 3/31/96 Exh. 10-H
Transporation
10-Q.17 Firm Storage-Related Panhandle Eastern P PLT 012045 24,604 5/1/93 3/31/96 Exh. 10-F
Transporation
10-Q.18 Firm Storage-Related ANR T,E & S 05788 100,000 4/1/92 3/31/97 1992 Form 10K, Exh.
Transportation 10-S, File 1-6494.
10-Q.19 Firm Natural Gas Anadarko NGFSA 507 50,000 10/1/94 9/30/95 1994 Form 10K, Exh.
Supply 10-Q.19, File 1-6494.
21 Subsidiaries of Indiana Energy, Inc. Filed herewith.
23 Consent of Independent Public Accountants Filed herewith.
27 Financial Data Schedule Filed herewith.
</TABLE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SCHEDULES
To Indiana Energy, Inc.:
We have audited in accordance with generally accepted
auditing standards, the consolidated financial statements
included in Item 8, in this Form 10-K, and have issued our
report thereon dated October 28, 1994. Our audit was made for
the purpose of forming an opinion on those statements taken as
a whole. The schedules listed in Item 14(a)-2 are the
responsibility of the company's management and are presented
for purposes of complying with the Securities and Exchange
Commission's rules and are not part of the basic financial
statements. These schedules have been subjected to the
auditing procedures applied in the audit of the basic
financial statements and, in our opinion, fairly state in all
material respects the financial data required to be set forth
therein in relation to the basic financial statements taken as
a whole.
/s/Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Indianapolis, Indiana
October 28, 1994
<TABLE>
INDIANA ENERGY, INC.
AND SUBSIDIARY COMPANIES
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
YEAR ENDED SEPTEMBER 30, 1994
(Thousands)
Col. A Col. B Col. C Col. D Col. E Col. F
Balance at Other Balance at
September 30, Additions Changes September 30,
Classification 1993 At Cost Retirements (Note 1) 1994
<S> <C> <C> <C> <C> <C>
ORIGINAL COST:
Gas Plant in Service -
Production $ 8,144 $ 84 $ 0 $ 0 $ 8,228
Storage - Underground 29,161 9,244 585 0 37,820
Distribution 560,445 36,138 4,037 0 592,546
General 73,644 5,283 1,987 4 76,944
Total Gas Plant in Service 671,394 50,749 6,609 4 715,538
Gas in Underground Storage -
Noncurrent 11,520 737 0 0 12,257
Completed Construction Not Classified 22,042 26,463 0 0 48,505
Construction Work In Progress 29,250 (22,074) 0 0 7,176
Retirements (Estimated) (2,013) 0 (271) 0 (1,742)
Property Held Under Capital Lease 4,026 0 0 0 4,026
Property Leased to Others 772 8 0 0 780
Property Held for Future Use 444 0 0 0 444
Intangibles 8,570 1,702 0 (4) 10,268
Total Original Cost $ 746,005 $ 57,585 $ 6,338 $ 0 $ 797,252
ACQUISITION ADJUSTMENTS $ 27,169 $ 1,053 $ 635 $ 0 $ 27,587
NONUTILITY PROPERTY $ 4,198 $ 73 $ 93 $ 0 $ 4,178
Note:
(1) Represents the reclassification of certain property within "Original Cost" categories.
</TABLE>
<TABLE>
INDIANA ENERGY, INC.
AND SUBSIDIARY COMPANIES
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
YEAR ENDED SEPTEMBER 30, 1993
(Thousands)
Col. A Col. B Col. C Col. D Col. E Col. F
Balance at Other Balance at
September 30, Additions Changes September 30,
Classification 1992 At Cost Retirements (Note 1) 1993
<S> <C> <C> <C> <C> <C>
ORIGINAL COST:
Gas Plant in Service -
Production $ 7,843 $ 2,238 $ 63 $ (1,874) $ 8,144
Storage - Underground 28,477 711 27 0 29,161
Distribution 522,051 44,213 5,744 (75) 560,445
General 70,777 6,771 3,979 75 73,644
Total Gas Plant in Service 629,148 53,933 9,813 (1,874) 671,394
Gas in Underground Storage -
Noncurrent 11,520 0 0 0 11,520
Completed Construction Not Classified 30,759 (8,717) 0 0 22,042
Construction Work In Progress 17,640 11,610 0 0 29,250
Retirements (Estimated) (2,986) 0 (973) 0 (2,013)
Property Held Under Capital Lease 4,026 0 0 0 4,026
Property Leased to Others 598 174 0 0 772
Property Held for Future Use 444 0 0 0 444
Intangibles 6,577 119 0 1,874 8,570
Total Original Cost $ 697,726 $ 57,119 $ 8,840 $ 0 $ 746,005
ACQUISITION ADJUSTMENTS $ 27,586 $ (417) $ 0 $ 0 $ 27,169
NONUTILITY PROPERTY $ 3,818 $ 3,835 $ 0 $ (3,455) $ 4,198
Note:
(1) Represents the reclassification of certain property within "Original Cost" categories and
the sale by IGC Energy, Inc. of its interest in EnTrade Corporation on December 29, 1992 within "Nonutility Property".
</TABLE>
<TABLE>
INDIANA ENERGY, INC.
AND SUBSIDIARY COMPANIES
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
YEAR ENDED SEPTEMBER 30, 1992
(Thousands)
Col. A Col. B Col. C Col. D Col. E Col. F
Balance at Other Balance at
September 30, Additions Changes September 30,
Classification 1991 At Cost Retirements (Note 1) 1992
<S> <C> <C> <C> <C> <C>
ORIGINAL COST:
Gas Plant in Service -
Production $ 5,968 $ 1,879 $ 4 $ 0 $ 7,843
Storage - Underground 27,185 1,301 17 8 28,477
Distribution 485,958 39,692 3,592 (7) 522,051
General 64,322 11,076 4,620 (1) 70,777
Total Gas Plant in Service 583,433 53,948 8,233 0 629,148
Gas in Underground Storage -
Noncurrent 7,296 4,224 0 0 11,520
Completed Construction Not Classified 26,830 3,929 0 0 30,759
Construction Work In Progress 22,998 (5,358) 0 0 17,640
Retirements (Estimated) (5,031) 0 (2,045) 0 (2,986)
Property Held Under Capital Lease 3,324 702 0 0 4,026
Property Leased to Others 0 598 0 0 598
Property Held for Future Use 444 0 0 0 444
Intangibles 36 6,541 0 0 6,577
Total Original Cost $ 639,330 $ 64,584 $ 6,188 $ 0 $ 697,726
ACQUISITION ADJUSTMENTS $ 27,922 $ (336) $ 0 $ 0 $ 27,586
NONUTILITY PROPERTY $ 2,784 $ 1,036 $ 2 $ 0 $ 3,818
Note:
(1) Represents the reclassification of certain property within the "Gas Plant in Service" categories.
</TABLE>
<TABLE>
INDIANA ENERGY, INC.
AND SUBSIDIARY COMPANIES
SCHEDULE VI - ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT
YEAR ENDED SEPTEMBER 30, 1994
(Thousands)
Col. A Col. B Col. C Col. D Col. E Col. F
Additions Deductions
(1) (2) (1) (2)
Charged Property Salvage
Balance at Charged to to Other Retired at Less Balance at
September 30, Costs and Accounts Original Removal Other September 30,
Description 1993 Expenses (Note A) Cost Cost Charges 1994
<S> <C> <C> <C> <C> <C> <C> <C>
Gas Plant in Service -
Production $ 4,183 $ 363 $ 0 $ 0 $ 0 $ 0 $ 4,546
Storage - Underground 16,068 1,253 0 6 2 0 17,313
Distribution 221,221 22,729 0 4,037 1,053 0 238,860
General 20,061 3,020 1,151 2,565 (852) 0 22,519
Total Gas Plant in Service 261,533 27,365 1,151 6,608 203 0 283,238
Retirement Work in Progress (855) 0 0 0 (77) 0 (778)
Retirements (Estimated) (2,013) 0 0 (270) 0 0 (1,743)
Property Held Under Capital Lease 1,576 564 0 0 0 0 2,140
Property Leased to Others 138 116 0 0 0 0 254
Property Held for Future Use 83 0 0 0 0 0 83
Intangibles 1,044 753 0 0 0 0 1,797
Total Accumulated Depreciation $ 261,506 $ 28,798 $ 1,151 $ 6,338 $ 126 $ 0 $ 284,991
Acquisition Adjustments $ 6,123 $ 709 $ 0 $ 0 $ 0 $ 0 $ 6,832
Nonutility Property $ 293 $ 117 $ 0 $ 93 $ 168 $ 0 $ 149
Notes:
(A) Represents provision charged to transportation clearing account.
INDIANA ENERGY, INC.
AND SUBSIDIARY COMPANIES
SCHEDULE VI - ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT
YEAR ENDED SEPTEMBER 30, 1993
(Thousands)
Col. A Col. B Col. C Col. D Col. E Col. F
Additions Deductions
(1) (2) (1) (2)
Charged Property Salvage
Balance at Charged to to Other Retired at Less Other Balance at
September 30, Costs and Accounts Original Removal Charges September 30,
Description 1992 Expenses (Note A) Cost Cost (Note B) 1993
<S> <C> <C> <C> <C> <C> <C> <C>
Gas Plant in Service -
Production $ 3,966 $ 290 $ 0 $ 64 $ 9 $ 0 $ 4,183
Storage - Underground 15,114 989 0 27 8 0 16,068
Distribution 207,251 21,093 1 5,743 1,381 0 221,221
General 19,186 2,969 1,058 3,979 (1,447) (620) 20,061
Total Gas Plant in Service 245,517 25,341 1,059 9,813 (49) (620) 261,533
Retirement Work in Progress (372) 0 0 0 483 0 (855)
Retirements (Estimated) (2,986) 0 0 (973) 0 0 (2,013)
Property Held Under Capital Lease 1,012 564 0 0 0 0 1,576
Property Leased to Others 52 86 0 0 0 0 138
Property Held for Future Use 83 0 0 0 0 0 83
Intangibles 0 424 0 0 0 620 1,044
Total Accumulated Depreciation $ 243,306 $ 26,415 $ 1,059 $ 8,840 $ 434 $ 0 $ 261,506
Acquisition Adjustments $ 5,371 $ 752 $ 0 $ 0 $ 0 $ 0 $ 6,123
Nonutility Property $ 1,687 $ 181 $ 0 $ 0 $ 0 $ (1,575) $ 293
Notes:
(A) Represents provision charged to transportation clearing account.
(B) Represents the reclassification of certain property within "Accumulated Depreciation" categories and
the sale by IGC Energy, Inc. of its interest in EnTrade Corporation on December 29, 1992 within "Nonutility Property".
INDIANA ENERGY, INC.
AND SUBSIDIARY COMPANIES
SCHEDULE VI - ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT
YEAR ENDED SEPTEMBER 30, 1992
(Thousands)
Col. A Col. B Col. C Col. D Col. E Col. F
Additions Deductions
(1) (2) (1) (2)
Charged Property Salvage
Balance at Charged to to Other Retired at Less Balance at
September 30, Costs and Accounts Original Removal Other September 30,
Description 1991 Expenses (Note A) Cost Cost Charges 1992
<S> <C> <C> <C> <C> <C> <C> <C>
Gas Plant in Service -
Production $ 3,727 $ 243 $ 0 $ 4 $ 0 $ 0 $ 3,966
Storage - Underground 14,157 976 0 17 2 0 15,114
Distribution 189,296 19,761 2 3,592 (1,784) 0 207,251
General 18,909 3,103 980 4,620 (814) 0 19,186
Total Gas Plant in Service 226,089 24,083 982 8,233 (2,596) 0 245,517
Retirement Work in Progress (172) 0 0 0 200 0 (372)
Retirements (Estimated) (5,031) 0 0 (2,045) 0 0 (2,986)
Property Held Under Capital Lease 499 513 0 0 0 0 1,012
Property Leased to Others 0 52 0 0 0 0 52
Property Held for Future Use 83 0 0 0 0 0 83
Total Accumulated Depreciation $ 221,468 $ 24,648 $ 982 $ 6,188 $ (2,396) $ 0 $ 243,306
Acquisition Adjustments $ 4,614 $ 757 $ 0 $ 0 $ 0 $ 0 $ 5,371
Nonutility Property $ 1,091 $ 596 $ 0 $ 0 $ 0 $ 0 $ 1,687
Note:
(A) Represents provision charged to transportation clearing account.
INDIANA ENERGY, INC.
AND SUBSIDIARY COMPANIES
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
YEAR ENDED SEPTEMBER 30, 1994
(Thousands)
Col. A Col. B Col. C Col. D Col. E Col. F
Additions Deductions
(1) (2)
For Purposes
Balance at Charged to For Which Other Balance at
September 30, Costs and Reserves Changes September 30,
Description 1993 Expenses Other Were Created (Note A) 1994
RESERVE DEDUCTED FROM APPLICABLE ASSETS:
Reserve for uncollectible accounts $ 2,055 $ 3,850 $ 0 $ 4,667 $ 0 $ 1,238
RESERVE SEPARATELY CLASSIFIED:
Deferred income taxes $ 56,911 $ 3,273 $ 0 $ 0 $ (297) $ 59,887
Note:
(A) Represents the implementation of Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes effective
October 1, 1993.
INDIANA ENERGY, INC.
AND SUBSIDIARY COMPANIES
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
YEAR ENDED SEPTEMBER 30, 1993
(Thousands)
Col. A Col. B Col. C Col. D Col. E Col. F
Additions Deductions
(1) (2)
For Purposes
Balance at Charged to For Which Other Balance at
September 30, Costs and Reserves Changes September 30,
Description 1992 Expenses Other Were Created (Note A) 1993
RESERVE DEDUCTED FROM APPLICABLE ASSETS:
Reserve for uncollectible accounts $ 2,680 $ 3,578 $ 0 $ 3,324 $ (879) $ 2,055
RESERVE SEPARATELY CLASSIFIED:
Deferred income taxes $ 53,980 $ 2,931 $ 0 $ 0 $ 0 $ 56,911
Note:
(A) Represents the sale by IGC Energy, Inc. of its interest in EnTrade Corporation on December 29, 1992.
INDIANA ENERGY, INC.
AND SUBSIDIARY COMPANIES
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
YEAR ENDED SEPTEMBER 30, 1992
(Thousands)
Col. A Col. B Col. C Col. D Col. E Col. F
Additions Deductions
(1) (2)
For Purposes
Balance at Charged to For Which Balance at
September 30, Costs and Reserves Other September 30,
Description 1991 Expenses Other Were Created Changes 1992
RESERVE DEDUCTED FROM APPLICABLE ASSETS:
Reserve for uncollectible accounts $ 2,538 $ 2,803 $ 0 $ 2,661 $ 0 $ 2,680
RESERVE SEPARATELY CLASSIFIED:
Deferred income taxes $ 51,907 $ 2,073 $ 0 $ 0 $ 0 $ 53,980
SCHEDULE X
Supplemental Income Statement Information
Years Ended September 30, 1994, 1993 and 1992
In addition to the amounts included in other operation
and maintenance and the depreciation amounts shown in the
consolidated statements of income in Item 8 of this
report Form 10-K, certain maintenance and depreciation is
charged to various clearing accounts. The amounts so
charged were not significant.
During the years presented, there were no royalties or
advertising costs of significant amount.
Maintenance amounts included in the caption "Other
operation and maintenance" and gross income taxes shown
under the caption "Taxes other than income taxes" in the
consolidated statements of income are set forth below.
Other taxes charged to income, other than payroll and
income taxes, were not significant.
Years Ended September 30
Thousands 1994 1993 1992
Maintenance $ 9,501 $14,197 $10,205
Indiana gross income taxes $ 6,267 $ 5,760 $ 4,947
EXHIBIT 21
State of Incorporation
Subsidiaries of Indiana Energy,
Inc., (Parent) -
Indiana Gas Company, Inc. Indiana
Richmond Gas Corporation Indiana
Terre Haute Gas Corporation Indiana
IEI Investments, Inc. Indiana
Energy Realty, Inc. Indiana
IGC Energy, Inc. Indiana
Indiana Energy Services, Inc. Indiana
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to
the incorporation of our reports included in this Form 10-K
into Indiana Energy, Inc.'s previously filed Registration
Statements File Nos. 33-45046, 33-56522, 33-57148 and 33-
55983.
/s/Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Indianapolis, Indiana
December 22, 1994
SIGNATURES
Pursuant to the requirements of the Section 13 or 15(d) of
the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
INDIANA ENERGY, INC.
Dated December 22, 1994 /s/Lawrence A. Ferger
Lawrence A. Ferger, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following
persons on behalf of the Registrant and in the capacities and
on the dates indicated.
</TABLE>
<TABLE>
Signature Title Date
<S> <C> <C>
/s/Lawrence A. Ferger President, Chief Executive December 22, 1994
Lawrence A. Ferger Officer and Director
/s/Niel C. Ellerbrook Vice President and Treasurer December 22, 1994
Niel C. Ellerbrook Chief Financial Officer and Director
/s/Jerome A. Benkert Controller December 22, 1994
Jerome A. Benkert
/s/Duane M. Amundson Chairman of the Board of December 22, 1994
Duane M. Amundson Directors
/s/Paul T. Baker Senior Vice President December 22, 1994
Paul T. Baker Chief Operating Officer and
Director
/s/Gerald L. Bepko Director December 22, 1994
Gerald L. Bepko
/s/Howard J. Cofield Director December 22, 1994
Howard J. Cofield
/s/Loren K. Evans Director December 22, 1994
Loren K. Evans
/s/Otto N. Frenzel III Director December 22, 1994
Otto N. Frenzel III
/s/Anton H. George Director December 22, 1994
Anton H. George
/s/Don E. Marsh Director December 22, 1994
Don E. Marsh
/s/Richard P. Rechter Director December 22, 1994
Richard P. Rechter
/s/James C. Shook Director December 22, 1994
James C. Shook
</TABLE>
EXHIBIT 3-B
CODE OF BY-LAWS
OF
INDIANA ENERGY, INC.
AS AMENDED AND RESTATED
IN FULL ON JULY 1, 1987
AS FURTHER AMENDED OCTOBER 27, 1989
AS FURTHER AMENDED AUGUST 31, 1990
AS FURTHER AMENDED JULY 26, 1991
AS FURTHER AMENDED SEPTEMBER 24, 1993
AS FURTHER AMENDED FEBRUARY 25, 1994
ARTICLE I
OFFICES
SECTION 1. PRINCIPAL OFFICE. The principal office
(the "Principal Office") of INDIANA ENERGY, INC. (the
"Corporation") shall be at the registered office of the
Corporation, or such other place as shall be determined by
resolution of the Board of Directors of the Corporation
(the "Board").
SECTION 2. OTHER OFFICES. The Corporation may have
such other offices at such other places within or without
the State of Indiana as the Board may from time to time
designate, or as the business of the Corporation may
require.
ARTICLE II
SEAL
SECTION 1. CORPORATE SEAL. The corporate seal of
the Corporation (the "Seal") shall be circular in form and
shall have inscribed thereon the words "INDIANA ENERGY,
INC. -- CORPORATE SEAL -- INDIANA." Use of the Seal or an
impression thereof shall not be required, and shall not
affect the validity of any instrument whatsoever.
ARTICLE III
SHAREHOLDERS' MEETINGS
SECTION 1. PLACE OF MEETING. Every meeting of the
shareholders of the Corporation (the "Shareholders") shall
be held at the Principal Office, unless a different place
is specified in the notice or waiver of notice of such
meeting or by resolution of the Board or the Shareholders,
in which event such meeting may be held at the place so
specified, either within or without the State of Indiana.
SECTION 2. ANNUAL MEETING. The annual meeting of
the Shareholders (the "Annual Meeting") shall be held each
year at 11:00 o'clock A.M. on the second Monday in
January, or such other time or date determined by
resolution of the board, for the purpose of electing
directors of the Corporation ("Directors") and for the
transaction of such other business as may legally come
before the Annual Meeting. If for any reason the Annual
Meeting shall not be held at the date and time specified
or fixed as herein provided, the business to be transacted
at such Annual Meeting may be transacted at any special
meeting of the Shareholders (a "Special Meeting") called
for that purpose.
SECTION 3. NOTICE OF ANNUAL MEETING. Written or
printed notice of the Annual Meeting, stating the date,
time and place thereof, shall be delivered or mailed by
the Secretary or an Assistant Secretary to each
Shareholder of record entitled to notice of such Meeting,
at such address as appears on the records of the
Corporation, at least ten and not more than sixty days
before the date of such Meeting.
SECTION 4. SPECIAL MEETINGS. Special Meetings, for
any purpose or purposes (unless otherwise prescribed by
law), may be called by the Board or the President, and
shall be called by the President or any Vice President at
(a) the request in writing of a majority of the Board, or
(b) at the written demand, delivered to the Secretary, of
Shareholders holding of record not less than one-fourth of
the voting power of all the shares of the Corporation
("Shares") issued and outstanding and entitled by the
Amended and Restated Articles of Incorporation of the
Corporation, as the same may, from time to time, be
amended (the "Articles"), to vote on the business proposed
to be transacted thereat. All requests or demands for
Special Meetings shall state the purpose or purposes
thereof, and the business transacted at such Meeting shall
be confined to the purposes stated in the call and matters
germane thereto.
SECTION 5. NOTICE OF SPECIAL MEETINGS. Written or
printed notice of all Special Meetings, stating the date,
time, place and purpose or purposes thereof, shall be
delivered or mailed by the Secretary or the President or
the Vice President calling the Meeting to each Shareholder
of record entitled to notice of such Meeting, at such
address as appears on the records of the Corporation, at
least ten and not more than sixty days before the date of
such Meeting. Notice of any Special Meeting called at the
written demand of Shareholders shall be delivered or
mailed within sixty days of the Secretary's receipt of
such demand.
SECTION 6. WAIVER OF NOTICE OF MEETINGS. Notice of
any Annual or Special Meeting (a "Meeting") may be waived
in writing by any Shareholder, before or after the date
and time of the Meeting specified in the notice thereof,
by a written waiver delivered to the Corporation for
inclusion in the minutes or filing with the corporate
records. A Shareholder's attendance at any Meeting in
person or by proxy shall constitute a waiver of (a) notice
of such Meeting, unless the Shareholder at the beginning
of the Meeting objects to the holding of or the
transaction of business at the Meeting, and (b)
consideration at such Meeting of any business that is not
within the purpose or purposes described in the Meeting
notice, unless the Shareholder objects to considering the
matter when it is presented.
SECTION 7. QUORUM. At any Meeting, the holders of a
majority of the voting power of Shares issued and
outstanding and entitled to vote at such Meeting,
represented in person or by proxy, shall constitute a
quorum for the election of Directors or for the
transaction of other business, unless otherwise provided
by law, the Articles or this Code of By-Laws, as the same
may, from time to time, be amended (these "By-Laws"). If,
however, a quorum shall not be present or represented at
any Meeting, the Shareholders entitled to vote thereat,
present in person or represented by proxy, shall have
power to adjourn the Meeting from time to time, without
notice other than announcement at the Meeting of the date,
time and place of the adjourned Meeting, unless the date
of the adjourned Meeting requires that the Board fix a new
record date (the "Record Date") therefor, in which case
notice of the adjourned Meeting shall be given. At such
adjourned Meeting, if a quorum shall be present or
represented, any business may be transacted that might
have been transacted at the Meeting as originally
scheduled.
SECTION 8. VOTING. At each Meeting, every
Shareholder entitled to vote shall have one vote for each
Share standing in his name on the books of the Corporation
as of the Record Date fixed by the Board for such Meeting,
except as otherwise provided by law or the Articles, and
except that no Share shall be voted at any Meeting upon
which any installment is due and unpaid. Voting for
Directors and, upon the demand of any Shareholder, voting
upon any question properly before a Meeting, shall be by
ballot. A plurality vote shall be necessary to elect any
Director, and on all other matters, the action or a
question shall be approved if the number of votes cast
thereon in favor of the action or question exceeds the
number of votes cast opposing the action or question,
except as otherwise provided by law or the Articles.
SECTION 9. SHAREHOLDER LIST. The Secretary shall
prepare before each Meeting a complete list of the
Shareholders entitled to notice of such Meeting, arranged
in alphabetical order by class of Shares (and each series
within a class), and showing the address of, and the
number of Shares entitled to vote held by, each
Shareholder (the "Shareholder List"). Beginning five
business days before the Meeting and continuing throughout
the Meeting, the Shareholder List shall be on file at the
Principal Office or at a place identified in the Meeting
notice in the city where the Meeting will be held, and
shall be available for inspection by any Shareholder
entitled to vote at the Meeting. On written demand, made
in good faith and for a proper purpose and describing with
reasonable particularity the Shareholder's purpose, and if
the Shareholder List is directly connected with the
Shareholder's purpose, a Shareholder (or such
Shareholder's agent or attorney authorized in writing)
shall be entitled to inspect and to copy the Shareholder
List, during regular business hours and at the
Shareholder's expense, during the period the Shareholder
List is available for inspection. The original stock
register or transfer book (the "Stock Book"), or a
duplicate thereof kept in the State of Indiana, shall be
the only evidence as to who are the Shareholders entitled
to examine the Shareholder List, or to notice of or to
vote at any Meeting.
SECTION 10. PROXIES. A Shareholder may vote either
in person or by proxy executed in writing by the
Shareholder or a duly authorized attorney-in-fact. No
proxy shall be valid after eleven months from the date of
its execution, unless a longer time is expressly provided
therein.
SECTION 11. NOTICE OF SHAREHOLDER BUSINESS. At any
meeting of the shareholders, only such business may be
conducted as shall have been properly brought before the
meeting, and as shall have been determined to be lawful
and appropriate for consideration by shareholders at the
meeting. To be properly brought before a meeting,
business must be (a) specified in the notice of meeting
given in accordance with Section 3 or 5 of this Article
III, (b) otherwise properly brought before the meeting by
or at the direction of the board of directors or the chief
executive officer, or (c) otherwise properly brought
before the meeting by a shareholder. For business to be
properly brought before a meeting by a shareholder
pursuant to clause (c) above, the shareholder must have
given timely notice thereof in writing to the secretary of
the Company. To be timely, a shareholder's notice must be
delivered to, or mailed and received at, the principal
office of the Company, not less than fifty days nor more
than ninety days prior to the meeting; provided, however,
that in the event that less than sixty days' notice of the
date of the meeting is given to shareholders, notice by
the shareholder to be timely must be so received not later
than the close of business on the tenth day following the
day on which such notice of the date of the meeting was
given. A shareholder's notice to the secretary shall set
forth as to each matter the shareholder proposes to bring
before the meeting (a) a brief description of the business
desired to be brought before the meeting, (b) the name and
address, as they appear on the Company's stock records, of
the shareholder proposing such business, (c) the class and
number of shares of the Company which are beneficially
owned by the shareholder, and (d) any interest of the
shareholder in such business. Notwithstanding anything in
these by-laws to the contrary, no business shall be
conducted at a meeting except in accordance with the
procedures set forth in this Section 11. The person
presiding at the meeting shall, if the facts warrant,
determine and declare to the meeting that business was not
properly brought before the meeting in accordance with the
by-laws, or that business was not lawful or appropriate
for consideration by shareholders at the meeting, and if
he should so determine, he shall so declare to the meeting
and any such business shall not be transacted.
SECTION 12. NOTICE OF SHAREHOLDER NOMINEES.
Nominations of persons for election to the board of
directors of the Company may be made at any meeting of
shareholders by or at the direction of the board of
directors or by any shareholder of the Company entitled to
vote for the election of directors at the meeting.
Shareholder nominations shall be made pursuant to timely
notice given in writing to the secretary of the Company in
accordance with Section 11 of this Article III. Such
shareholder's notice shall set forth, in addition to the
information required by Section 11, 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 number of shares of the Company which are
beneficially owned by such person, (iv) any other
information relating to such person that is required to be
disclosed in solicitation of proxies for election of
directors, or is otherwise required, in each case pursuant
to Regulation 14A under the Securities Exchange Act of
1934, as amended (including, without limitation, such
person's written consent to being named in the proxy
statement as a nominee and to serving as a director, if
elected), and (v) the qualifications of the nominee to
serve as a director of the Company. No shareholder
nomination shall be effective unless made in accordance
with the procedures set forth in this Section 12. The
person presiding at the meeting shall, if the facts
warrant, determine and declare to the meeting that a
shareholder nomination was not made in accordance with the
by-laws, and if he should so determine, he shall so
declare to the meeting and the defective nomination shall
be disregarded.
ARTICLE IV
BOARD OF DIRECTORS
SECTION 1. NUMBER. The business and affairs of the
Corporation shall be managed by a Board of twelve (12)
Directors, divided into three classes as provided in the
Articles. The Board may elect or appoint, from among its
members, a Chairman of the Board (the "Chairman"), who
need not be an Officer or employee of the Corporation.
The Chairman shall preside at all Shareholders Meetings
and Board Meetings and shall have such other powers and
perform such other duties as are incident to such position
and as may be assigned by the Board.
SECTION 2. VACANCIES AND REMOVAL. Any vacancy
occurring in the Board shall be filled as provided in the
Articles. Shareholders shall be notified of any increase
in the number of Directors and the name, principal
occupation and other pertinent information about any
Director elected by the Board to fill any vacancy. Any
Director, or the entire Board, may be removed from office
only as provided in the Articles.
SECTION 3. POWERS AND DUTIES. In addition to the
powers and duties expressly conferred upon it by law, the
Articles or these By-Laws, the Board may exercise all such
powers of the Corporation and do all such lawful acts and
things as are not inconsistent with the law, the Articles
or these By-Laws.
SECTION 4. ANNUAL BOARD MEETING. Unless otherwise
determined by the Board, the Board shall meet each year
immediately after the Annual Meeting, at the place where
such Meeting has been held, for the purpose of
organization, election of Officers of the Corporation (the
"Officers") and consideration of any other business that
may properly be brought before such annual meeting of the
Board (the "Annual Board Meeting"). No notice shall be
necessary for the holding of the Annual Board Meeting. If
the Annual Board Meeting is not held as above provided,
the election of Officers may be held at any subsequent
duly constituted meeting of the Board (a "Board Meeting").
SECTION 5. REGULAR BOARD MEETINGS. Regular meetings
of the Board ("Regular Board Meetings") may be held at
stated times or from time to time, and at such place,
either within or without the State of Indiana, as the
Board may determine, without call and without notice.
SECTION 6. SPECIAL BOARD MEETINGS. Special meetings
of the Board ("Special Board Meetings") may be called at
any time or from time to time, and shall be called on the
written request of at least two Directors, by the Chairman
or the President, by causing the Secretary or any
Assistant Secretary to give to each Director, either
personally or by mail, telephone, telegraph, teletype or
other form of wire or wireless communication at least two
days' notice of the date, time and place of such Meeting.
Special Board Meetings shall be held at the Principal
Office or at such other place, within or without the State
of Indiana, as shall be specified in the respective
notices or waivers of notice thereof.
SECTION 7. WAIVER OF NOTICE AND ASSENT. A Director
may waive notice of any Board Meeting before or after the
date and time of the Board Meeting stated in the notice by
a written waiver signed by the Director and filed with the
minutes or corporate records. A Director's attendance at
or participation in a Board Meeting shall constitute a
waiver of notice of such Meeting and assent to any
corporate action taken at such Meeting, unless (a) the
Director at the beginning of such Meeting (or promptly
upon his arrival) objects to holding of or transacting
business at the Meeting and does not thereafter vote for
or assent to action taken at the Meeting; (b) the
Director's dissent or abstention from the action taken is
entered in the minutes of such Meeting; or (c) the
Director delivers written notice of his dissent or
abstention to the presiding Director at such Meeting
before its adjournment, or to the Secretary immediately
after its adjournment. The right of dissent or abstention
is not available to a Director who votes in favor of the
action taken.
SECTION 8. QUORUM. At all Board Meetings, a
majority of the number of Directors designated for the
full Board (the "Full Board") shall be necessary to
constitute a quorum for the transaction of any business,
except (a) that for the purpose of filling of vacancies a
majority of Directors then in office shall constitute a
quorum, and (b) that a lesser number may adjourn the
Meeting from time to time until a quorum is present. The
act of a majority of the Board present at a Meeting at
which a quorum is present shall be the act of the Board,
unless the act of a greater number is required by law, the
Articles or these By-Laws.
SECTION 9. AUDIT AND OTHER COMMITTEES OF THE BOARD.
The Board shall, by resolution adopted by a majority of
the Full Board, designate an Audit Committee comprised of
two or more Directors, which shall have such authority and
exercise such duties as shall be provided by resolution of
the Board. The Board may, by resolution adopted by such
majority, also designate other regular or special
committees of the Board ("Committees"), in each case
comprised of two or more Directors and to have such powers
and exercise such duties as shall be provided by
resolution of the Board.
SECTION 10. RESIGNATIONS. Any Director may resign
at any time by giving written notice to the Board, the
Chairman, the President or the Secretary. Any such
resignation shall take effect when delivered unless the
notice specifies a later effective date. Unless otherwise
specified in the notice, the acceptance of such
resignation shall not be necessary to make it effective.
ARTICLE V
OFFICERS
SECTION 1. OFFICERS. The Officers shall be the
President, one or more Vice Presidents, the Secretary and
the Treasurer, and may include one or more Assistant
Secretaries, one or more Assistant Treasurers, a
Controller and one or more Assistant Controllers. Any two
or more offices may be held by the same person. The Board
may from time to time elect or appoint such other Officers
as it shall deem necessary, who shall exercise such powers
and perform such duties as may be prescribed from time to
time by these By-Laws or, in the absence of a provision in
these By-Laws in respect thereto, as may be prescribed
from time to time by the Board.
SECTION 2. ELECTION OF OFFICERS. The Officers shall
be elected by the Board at the Annual Board Meeting and
shall hold office for one year or until their respective
successors shall have been duly elected and shall have
qualified; provided, however, that the Board may at any
time elect one or more persons to new or different offices
and/or change the title, designation and duties and
responsibilities of any of the Officers consistent with
the law, the Articles and these By-Laws.
SECTION 3. VACANCIES; REMOVAL. Any vacancy among
the Officers may be filled for the unexpired term by the
Board. Any Officer may be removed at any time by the
affirmative vote of a majority of the Full Board.
SECTION 4. DELEGATION OF DUTIES. In the case of the
absence, disability, death, resignation or removal from
office of any Officer, or for any other reason that the
Board shall deem sufficient, the Board may delegate, for
the time being, any or all of the powers or duties of such
Officer to any other Officer or to any Director.
SECTION 5. PRESIDENT. The President shall be a
Director and, subject to the control of the Board, shall
have general charge of and supervision and authority over
the business and affairs of the Corporation, and shall
have such other powers and perform such other duties as
are incident to this office and as may be assigned to him
by the Board. In the case of the absence or disability of
the Chairman or if no Chairman shall be elected or
appointed by the Board, the President shall preside at all
Shareholders' Meetings and Board Meetings.
SECTION 6. VICE PRESIDENTS. Each of the Vice
Presidents shall have such powers and perform such duties
as may be prescribed for him by the Board or delegated to
him by the President. In the case of the absence,
disability, death, resignation or removal from office of
the President, the powers and duties of the President
shall, for the time being, devolve upon and be exercised
by the Executive Vice President, if there be one, and if
not, then by such one of the Vice Presidents as the Board
or the President may designate, or, if there be but one
Vice President, then upon such Vice President; and he
shall thereupon, during such period, exercise and perform
all of the powers and duties of the President, except as
may be otherwise provided by the Board.
SECTION 7. SECRETARY. The Secretary shall have the
custody and care of the Seal, records, minutes and the
Stock Book of the Corporation; shall attend all
Shareholders' Meetings and Board Meetings, and duly record
and keep the minutes of their proceedings in a book or
books to be kept for that purpose; shall give or cause to
be given notice of all Shareholders' Meetings and Board
Meetings when such notice shall be required; shall file
and take charge of all papers and documents belonging to
the Corporation; and shall have such other powers and
perform such other duties as are incident to the office of
secretary of a business corporation, subject at all times
to the direction and control of the Board and the
President.
SECTION 8. ASSISTANT SECRETARIES. Each of the
Assistant Secretaries shall assist the Secretary in his
duties and shall have such other powers and perform such
other duties as may be prescribed for him by the Board or
delegated to him by the President. In case of the
absence, disability, death, resignation or removal from
office of the Secretary, his powers and duties shall, for
the time being, devolve upon such one of the Assistant
Secretaries as the Board, the President or the Secretary
may designate, or, if there be but one Assistant
Secretary, then upon such Assistant Secretary; and he
shall thereupon, during such period, exercise and perform
all of the powers and duties of the Secretary, except as
may be otherwise provided by the Board.
SECTION 9. TREASURER. The Treasurer shall have
control over all records of the Corporation pertaining to
moneys and securities belonging to the Corporation; shall
have charge of, and be responsible for, the collection,
receipt, custody and disbursements of funds of the
Corporation; shall have the custody of all securities
belonging to the Corporation; shall keep full and accurate
accounts of receipts and disbursements in books belonging
to the Corporation; and shall disburse the funds of the
Corporation as may be ordered by the Board, taking proper
receipts or making proper vouchers for such disbursements
and preserving the same at all times during his term of
office. When necessary or proper, he shall endorse on
behalf of the Corporation all checks, notes or other
obligations payable to the Corporation or coming into his
possession for or on behalf of the Corporation, and shall
deposit the funds arising therefrom, together with all
other funds and valuable effects of the Corporation coming
into his possession, in the name and the credit of the
Corporation in such depositories as the Board from time to
time shall direct, or in the absence of such action by the
Board, as may be determined by the President or any Vice
President. If the Board has not elected a Controller or
an Assistant Controller, or in the absence or disability
of the Controller and each Assistant Controller or if, for
any reason, a vacancy shall occur in such offices, then
during such period the Treasurer shall have, exercise and
perform all of the powers and duties of the Controller.
The Treasurer shall also have such other powers and
perform such other duties as are incident to the office of
treasurer of a business corporation, subject at all times
to the direction and control of the Board and the
President.
If required by the Board, the Treasurer shall give
the Corporation a bond, in such an amount and with such
surety or sureties as may be ordered by the Board, for the
faithful performance of the duties of his office and for
the restoration to the Corporation, in case of his death,
resignation, retirement or removal from office, of all
books, papers, vouchers, money and other property of
whatever kind in his possession or under his control
belonging to the Corporation.
SECTION 10. ASSISTANT TREASURERS. Each of the
Assistant Treasurers shall assist the Treasurer in his
duties, and shall have such other powers and perform such
other duties as may be prescribed for him by the Board or
delegated to him by the President. In case of the
absence, disability, death, resignation or removal from
office of the Treasurer, his powers and duties shall, for
the time being, devolve upon such one of the Assistant
Treasurers as the Board, the President or the Treasurer
may designate, or, if there be but one Assistant
Treasurer, then upon such Assistant Treasurer; and he
shall thereupon, during such period, exercise and perform
all the powers and duties of the Treasurer except as may
be otherwise provided by the Board. If required by the
Board, each Assistant Treasurer shall likewise give the
Corporation a bond, in such amount and with such surety or
sureties as may be ordered by the Board, for the same
purposes as the bond that may be required to be given by
the Treasurer.
SECTION 11. CONTROLLER. The Controller shall have
direct control over all accounting records of the
Corporation pertaining to moneys, properties, materials
and supplies, including the bookkeeping and accounting
departments; shall have direct supervision over the
accounting records in all other departments pertaining to
moneys, properties, materials and supplies; shall render
to the President and the Board, at Regular Board Meetings
or whenever the same shall be required, an account of all
his transactions as Controller and of the financial
condition of the Corporation; and shall have such other
powers and perform such other duties as are incident to
the office of controller of a business corporation,
subject at all times to the direction and control of the
Board and the President.
SECTION 12. ASSISTANT CONTROLLERS. Each of the
Assistant Controllers shall assist the Controller in his
duties, and shall have such other powers and perform such
other duties as may be prescribed for him by the Board or
delegated to him by the President. In case of the
absence, disability, death, resignation or removal from
office of the Controller, his powers and duties shall, for
the time being, devolve upon such one of the Assistant
Controllers as the Board, the President or the Controller
may designate, or, if there be but one Assistant
Controller, then upon such Assistant Controller; and he
shall thereupon, during such period, exercise and perform
all the powers and duties of the Controller, except as may
be otherwise provided by the Board.
ARTICLE VI
CERTIFICATES FOR SHARES
SECTION 1. CERTIFICATES. Certificates for Shares
("Certificates") shall be in such form, consistent with
law and the Articles, as shall be approved by the Board.
Certificates for each class, or series within a class, of
Shares, shall be numbered consecutively as issued. Each
Certificate shall state the name of the Corporation and
that it is organized under the laws of the State of
Indiana; the name of the registered holder; the number and
class and the designation of the series, if any, of the
Shares represented thereby; and a summary of the
designations, relative rights, preferences and limitations
applicable to such class and, if applicable, the
variations in rights, preferences and limitations
determined for each series and the authority of the Board
to determine such variations for future series; provided,
however, that such summary may be omitted if the
Certificate states conspicuously on its front or back that
the Corporation will furnish the Shareholder such
information upon written request and without charge. Each
Certificate shall be signed (either manually or in
facsimile) by (i) the President or a Vice President and
(ii) the Secretary or an Assistant Secretary, or by any
two or more Officers that may be designated by the Board,
and may have affixed thereto the Seal, which may be a
facsimile, engraved or printed.
SECTION 2. RECORD OF CERTIFICATES. Shares shall be
entered in the Stock Book as they are issued, and shall be
transferable on the Stock Book by the holder thereof in
person, or by his attorney duly authorized thereto in
writing, upon the surrender of the outstanding Certificate
therefor properly endorsed.
SECTION 3. LOST OR DESTROYED CERTIFICATES. Any
person claiming a Certificate to be lost or destroyed
shall make affidavit or affirmation of that fact and, if
the Board or the President shall so require, shall give
the Corporation and/or the transfer agents and registrars,
if they shall so require, a bond of indemnity, in form and
with one or more sureties satisfactory to the Board or the
President and/or the transfer agents and registrars, in
such amount as the Board or the President may direct
and/or the transfer agents and registrars may require,
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.
SECTION 4. SHAREHOLDER ADDRESSES. Every Shareholder
shall furnish the Secretary with an address to which
notices of Meetings and all other notices may be served
upon him or mailed to him, and in default thereof notices
may be addressed to him at his last known address or at
the Principal Office.
ARTICLE VII
CORPORATE BOOKS AND RECORDS
SECTION 1. PLACES OF KEEPING. Except as otherwise
provided by law, the Articles or these By-Laws, the books
and records of the Corporation (including the "Corporate
Records," as defined in the Articles) may be kept at such
place or places, within or without the State of Indiana,
as the Board may from time to time by resolution determine
or, in the absence of such determination by the Board, as
shall be determined by the President.
SECTION 2. STOCK BOOK. The Corporation shall keep
at the Principal Office the original Stock Book or a
duplicate thereof, or, in case the Corporation employs a
stock registrar or transfer agent within or without the
State of Indiana, another record of the Shareholders in a
form that permits preparation of a list of the names and
addresses of all the Shareholders, in alphabetical order
by class of Shares, stating the number and class of Shares
held by each Shareholder (the "Record of Shareholders").
SECTION 3. INSPECTION OF CORPORATE RECORDS. Any
Shareholder (or the Shareholder's agent or attorney
authorized in writing) shall be entitled to inspect and
copy at his expense, after giving the Corporation at least
five business days written notice of his demand to do so,
the following Corporate Records: (1) the Articles; (2)
these By-Laws; (3) minutes of all Shareholders' Meetings
and records of all actions taken by the Shareholders
without a meeting (collectively, "Shareholders Minutes")
for the prior three years; (4) all written communications
by the Corporation to the Shareholders including the
financial statements furnished by the Corporation to the
Shareholders for the prior three years; (5) a list of the
names and business addresses of the current Directors and
the current Officers; and (6) the most recent Annual
Report of the Corporation as filed with the Secretary of
State of Indiana. Any Shareholder (or the Shareholder's
agent or attorney authorized in writing) shall also be
entitled to inspect and copy at his expense, after giving
the Corporation at least five business days written notice
of his demand to do so, the following Corporate Records,
if his demand is made in good faith and for a proper
purpose and describes with reasonable particularity his
purpose and the records he desires to inspect, and the
records are directly connected with his purpose: (1) to
the extent not subject to inspection under the previous
sentence, Shareholders Minutes, excerpts from minutes of
Board Meetings and of Committee meetings, and records of
any actions taken by the Board or any Committee without a
meeting; (2) appropriate accounting records of the
Corporation; and (3) the Record of Shareholders.
SECTION 4. RECORD DATE. The Board may, in its
discretion, fix in advance a Record Date not more than
seventy days before the date (a) of any Shareholders'
Meeting, (b) for the payment of any dividend or the making
of any other distribution, (c) for the allotment of
rights, or (d) when any change or conversion or exchange
of Shares shall go into effect. If the Board fixes a
Record Date, then only Shareholders who are Shareholders
of record on such Record Date shall be entitled (a) to
notice of and/or to vote at any such Meeting, (b) to
receive any such dividend or other distribution, (c) to
receive any such allotment of rights, or (d) to exercise
the rights in respect of any such change, conversion or
exchange of Shares, as the case may be, notwithstanding
any transfer of Shares on the Stock Book after such Record
Date.
SECTION 5. TRANSFER AGENTS; REGISTRARS. The Board
may appoint one or more transfer agents and registrars for
its Shares and may require all Certificates to bear the
signature either of a transfer agent or of a registrar, or
both.
ARTICLE VIII
CHECKS, DRAFTS, DEEDS AND SHARES OF STOCK
SECTION 1. CHECKS, DRAFTS, NOTES, ETC. All checks,
drafts, notes or orders for the payment of money of the
Corporation shall, unless otherwise directed by the Board
or otherwise required by law, be signed by one or more
Officers as authorized in writing by the President. In
addition, the President may authorize any one or more
employees of the Corporation ("Employees") to sign checks,
drafts and orders for the payment of money not to exceed
specific maximum amounts as designated in writing by the
President for any one check, draft or order. When so
authorized by the President, the signature of any such
Officer or Employee may be a facsimile signature.
SECTION 2. DEEDS, NOTES, BONDS, MORTGAGES,
CONTRACTS, ETC. All deeds, notes, bonds and mortgages
made by the Corporation, and all other written contracts
and agreements, other than those executed in the ordinary
course of corporate business, to which the Corporation
shall be a party, shall be executed in its name by the
President, a Vice President or any other Officer so
authorized by the Board and, when necessary or required,
the Secretary or an Assistant Secretary shall attest the
execution thereof. All written contracts and agreements
into which the Corporation enters in the ordinary course
of corporate business shall be executed by any Officer or
by any other Employee designated by the President or a
Vice President to execute such contracts and agreements.
SECTION 3. SALE OR TRANSFER OF STOCK. Subject
always to the further orders and directions of the Board,
any share of stock issued by any corporation and owned by
the Corporation (including reacquired Shares of the
Corporation) may, for sale or transfer, be endorsed in the
name of the Corporation by the President or a Vice
President, and said endorsement shall be duly attested by
the Secretary or an Assistant Secretary either with or
without affixing thereto the Seal.
SECTION 4. VOTING OF STOCK OF OTHER CORPORATIONS.
Subject always to the further orders and directions of the
Board, any share of stock issued by any other corporation
and owned or controlled by the Corporation (an "Investment
Share") may be voted at any shareholders' meeting of such
other corporation by the President or by a Vice President.
Whenever, in the judgment of the President, it is
desirable for the Corporation to execute a proxy or give a
shareholder's consent in respect of any Investment Share,
such proxy or consent shall be executed in the name of the
Corporation, by the President or a Vice President, and,
when necessary or required, shall be attested by the
Secretary or an Assistant Secretary either with or without
affixing thereto the Seal. Any person or persons
designated in the manner above stated as the proxy or
proxies of the Corporation shall have full right, power
and authority to vote an Investment Share the same as such
Investment Share might be voted by the Corporation.
ARTICLE IX
FISCAL YEAR
SECTION 1. FISCAL YEAR. The Corporation's fiscal
year shall begin on October 1 of each year and end on
September 30 of the following year.
ARTICLE X
AMENDMENTS
SECTION 1. AMENDMENTS. These By-Laws may be
altered, amended or repealed, in whole or in part, and new
By-Laws may be adopted, at any Board Meeting by the
affirmative vote of a majority of the Full Board.
EXHIBIT 10-F
TERMINATION BENEFITS AGREEMENT
This Agreement, dated as of July 29, 1994, by and among
INDIANA ENERGY, INC., an Indiana corporation having its principal
executive offices at 1630 North Meridian Street, Indianapolis,
Indiana 46202 ("ENERGY"), INDIANA GAS COMPANY, INC., an Indiana
corporation having its principal executive offices at 1630 North
Meridian Street, Indianapolis, Indiana 46202 ("INDIANA GAS")
(both ENERGY and INDIANA GAS being collectively referred to
herein as the "Company"), and Lawrence A. Ferger, an Indiana
resident whose mailing address is 1630 North Meridian Street,
Indianapolis, Indiana 46202-1496 (the "Executive").
R E C I T A L S
The following facts are true:
A. The Executive is serving the Company as a key executive
officer, and is expected to continue to make a major contribution
to the profitability, growth, and financial strength of the
Company.
B. The Company considers the continued services of the
Executive to be in the best interests of the Company and its
shareholders, and desires to assure itself of the availability of
such continued services in the future on an objective and
impartial basis and without distraction or conflict of interest
in the event of an attempt to obtain control of the Company.
C. The Executive is willing to remain in the employ of the
Company upon the understanding that the Company will provide him
with income security upon the terms and subject to the conditions
contained herein if his employment is terminated by the Company
without cause or if he voluntarily terminates his employment for
good reason.
A G R E E M E N T
In consideration of the premises and the mutual covenants
and agreements hereinafter set forth, the Company and the
Executive agree as follows:
1. Undertaking. The Company agrees to pay to the
Executive the termination benefits specified in paragraph 2
hereof if (a) control of ENERGY is acquired (as defined in
paragraph 3(a) hereof) during the term of this Agreement (as
described in paragraph 5 hereof) and (b) within three (3) years
after the acquisition of control occurs (i) the Company
terminates the employment of the Executive for any reason other
than Cause (as defined in paragraph 3(b) hereof), death, the
Executive's attainment of age sixty-five (65) or total and
permanent disability, or (ii) the Executive voluntarily
terminates his employment for Good Reason (as defined in
paragraph 3(c) hereof) or without reason during the Window Period
(as defined in paragraph 3(d) hereof).
2. Termination Benefits. If the Executive is entitled to
termination benefits pursuant to paragraph 1 hereof, the Company
agrees to pay to the Executive as termination benefits in a
lump-sum payment within five (5) calendar days of the termination
of the Executive's employment an amount to be computed by
multiplying (i) the Executive's average annual compensation (as
determined consistent with the provisions of Section 280G(d)(1)
of the Internal Revenue Code of 1986, as amended (the "Code") in
effect on July 29, 1994) payable by the Company which was
includable in the gross income of the Executive for the most
recent five (5) calendar years ending coincident with or
immediately before the date on which control of the Company is
acquired (or such portion of such period during which the
Executive was an employee of the Company), by (ii) two hundred
ninety-nine and ninety-nine one hundredths percent (299.99%). For
the purposes of this Agreement, employment and compensation paid
by any direct or indirect subsidiary of the Company will be
deemed to be employment and compensation paid by the Company.
3. Definitions.
(a) As used in this Agreement, the "acquisition
of control" means:
(i) The acquisition by any individual,
entity or group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of twenty percent
(20%) or more of either (A) the then outstanding shares
of common stock of ENERGY (the "Outstanding ENERGY
Common Stock") or (B) the combined voting power of the
then outstanding voting securities of ENERGY entitled
to vote generally in the election of directors (the
"Outstanding ENERGY Voting Securities"); provided,
however, that the following acquisitions shall not
constitute an acquisition of control: (A) any
acquisition directly from ENERGY (excluding an
acquisition by virtue of the exercise of a conversion
privilege), (B) any acquisition by ENERGY, (C) any
acquisition by any employee benefit plan (or related
trust) sponsored or maintained by ENERGY, INDIANA GAS
or any corporation controlled by ENERGY or (D) any
acquisition by any corporation pursuant to a
reorganization, merger or consolidation, if, following
such reorganization, merger or consolidation, the
conditions described in clauses (A), (B) and (C) of
subsection (iii) of this paragraph 3(a) are satisfied;
(ii) Individuals who, as of the date hereof,
constitute the Board of Directors of ENERGY (the
"Incumbent Board") cease for any reason to constitute
at least a majority of the Board of Directors of ENERGY
(the "Board"); provided, however, that any individual
becoming a director subsequent to the date hereof whose
election, or nomination for election by ENERGY's
shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent
Board shall be considered as though such individual
were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial
assumption of office occurs as a result of either an
actual or threatened election contest (as such terms
are used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of
a Person other than the Board; or
(iii) Approval by the shareholders of
ENERGY 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 ENERGY Common Stock and Outstanding ENERGY
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 ENERGY Stock and
Outstanding ENERGY Voting Securities, as the case may
be, (B) no Person (excluding ENERGY, any employee
benefit plan or related trust of ENERGY, INDIANA GAS or
such corporation resulting from such reorganization,
merger or consolidation and any Person beneficially
owning, immediately prior to such reorganization,
merger or consolidation and any Person beneficially
owning, immediately prior to such reorganization,
merger or consolidation, directly or indirectly, twenty
percent (20%) or more of the Outstanding ENERGY Common
Stock or Outstanding Voting Securities, as the case may
be) beneficially owns, directly or indirectly, twenty
percent (20%) or more of, respectively, the then
outstanding shares of common stock of the corporation
resulting from such reorganization, merger or
consolidation or the combined voting power of the then
outstanding voting securities of such corporation
entitled to vote generally in the election of directors
and (C) at least a majority of the members of the board
of directors of the corporation resulting from such
reorganization, merger or consolidation were members of
the Incumbent Board at the time of the execution of the
initial agreement providing for such reorganization,
merger or consolidation;
(iv) Approval by the shareholders of ENERGY
of (A) a complete liquidation or dissolution of ENERGY
or (B) the sale or other disposition of all or
substantially all of the assets of ENERGY, other than
to a corporation, with respect to which following such
sale or other disposition (1) more than sixty percent
(60%) of, respectively, the then outstanding shares of
common stock of such corporation and the combined
voting power of the then outstanding voting securities
of such corporation entitled to vote generally in the
election of directors is then beneficially owned,
directly or indirectly, by all or substantially all of
the individuals and entities who were the beneficial
owners, respectively, of the Outstanding ENERGY Common
Stock and Outstanding ENERGY 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 ENERGY Common Stock and Outstanding
ENERGY Voting Securities, as the case may be, (2) no
Person (excluding ENERGY and any employee benefit plan
or related trust of ENERGY, INDIANA GAS 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 ENERGY Common Stock or Outstanding
ENERGY Voting Securities, as the case may be)
beneficially owns, directly or indirectly, twenty
percent (20%) or more of, respectively, the then
outstanding shares of common stock of such corporation
and the combined voting power of the then outstanding
voting securities of such corporation entitled to vote
generally in the election of directors and (3) at least
a majority of the members of the board of directors of
such corporation were members of the Incumbent Board at
the time of the execution of the initial agreement or
action of the Board providing for such sale or other
disposition of assets of ENERGY; or
(v) The closing, as defined in the documents
relating to, or as evidenced by a certificate of any
state or federal governmental authority in connection
with, a transaction approval of which by the
shareholders of ENERGY would constitute an "acquisition
of control" under subsection (iii) or (iv) of this
section 3(a) of this Agreement.
Notwithstanding anything contained in this Agreement to
the contrary, if the Executive's employment is terminated
before an "acquisition of control" as defined in this
section 3(a) and the Executive reasonably demonstrates that
such termination (i) was at the request of a third party who
has indicated an intention or taken steps reasonably
calculated to effect an "acquisition of control" and who
effectuates an "acquisition of control" (a "Third Party") or
(ii) otherwise occurred in connection with, or in
anticipation of, an "acquisition of control" which actually
occurs, then for all purposes of this Agreement, the date of
an "acquisition of control" with respect to the Executive
shall mean the date immediately prior to the date of such
termination of the Executive's employment.
(b) As used in this Agreement, the term "Cause" means
fraud, dishonesty, theft of corporate assets, or other gross
misconduct by the Executive. Notwithstanding the foregoing,
the Executive shall not be deemed to have been terminated
for cause unless and until there shall have been delivered
to him a copy of a resolution duly adopted by the
affirmative vote of not less than a majority of the entire
membership of the Board at a meeting of the Board called and
held for the purpose (after reasonable notice to him and an
opportunity for him, together with his counsel, to be heard
before the Board), finding that in the good faith opinion of
the Board the Executive was guilty of conduct set forth
above in the first sentence of the subsection and specifying
the particulars thereof in detail.
(c) As used in this Agreement, the term "Good Reason"
means, without the Executive's written consent, (i) a
demotion in the Executive's status, position or
responsibilities which, in his reasonable judgment, does not
represent a promotion from his status, position or
responsibilities as in effect immediately prior to the
change in control; (ii) the assignment to the Executive of
any duties or responsibilities which, in his reasonable
judgment, are inconsistent with such status, position or
responsibilities; or any removal of the Executive from or
failure to reappoint or reelect him to any of such
positions, except in connection with the termination of his
employment for total and permanent disability, death or
Cause or by him other than for Good Reason; (iii) a
reduction by the Company in the Executive's base salary as
in effect on the date hereof or as the same may be increased
from time to time during the term of this Agreement or the
Company's failure to increase (within twelve (12) months of
the Executive's last increase in base salary) the
Executive's base salary after a change in control in an
amount which at least equals, on a percentage basis, the
average percentage increase in base salary for all executive
and senior officers of the Company effected in the preceding
twelve (12) months; (iv) the relocation of the principal
executive offices of ENERGY or INDIANA GAS, whichever entity
on behalf of which the Executive performs a principal
function of that entity as part of his employment services,
to a location outside the Indianapolis, Indiana metropolitan
area or the Company's requiring him to be based at any place
other than the location at which he performed his duties
prior to a change in control, except for required travel on
the Company's business to an extent substantially consistent
with his business travel obligations at the time of a change
in control; (v) the failure by the Company to continue in
effect any incentive, bonus or other compensation plan in
which the Executive participates, including but not limited
to the Company's stock option and restricted stock plans, if
any, unless an equitable arrangement (embodied in an ongoing
substitute or alternative plan), with which he has
consented, has been made with respect to such plan in
connection with the change in control, or the failure by the
Company to continue his participation therein, or any action
by the Company which would directly or indirectly materially
reduce his participation therein; (vi) the failure by the
Company to continue to provide the Executive with benefits
substantially similar to those enjoyed by him or to which he
was entitled under any of the Company's pension, profit
sharing, life insurance, medical, dental, health and
accident, or disability plans in which he was participating
at the time of a change in control, the taking of any action
by the Company which would directly or indirectly materially
reduce any of such benefits or deprive him of any material
fringe benefit enjoyed by him or to which he was entitled at
the time of the change in control, or the failure by the
Company to provide him with the number of paid vacation and
sick leave days to which he is entitled on the basis of
years of service with the Company in accordance with the
Company's normal vacation policy in effect on the date
hereof; (vii) the failure of the Company to obtain a
satisfactory agreement from any successor or assign of the
Company to assume and agree to perform this Agreement;
(viii) any purported termination of the Executive's
employment which is not effected pursuant to a Notice of
Termination satisfying the requirements of paragraph 4(c)
hereof (and, if applicable, paragraph 3(b) hereof); and for
purposes of this Agreement, no such purported termination
shall be effective; or (ix) any request by the Company that
the Executive participate in an unlawful act or take any
action constituting a breach of the Executive's professional
standard of conduct.
Notwithstanding anything in this paragraph 3(c) to the
contrary, the Executive's right to terminate his employment
pursuant to this paragraph 3(c) shall not be affected by his
incapacity due to physical or mental illness.
(d) As used in this Agreement, the "Window Period"
shall mean the 30-day period immediately following the first
anniversary of the acquisition of control.
4. Additional Provisions.
(a) Enforcement of Agreement. The Company is aware
that upon the occurrence of a change in control the Board of
Directors or a shareholder of the Company may then cause or
attempt to cause the Company to refuse to comply with its
obligations under this Agreement, or may cause or attempt to
cause the Company to institute, or may institute, litigation
seeking to have this Agreement declared unenforceable, or
may take or attempt to take other action to deny the
Executive the benefits intended under this Agreement. In
these circumstances, the purpose of this Agreement could be
frustrated. It is the intent of the Company that the
Executive not be required to incur the expenses associated
with the enforcement of his rights under this Agreement by
litigation or other legal action, nor be bound to negotiate
any settlement of his rights hereunder, because the cost and
expense of such legal action or settlement would
substantially detract from the benefits intended to be
extended to the Executive hereunder. Accordingly, if
following a change in control it should appear to the
Executive that the Company has failed to comply with any of
its obligations under this Agreement or in the event that
the Company or any other person takes any action to declare
this Agreement void or unenforceable, or institutes any
litigation or other legal action designed to deny, diminish
or to recover from the Executive the benefits entitled to be
provided to the Executive hereunder, and that the Executive
has complied with all of his obligations under this
Agreement, the Company irrevocably authorizes the Executive
from time to time to retain counsel of his choice, at the
expense of the Company as provided in this paragraph 4(a),
to represent the Executive in connection with the initiation
or defense of any litigation or other legal action, whether
such action is by or against the Company or any director,
officer, shareholder, or other person affiliated with the
Company, in any jurisdiction. Notwithstanding any existing
or prior attorney-client relationship between the Company
and such counsel, the Company irrevocably consents to the
Executive entering into an attorney-client relationship with
such counsel, and in that connection the Company and the
Executive agree that a confidential relationship shall exist
between the Executive and such counsel. The reasonable fees
and expenses of counsel selected from time to time by the
Executive as hereinabove provided shall be paid or
reimbursed to the Executive by the Company on a regular,
periodic basis upon presentation by the Executive of a
statement or statements prepared by such counsel in
accordance with its customary practices, up to a maximum
aggregate amount of $500,000. Any legal expenses incurred
by the Company by reason of any dispute between the parties
as to enforceability of or the terms contained in this
Agreement, notwithstanding the outcome of any such dispute,
shall be the sole responsibility of the Company, and the
Company shall not take any action to seek reimbursement from
the Executive for such expenses.
(b) Severance Pay; No Duty to Mitigate. The amounts
payable to the Executive under this Agreement shall not be
treated as damages but as severance compensation to which
the Executive is entitled by reason of termination of his
employment in the circumstances contemplated by this
Agreement. The Company shall not be entitled to set off
against the amounts payable to the Executive any amounts
earned by the Executive in other employment after
termination of his employment with the Company, or any
amounts which might have been earned by the Executive in
other employment had he sought such other employment.
(c) Notice of Termination. Any purported termination
by the Company or by the Executive for Good Reason or by the
Executive without any reason during the Window Period shall
be communicated by written Notice of Termination to the
other party hereto in accordance with paragraph 4(j) hereof.
For purposes of this Agreement, a "Notice of Termination"
shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of
his employment under the provision so indicated. For
purposes of this Agreement, no such purported termination
shall be effective without such Notice of Termination.
(d) Internal Revenue Code. Notwithstanding anything
in this Agreement to the contrary (other than this
paragraph), in the event that Arthur Andersen & Co. (or its
successor) determines that any payment by the Company to or
for the benefit of the Executive pursuant to the terms of
this Agreement would be nondeductible by the Company for
federal income tax purposes because of Section 280G of the
Code, then the amount payable to or for the benefit of the
Executive pursuant to this Agreement shall be reduced (but
not below zero) to the maximum amount payable without
causing the payment to be nondeductible by the Company
because of Section 280G of the Code; provided, however, that
notwithstanding the preceding clause of this sentence, if
Section 280G of the Code is amended after the date on which
this Agreement has been executed and if the amendment has
the effect of reducing the amount of deductible payments
that may be made by the Company to the Executive under
Section 280G of the Code to an amount less than what would
have been deductible by the Company under Section 280G of
the Code as in effect on July 29, 1994, the maximum amount
payable to the Executive under this paragraph 4(d) shall be
determined without regard to any amendment to Section 280G
of the Code; provided, further, that if solely by reason of
any amendment to Section 280G of the Code an excise tax is
imposed on the Executive under Section 4999 of the Code as a
result of payments made under this Agreement, the Company
shall increase the benefit payable to the Executive under
this Agreement by an amount ("Make Whole Payment") which,
after taking into account the additional federal, state and
local income taxes or the amount (including the Code Section
4999 excise tax that would be imposed on the "Make Whole
Payment"), would reimburse the Executive fully for the Code
Section 4999 tax that is imposed on the other payments made
hereunder and put the Executive in same net after-tax
position with respect to this Agreement that he would have
been but for the excise tax. Such determination by Arthur
Andersen & Co. (or its successor) shall be conclusive and
binding upon the parties.
(e) Assignment. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their
respective executors, administrators, heirs, personal
representatives, successors, and assigns, but neither this
Agreement nor any right hereunder may be assigned or
transferred by either party hereto, any beneficiary, or any
other person, nor be subject to alienation, anticipation,
sale, pledge, encumbrance, execution, levy, or other legal
process of any kind against the Executive, his beneficiary
or any other person. Notwithstanding the foregoing, the
Company shall assign this Agreement to any corporation or
other business entity succeeding to substantially all of the
business and assets of the Company by merger, consolidation,
sale of assets, or otherwise and shall obtain the assumption
of this Agreement by such successor.
(f) Amendment. This Agreement shall not be amended,
modified, or supplemented without the written agreement of
the parties at the time of such amendment, modification, or
supplement.
(g) Governing Law. This Agreement shall be governed
by and subject to the laws of the State of Indiana.
(h) Severability. The invalidity or unenforceability
of any particular provision of this Agreement shall not
affect the other provisions, and this Agreement shall be
construed in all respects as if such invalid or
unenforceable provision had not been contained herein.
(i) Captions. The captions in this Agreement are for
convenience and identification purposes only, are not an
integral part of this Agreement, and are not to be
considered in the interpretation of any part hereof.
(j) Notices. Except as otherwise specifically
provided in this Agreement, all notices and other
communications hereunder shall be in writing and shall be
deemed to have been duly given if delivered in person or
sent by registered or certified mail, postage prepaid,
addressed as set forth above, or to such other address as
shall be furnished in writing by any party to the others.
(k) Waivers. Except as otherwise specifically
provided in this Agreement, no waiver by either party hereto
of any breach by the other party hereto of any condition or
provision of this Agreement to be performed by such other
party shall be deemed to be a valid waiver unless such
waiver is in writing or, even if in writing, shall be
deemed to be a waiver of a subsequent breach of such
condition or provision or a waiver of a similar or
dissimilar provision or condition at the same or at any
prior or subsequent time.
5. Term of this Agreement. This Agreement shall remain in
effect until October 1, 1999 or until the expiration of any
extension thereof. The term of this Agreement shall be
automatically extended for one (1) year periods without further
action of the parties as of October 1, 1995 and each succeeding
October 1 thereafter, unless ENERGY shall have served written
notice to the Executive prior to October 1, 1995 or prior to
October 1 of each succeeding year, as the case may be, of its
intention that the Agreement shall terminate at the end of the
five (5) year period that begins with the October 1 following the
date of such written notice.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the day and year first above written.
INDIANA ENERGY, INC.
By:
O. N. Frenzel III, as
Chairman of the Compensation
Committee
Attest:
Secretary or Assistant Secretary
INDIANA GAS COMPANY, INC.
By:
President or Vice President
Attest:
Secretary or Assistant Secretary
EXECUTIVE
Lawrence A. Ferger
JAS 44371
EXHIBIT 10-G
TERMINATION BENEFITS AGREEMENT
This Agreement, dated as of July 29, 1994, by and among
INDIANA ENERGY, INC., an Indiana corporation having its principal
executive offices at 1630 North Meridian Street, Indianapolis,
Indiana 46202 ("ENERGY"), INDIANA GAS COMPANY, INC., an Indiana
corporation having its principal executive offices at 1630 North
Meridian Street, Indianapolis, Indiana 46202 ("INDIANA GAS")
(both ENERGY and INDIANA GAS being collectively referred to
herein as the "Company"), and Paul T. Baker, an Indiana resident
whose mailing address is 1630 North Meridian Street,
Indianapolis, Indiana 46202-1496 (the "Executive").
R E C I T A L S
The following facts are true:
A. The Executive is serving the Company as a key executive
officer, and is expected to continue to make a major contribution
to the profitability, growth, and financial strength of the
Company.
B. The Company considers the continued services of the
Executive to be in the best interests of the Company and its
shareholders, and desires to assure itself of the availability of
such continued services in the future on an objective and
impartial basis and without distraction or conflict of interest
in the event of an attempt to obtain control of the Company.
C. The Executive is willing to remain in the employ of the
Company upon the understanding that the Company will provide him
with income security upon the terms and subject to the conditions
contained herein if his employment is terminated by the Company
without cause or if he voluntarily terminates his employment for
good reason.
A G R E E M E N T
In consideration of the premises and the mutual covenants
and agreements hereinafter set forth, the Company and the
Executive agree as follows:
1. Undertaking. The Company agrees to pay to the
Executive the termination benefits specified in paragraph 2
hereof if (a) control of ENERGY is acquired (as defined in
paragraph 3(a) hereof) during the term of this Agreement (as
described in paragraph 5 hereof) and (b) within three (3) years
after the acquisition of control occurs (i) the Company
terminates the employment of the Executive for any reason other
than Cause (as defined in paragraph 3(b) hereof), death, the
Executive's attainment of age sixty-five (65) or total and
permanent disability, or (ii) the Executive voluntarily
terminates his employment for Good Reason (as defined in
paragraph 3(c) hereof) or without reason during the Window Period
(as defined in paragraph 3(d) hereof).
2. Termination Benefits. If the Executive is entitled to
termination benefits pursuant to paragraph 1 hereof, the Company
agrees to pay to the Executive as termination benefits in a
lump-sum payment within five (5) calendar days of the termination
of the Executive's employment an amount to be computed by
multiplying (i) the Executive's average annual compensation (as
determined consistent with the provisions of Section 280G(d)(1)
of the Internal Revenue Code of 1986, as amended (the "Code") in
effect on July 29, 1994) payable by the Company which was
includable in the gross income of the Executive for the most
recent five (5) calendar years ending coincident with or
immediately before the date on which control of the Company is
acquired (or such portion of such period during which the
Executive was an employee of the Company), by (ii) two hundred
ninety-nine and ninety-nine one hundredths percent (299.99%). For
the purposes of this Agreement, employment and compensation paid
by any direct or indirect subsidiary of the Company will be
deemed to be employment and compensation paid by the Company.
3. Definitions.
(a) As used in this Agreement, the "acquisition
of control" means:
(i) The acquisition by any individual,
entity or group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of twenty percent
(20%) or more of either (A) the then outstanding shares
of common stock of ENERGY (the "Outstanding ENERGY
Common Stock") or (B) the combined voting power of the
then outstanding voting securities of ENERGY entitled
to vote generally in the election of directors (the
"Outstanding ENERGY Voting Securities"); provided,
however, that the following acquisitions shall not
constitute an acquisition of control: (A) any
acquisition directly from ENERGY (excluding an
acquisition by virtue of the exercise of a conversion
privilege), (B) any acquisition by ENERGY, (C) any
acquisition by any employee benefit plan (or related
trust) sponsored or maintained by ENERGY, INDIANA GAS
or any corporation controlled by ENERGY or (D) any
acquisition by any corporation pursuant to a
reorganization, merger or consolidation, if, following
such reorganization, merger or consolidation, the
conditions described in clauses (A), (B) and (C) of
subsection (iii) of this paragraph 3(a) are satisfied;
(ii) Individuals who, as of the date hereof,
constitute the Board of Directors of ENERGY (the
"Incumbent Board") cease for any reason to constitute
at least a majority of the Board of Directors of ENERGY
(the "Board"); provided, however, that any individual
becoming a director subsequent to the date hereof whose
election, or nomination for election by ENERGY's
shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent
Board shall be considered as though such individual
were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial
assumption of office occurs as a result of either an
actual or threatened election contest (as such terms
are used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of
a Person other than the Board; or
(iii) Approval by the shareholders of
ENERGY 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 ENERGY Common Stock and Outstanding ENERGY
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 ENERGY Stock and
Outstanding ENERGY Voting Securities, as the case may
be, (B) no Person (excluding ENERGY, any employee
benefit plan or related trust of ENERGY, INDIANA GAS or
such corporation resulting from such reorganization,
merger or consolidation and any Person beneficially
owning, immediately prior to such reorganization,
merger or consolidation and any Person beneficially
owning, immediately prior to such reorganization,
merger or consolidation, directly or indirectly, twenty
percent (20%) or more of the Outstanding ENERGY Common
Stock or Outstanding Voting Securities, as the case may
be) beneficially owns, directly or indirectly, twenty
percent (20%) or more of, respectively, the then
outstanding shares of common stock of the corporation
resulting from such reorganization, merger or
consolidation or the combined voting power of the then
outstanding voting securities of such corporation
entitled to vote generally in the election of directors
and (C) at least a majority of the members of the board
of directors of the corporation resulting from such
reorganization, merger or consolidation were members of
the Incumbent Board at the time of the execution of the
initial agreement providing for such reorganization,
merger or consolidation;
(iv) Approval by the shareholders of ENERGY
of (A) a complete liquidation or dissolution of ENERGY
or (B) the sale or other disposition of all or
substantially all of the assets of ENERGY, other than
to a corporation, with respect to which following such
sale or other disposition (1) more than sixty percent
(60%) of, respectively, the then outstanding shares of
common stock of such corporation and the combined
voting power of the then outstanding voting securities
of such corporation entitled to vote generally in the
election of directors is then beneficially owned,
directly or indirectly, by all or substantially all of
the individuals and entities who were the beneficial
owners, respectively, of the Outstanding ENERGY Common
Stock and Outstanding ENERGY 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 ENERGY Common Stock and Outstanding
ENERGY Voting Securities, as the case may be, (2) no
Person (excluding ENERGY and any employee benefit plan
or related trust of ENERGY, INDIANA GAS 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 ENERGY Common Stock or Outstanding
ENERGY Voting Securities, as the case may be)
beneficially owns, directly or indirectly, twenty
percent (20%) or more of, respectively, the then
outstanding shares of common stock of such corporation
and the combined voting power of the then outstanding
voting securities of such corporation entitled to vote
generally in the election of directors and (3) at least
a majority of the members of the board of directors of
such corporation were members of the Incumbent Board at
the time of the execution of the initial agreement or
action of the Board providing for such sale or other
disposition of assets of ENERGY; or
(v) The closing, as defined in the documents
relating to, or as evidenced by a certificate of any
state or federal governmental authority in connection
with, a transaction approval of which by the
shareholders of ENERGY would constitute an "acquisition
of control" under subsection (iii) or (iv) of this
section 3(a) of this Agreement.
Notwithstanding anything contained in this Agreement to
the contrary, if the Executive's employment is terminated
before an "acquisition of control" as defined in this
section 3(a) and the Executive reasonably demonstrates that
such termination (i) was at the request of a third party who
has indicated an intention or taken steps reasonably
calculated to effect an "acquisition of control" and who
effectuates an "acquisition of control" (a "Third Party") or
(ii) otherwise occurred in connection with, or in
anticipation of, an "acquisition of control" which actually
occurs, then for all purposes of this Agreement, the date of
an "acquisition of control" with respect to the Executive
shall mean the date immediately prior to the date of such
termination of the Executive's employment.
(b) As used in this Agreement, the term "Cause" means
fraud, dishonesty, theft of corporate assets, or other gross
misconduct by the Executive. Notwithstanding the foregoing,
the Executive shall not be deemed to have been terminated
for cause unless and until there shall have been delivered
to him a copy of a resolution duly adopted by the
affirmative vote of not less than a majority of the entire
membership of the Board at a meeting of the Board called and
held for the purpose (after reasonable notice to him and an
opportunity for him, together with his counsel, to be heard
before the Board), finding that in the good faith opinion of
the Board the Executive was guilty of conduct set forth
above in the first sentence of the subsection and specifying
the particulars thereof in detail.
(c) As used in this Agreement, the term "Good Reason"
means, without the Executive's written consent, (i) a
demotion in the Executive's status, position or
responsibilities which, in his reasonable judgment, does not
represent a promotion from his status, position or
responsibilities as in effect immediately prior to the
change in control; (ii) the assignment to the Executive of
any duties or responsibilities which, in his reasonable
judgment, are inconsistent with such status, position or
responsibilities; or any removal of the Executive from or
failure to reappoint or reelect him to any of such
positions, except in connection with the termination of his
employment for total and permanent disability, death or
Cause or by him other than for Good Reason; (iii) a
reduction by the Company in the Executive's base salary as
in effect on the date hereof or as the same may be increased
from time to time during the term of this Agreement or the
Company's failure to increase (within twelve (12) months of
the Executive's last increase in base salary) the
Executive's base salary after a change in control in an
amount which at least equals, on a percentage basis, the
average percentage increase in base salary for all executive
and senior officers of the Company effected in the preceding
twelve (12) months; (iv) the relocation of the principal
executive offices of ENERGY or INDIANA GAS, whichever entity
on behalf of which the Executive performs a principal
function of that entity as part of his employment services,
to a location outside the Indianapolis, Indiana metropolitan
area or the Company's requiring him to be based at any place
other than the location at which he performed his duties
prior to a change in control, except for required travel on
the Company's business to an extent substantially consistent
with his business travel obligations at the time of a change
in control; (v) the failure by the Company to continue in
effect any incentive, bonus or other compensation plan in
which the Executive participates, including but not limited
to the Company's stock option and restricted stock plans, if
any, unless an equitable arrangement (embodied in an ongoing
substitute or alternative plan), with which he has
consented, has been made with respect to such plan in
connection with the change in control, or the failure by the
Company to continue his participation therein, or any action
by the Company which would directly or indirectly materially
reduce his participation therein; (vi) the failure by the
Company to continue to provide the Executive with benefits
substantially similar to those enjoyed by him or to which he
was entitled under any of the Company's pension, profit
sharing, life insurance, medical, dental, health and
accident, or disability plans in which he was participating
at the time of a change in control, the taking of any action
by the Company which would directly or indirectly materially
reduce any of such benefits or deprive him of any material
fringe benefit enjoyed by him or to which he was entitled at
the time of the change in control, or the failure by the
Company to provide him with the number of paid vacation and
sick leave days to which he is entitled on the basis of
years of service with the Company in accordance with the
Company's normal vacation policy in effect on the date
hereof; (vii) the failure of the Company to obtain a
satisfactory agreement from any successor or assign of the
Company to assume and agree to perform this Agreement;
(viii) any purported termination of the Executive's
employment which is not effected pursuant to a Notice of
Termination satisfying the requirements of paragraph 4(c)
hereof (and, if applicable, paragraph 3(b) hereof); and for
purposes of this Agreement, no such purported termination
shall be effective; or (ix) any request by the Company that
the Executive participate in an unlawful act or take any
action constituting a breach of the Executive's professional
standard of conduct.
Notwithstanding anything in this paragraph 3(c) to the
contrary, the Executive's right to terminate his employment
pursuant to this paragraph 3(c) shall not be affected by his
incapacity due to physical or mental illness.
(d) As used in this Agreement, the "Window Period"
shall mean the 30-day period immediately following the first
anniversary of the acquisition of control.
4. Additional Provisions.
(a) Enforcement of Agreement. The Company is aware
that upon the occurrence of a change in control the Board of
Directors or a shareholder of the Company may then cause or
attempt to cause the Company to refuse to comply with its
obligations under this Agreement, or may cause or attempt to
cause the Company to institute, or may institute, litigation
seeking to have this Agreement declared unenforceable, or
may take or attempt to take other action to deny the
Executive the benefits intended under this Agreement. In
these circumstances, the purpose of this Agreement could be
frustrated. It is the intent of the Company that the
Executive not be required to incur the expenses associated
with the enforcement of his rights under this Agreement by
litigation or other legal action, nor be bound to negotiate
any settlement of his rights hereunder, because the cost and
expense of such legal action or settlement would
substantially detract from the benefits intended to be
extended to the Executive hereunder. Accordingly, if
following a change in control it should appear to the
Executive that the Company has failed to comply with any of
its obligations under this Agreement or in the event that
the Company or any other person takes any action to declare
this Agreement void or unenforceable, or institutes any
litigation or other legal action designed to deny, diminish
or to recover from the Executive the benefits entitled to be
provided to the Executive hereunder, and that the Executive
has complied with all of his obligations under this
Agreement, the Company irrevocably authorizes the Executive
from time to time to retain counsel of his choice, at the
expense of the Company as provided in this paragraph 4(a),
to represent the Executive in connection with the initiation
or defense of any litigation or other legal action, whether
such action is by or against the Company or any director,
officer, shareholder, or other person affiliated with the
Company, in any jurisdiction. Notwithstanding any existing
or prior attorney-client relationship between the Company
and such counsel, the Company irrevocably consents to the
Executive entering into an attorney-client relationship with
such counsel, and in that connection the Company and the
Executive agree that a confidential relationship shall exist
between the Executive and such counsel. The reasonable fees
and expenses of counsel selected from time to time by the
Executive as hereinabove provided shall be paid or
reimbursed to the Executive by the Company on a regular,
periodic basis upon presentation by the Executive of a
statement or statements prepared by such counsel in
accordance with its customary practices, up to a maximum
aggregate amount of $500,000. Any legal expenses incurred
by the Company by reason of any dispute between the parties
as to enforceability of or the terms contained in this
Agreement, notwithstanding the outcome of any such dispute,
shall be the sole responsibility of the Company, and the
Company shall not take any action to seek reimbursement from
the Executive for such expenses.
(b) Severance Pay; No Duty to Mitigate. The amounts
payable to the Executive under this Agreement shall not be
treated as damages but as severance compensation to which
the Executive is entitled by reason of termination of his
employment in the circumstances contemplated by this
Agreement. The Company shall not be entitled to set off
against the amounts payable to the Executive any amounts
earned by the Executive in other employment after
termination of his employment with the Company, or any
amounts which might have been earned by the Executive in
other employment had he sought such other employment.
(c) Notice of Termination. Any purported termination
by the Company or by the Executive for Good Reason or by the
Executive without any reason during the Window Period shall
be communicated by written Notice of Termination to the
other party hereto in accordance with paragraph 4(j) hereof.
For purposes of this Agreement, a "Notice of Termination"
shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of
his employment under the provision so indicated. For
purposes of this Agreement, no such purported termination
shall be effective without such Notice of Termination.
(d) Internal Revenue Code. Notwithstanding anything
in this Agreement to the contrary (other than this
paragraph), in the event that Arthur Andersen & Co. (or its
successor) determines that any payment by the Company to or
for the benefit of the Executive pursuant to the terms of
this Agreement would be nondeductible by the Company for
federal income tax purposes because of Section 280G of the
Code, then the amount payable to or for the benefit of the
Executive pursuant to this Agreement shall be reduced (but
not below zero) to the maximum amount payable without
causing the payment to be nondeductible by the Company
because of Section 280G of the Code; provided, however, that
notwithstanding the preceding clause of this sentence, if
Section 280G of the Code is amended after the date on which
this Agreement has been executed and if the amendment has
the effect of reducing the amount of deductible payments
that may be made by the Company to the Executive under
Section 280G of the Code to an amount less than what would
have been deductible by the Company under Section 280G of
the Code as in effect on July 29, 1994, the maximum amount
payable to the Executive under this paragraph 4(d) shall be
determined without regard to any amendment to Section 280G
of the Code; provided, further, that if solely by reason of
any amendment to Section 280G of the Code an excise tax is
imposed on the Executive under Section 4999 of the Code as a
result of payments made under this Agreement, the Company
shall increase the benefit payable to the Executive under
this Agreement by an amount ("Make Whole Payment") which,
after taking into account the additional federal, state and
local income taxes or the amount (including the Code Section
4999 excise tax that would be imposed on the Make Whole
Payment), would reimburse the Executive fully for the Code
Section 4999 tax that is imposed on the other payments made
hereunder and put the Executive in same net after-tax
position with respect to this Agreement that he would have
been but for the excise tax. Such determination by Arthur
Andersen & Co. (or its successor) shall be conclusive and
binding upon the parties.
(e) Assignment. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their
respective executors, administrators, heirs, personal
representatives, successors, and assigns, but neither this
Agreement nor any right hereunder may be assigned or
transferred by either party hereto, any beneficiary, or any
other person, nor be subject to alienation, anticipation,
sale, pledge, encumbrance, execution, levy, or other legal
process of any kind against the Executive, his beneficiary
or any other person. Notwithstanding the foregoing, the
Company shall assign this Agreement to any corporation or
other business entity succeeding to substantially all of the
business and assets of the Company by merger, consolidation,
sale of assets, or otherwise and shall obtain the assumption
of this Agreement by such successor.
(f) Amendment. This Agreement shall not be amended,
modified, or supplemented without the written agreement of
the parties at the time of such amendment, modification, or
supplement.
(g) Governing Law. This Agreement shall be governed
by and subject to the laws of the State of Indiana.
(h) Severability. The invalidity or unenforceability
of any particular provision of this Agreement shall not
affect the other provisions, and this Agreement shall be
construed in all respects as if such invalid or
unenforceable provision had not been contained herein.
(i) Captions. The captions in this Agreement are for
convenience and identification purposes only, are not an
integral part of this Agreement, and are not to be
considered in the interpretation of any part hereof.
(j) Notices. Except as otherwise specifically
provided in this Agreement, all notices and other
communications hereunder shall be in writing and shall be
deemed to have been duly given if delivered in person or
sent by registered or certified mail, postage prepaid,
addressed as set forth above, or to such other address as
shall be furnished in writing by any party to the others.
(k) Waivers. Except as otherwise specifically
provided in this Agreement, no waiver by either party hereto
of any breach by the other party hereto of any condition or
provision of this Agreement to be performed by such other
party shall be deemed to be a valid waiver unless such
waiver is in writing or, even if in writing, shall be
deemed to be a waiver of a subsequent breach of such
condition or provision or a waiver of a similar or
dissimilar provision or condition at the same or at any
prior or subsequent time.
5. Term of this Agreement. This Agreement shall remain in
effect until October 1, 1999 or until the expiration of any
extension thereof. The term of this Agreement shall be
automatically extended for one (1) year periods without further
action of the parties as of October 1, 1995 and each succeeding
October 1 thereafter, unless ENERGY shall have served written
notice to the Executive prior to October 1, 1995 or prior to
October 1 of each succeeding year, as the case may be, of its
intention that the Agreement shall terminate at the end of the
five (5) year period that begins with the October 1 following the
date of such written notice.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the day and year first above written.
INDIANA ENERGY, INC.
By:
O. N. Frenzel III, as
Chairman of the Compensation
Committee
Attest:
Secretary or Assistant Secretary
INDIANA GAS COMPANY, INC.
By:
President or Vice President
Attest:
Secretary or Assistant Secretary
EXECUTIVE
Paul T. Baker
JAS 44374
EXHIBIT 10-H
TERMINATION BENEFITS AGREEMENT
This Agreement, dated as of July 29, 1994, by and among
INDIANA ENERGY, INC., an Indiana corporation having its principal
executive offices at 1630 North Meridian Street, Indianapolis,
Indiana 46202 ("ENERGY"), INDIANA GAS COMPANY, INC., an Indiana
corporation having its principal executive offices at 1630 North
Meridian Street, Indianapolis, Indiana 46202 ("INDIANA GAS")
(both ENERGY and INDIANA GAS being collectively referred to
herein as the "Company"), and Niel C. Ellerbrook, an Indiana
resident whose mailing address is 1630 North Meridian Street,
Indianapolis, Indiana 46202-1496 (the "Executive").
R E C I T A L S
The following facts are true:
A. The Executive is serving the Company as a key executive
officer, and is expected to continue to make a major contribution
to the profitability, growth, and financial strength of the
Company.
B. The Company considers the continued services of the
Executive to be in the best interests of the Company and its
shareholders, and desires to assure itself of the availability of
such continued services in the future on an objective and
impartial basis and without distraction or conflict of interest
in the event of an attempt to obtain control of the Company.
C. The Executive is willing to remain in the employ of the
Company upon the understanding that the Company will provide him
with income security upon the terms and subject to the conditions
contained herein if his employment is terminated by the Company
without cause or if he voluntarily terminates his employment for
good reason.
A G R E E M E N T
In consideration of the premises and the mutual covenants
and agreements hereinafter set forth, the Company and the
Executive agree as follows:
1. Undertaking. The Company agrees to pay to the
Executive the termination benefits specified in paragraph 2
hereof if (a) control of ENERGY is acquired (as defined in
paragraph 3(a) hereof) during the term of this Agreement (as
described in paragraph 5 hereof) and (b) within three (3) years
after the acquisition of control occurs (i) the Company
terminates the employment of the Executive for any reason other
than Cause (as defined in paragraph 3(b) hereof), death, the
Executive's attainment of age sixty-five (65) or total and
permanent disability, or (ii) the Executive voluntarily
terminates his employment for Good Reason (as defined in
paragraph 3(c) hereof) or without reason during the Window Period
(as defined in paragraph 3(d) hereof).
2. Termination Benefits. If the Executive is entitled to
termination benefits pursuant to paragraph 1 hereof, the Company
agrees to pay to the Executive as termination benefits in a
lump-sum payment within five (5) calendar days of the termination
of the Executive's employment an amount to be computed by
multiplying (i) the Executive's average annual compensation (as
determined consistent with the provisions of Section 280G(d)(1)
of the Internal Revenue Code of 1986, as amended (the "Code") in
effect on July 29, 1994) payable by the Company which was
includable in the gross income of the Executive for the most
recent five (5) calendar years ending coincident with or
immediately before the date on which control of the Company is
acquired (or such portion of such period during which the
Executive was an employee of the Company), by (ii) two hundred
ninety-nine and ninety-nine one hundredths percent (299.99%). For
the purposes of this Agreement, employment and compensation paid
by any direct or indirect subsidiary of the Company will be
deemed to be employment and compensation paid by the Company.
3. Definitions.
(a) As used in this Agreement, the "acquisition
of control" means:
(i) The acquisition by any individual,
entity or group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of twenty percent
(20%) or more of either (A) the then outstanding shares
of common stock of ENERGY (the "Outstanding ENERGY
Common Stock") or (B) the combined voting power of the
then outstanding voting securities of ENERGY entitled
to vote generally in the election of directors (the
"Outstanding ENERGY Voting Securities"); provided,
however, that the following acquisitions shall not
constitute an acquisition of control: (A) any
acquisition directly from ENERGY (excluding an
acquisition by virtue of the exercise of a conversion
privilege), (B) any acquisition by ENERGY, (C) any
acquisition by any employee benefit plan (or related
trust) sponsored or maintained by ENERGY, INDIANA GAS
or any corporation controlled by ENERGY or (D) any
acquisition by any corporation pursuant to a
reorganization, merger or consolidation, if, following
such reorganization, merger or consolidation, the
conditions described in clauses (A), (B) and (C) of
subsection (iii) of this paragraph 3(a) are satisfied;
(ii) Individuals who, as of the date hereof,
constitute the Board of Directors of ENERGY (the
"Incumbent Board") cease for any reason to constitute
at least a majority of the Board of Directors of ENERGY
(the "Board"); provided, however, that any individual
becoming a director subsequent to the date hereof whose
election, or nomination for election by ENERGY's
shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent
Board shall be considered as though such individual
were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial
assumption of office occurs as a result of either an
actual or threatened election contest (as such terms
are used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of
a Person other than the Board; or
(iii) Approval by the shareholders of
ENERGY 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 ENERGY Common Stock and Outstanding ENERGY
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 ENERGY Stock and
Outstanding ENERGY Voting Securities, as the case may
be, (B) no Person (excluding ENERGY, any employee
benefit plan or related trust of ENERGY, INDIANA GAS or
such corporation resulting from such reorganization,
merger or consolidation and any Person beneficially
owning, immediately prior to such reorganization,
merger or consolidation and any Person beneficially
owning, immediately prior to such reorganization,
merger or consolidation, directly or indirectly, twenty
percent (20%) or more of the Outstanding ENERGY Common
Stock or Outstanding Voting Securities, as the case may
be) beneficially owns, directly or indirectly, twenty
percent (20%) or more of, respectively, the then
outstanding shares of common stock of the corporation
resulting from such reorganization, merger or
consolidation or the combined voting power of the then
outstanding voting securities of such corporation
entitled to vote generally in the election of directors
and (C) at least a majority of the members of the board
of directors of the corporation resulting from such
reorganization, merger or consolidation were members of
the Incumbent Board at the time of the execution of the
initial agreement providing for such reorganization,
merger or consolidation;
(iv) Approval by the shareholders of ENERGY
of (A) a complete liquidation or dissolution of ENERGY
or (B) the sale or other disposition of all or
substantially all of the assets of ENERGY, other than
to a corporation, with respect to which following such
sale or other disposition (1) more than sixty percent
(60%) of, respectively, the then outstanding shares of
common stock of such corporation and the combined
voting power of the then outstanding voting securities
of such corporation entitled to vote generally in the
election of directors is then beneficially owned,
directly or indirectly, by all or substantially all of
the individuals and entities who were the beneficial
owners, respectively, of the Outstanding ENERGY Common
Stock and Outstanding ENERGY 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 ENERGY Common Stock and Outstanding
ENERGY Voting Securities, as the case may be, (2) no
Person (excluding ENERGY and any employee benefit plan
or related trust of ENERGY, INDIANA GAS 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 ENERGY Common Stock or Outstanding
ENERGY Voting Securities, as the case may be)
beneficially owns, directly or indirectly, twenty
percent (20%) or more of, respectively, the then
outstanding shares of common stock of such corporation
and the combined voting power of the then outstanding
voting securities of such corporation entitled to vote
generally in the election of directors and (3) at least
a majority of the members of the board of directors of
such corporation were members of the Incumbent Board at
the time of the execution of the initial agreement or
action of the Board providing for such sale or other
disposition of assets of ENERGY; or
(v) The closing, as defined in the documents
relating to, or as evidenced by a certificate of any
state or federal governmental authority in connection
with, a transaction approval of which by the
shareholders of ENERGY would constitute an "acquisition
of control" under subsection (iii) or (iv) of this
section 3(a) of this Agreement.
Notwithstanding anything contained in this Agreement to
the contrary, if the Executive's employment is terminated
before an "acquisition of control" as defined in this
section 3(a) and the Executive reasonably demonstrates that
such termination (i) was at the request of a third party who
has indicated an intention or taken steps reasonably
calculated to effect an "acquisition of control" and who
effectuates an "acquisition of control" (a "Third Party") or
(ii) otherwise occurred in connection with, or in
anticipation of, an "acquisition of control" which actually
occurs, then for all purposes of this Agreement, the date of
an "acquisition of control" with respect to the Executive
shall mean the date immediately prior to the date of such
termination of the Executive's employment.
(b) As used in this Agreement, the term "Cause" means
fraud, dishonesty, theft of corporate assets, or other gross
misconduct by the Executive. Notwithstanding the foregoing,
the Executive shall not be deemed to have been terminated
for cause unless and until there shall have been delivered
to him a copy of a resolution duly adopted by the
affirmative vote of not less than a majority of the entire
membership of the Board at a meeting of the Board called and
held for the purpose (after reasonable notice to him and an
opportunity for him, together with his counsel, to be heard
before the Board), finding that in the good faith opinion of
the Board the Executive was guilty of conduct set forth
above in the first sentence of the subsection and specifying
the particulars thereof in detail.
(c) As used in this Agreement, the term "Good Reason"
means, without the Executive's written consent, (i) a
demotion in the Executive's status, position or
responsibilities which, in his reasonable judgment, does not
represent a promotion from his status, position or
responsibilities as in effect immediately prior to the
change in control; (ii) the assignment to the Executive of
any duties or responsibilities which, in his reasonable
judgment, are inconsistent with such status, position or
responsibilities; or any removal of the Executive from or
failure to reappoint or reelect him to any of such
positions, except in connection with the termination of his
employment for total and permanent disability, death or
Cause or by him other than for Good Reason; (iii) a
reduction by the Company in the Executive's base salary as
in effect on the date hereof or as the same may be increased
from time to time during the term of this Agreement or the
Company's failure to increase (within twelve (12) months of
the Executive's last increase in base salary) the
Executive's base salary after a change in control in an
amount which at least equals, on a percentage basis, the
average percentage increase in base salary for all executive
and senior officers of the Company effected in the preceding
twelve (12) months; (iv) the relocation of the principal
executive offices of ENERGY or INDIANA GAS, whichever entity
on behalf of which the Executive performs a principal
function of that entity as part of his employment services,
to a location outside the Indianapolis, Indiana metropolitan
area or the Company's requiring him to be based at any place
other than the location at which he performed his duties
prior to a change in control, except for required travel on
the Company's business to an extent substantially consistent
with his business travel obligations at the time of a change
in control; (v) the failure by the Company to continue in
effect any incentive, bonus or other compensation plan in
which the Executive participates, including but not limited
to the Company's stock option and restricted stock plans, if
any, unless an equitable arrangement (embodied in an ongoing
substitute or alternative plan), with which he has
consented, has been made with respect to such plan in
connection with the change in control, or the failure by the
Company to continue his participation therein, or any action
by the Company which would directly or indirectly materially
reduce his participation therein; (vi) the failure by the
Company to continue to provide the Executive with benefits
substantially similar to those enjoyed by him or to which he
was entitled under any of the Company's pension, profit
sharing, life insurance, medical, dental, health and
accident, or disability plans in which he was participating
at the time of a change in control, the taking of any action
by the Company which would directly or indirectly materially
reduce any of such benefits or deprive him of any material
fringe benefit enjoyed by him or to which he was entitled at
the time of the change in control, or the failure by the
Company to provide him with the number of paid vacation and
sick leave days to which he is entitled on the basis of
years of service with the Company in accordance with the
Company's normal vacation policy in effect on the date
hereof; (vii) the failure of the Company to obtain a
satisfactory agreement from any successor or assign of the
Company to assume and agree to perform this Agreement;
(viii) any purported termination of the Executive's
employment which is not effected pursuant to a Notice of
Termination satisfying the requirements of paragraph 4(c)
hereof (and, if applicable, paragraph 3(b) hereof); and for
purposes of this Agreement, no such purported termination
shall be effective; or (ix) any request by the Company that
the Executive participate in an unlawful act or take any
action constituting a breach of the Executive's professional
standard of conduct.
Notwithstanding anything in this paragraph 3(c) to the
contrary, the Executive's right to terminate his employment
pursuant to this paragraph 3(c) shall not be affected by his
incapacity due to physical or mental illness.
(d) As used in this Agreement, the "Window Period"
shall mean the 30-day period immediately following the first
anniversary of the acquisition of control.
4. Additional Provisions.
(a) Enforcement of Agreement. The Company is aware
that upon the occurrence of a change in control the Board of
Directors or a shareholder of the Company may then cause or
attempt to cause the Company to refuse to comply with its
obligations under this Agreement, or may cause or attempt to
cause the Company to institute, or may institute, litigation
seeking to have this Agreement declared unenforceable, or
may take or attempt to take other action to deny the
Executive the benefits intended under this Agreement. In
these circumstances, the purpose of this Agreement could be
frustrated. It is the intent of the Company that the
Executive not be required to incur the expenses associated
with the enforcement of his rights under this Agreement by
litigation or other legal action, nor be bound to negotiate
any settlement of his rights hereunder, because the cost and
expense of such legal action or settlement would
substantially detract from the benefits intended to be
extended to the Executive hereunder. Accordingly, if
following a change in control it should appear to the
Executive that the Company has failed to comply with any of
its obligations under this Agreement or in the event that
the Company or any other person takes any action to declare
this Agreement void or unenforceable, or institutes any
litigation or other legal action designed to deny, diminish
or to recover from the Executive the benefits entitled to be
provided to the Executive hereunder, and that the Executive
has complied with all of his obligations under this
Agreement, the Company irrevocably authorizes the Executive
from time to time to retain counsel of his choice, at the
expense of the Company as provided in this paragraph 4(a),
to represent the Executive in connection with the initiation
or defense of any litigation or other legal action, whether
such action is by or against the Company or any director,
officer, shareholder, or other person affiliated with the
Company, in any jurisdiction. Notwithstanding any existing
or prior attorney-client relationship between the Company
and such counsel, the Company irrevocably consents to the
Executive entering into an attorney-client relationship with
such counsel, and in that connection the Company and the
Executive agree that a confidential relationship shall exist
between the Executive and such counsel. The reasonable fees
and expenses of counsel selected from time to time by the
Executive as hereinabove provided shall be paid or
reimbursed to the Executive by the Company on a regular,
periodic basis upon presentation by the Executive of a
statement or statements prepared by such counsel in
accordance with its customary practices, up to a maximum
aggregate amount of $500,000. Any legal expenses incurred
by the Company by reason of any dispute between the parties
as to enforceability of or the terms contained in this
Agreement, notwithstanding the outcome of any such dispute,
shall be the sole responsibility of the Company, and the
Company shall not take any action to seek reimbursement from
the Executive for such expenses.
(b) Severance Pay; No Duty to Mitigate. The amounts
payable to the Executive under this Agreement shall not be
treated as damages but as severance compensation to which
the Executive is entitled by reason of termination of his
employment in the circumstances contemplated by this
Agreement. The Company shall not be entitled to set off
against the amounts payable to the Executive any amounts
earned by the Executive in other employment after
termination of his employment with the Company, or any
amounts which might have been earned by the Executive in
other employment had he sought such other employment.
(c) Notice of Termination. Any purported termination
by the Company or by the Executive for Good Reason or by the
Executive without any reason during the Window Period shall
be communicated by written Notice of Termination to the
other party hereto in accordance with paragraph 4(j) hereof.
For purposes of this Agreement, a "Notice of Termination"
shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of
his employment under the provision so indicated. For
purposes of this Agreement, no such purported termination
shall be effective without such Notice of Termination.
(d) Internal Revenue Code. Notwithstanding anything
in this Agreement to the contrary (other than this
paragraph), in the event that Arthur Andersen & Co. (or its
successor) determines that any payment by the Company to or
for the benefit of the Executive pursuant to the terms of
this Agreement would be nondeductible by the Company for
federal income tax purposes because of Section 280G of the
Code, then the amount payable to or for the benefit of the
Executive pursuant to this Agreement shall be reduced (but
not below zero) to the maximum amount payable without
causing the payment to be nondeductible by the Company
because of Section 280G of the Code; provided, however, that
notwithstanding the preceding clause of this sentence, if
Section 280G of the Code is amended after the date on which
this Agreement has been executed and if the amendment has
the effect of reducing the amount of deductible payments
that may be made by the Company to the Executive under
Section 280G of the Code to an amount less than what would
have been deductible by the Company under Section 280G of
the Code as in effect on July 29, 1994, the maximum amount
payable to the Executive under this paragraph 4(d) shall be
determined without regard to any amendment to Section 280G
of the Code; provided, further, that if solely by reason of
any amendment to Section 280G of the Code an excise tax is
imposed on the Executive under Section 4999 of the Code as a
result of payments made under this Agreement, the Company
shall increase the benefit payable to the Executive under
this Agreement by an amount ("Make Whole Payment") which,
after taking into account the additional federal, state and
local income taxes or the amount (including the Code Section
4999 excise tax that would be imposed on the Make Whole
Payment), would reimburse the Executive fully for the Code
Section 4999 tax that is imposed on the other payments made
hereunder and put the Executive in same net after-tax
position with respect to this Agreement that he would have
been but for the excise tax. Such determination by Arthur
Andersen & Co. (or its successor) shall be conclusive and
binding upon the parties.
(e) Assignment. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their
respective executors, administrators, heirs, personal
representatives, successors, and assigns, but neither this
Agreement nor any right hereunder may be assigned or
transferred by either party hereto, any beneficiary, or any
other person, nor be subject to alienation, anticipation,
sale, pledge, encumbrance, execution, levy, or other legal
process of any kind against the Executive, his beneficiary
or any other person. Notwithstanding the foregoing, the
Company shall assign this Agreement to any corporation or
other business entity succeeding to substantially all of the
business and assets of the Company by merger, consolidation,
sale of assets, or otherwise and shall obtain the assumption
of this Agreement by such successor.
(f) Amendment. This Agreement shall not be amended,
modified, or supplemented without the written agreement of
the parties at the time of such amendment, modification, or
supplement.
(g) Governing Law. This Agreement shall be governed
by and subject to the laws of the State of Indiana.
(h) Severability. The invalidity or unenforceability
of any particular provision of this Agreement shall not
affect the other provisions, and this Agreement shall be
construed in all respects as if such invalid or
unenforceable provision had not been contained herein.
(i) Captions. The captions in this Agreement are for
convenience and identification purposes only, are not an
integral part of this Agreement, and are not to be
considered in the interpretation of any part hereof.
(j) Notices. Except as otherwise specifically
provided in this Agreement, all notices and other
communications hereunder shall be in writing and shall be
deemed to have been duly given if delivered in person or
sent by registered or certified mail, postage prepaid,
addressed as set forth above, or to such other address as
shall be furnished in writing by any party to the others.
(k) Waivers. Except as otherwise specifically
provided in this Agreement, no waiver by either party hereto
of any breach by the other party hereto of any condition or
provision of this Agreement to be performed by such other
party shall be deemed to be a valid waiver unless such
waiver is in writing or, even if in writing, shall be
deemed to be a waiver of a subsequent breach of such
condition or provision or a waiver of a similar or
dissimilar provision or condition at the same or at any
prior or subsequent time.
5. Term of this Agreement. This Agreement shall remain in
effect until October 1, 1999 or until the expiration of any
extension thereof. The term of this Agreement shall be
automatically extended for one (1) year periods without further
action of the parties as of October 1, 1995 and each succeeding
October 1 thereafter, unless ENERGY shall have served written
notice to the Executive prior to October 1, 1995 or prior to
October 1 of each succeeding year, as the case may be, of its
intention that the Agreement shall terminate at the end of the
five (5) year period that begins with the October 1 following the
date of such written notice.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the day and year first above written.
INDIANA ENERGY, INC.
By:
O. N. Frenzel III, as
Chairman of the Compensation
Committee
Attest:
Secretary or Assistant Secretary
INDIANA GAS COMPANY, INC.
By:
President or Vice President
Attest:
Secretary or Assistant Secretary
EXECUTIVE
Niel C. Ellerbrook
JAS 44372
EXHIBIT 10-I
TERMINATION BENEFITS AGREEMENT
This Agreement, dated as of July 29, 1994, by and among
INDIANA ENERGY, INC., an Indiana corporation having its principal
executive offices at 1630 North Meridian Street, Indianapolis,
Indiana 46202 ("ENERGY"), INDIANA GAS COMPANY, INC., an Indiana
corporation having its principal executive offices at 1630 North
Meridian Street, Indianapolis, Indiana 46202 ("INDIANA GAS")
(both ENERGY and INDIANA GAS being collectively referred to
herein as the "Company"), and Anthony E. Ard, an Indiana resident
whose mailing address is 1630 North Meridian Street,
Indianapolis, Indiana 46202-1496 (the "Executive").
R E C I T A L S
The following facts are true:
A. The Executive is serving the Company as a key executive
officer, and is expected to continue to make a major contribution
to the profitability, growth, and financial strength of the
Company.
B. The Company considers the continued services of the
Executive to be in the best interests of the Company and its
shareholders, and desires to assure itself of the availability of
such continued services in the future on an objective and
impartial basis and without distraction or conflict of interest
in the event of an attempt to obtain control of the Company.
C. The Executive is willing to remain in the employ of the
Company upon the understanding that the Company will provide him
with income security upon the terms and subject to the conditions
contained herein if his employment is terminated by the Company
without cause or if he voluntarily terminates his employment for
good reason.
A G R E E M E N T
In consideration of the premises and the mutual covenants
and agreements hereinafter set forth, the Company and the
Executive agree as follows:
1. Undertaking. The Company agrees to pay to the
Executive the termination benefits specified in paragraph 2
hereof if (a) control of ENERGY is acquired (as defined in
paragraph 3(a) hereof) during the term of this Agreement (as
described in paragraph 5 hereof) and (b) within three (3) years
after the acquisition of control occurs (i) the Company
terminates the employment of the Executive for any reason other
than Cause (as defined in paragraph 3(b) hereof), death, the
Executive's attainment of age sixty-five (65) or total and
permanent disability, or (ii) the Executive voluntarily
terminates his employment for Good Reason (as defined in
paragraph 3(c) hereof) or without reason during the Window Period
(as defined in paragraph 3(d) hereof).
2. Termination Benefits. If the Executive is entitled to
termination benefits pursuant to paragraph 1 hereof, the Company
agrees to pay to the Executive as termination benefits in a
lump-sum payment within five (5) calendar days of the termination
of the Executive's employment an amount to be computed by
multiplying (i) the Executive's average annual compensation (as
determined consistent with the provisions of Section 280G(d)(1)
of the Internal Revenue Code of 1986, as amended (the "Code") in
effect on July 29, 1994) payable by the Company which was
includable in the gross income of the Executive for the most
recent five (5) calendar years ending coincident with or
immediately before the date on which control of the Company is
acquired (or such portion of such period during which the
Executive was an employee of the Company), by (ii) two hundred
ninety-nine and ninety-nine one hundredths percent (299.99%). For
the purposes of this Agreement, employment and compensation paid
by any direct or indirect subsidiary of the Company will be
deemed to be employment and compensation paid by the Company.
3. Definitions.
(a) As used in this Agreement, the "acquisition
of control" means:
(i) The acquisition by any individual,
entity or group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of twenty percent
(20%) or more of either (A) the then outstanding shares
of common stock of ENERGY (the "Outstanding ENERGY
Common Stock") or (B) the combined voting power of the
then outstanding voting securities of ENERGY entitled
to vote generally in the election of directors (the
"Outstanding ENERGY Voting Securities"); provided,
however, that the following acquisitions shall not
constitute an acquisition of control: (A) any
acquisition directly from ENERGY (excluding an
acquisition by virtue of the exercise of a conversion
privilege), (B) any acquisition by ENERGY, (C) any
acquisition by any employee benefit plan (or related
trust) sponsored or maintained by ENERGY, INDIANA GAS
or any corporation controlled by ENERGY or (D) any
acquisition by any corporation pursuant to a
reorganization, merger or consolidation, if, following
such reorganization, merger or consolidation, the
conditions described in clauses (A), (B) and (C) of
subsection (iii) of this paragraph 3(a) are satisfied;
(ii) Individuals who, as of the date hereof,
constitute the Board of Directors of ENERGY (the
"Incumbent Board") cease for any reason to constitute
at least a majority of the Board of Directors of ENERGY
(the "Board"); provided, however, that any individual
becoming a director subsequent to the date hereof whose
election, or nomination for election by ENERGY's
shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent
Board shall be considered as though such individual
were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial
assumption of office occurs as a result of either an
actual or threatened election contest (as such terms
are used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of
a Person other than the Board; or
(iii) Approval by the shareholders of
ENERGY 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 ENERGY Common Stock and Outstanding ENERGY
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 ENERGY Stock and
Outstanding ENERGY Voting Securities, as the case may
be, (B) no Person (excluding ENERGY, any employee
benefit plan or related trust of ENERGY, INDIANA GAS or
such corporation resulting from such reorganization,
merger or consolidation and any Person beneficially
owning, immediately prior to such reorganization,
merger or consolidation and any Person beneficially
owning, immediately prior to such reorganization,
merger or consolidation, directly or indirectly, twenty
percent (20%) or more of the Outstanding ENERGY Common
Stock or Outstanding Voting Securities, as the case may
be) beneficially owns, directly or indirectly, twenty
percent (20%) or more of, respectively, the then
outstanding shares of common stock of the corporation
resulting from such reorganization, merger or
consolidation or the combined voting power of the then
outstanding voting securities of such corporation
entitled to vote generally in the election of directors
and (C) at least a majority of the members of the board
of directors of the corporation resulting from such
reorganization, merger or consolidation were members of
the Incumbent Board at the time of the execution of the
initial agreement providing for such reorganization,
merger or consolidation;
(iv) Approval by the shareholders of ENERGY
of (A) a complete liquidation or dissolution of ENERGY
or (B) the sale or other disposition of all or
substantially all of the assets of ENERGY, other than
to a corporation, with respect to which following such
sale or other disposition (1) more than sixty percent
(60%) of, respectively, the then outstanding shares of
common stock of such corporation and the combined
voting power of the then outstanding voting securities
of such corporation entitled to vote generally in the
election of directors is then beneficially owned,
directly or indirectly, by all or substantially all of
the individuals and entities who were the beneficial
owners, respectively, of the Outstanding ENERGY Common
Stock and Outstanding ENERGY 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 ENERGY Common Stock and Outstanding
ENERGY Voting Securities, as the case may be, (2) no
Person (excluding ENERGY and any employee benefit plan
or related trust of ENERGY, INDIANA GAS 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 ENERGY Common Stock or Outstanding
ENERGY Voting Securities, as the case may be)
beneficially owns, directly or indirectly, twenty
percent (20%) or more of, respectively, the then
outstanding shares of common stock of such corporation
and the combined voting power of the then outstanding
voting securities of such corporation entitled to vote
generally in the election of directors and (3) at least
a majority of the members of the board of directors of
such corporation were members of the Incumbent Board at
the time of the execution of the initial agreement or
action of the Board providing for such sale or other
disposition of assets of ENERGY; or
(v) The closing, as defined in the documents
relating to, or as evidenced by a certificate of any
state or federal governmental authority in connection
with, a transaction approval of which by the
shareholders of ENERGY would constitute an "acquisition
of control" under subsection (iii) or (iv) of this
section 3(a) of this Agreement.
Notwithstanding anything contained in this Agreement to
the contrary, if the Executive's employment is terminated
before an "acquisition of control" as defined in this
section 3(a) and the Executive reasonably demonstrates that
such termination (i) was at the request of a third party who
has indicated an intention or taken steps reasonably
calculated to effect an "acquisition of control" and who
effectuates an "acquisition of control" (a "Third Party") or
(ii) otherwise occurred in connection with, or in
anticipation of, an "acquisition of control" which actually
occurs, then for all purposes of this Agreement, the date of
an "acquisition of control" with respect to the Executive
shall mean the date immediately prior to the date of such
termination of the Executive's employment.
(b) As used in this Agreement, the term "Cause" means
fraud, dishonesty, theft of corporate assets, or other gross
misconduct by the Executive. Notwithstanding the foregoing,
the Executive shall not be deemed to have been terminated
for cause unless and until there shall have been delivered
to him a copy of a resolution duly adopted by the
affirmative vote of not less than a majority of the entire
membership of the Board at a meeting of the Board called and
held for the purpose (after reasonable notice to him and an
opportunity for him, together with his counsel, to be heard
before the Board), finding that in the good faith opinion of
the Board the Executive was guilty of conduct set forth
above in the first sentence of the subsection and specifying
the particulars thereof in detail.
(c) As used in this Agreement, the term "Good Reason"
means, without the Executive's written consent, (i) a
demotion in the Executive's status, position or
responsibilities which, in his reasonable judgment, does not
represent a promotion from his status, position or
responsibilities as in effect immediately prior to the
change in control; (ii) the assignment to the Executive of
any duties or responsibilities which, in his reasonable
judgment, are inconsistent with such status, position or
responsibilities; or any removal of the Executive from or
failure to reappoint or reelect him to any of such
positions, except in connection with the termination of his
employment for total and permanent disability, death or
Cause or by him other than for Good Reason; (iii) a
reduction by the Company in the Executive's base salary as
in effect on the date hereof or as the same may be increased
from time to time during the term of this Agreement or the
Company's failure to increase (within twelve (12) months of
the Executive's last increase in base salary) the
Executive's base salary after a change in control in an
amount which at least equals, on a percentage basis, the
average percentage increase in base salary for all executive
and senior officers of the Company effected in the preceding
twelve (12) months; (iv) the relocation of the principal
executive offices of ENERGY or INDIANA GAS, whichever entity
on behalf of which the Executive performs a principal
function of that entity as part of his employment services,
to a location outside the Indianapolis, Indiana metropolitan
area or the Company's requiring him to be based at any place
other than the location at which he performed his duties
prior to a change in control, except for required travel on
the Company's business to an extent substantially consistent
with his business travel obligations at the time of a change
in control; (v) the failure by the Company to continue in
effect any incentive, bonus or other compensation plan in
which the Executive participates, including but not limited
to the Company's stock option and restricted stock plans, if
any, unless an equitable arrangement (embodied in an ongoing
substitute or alternative plan), with which he has
consented, has been made with respect to such plan in
connection with the change in control, or the failure by the
Company to continue his participation therein, or any action
by the Company which would directly or indirectly materially
reduce his participation therein; (vi) the failure by the
Company to continue to provide the Executive with benefits
substantially similar to those enjoyed by him or to which he
was entitled under any of the Company's pension, profit
sharing, life insurance, medical, dental, health and
accident, or disability plans in which he was participating
at the time of a change in control, the taking of any action
by the Company which would directly or indirectly materially
reduce any of such benefits or deprive him of any material
fringe benefit enjoyed by him or to which he was entitled at
the time of the change in control, or the failure by the
Company to provide him with the number of paid vacation and
sick leave days to which he is entitled on the basis of
years of service with the Company in accordance with the
Company's normal vacation policy in effect on the date
hereof; (vii) the failure of the Company to obtain a
satisfactory agreement from any successor or assign of the
Company to assume and agree to perform this Agreement;
(viii) any purported termination of the Executive's
employment which is not effected pursuant to a Notice of
Termination satisfying the requirements of paragraph 4(c)
hereof (and, if applicable, paragraph 3(b) hereof); and for
purposes of this Agreement, no such purported termination
shall be effective; or (ix) any request by the Company that
the Executive participate in an unlawful act or take any
action constituting a breach of the Executive's professional
standard of conduct.
Notwithstanding anything in this paragraph 3(c) to the
contrary, the Executive's right to terminate his employment
pursuant to this paragraph 3(c) shall not be affected by his
incapacity due to physical or mental illness.
(d) As used in this Agreement, the "Window Period"
shall mean the 30-day period immediately following the first
anniversary of the acquisition of control.
4. Additional Provisions.
(a) Enforcement of Agreement. The Company is aware
that upon the occurrence of a change in control the Board of
Directors or a shareholder of the Company may then cause or
attempt to cause the Company to refuse to comply with its
obligations under this Agreement, or may cause or attempt to
cause the Company to institute, or may institute, litigation
seeking to have this Agreement declared unenforceable, or
may take or attempt to take other action to deny the
Executive the benefits intended under this Agreement. In
these circumstances, the purpose of this Agreement could be
frustrated. It is the intent of the Company that the
Executive not be required to incur the expenses associated
with the enforcement of his rights under this Agreement by
litigation or other legal action, nor be bound to negotiate
any settlement of his rights hereunder, because the cost and
expense of such legal action or settlement would
substantially detract from the benefits intended to be
extended to the Executive hereunder. Accordingly, if
following a change in control it should appear to the
Executive that the Company has failed to comply with any of
its obligations under this Agreement or in the event that
the Company or any other person takes any action to declare
this Agreement void or unenforceable, or institutes any
litigation or other legal action designed to deny, diminish
or to recover from the Executive the benefits entitled to be
provided to the Executive hereunder, and that the Executive
has complied with all of his obligations under this
Agreement, the Company irrevocably authorizes the Executive
from time to time to retain counsel of his choice, at the
expense of the Company as provided in this paragraph 4(a),
to represent the Executive in connection with the initiation
or defense of any litigation or other legal action, whether
such action is by or against the Company or any director,
officer, shareholder, or other person affiliated with the
Company, in any jurisdiction. Notwithstanding any existing
or prior attorney-client relationship between the Company
and such counsel, the Company irrevocably consents to the
Executive entering into an attorney-client relationship with
such counsel, and in that connection the Company and the
Executive agree that a confidential relationship shall exist
between the Executive and such counsel. The reasonable fees
and expenses of counsel selected from time to time by the
Executive as hereinabove provided shall be paid or
reimbursed to the Executive by the Company on a regular,
periodic basis upon presentation by the Executive of a
statement or statements prepared by such counsel in
accordance with its customary practices, up to a maximum
aggregate amount of $500,000. Any legal expenses incurred
by the Company by reason of any dispute between the parties
as to enforceability of or the terms contained in this
Agreement, notwithstanding the outcome of any such dispute,
shall be the sole responsibility of the Company, and the
Company shall not take any action to seek reimbursement from
the Executive for such expenses.
(b) Severance Pay; No Duty to Mitigate. The amounts
payable to the Executive under this Agreement shall not be
treated as damages but as severance compensation to which
the Executive is entitled by reason of termination of his
employment in the circumstances contemplated by this
Agreement. The Company shall not be entitled to set off
against the amounts payable to the Executive any amounts
earned by the Executive in other employment after
termination of his employment with the Company, or any
amounts which might have been earned by the Executive in
other employment had he sought such other employment.
(c) Notice of Termination. Any purported termination
by the Company or by the Executive for Good Reason or by the
Executive without any reason during the Window Period shall
be communicated by written Notice of Termination to the
other party hereto in accordance with paragraph 4(j) hereof.
For purposes of this Agreement, a "Notice of Termination"
shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of
his employment under the provision so indicated. For
purposes of this Agreement, no such purported termination
shall be effective without such Notice of Termination.
(d) Internal Revenue Code. Notwithstanding anything
in this Agreement to the contrary (other than this
paragraph), in the event that Arthur Andersen & Co. (or its
successor) determines that any payment by the Company to or
for the benefit of the Executive pursuant to the terms of
this Agreement would be nondeductible by the Company for
federal income tax purposes because of Section 280G of the
Code, then the amount payable to or for the benefit of the
Executive pursuant to this Agreement shall be reduced (but
not below zero) to the maximum amount payable without
causing the payment to be nondeductible by the Company
because of Section 280G of the Code; provided, however, that
notwithstanding the preceding clause of this sentence, if
Section 280G of the Code is amended after the date on which
this Agreement has been executed and if the amendment has
the effect of reducing the amount of deductible payments
that may be made by the Company to the Executive under
Section 280G of the Code to an amount less than what would
have been deductible by the Company under Section 280G of
the Code as in effect on July 29, 1994, the maximum amount
payable to the Executive under this paragraph 4(d) shall be
determined without regard to any amendment to Section 280G
of the Code; provided, further, that if solely by reason of
any amendment to Section 280G of the Code an excise tax is
imposed on the Executive under Section 4999 of the Code as a
result of payments made under this Agreement, the Company
shall increase the benefit payable to the Executive under
this Agreement by an amount ("Make Whole Payment") which,
after taking into account the additional federal, state and
local income taxes or the amount (including the Code Section
4999 excise tax that would be imposed on the Make Whole
Payment), would reimburse the Executive fully for the Code
Section 4999 tax that is imposed on the other payments made
hereunder and put the Executive in same net after-tax
position with respect to this Agreement that he would have
been but for the excise tax. Such determination by Arthur
Andersen & Co. (or its successor) shall be conclusive and
binding upon the parties.
(e) Assignment. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their
respective executors, administrators, heirs, personal
representatives, successors, and assigns, but neither this
Agreement nor any right hereunder may be assigned or
transferred by either party hereto, any beneficiary, or any
other person, nor be subject to alienation, anticipation,
sale, pledge, encumbrance, execution, levy, or other legal
process of any kind against the Executive, his beneficiary
or any other person. Notwithstanding the foregoing, the
Company shall assign this Agreement to any corporation or
other business entity succeeding to substantially all of the
business and assets of the Company by merger, consolidation,
sale of assets, or otherwise and shall obtain the assumption
of this Agreement by such successor.
(f) Amendment. This Agreement shall not be amended,
modified, or supplemented without the written agreement of
the parties at the time of such amendment, modification, or
supplement.
(g) Governing Law. This Agreement shall be governed
by and subject to the laws of the State of Indiana.
(h) Severability. The invalidity or unenforceability
of any particular provision of this Agreement shall not
affect the other provisions, and this Agreement shall be
construed in all respects as if such invalid or
unenforceable provision had not been contained herein.
(i) Captions. The captions in this Agreement are for
convenience and identification purposes only, are not an
integral part of this Agreement, and are not to be
considered in the interpretation of any part hereof.
(j) Notices. Except as otherwise specifically
provided in this Agreement, all notices and other
communications hereunder shall be in writing and shall be
deemed to have been duly given if delivered in person or
sent by registered or certified mail, postage prepaid,
addressed as set forth above, or to such other address as
shall be furnished in writing by any party to the others.
(k) Waivers. Except as otherwise specifically
provided in this Agreement, no waiver by either party hereto
of any breach by the other party hereto of any condition or
provision of this Agreement to be performed by such other
party shall be deemed to be a valid waiver unless such
waiver is in writing or, even if in writing, shall be
deemed to be a waiver of a subsequent breach of such
condition or provision or a waiver of a similar or
dissimilar provision or condition at the same or at any
prior or subsequent time.
5. Term of this Agreement. This Agreement shall remain in
effect until October 1, 1999 or until the expiration of any
extension thereof. The term of this Agreement shall be
automatically extended for one (1) year periods without further
action of the parties as of October 1, 1995 and each succeeding
October 1 thereafter, unless ENERGY shall have served written
notice to the Executive prior to October 1, 1995 or prior to
October 1 of each succeeding year, as the case may be, of its
intention that the Agreement shall terminate at the end of the
five (5) year period that begins with the October 1 following the
date of such written notice.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the day and year first above written.
INDIANA ENERGY, INC.
By:
O. N. Frenzel III, as
Chairman of the Compensation
Committee
Attest:
Secretary or Assistant Secretary
INDIANA GAS COMPANY, INC.
By:
President or Vice President
Attest:
Secretary or Assistant Secretary
EXECUTIVE
Anthony E. Ard
JAS 44375
EXHIBIT 10-J
TERMINATION BENEFITS AGREEMENT
This Agreement, dated as of July 29, 1994, by and among
INDIANA ENERGY, INC., an Indiana corporation having its principal
executive offices at 1630 North Meridian Street, Indianapolis,
Indiana 46202 ("ENERGY"), INDIANA GAS COMPANY, INC., an Indiana
corporation having its principal executive offices at 1630 North
Meridian Street, Indianapolis, Indiana 46202 ("INDIANA GAS")
(both ENERGY and INDIANA GAS being collectively referred to
herein as the "Company"), and Carl L. Chapman, an Indiana
resident whose mailing address is 1630 North Meridian Street,
Indianapolis, Indiana 46202-1496 (the "Executive").
R E C I T A L S
The following facts are true:
A. The Executive is serving the Company as a key executive
officer, and is expected to continue to make a major contribution
to the profitability, growth, and financial strength of the
Company.
B. The Company considers the continued services of the
Executive to be in the best interests of the Company and its
shareholders, and desires to assure itself of the availability of
such continued services in the future on an objective and
impartial basis and without distraction or conflict of interest
in the event of an attempt to obtain control of the Company.
C. The Executive is willing to remain in the employ of the
Company upon the understanding that the Company will provide him
with income security upon the terms and subject to the conditions
contained herein if his employment is terminated by the Company
without cause or if he voluntarily terminates his employment for
good reason.
A G R E E M E N T
In consideration of the premises and the mutual covenants
and agreements hereinafter set forth, the Company and the
Executive agree as follows:
1. Undertaking. The Company agrees to pay to the
Executive the termination benefits specified in paragraph 2
hereof if (a) control of ENERGY is acquired (as defined in
paragraph 3(a) hereof) during the term of this Agreement (as
described in paragraph 5 hereof) and (b) within three (3) years
after the acquisition of control occurs (i) the Company
terminates the employment of the Executive for any reason other
than Cause (as defined in paragraph 3(b) hereof), death, the
Executive's attainment of age sixty-five (65) or total and
permanent disability, or (ii) the Executive voluntarily
terminates his employment for Good Reason (as defined in
paragraph 3(c) hereof) or without reason during the Window Period
(as defined in paragraph 3(d) hereof).
2. Termination Benefits. If the Executive is entitled to
termination benefits pursuant to paragraph 1 hereof, the Company
agrees to pay to the Executive as termination benefits in a
lump-sum payment within five (5) calendar days of the termination
of the Executive's employment an amount to be computed by
multiplying (i) the Executive's average annual compensation (as
determined consistent with the provisions of Section 280G(d)(1)
of the Internal Revenue Code of 1986, as amended (the "Code") in
effect on July 29, 1994) payable by the Company which was
includable in the gross income of the Executive for the most
recent five (5) calendar years ending coincident with or
immediately before the date on which control of the Company is
acquired (or such portion of such period during which the
Executive was an employee of the Company), by (ii) two hundred
ninety-nine and ninety-nine one hundredths percent (299.99%). For
the purposes of this Agreement, employment and compensation paid
by any direct or indirect subsidiary of the Company will be
deemed to be employment and compensation paid by the Company.
3. Definitions.
(a) As used in this Agreement, the "acquisition
of control" means:
(i) The acquisition by any individual,
entity or group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of twenty percent
(20%) or more of either (A) the then outstanding shares
of common stock of ENERGY (the "Outstanding ENERGY
Common Stock") or (B) the combined voting power of the
then outstanding voting securities of ENERGY entitled
to vote generally in the election of directors (the
"Outstanding ENERGY Voting Securities"); provided,
however, that the following acquisitions shall not
constitute an acquisition of control: (A) any
acquisition directly from ENERGY (excluding an
acquisition by virtue of the exercise of a conversion
privilege), (B) any acquisition by ENERGY, (C) any
acquisition by any employee benefit plan (or related
trust) sponsored or maintained by ENERGY, INDIANA GAS
or any corporation controlled by ENERGY or (D) any
acquisition by any corporation pursuant to a
reorganization, merger or consolidation, if, following
such reorganization, merger or consolidation, the
conditions described in clauses (A), (B) and (C) of
subsection (iii) of this paragraph 3(a) are satisfied;
(ii) Individuals who, as of the date hereof,
constitute the Board of Directors of ENERGY (the
"Incumbent Board") cease for any reason to constitute
at least a majority of the Board of Directors of ENERGY
(the "Board"); provided, however, that any individual
becoming a director subsequent to the date hereof whose
election, or nomination for election by ENERGY's
shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent
Board shall be considered as though such individual
were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial
assumption of office occurs as a result of either an
actual or threatened election contest (as such terms
are used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of
a Person other than the Board; or
(iii) Approval by the shareholders of
ENERGY 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 ENERGY Common Stock and Outstanding ENERGY
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 ENERGY Stock and
Outstanding ENERGY Voting Securities, as the case may
be, (B) no Person (excluding ENERGY, any employee
benefit plan or related trust of ENERGY, INDIANA GAS or
such corporation resulting from such reorganization,
merger or consolidation and any Person beneficially
owning, immediately prior to such reorganization,
merger or consolidation and any Person beneficially
owning, immediately prior to such reorganization,
merger or consolidation, directly or indirectly, twenty
percent (20%) or more of the Outstanding ENERGY Common
Stock or Outstanding Voting Securities, as the case may
be) beneficially owns, directly or indirectly, twenty
percent (20%) or more of, respectively, the then
outstanding shares of common stock of the corporation
resulting from such reorganization, merger or
consolidation or the combined voting power of the then
outstanding voting securities of such corporation
entitled to vote generally in the election of directors
and (C) at least a majority of the members of the board
of directors of the corporation resulting from such
reorganization, merger or consolidation were members of
the Incumbent Board at the time of the execution of the
initial agreement providing for such reorganization,
merger or consolidation;
(iv) Approval by the shareholders of ENERGY
of (A) a complete liquidation or dissolution of ENERGY
or (B) the sale or other disposition of all or
substantially all of the assets of ENERGY, other than
to a corporation, with respect to which following such
sale or other disposition (1) more than sixty percent
(60%) of, respectively, the then outstanding shares of
common stock of such corporation and the combined
voting power of the then outstanding voting securities
of such corporation entitled to vote generally in the
election of directors is then beneficially owned,
directly or indirectly, by all or substantially all of
the individuals and entities who were the beneficial
owners, respectively, of the Outstanding ENERGY Common
Stock and Outstanding ENERGY 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 ENERGY Common Stock and Outstanding
ENERGY Voting Securities, as the case may be, (2) no
Person (excluding ENERGY and any employee benefit plan
or related trust of ENERGY, INDIANA GAS 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 ENERGY Common Stock or Outstanding
ENERGY Voting Securities, as the case may be)
beneficially owns, directly or indirectly, twenty
percent (20%) or more of, respectively, the then
outstanding shares of common stock of such corporation
and the combined voting power of the then outstanding
voting securities of such corporation entitled to vote
generally in the election of directors and (3) at least
a majority of the members of the board of directors of
such corporation were members of the Incumbent Board at
the time of the execution of the initial agreement or
action of the Board providing for such sale or other
disposition of assets of ENERGY; or
(v) The closing, as defined in the documents
relating to, or as evidenced by a certificate of any
state or federal governmental authority in connection
with, a transaction approval of which by the
shareholders of ENERGY would constitute an "acquisition
of control" under subsection (iii) or (iv) of this
section 3(a) of this Agreement.
Notwithstanding anything contained in this Agreement to
the contrary, if the Executive's employment is terminated
before an "acquisition of control" as defined in this
section 3(a) and the Executive reasonably demonstrates that
such termination (i) was at the request of a third party who
has indicated an intention or taken steps reasonably
calculated to effect an "acquisition of control" and who
effectuates an "acquisition of control" (a "Third Party") or
(ii) otherwise occurred in connection with, or in
anticipation of, an "acquisition of control" which actually
occurs, then for all purposes of this Agreement, the date of
an "acquisition of control" with respect to the Executive
shall mean the date immediately prior to the date of such
termination of the Executive's employment.
(b) As used in this Agreement, the term "Cause" means
fraud, dishonesty, theft of corporate assets, or other gross
misconduct by the Executive. Notwithstanding the foregoing,
the Executive shall not be deemed to have been terminated
for cause unless and until there shall have been delivered
to him a copy of a resolution duly adopted by the
affirmative vote of not less than a majority of the entire
membership of the Board at a meeting of the Board called and
held for the purpose (after reasonable notice to him and an
opportunity for him, together with his counsel, to be heard
before the Board), finding that in the good faith opinion of
the Board the Executive was guilty of conduct set forth
above in the first sentence of the subsection and specifying
the particulars thereof in detail.
(c) As used in this Agreement, the term "Good Reason"
means, without the Executive's written consent, (i) a
demotion in the Executive's status, position or
responsibilities which, in his reasonable judgment, does not
represent a promotion from his status, position or
responsibilities as in effect immediately prior to the
change in control; (ii) the assignment to the Executive of
any duties or responsibilities which, in his reasonable
judgment, are inconsistent with such status, position or
responsibilities; or any removal of the Executive from or
failure to reappoint or reelect him to any of such
positions, except in connection with the termination of his
employment for total and permanent disability, death or
Cause or by him other than for Good Reason; (iii) a
reduction by the Company in the Executive's base salary as
in effect on the date hereof or as the same may be increased
from time to time during the term of this Agreement or the
Company's failure to increase (within twelve (12) months of
the Executive's last increase in base salary) the
Executive's base salary after a change in control in an
amount which at least equals, on a percentage basis, the
average percentage increase in base salary for all executive
and senior officers of the Company effected in the preceding
twelve (12) months; (iv) the relocation of the principal
executive offices of ENERGY or INDIANA GAS, whichever entity
on behalf of which the Executive performs a principal
function of that entity as part of his employment services,
to a location outside the Indianapolis, Indiana metropolitan
area or the Company's requiring him to be based at any place
other than the location at which he performed his duties
prior to a change in control, except for required travel on
the Company's business to an extent substantially consistent
with his business travel obligations at the time of a change
in control; (v) the failure by the Company to continue in
effect any incentive, bonus or other compensation plan in
which the Executive participates, including but not limited
to the Company's stock option and restricted stock plans, if
any, unless an equitable arrangement (embodied in an ongoing
substitute or alternative plan), with which he has
consented, has been made with respect to such plan in
connection with the change in control, or the failure by the
Company to continue his participation therein, or any action
by the Company which would directly or indirectly materially
reduce his participation therein; (vi) the failure by the
Company to continue to provide the Executive with benefits
substantially similar to those enjoyed by him or to which he
was entitled under any of the Company's pension, profit
sharing, life insurance, medical, dental, health and
accident, or disability plans in which he was participating
at the time of a change in control, the taking of any action
by the Company which would directly or indirectly materially
reduce any of such benefits or deprive him of any material
fringe benefit enjoyed by him or to which he was entitled at
the time of the change in control, or the failure by the
Company to provide him with the number of paid vacation and
sick leave days to which he is entitled on the basis of
years of service with the Company in accordance with the
Company's normal vacation policy in effect on the date
hereof; (vii) the failure of the Company to obtain a
satisfactory agreement from any successor or assign of the
Company to assume and agree to perform this Agreement;
(viii) any purported termination of the Executive's
employment which is not effected pursuant to a Notice of
Termination satisfying the requirements of paragraph 4(c)
hereof (and, if applicable, paragraph 3(b) hereof); and for
purposes of this Agreement, no such purported termination
shall be effective; or (ix) any request by the Company that
the Executive participate in an unlawful act or take any
action constituting a breach of the Executive's professional
standard of conduct.
Notwithstanding anything in this paragraph 3(c) to the
contrary, the Executive's right to terminate his employment
pursuant to this paragraph 3(c) shall not be affected by his
incapacity due to physical or mental illness.
(d) As used in this Agreement, the "Window Period"
shall mean the 30-day period immediately following the first
anniversary of the acquisition of control.
4. Additional Provisions.
(a) Enforcement of Agreement. The Company is aware
that upon the occurrence of a change in control the Board of
Directors or a shareholder of the Company may then cause or
attempt to cause the Company to refuse to comply with its
obligations under this Agreement, or may cause or attempt to
cause the Company to institute, or may institute, litigation
seeking to have this Agreement declared unenforceable, or
may take or attempt to take other action to deny the
Executive the benefits intended under this Agreement. In
these circumstances, the purpose of this Agreement could be
frustrated. It is the intent of the Company that the
Executive not be required to incur the expenses associated
with the enforcement of his rights under this Agreement by
litigation or other legal action, nor be bound to negotiate
any settlement of his rights hereunder, because the cost and
expense of such legal action or settlement would
substantially detract from the benefits intended to be
extended to the Executive hereunder. Accordingly, if
following a change in control it should appear to the
Executive that the Company has failed to comply with any of
its obligations under this Agreement or in the event that
the Company or any other person takes any action to declare
this Agreement void or unenforceable, or institutes any
litigation or other legal action designed to deny, diminish
or to recover from the Executive the benefits entitled to be
provided to the Executive hereunder, and that the Executive
has complied with all of his obligations under this
Agreement, the Company irrevocably authorizes the Executive
from time to time to retain counsel of his choice, at the
expense of the Company as provided in this paragraph 4(a),
to represent the Executive in connection with the initiation
or defense of any litigation or other legal action, whether
such action is by or against the Company or any director,
officer, shareholder, or other person affiliated with the
Company, in any jurisdiction. Notwithstanding any existing
or prior attorney-client relationship between the Company
and such counsel, the Company irrevocably consents to the
Executive entering into an attorney-client relationship with
such counsel, and in that connection the Company and the
Executive agree that a confidential relationship shall exist
between the Executive and such counsel. The reasonable fees
and expenses of counsel selected from time to time by the
Executive as hereinabove provided shall be paid or
reimbursed to the Executive by the Company on a regular,
periodic basis upon presentation by the Executive of a
statement or statements prepared by such counsel in
accordance with its customary practices, up to a maximum
aggregate amount of $500,000. Any legal expenses incurred
by the Company by reason of any dispute between the parties
as to enforceability of or the terms contained in this
Agreement, notwithstanding the outcome of any such dispute,
shall be the sole responsibility of the Company, and the
Company shall not take any action to seek reimbursement from
the Executive for such expenses.
(b) Severance Pay; No Duty to Mitigate. The amounts
payable to the Executive under this Agreement shall not be
treated as damages but as severance compensation to which
the Executive is entitled by reason of termination of his
employment in the circumstances contemplated by this
Agreement. The Company shall not be entitled to set off
against the amounts payable to the Executive any amounts
earned by the Executive in other employment after
termination of his employment with the Company, or any
amounts which might have been earned by the Executive in
other employment had he sought such other employment.
(c) Notice of Termination. Any purported termination
by the Company or by the Executive for Good Reason or by the
Executive without any reason during the Window Period shall
be communicated by written Notice of Termination to the
other party hereto in accordance with paragraph 4(j) hereof.
For purposes of this Agreement, a "Notice of Termination"
shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of
his employment under the provision so indicated. For
purposes of this Agreement, no such purported termination
shall be effective without such Notice of Termination.
(d) Internal Revenue Code. Notwithstanding anything
in this Agreement to the contrary (other than this
paragraph), in the event that Arthur Andersen & Co. (or its
successor) determines that any payment by the Company to or
for the benefit of the Executive pursuant to the terms of
this Agreement would be nondeductible by the Company for
federal income tax purposes because of Section 280G of the
Code, then the amount payable to or for the benefit of the
Executive pursuant to this Agreement shall be reduced (but
not below zero) to the maximum amount payable without
causing the payment to be nondeductible by the Company
because of Section 280G of the Code; provided, however, that
notwithstanding the preceding clause of this sentence, if
Section 280G of the Code is amended after the date on which
this Agreement has been executed and if the amendment has
the effect of reducing the amount of deductible payments
that may be made by the Company to the Executive under
Section 280G of the Code to an amount less than what would
have been deductible by the Company under Section 280G of
the Code as in effect on July 29, 1994, the maximum amount
payable to the Executive under this paragraph 4(d) shall be
determined without regard to any amendment to Section 280G
of the Code; provided, further, that if solely by reason of
any amendment to Section 280G of the Code an excise tax is
imposed on the Executive under Section 4999 of the Code as a
result of payments made under this Agreement, the Company
shall increase the benefit payable to the Executive under
this Agreement by an amount ("Make Whole Payment") which,
after taking into account the additional federal, state and
local income taxes or the amount (including the Code Section
4999 excise tax that would be imposed on the Make Whole
Payment), would reimburse the Executive fully for the Code
Section 4999 tax that is imposed on the other payments made
hereunder and put the Executive in same net after-tax
position with respect to this Agreement that he would have
been but for the excise tax. Such determination by Arthur
Andersen & Co. (or its successor) shall be conclusive and
binding upon the parties.
(e) Assignment. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their
respective executors, administrators, heirs, personal
representatives, successors, and assigns, but neither this
Agreement nor any right hereunder may be assigned or
transferred by either party hereto, any beneficiary, or any
other person, nor be subject to alienation, anticipation,
sale, pledge, encumbrance, execution, levy, or other legal
process of any kind against the Executive, his beneficiary
or any other person. Notwithstanding the foregoing, the
Company shall assign this Agreement to any corporation or
other business entity succeeding to substantially all of the
business and assets of the Company by merger, consolidation,
sale of assets, or otherwise and shall obtain the assumption
of this Agreement by such successor.
(f) Amendment. This Agreement shall not be amended,
modified, or supplemented without the written agreement of
the parties at the time of such amendment, modification, or
supplement.
(g) Governing Law. This Agreement shall be governed
by and subject to the laws of the State of Indiana.
(h) Severability. The invalidity or unenforceability
of any particular provision of this Agreement shall not
affect the other provisions, and this Agreement shall be
construed in all respects as if such invalid or
unenforceable provision had not been contained herein.
(i) Captions. The captions in this Agreement are for
convenience and identification purposes only, are not an
integral part of this Agreement, and are not to be
considered in the interpretation of any part hereof.
(j) Notices. Except as otherwise specifically
provided in this Agreement, all notices and other
communications hereunder shall be in writing and shall be
deemed to have been duly given if delivered in person or
sent by registered or certified mail, postage prepaid,
addressed as set forth above, or to such other address as
shall be furnished in writing by any party to the others.
(k) Waivers. Except as otherwise specifically
provided in this Agreement, no waiver by either party hereto
of any breach by the other party hereto of any condition or
provision of this Agreement to be performed by such other
party shall be deemed to be a valid waiver unless such
waiver is in writing or, even if in writing, shall be
deemed to be a waiver of a subsequent breach of such
condition or provision or a waiver of a similar or
dissimilar provision or condition at the same or at any
prior or subsequent time.
5. Term of this Agreement. This Agreement shall remain in
effect until October 1, 1999 or until the expiration of any
extension thereof. The term of this Agreement shall be
automatically extended for one (1) year periods without further
action of the parties as of October 1, 1995 and each succeeding
October 1 thereafter, unless ENERGY shall have served written
notice to the Executive prior to October 1, 1995 or prior to
October 1 of each succeeding year, as the case may be, of its
intention that the Agreement shall terminate at the end of the
five (5) year period that begins with the October 1 following the
date of such written notice.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the day and year first above written.
INDIANA ENERGY, INC.
By:
O. N. Frenzel III, as
Chairman of the Compensation
Committee
Attest:
Secretary or Assistant Secretary
INDIANA GAS COMPANY, INC.
By:
President or Vice President
Attest:
Secretary or Assistant Secretary
EXECUTIVE
Carl L. Chapman
JAS 44377
EXHIBIT 10-K
INDIANA GAS COMPANY, INC.
EXECUTIVE COMPENSATION
DEFERRAL PLAN
Effective December 1, 1994
INDIANA GAS COMPANY, INC.
EXECUTIVE COMPENSATION
DEFERRAL PLAN
(EFFECTIVE DECEMBER 1, 1994)
PREAMBLE
The Indiana Gas Company, Inc. Executive Compensation
Deferral Plan (the "Plan") is an unfunded supplemental retirement
plan for a select group of management employees of Indiana Gas
Company, Inc. and Indiana Energy, Inc. (the "Company"). The Plan
is designed to meet applicable exemptions under Sections 201(2),
301(a)(3), 401(a)(1) and 4021(b)(6) of the Employee Retirement
Income Security Act of 1974, as amended, (the "Act") and under
Department of Labor Regulation Section 2520.104-23.
ARTICLE I
DEFINITIONS
Section 1.01. Administrator. The term "Administrator"
means the Compensation Committee which shall have the authority
to manage and control the operation of this Plan.
Section 1.02. Beneficiary. The term "Beneficiary" means
for a Participant the individual or individuals designated by
that Participant in the last Participation Agreement executed by
that Participant to receive benefits in the event of that
Participant's death.
Section 1.03. Bonus. The term "Bonus" means for each
employee Participant the bonus, if any, which is payable for a
fiscal year of the Company under the Indiana Energy, Inc. Annual
Management Incentive Plan and which is subject to an annual
deferral election under this Plan.
Section 1.04. Company. The term "Company" means Indiana
Gas Company, Inc., and any successor thereto.
Section 1.05. Compensation. The term "Compensation" means
for each Participant in any Plan Year the total amount of
remuneration for employment services as paid to that Participant
by the Company in that Plan Year.
Section 1.06. Compensation Committee. The term
"Compensation Committee" means the Compensation Committee of the
Board of Directors of Indiana Energy, Inc.
Section 1.07. Effective Date. The term "Effective Date"
means December 1, 1994.
Section 1.08. Interest Fund Subaccount. The term "Interest
Fund Subaccount" means the bookkeeping account maintained for
each Participant in this Plan which is credited in each Plan
Year with a rate of return as provided in Article III of this
Plan.
Section 1.09. Interest Fund Subaccount Rate. The term
"Interest Fund Subaccount Rate" means the guaranteed rate of
return credited to amounts held in the Interest Fund Subaccounts.
The rate shall change each January 1 and shall be equal to the
mean between the high and low of the Corporate Bond Yield
Averages, Average Public Utility (aa rated), for the past twelve
(12) months as reported in Moody's Bond Survey in its first
published issue in the November preceding the January 1 on which
the rate is to come into effect.
Section 1.10. Participant. The term "Participant" means
any individual who fulfills the eligibility requirements
contained in Article II of this Plan.
Section 1.11. Participation Account. The term
"Participation Account" means the bookkeeping account maintained
by the Company for each Participant reflecting amounts deferred
under this Plan (as adjusted from time to time) and which is
equal to the sum of the Participant's Interest Fund Subaccounts
and Phantom Unit Subaccounts.
Section 1.12. Participation Agreement. The term
"Participation Agreement" means the agreement executed by an
eligible employee each Plan Year signifying his desire to become
(or to continue to be) a Participant in this Plan and signifying
the amount of his Compensation and/or Bonus which is to be
deferred during the subsequent Plan Year pursuant to the terms of
this Plan.
Section 1.13. Phantom Unit Subaccount. The term "Phantom
Unit Subaccount" means the bookkeeping account maintained by the
Company for each Participant in this Plan for each Plan Year
during which the Participant has a deferred election in effect
which is credited with Phantom Units.
Section 1.14. Phantom Units. The term "Phantom Units"
means the phantom units allocated to a bookkeeping account under
this Plan with a per unit value equal to the value of Indiana
Energy, Inc. common stock (as determined in the manner provided
in Article III).
Section 1.15. Plan. The term "Plan" means the plan
embodied by this instrument as now in effect or hereafter
amended.
Section 1.16. Plan Year. The term "Plan Year" means the
calendar year.
ARTICLE II
PARTICIPATION IN THE PLAN
Section 2.01. Eligibility. As of the Effective Date, all
officers of the Company shall be eligible to become Participants
in this Plan; provided, however, that the Compensation Committee
may, by appropriate action, expand the group of employees
eligible to defer Compensation or Bonuses under this Plan.
Section 2.02. Deferral Amounts.
(a) Amount of Deferral. The amount of Compensation
and/or Bonus to be deferred in a Plan Year shall be designated by
each Participant in the Participation Agreement executed by that
Participant for that Plan Year prior to the beginning of that
Plan Year; provided, however, that a Participant shall be
permitted to defer in 1994 Compensation earned on or after
December 1, 1994 by completing a Participation Agreement and
delivering it to the Secretary of the Company prior to
December 1, 1994.
(b) Special Rules for New Officers. For the Plan Year
during which a person first becomes eligible to become a
Participant, the Participant shall be provided by the Company the
opportunity to make a special election for such Plan Year with
respect to the Compensation paid in the Plan Year after the date
on which he becomes an eligible Participant.
(c) Timing of Deferral. The following rules govern the
timing of the deferral of Compensation and, if applicable,
Bonuses under this Plan:
(i) Compensation deferred by Participants
shall be effected pro-rata from each payday in the Plan
Year.
(ii) Any portion of the Bonus deferred
hereunder shall be effected from the Bonus itself.
(iii) For purposes of the allocations
described in Article III, the amount of any
Compensation or Bonus deferred hereunder shall not be
credited to a Participant's Participation Account until
the last day of the calendar month during which, but
for the deferral, the deferred Compensation or Bonus
would have been paid.
(d) Modification of Deferral Amount. A Participant
may modify the amount of his Compensation and/or Bonus to be
deferred in a Plan Year under this Plan by written notice to the
Secretary of the Company which is received by the Secretary of
the Company prior to the beginning of that Plan Year.
(e) Discontinuation of Participation. A Participant
may discontinue his participation in this Plan by written notice
to the Secretary of the Company which is received prior to the
beginning of the Plan Year in which the discontinuation is to be
effective or by failing to execute a Participation Agreement for
that Plan Year. Any amounts previously deferred shall be paid in
accordance with the provisions of this Plan and elections made by
the Participant in his Participation Agreements. If applicable,
the participation of a Participant who has made a withdrawal from
his Participation Account pursuant to Article V of this Plan
shall be discontinued as of the date of the withdrawal.
(f) Manner of Payout of a Participant's Participation
Account. The manner in which a Participant's Participation
Account attributable to deferrals in a Plan Year is to be
distributed to that Participant under the provisions of this Plan
shall be designated by that Participant in the Participation
Agreement executed by that Participant for that Plan Year.
Subject to Section 3.05, a Participant may, by establishing
hardship (as such term is defined in Article V of this Plan) to
the satisfaction of the Compensation Committee, modify the timing
or manner of payout of his Participation Account.
ARTICLE III
ACCOUNTS
Section 3.01. Purpose of Participation and Guaranteed
Accounts. The Company shall cause a Participation Account to be
established in the name of each Participant. The Company shall
cause a separate sub-account of a Participant's Participation
Account for each Plan Year during which Participant defers
Compensation or, if applicable, a portion of his Bonus (the Plan
Year Subaccount). Each Plan Year Subaccount shall be further
allocated, as directed by the Participant, between the Interest
Fund Subaccount and Phantom Stock Subaccount. The purpose of
establishing such Participation Accounts and Subaccounts is
solely to provide a mechanism for determining the Participants'
benefits under this Plan. It is the intent of the Company that
the Participants shall have no title to or beneficial ownership
in any cash or investments which the Company may set aside and
allocate to these Accounts.
Section 3.02. Investment of Deferrals. Subject to
Section 3.05, the Company shall cause a separate Plan Year
Subaccount established for each Participant who is deferring any
Compensation or Bonus in such Plan Year. The amount of the
deferral shall be allocated between the Interest Fund Subaccount
and the Phantom Stock Subaccount in accordance with the
investment directions provided by the Participant in his
Participation Agreement for such Plan Year. A Participant may
allocate deferrals between the Interest Fund Subaccount and
Phantom Stock Subaccount in twenty-five percent (25%) increments.
As of each January 1, a Participant shall be permitted by written
instructions to the Secretary of the Company to change the
investment directions of any deferrals for one (1) or more of the
previous Plan Year Subaccounts. In such direction, the
Participant needs to designate the Plan Year Subaccounts for
which the revised election or elections apply. Changes shall be
permitted in twenty-five percent (25%) increments. If in
accordance with Section 3.05 a Participant is permitted to invest
new deferrals or transfer existing deferrals to his Interest Fund
Subaccount, the Company shall provide a special election period
(commencing as soon as practicable after the opinion from counsel
required under Section 3.05 is delivered to the Company) to the
Participants to effectuate investment changes before the next
January 1.
Section 3.03. Description of Interest Fund and Phantom
Stock Subaccounts.
(a) Interest Fund Subaccounts. Any monies credited
to a Participant's Interest Fund Subaccount shall be credited
with simple interest monthly at the Interest Fund Subaccount Rate
in effect for such month based on the amounts held in such
Subaccount as of the last day of the preceding calendar month.
(b) Phantom Stock Subaccount. As of the last day of
any calendar month during which amounts are credited to a
Participant's Phantom Stock Subaccount, the Company shall cause a
number of Phantom Stock Units to be credited to the Phantom Stock
Subaccount equal to a number determined by dividing the total
amount of the allocation for such month by the average of the
daily averages of the high and low sales price of shares of
Indiana Energy, Inc. common stock for each of the trading days in
such month (as reported in The Wall Street Journal). Any time
that there is a dividend paid on shares of Indiana Energy, Inc.
common stock, the Company shall cause each Participant's Phantom
Stock Subaccount to be credited with an amount equal to the
aggregate dividend which would have been payable to such
Subaccount during such month if such Subaccount was invested in
shares of Indiana Energy, Inc. common stock rather than Phantom
Shares (without regard to whether the Phantom Shares were
allocated to such Subaccount on the record date for such
dividend). Any dividend equivalent credits for a calendar month
shall be converted to Phantom Units, along with any additional
deferrals allocated in such month, in the manner described above.
(c) Special Adjustments. In the event of any change
in the outstanding common stock of Indiana Energy, Inc. 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
Phantom Units allocable to a Participant's Phantom Unit
Subaccount shall be appropriately adjusted by the Committee,
whose determination shall be conclusive, consistent with the
corporate transaction.
Section 3.04. Allocation of Withdrawals and Distributions.
(a) Withdrawals. Except as otherwise expressly
provided in a Participant's withdrawal request, withdrawals from
a Participant's Participation Account under Article V shall be
charged proportionately against each Plan Year Subaccount based
on the amounts allocated as such Subaccount as of the last day of
the immediately preceding month and shall be charged against the
Interest Fund Subaccount and Phantom Stock Subaccount of such
Plan Year Subaccount proportionately based on the balance
credited to such Interest Fund Subaccount and Phantom Stock
Subaccount on the last day of the month immediately preceding the
withdrawal.
(b) Distributions. Distributions under Article IV for
each Plan Year Subaccount shall be charged proportionately
against the Participant's Interest Fund Subaccount and Phantom
Stock Subaccount based on the balances credited to such
Subaccounts as of the last day of the immediately preceding
month.
(c) Conversion of Phantom Units. For purposes of
effecting withdrawals and distributions from the Phantom Stock
Subaccount, the Phantom Stock Units to be withdrawn or
distributed shall be deemed to have a per unit value equal to
average of the daily averages of the high and low sales price of
Indiana Energy, Inc. common stock for each of the trading days in
the calendar month immediately preceding the month the withdrawal
or distribution is to be effected.
Section 3.05. Special Investment Rules. Notwithstanding
anything contained in this Plan to the contrary, the only
investment option permitted for deferrals under the Plan shall be
investments in the Phantom Stock Subaccount until such time as
the Secretary of the Company receives an opinion from counsel
that the offering of other investment options under this Plan,
such as the Interest Fund Subaccount, shall not result in any
transactions relating to the Phantom Stock Subaccount being
deemed to be a "sale" or "purchase" of an "equity security" or a
"derivative security" under the Securities Exchange Act of 1934,
as amended; provided, however, that amounts credited to a
Participant's Participation Account prior to the date on which
such an opinion is delivered to the Secretary of the Company
shall not be subject to other investment options unless such
opinion expressly states that transfers of such existing amounts
between various investment funds shall also not result in "sales"
or "purchases" of an "equity security" or a "derivative
security".
ARTICLE IV
BENEFITS
Section 4.01. Death Benefits. If a Participant dies prior
to the commencement of his benefits under this Article IV, the
Beneficiary of that Participant, as determined pursuant to the
last Participation Agreement executed by that Participant, shall
receive the balance contained in his Participation Account.
Payments under this Section 4.01 shall be paid in a single lump
sum cash payment no later than the last day of the third (3rd)
calendar month following the date of the Participant's death.
Section 4.02. Other Distributions. A Participant's Plan
Year Subaccounts shall be paid to him on the date and in the
manner designated by that Participant in his Participation
Agreements; provided, however, that under no circumstances shall
payment commencement be deferred more than sixty (60) calendar
days after the date on which the Participant's employment with
the Company is terminated. If any or all of the benefits of a
Participant are being paid in installments and that Participant
dies prior to receiving the final installments due hereunder, the
remaining amounts in his Participation Account shall be paid to
that Participant's Beneficiary, as determined pursuant to the
last Participation Agreement executed by that Participant, in a
single lump sum cash payment.
ARTICLE V
WITHDRAWALS
Except as provided below, a Participant may apply to the
Compensation Committee for withdrawals from his Participation
Account prior to the date on which he is entitled to
distributions under this Plan in the event of that Participant's
"hardship". For purposes of this Plan, a withdrawal shall be
deemed on account of hardship if necessary for the purpose of
alleviating extraordinary expenses arising from the sickness or
disability of that Participant or of his spouse, children or
other dependents, or of alleviating any other extraordinary
financial burden which is caused by an act beyond the control of
that Participant. The existence of a hardship shall be
determined solely by the Compensation Committee, by applying
uniform and nondiscriminatory standards. If such application for
withdrawal is approved by the Compensation Committee, the
withdrawal shall be effective at the later of the dates specified
in the Participant's application or the date of approval by the
Compensation Committee, and the Participant's right to defer
Compensation and/or Bonuses under this Plan for the remainder of
the Plan Year during which the withdrawal occurs shall be
suspended. The withdrawal amount shall be paid in a single lump
sum cash payment and shall be limited to amounts necessary to
meet the financial need, as determined by the Compensation
Committee in its sole discretion. The balance remaining in his
Participation Account shall be distributed as provided in Article
IV of this Plan. Notwithstanding anything contained herein to
the contrary, withdrawal shall not be permitted unless the
Secretary of the Company receives a letter from counsel that the
availability of withdrawal shall not result in any transaction
relating to the Phantom Stock Subaccount herein being deemed a
"sale" or "purchase" on an "equity security" or "derivative
security" under the Securities Exchange Act of 1934, as amended.
ARTICLE VI
ADMINISTRATION
Section 6.01. Administration of Plan. The Compensation
Committee shall represent the Company in all matters concerning
the administration of this Plan. The Compensation Committee
shall have full power and authority to adopt rules and
regulations for the administration of this Plan; provided,
however, that such rules and regulations are not inconsistent
with the provisions of this Plan.
Section 6.02. Delegation of Responsibility. The
Compensation Committee may delegate duties involved in the
administration of this Plan to such person or persons whose
services are deemed by it to be necessary or convenient.
Section 6.03. Payment of Benefits. The amounts allocated
to a Participant's Participation Account and payable as benefits
under this Plan shall be paid solely from the general assets of
the Company. The payment of benefit obligation shall be
allocated between the Company based on the portion of the
Compensation and/or Bonus which would have been paid by each
Company but for the deferral. No Participant shall have any
interest in any specific assets of the Company under the terms of
this Plan. This Plan shall not be considered to create an escrow
account, trust fund or other funding arrangement of any kind or a
fiduciary relationship between any Participant and the Company.
The Company's obligation under this Plan is purely contractual
and shall not be funded or secured in any way.
Section 6.04. Construction of Plan. The Compensation
Committee shall have the power to construe this Plan and to
determine all questions of fact or law arising under it. It may
correct any defect, supply any omission or reconcile any
inconsistency in this Plan in such manner and to such extent as
it may deem appropriate.
ARTICLE VII
AMENDMENT OR TERMINATION OF PLAN
Section 7.01. Termination. The Company may at any time
terminate this Plan. As of the first Plan Year beginning after
the date on which this Plan is terminated, no additional amounts
shall be deferred from any Participant's Compensation or Bonus.
The Compensation Committee shall direct the Company to pay to
each such Participant the balance contained in his Participation
Account at such time and in the manner designated by that
Participant in the Participation Agreements executed by that
Participant.
Section 7.02. Amendment. The Company may amend the
provisions of this Plan at any time; provided, however, that no
amendment shall adversely affect the rights of Participants or
their Beneficiaries with respect to the balances contained in
their Participation Accounts immediately prior to the amendment
unless the majority of the affected Participants consent to the
change.
ARTICLE VIII
MISCELLANEOUS
Section 8.01. Successors. This Plan shall be binding upon
the successors of the Company.
Section 8.02. Choice of Law. This Plan shall be construed
and interpreted pursuant to, and in accordance with, the laws of
the State of Indiana.
Section 8.03. No Employment Contract. This Plan shall not
be construed as an agreement, consideration or inducement of
employment or as affecting in any manner the rights or
obligations of the Company or of any Participant to continue or
to terminate the employment relationship at any time.
Section 8.04. Non-Alienation. No Participant or his
Beneficiary shall have any right to anticipate, pledge, alienate
or assign any of his rights under this Plan, and any effort to do
so shall be null and void. The benefits payable under this Plan
shall be exempt from the claims of creditors or other claimants
and from all orders, decrees, levies and executions and any other
legal process to the fullest extent that may be permitted by law.
Section 8.05. Gender and Number. Words in one (1) gender
shall be construed to include the other genders where
appropriate; words in the singular or plural shall be construed
as being in the plural or singular where appropriate.
Section 8.06. Disclaimer. The Company make no
representations or assurances and assume no responsibility as to
the performance by any parties, solvency, compliance with state
and federal securities regulation or state and federal tax
consequences of this Plan or participation therein. It shall be
the responsibility of the respective Participants to determine
such issues or any other pertinent issues to their own
satisfaction.
Section 8.07. Designation of Beneficiaries. Each
Participant shall designate his the Participation Agreement his
Beneficiary and his contingent Beneficiary to whom death benefits
due hereunder at the date of his death shall be paid; provided,
however, that the Beneficiary and Contingent Beneficiary
designated by a Participant in the last Participation Agreement
executed by that Participant shall supersede all other
Beneficiary or Contingent Beneficiary designations made by that
Participant in any earlier Employee's Participation Agreement
executed by that Participant. If any Participant fails to
designate a Beneficiary or if the designated Beneficiary
predecease any Participant, death benefits due hereunder at that
Participant's death shall be paid to his contingent Beneficiary
or, if none, to the deceased Participant's surviving spouse, if
any, and if none to the deceased Participant's estate.
This Plan has been executed on this day of ,
1994, and shall be effective as of December 1, 1994.
INDIANA GAS COMPANY, INC.
By:
Title:
Attest:
By:
EXHIBIT 10-L
BE IT RESOLVED, by the Board of Directors of Indiana
Gas Company, Inc. (Company), that effective February 1,
1981, there be, and hereby is, established and adopted, an
unfunded deferred compensation plan for Directors of the
Company (the "Plan") with respect to their fees as a
Director and for attendance at committee meetings of the
Board, the terms and conditions of which are as follows:
(1) The Plan shall be unfunded so that the
Company is under merely a contractual duty to make
payments when due under the Plan. The promise to
pay shall not be represented by notes and shall
not be secured in any way.
(2) On or before December 31 of any year a
Director may elect, by written notice to the
Secretary of the Company, to defer receipt of all
or a specified part of his or her fees for
succeeding calendar years. A person elected to
fill a vacancy on the Board and who was not a
Director on the preceding December 31, or whose
term of office did not begin until after such
date, may elect, before his or her term begins, to
defer all or a specified part of his or her fees
for the balance of the calendar year and for
succeeding calendar years. A person presently a
Director may also elect, prior to January 31,
1981, to defer all or a specified part of his or
her fees to be earned on and after February 1,
1981.
(3) An election to defer fees shall continue
from year to year unless the Director terminates
it in writing. No amount deferred shall be paid
to a Director until he or she (a) ceases to be a
Director, or (b) attains that age specified by the
retirement income test of the Social Security Act
(Section 203(f)(3) as amended or its equivalent)
then in effect, as he or she may elect, and then
only at the times and in the manner specified
below.
(4) The Company shall maintain an account
for each Director participating in the Plan. Such
account shall be credited with the amount of
deferred fees, plus interest at the Current
Interest Rate, as later defined, computed annually
on the average balance in such account (including
accumulated interest) for the twelve month period
ended January 31 of each year, until the date when
deferred amounts first become payable under the
Plan. No interest shall accrue or be credited to
such account on the balance in such account after
the date when deferred amounts first become
payable under the Plan.
(5) Amounts deferred under the Plan,
together with accumulated interest, shall, at the
Director's election, be distributed either in a
one lump sum payment or in equal annual
installments over any period of from two to ten
years, with the lump sum or first installment
being payable the first day of February
immediately following the date on which the
Director (a) ceases to be a Director, or (b)
attains that age specified by the retirement
income test of the Social Security Act (Section
203(f)(3) as amended or its equivalent) then in
effect, whichever he or she elects, and any
additional installments being payable on the first
day of February in each succeeding year
thereafter.
(6) The elections as to item (a) or (b) of
paragraph (3) and as to the form of payment of
deferred fees permitted by paragraph (5) above
shall be made by the Director at the time the
Director first elects to defer receipt of all or a
portion of his fees pursuant to paragraph (2)
above. The elections as to item (a) or (b) of
paragraph (3) and/or as to the form of payment of
the deferred fees permitted by paragraph (5) above
may be changed by the Director at any time during
his term as a Director of the Company; provided,
however, that no change in such elections will be
permitted after the December 31 preceding the
earlier of the dates provided in item (a) or (b)
of paragraph (3) above.
(7) If a person becomes a director,
proprietor, officer, partner, employee or
otherwise becomes affiliated with, any gas utility
within the State of Indiana other than the Company
or a subsidiary of the Company while receiving
payments under the Plan, all deferred fees and
interest remaining payable to such person shall be
forfeited.
(8) a. Upon the death of a Director,
or a person who has ceased to be a Director,
prior to the receipt by such Director of any
deferred fees and interest from his or her
account, all deferred fees accrued and
interest in his or her account shall be
payable to his or her estate in one lump sum
within ninety (90) days following his or her
death, unless a Director elects, at the time
an election is made under paragraph (2)
above, to have such account balance paid to a
beneficiary designated in writing by such
Director; in which event, such account
balance shall be payable to such beneficiary
in equal annual installments over a five year
period beginning with the first day of
February immediately following the year of
death.
b. In the event of the death of a
Director or a person who has ceased to be a
Director after he or she has begun receiving
installments from the deferred compensation
account under paragraph 5 above, the
remaining installments shall be paid when due
to his or her designated beneficiary, if
living; otherwise, the balance in the
deferred compensation account shall be paid
in one lump sum to his or her estate within
ninety (90) days following his or her death.
c. If a designated beneficiary
has begun receiving installments under this
paragraph (8), but dies before receiving the
last installment, the balance in the deferred
compensation account shall be paid in one
lump sum to such beneficiary's estate within
ninety (90) days following his or her death.
(9) The President of the Company shall be
empowered to place the Plan in effect under such
additional conditions and terms as shall not be
inconsistent with the terms stated above and as
shall not, to the extent legally permitted,
jeopardize the status of the Plan as a deferred
compensation plan allowing a Director of the
Company not to include deferred amounts (including
interest) in gross income under Federal income tax
laws until the taxable year or years such amounts
are actually paid.
(10) The term "Current Interest Rate" shall
mean the interest rate as established by the
Company's Board of Directors.
(11) The Current Interest Rate for the twelve
month period beginning February 1, 1981, and for
each successive twelve month period thereafter
unless changed by further action of this Board,
shall be that percent per annum which is equal to
the average commercial prime interest rate in
effect for the preceding calendar year.
To: The Corporate Secretary
Indiana Gas Company, Inc.
Election to Defer Compensation
The undersigned Director of Indiana Gas Company, Inc.
(Company) hereby elects, under the deferred compensation plan
adopted January 19, 1981, by Resolutions of the Board of
Directors of the Company, to defer ____% of all directorship
and/or committee fees to which the undersigned is entitled on and
after ____________________, as such Director and as a Member of
the ______________________ Committee(s) of such Board.
The undersigned Director understands that this election to
defer such fees shall continue from year to year unless
terminated in writing.
Check either A or B: (Election
permitted under Paragraph (3) of the
Plan)
_____ A. Deferral until I cease to be a
Director.
_____ B. Deferral until I attain that age
specified by the retirement income test of the
Social Security Act (Section 203(f)(3) as amended
or its equivalent) then in effect.
Check either C or D: (Election
permitted under Paragraph (5) of the
Plan)
_____ C. Distribution to be made to me in
one lump sum as provided in the Plan
_____ D. Distribution to be made to me in
equal annual installments over a period of
________ years (not less than two or more than ten
years) as provided in the Plan.
Check either E or F: (Election
permitted under Paragraph (8) of the
Plan)
_____ E. Deferred amounts to be payable to
my estate in one lump sum within ninety (90) days
following my death.
_____ F. Deferred amounts to be payable to
the beneficiary named below in equal annual
installments over a five (5) year period beginning
the first day of February immediately following my
death.
Beneficiary:
(Name)
(Street)
(City - State - Zip)
AAL 60531
EXHIBIT 10-M
INDIANA GAS COMPANY, INC.
DIRECTORS COMPENSATION
DEFERRAL PLAN
Effective January 1, 1995
INDIANA GAS COMPANY, INC.
DIRECTORS COMPENSATION
DEFERRAL PLAN
(EFFECTIVE JANUARY 1, 1995)
PREAMBLE
The Indiana Gas Company, Inc. Directors Compensation
Deferral Plan (the "Plan") is an unfunded supplemental retirement
plan for directors of Indiana Gas Company, Inc. and Indiana
Energy, Inc. (individually an "Employer" and collectively the
"Employers"). This Plan is intended to be a continuation of the
director deferred fee plan which was initially effective
February 1, 1981.
ARTICLE I
DEFINITIONS
Section 1.01. Administrator. The term "Administrator"
means the Company which shall have the authority to manage and
control the operation of this Plan.
Section 1.02. Beneficiary. The term "Beneficiary" means
for a Participant the individual or individuals designated by
that Participant in the last Participation Agreement executed by
that Participant to receive benefits in the event of that
Participant's death.
Section 1.03. Company. The term "Company" means Indiana
Gas Company, Inc., and any successor thereto.
Section 1.04. Compensation. The term "Compensation" means
for each Participant in any Plan Year the total amount of
remuneration for director services as paid to that Participant by
the Employers in that Plan Year; provided, however, that a
Director's Compensation shall not include any fees required to be
paid in restricted shares of Indiana Energy, Inc. common stock
under the Indiana Energy, Inc. Directors' Restricted Stock Plan.
Section 1.05. Director. The term "Director" means each non-
employee member of the Board of Directors of an Employer.
Section 1.06. Effective Date. The term "Effective Date"
means January 1, 1995; provided, however, that except as provided
below any deferrals made by Directors before January 1, 1995
shall be governed by the provisions of the Directors deferred fee
plan in effect prior to January 1, 1995; provided, further, that
any Director with a deferred account for the period before
January 1, 1995 shall be permitted to convert the entire account
to Phantom Units under this Plan as of January 1, 1995.
Section 1.07. Employer. The term "Employer" means the
Company, Indiana Energy, Inc. and any successor thereto. The
term "Employers" means the Company and Indiana Energy, Inc.
collectively.
Section 1.08. Interest Fund Subaccount. The term "Interest
Fund Subaccount" means the bookkeeping account maintained for
each Participant in this Plan which is credited in each Plan
Year with a rate of return as provided in Article III of this
Plan.
Section 1.09. Interest Fund Subaccount Rate. The term
"Interest Fund Subaccount Rate" means the guaranteed rate of
return credited to amounts held in the Interest Fund Subaccounts.
The rate shall change each January 1 and shall be equal to the
mean between the high and low of the "aa" rated Public Utility
Preferred and Common Stock Yield Averages for the past twelve
(12) months as reported in Moody's Bond Survey in its first
published issue in the November preceding the January 1 on which
the rate is to come into effect.
Section 1.10. Participant. The term "Participant" means
any individual who fulfills the eligibility requirements
contained in Article II of this Plan.
Section 1.11. Participation Account. The term
"Participation Account" means the bookkeeping account maintained
by the Company for each Participant reflecting amounts deferred
under this Plan (as adjusted from time to time) and which is
equal to the sum of the Participant's Interest Fund Subaccounts
and Phantom Unit Subaccounts.
Section 1.12. Participation Agreement. The term
"Participation Agreement" means the agreement executed by a
Director each Plan Year signifying his desire to become (or to
continue to be) a Participant in this Plan and signifying the
amount of his Compensation which is to be deferred during the
subsequent Plan Year pursuant to the terms of this Plan.
Section 1.13. Phantom Unit Subaccount. The term "Phantom
Unit Subaccount" means the bookkeeping account maintained by the
Company for each Participant in this Plan for each Plan Year
during which the Participant has a deferred election in effect
which is credited with Phantom Units.
Section 1.14. Phantom Units. The term "Phantom Units"
means the phantom units allocated to a bookkeeping account under
this Plan with a per unit value equal to the value of Indiana
Energy, Inc. common stock (as determined in the manner provided
in Article III).
Section 1.15. Plan. The term "Plan" means the plan
embodied by this instrument as now in effect or hereafter
amended.
Section 1.16. Plan Year. The term "Plan Year" means the
calendar year.
ARTICLE II
PARTICIPATION IN THE PLAN
Section 2.01. Eligibility. As of the Effective Date, all
Directors of the Employers shall be eligible to become
Participants in this Plan.
Section 2.02. Deferral Amounts.
(a) Amount of Deferral. The amount of Compensation to
be deferred in a Plan Year shall be designated by each
Participant in the Participation Agreement executed by that
Participant for that Plan Year prior to the beginning of that
Plan Year.
(b) Special Rules for New Directors. For the Plan
Year during which a person first becomes eligible to become a
Participant, the Participant shall be provided by the Company the
opportunity to make a special election for such Plan Year with
respect to the Compensation paid in the Plan Year after the date
on which he becomes an eligible Participant.
(c) Timing of Deferral. The following rules govern the
timing of the deferral of Compensation under this Plan:
(i) Compensation deferred by Participants
shall be effected pro-rata from each payday in the Plan
Year.
(ii) For purposes of the allocations
described in Article III, the amount of any
Compensation deferred hereunder shall not be credited
to a Participant's Participation Account until the last
day of the calendar month during which, but for the
deferral, the deferred Compensation would have been
paid.
(d) Modification of Deferral Amount. A Participant
may modify the amount of his Compensation to be deferred in a
Plan Year under this Plan by written notice to the Secretary of
the Company which is received by the Secretary of the Company
prior to the beginning of that Plan Year.
(e) Discontinuation of Participation. A Participant
may discontinue his participation in this Plan by written notice
to the Secretary of the Company which is received prior to the
beginning of the Plan Year in which the discontinuation is to be
effective or by failing to execute a Participation Agreement for
that Plan Year. Any amounts previously deferred shall be paid in
accordance with the provisions of this Plan and elections made by
the Participant in his Participation Agreements.
(f) Manner of Payout of a Participant's Participation
Account. The manner in which a Participant's Participation
Account attributable to deferrals in a Plan Year is to be
distributed to that Participant under the provisions of this Plan
shall be designated by that Participant in the Participation
Agreement executed by that Participant for that Plan Year.
ARTICLE III
ACCOUNTS
Section 3.01. Purpose of Participation and Guaranteed
Accounts. The Company shall cause a Participation Account to be
established in the name of each Participant. The Company shall
cause a separate sub-account of a Participant's Participation
Account for each Plan Year during which Participant defers
Compensation (the Plan Year Subaccount). Each Plan Year
Subaccount shall be further allocated, as directed by the
Participant, between the Interest Fund Subaccount and Phantom
Stock Subaccount. The purpose of establishing such Participation
Accounts and Subaccounts is solely to provide a mechanism for
determining the Participants' benefits under this Plan. It is
the intent of the Employers that the Participants shall have no
title to or beneficial ownership in any cash or investments which
the Employers may set aside and allocate to these Accounts.
Section 3.02. Investment of Deferrals. Subject to
Section 3.05, the Company shall cause a separate Plan Year
Subaccount established for each Participant who is deferring any
Compensation in such Plan Year. The amount of the deferral shall
be allocated between the Interest Fund Subaccount and the Phantom
Stock Subaccount in accordance with the investment directions
provided by the Participant in his Participation Agreement for
such Plan Year. A Participant may allocate deferrals between the
Interest Fund Subaccount and Phantom Stock Subaccount in twenty-
five percent (25%) increments. As of each January 1, a
Participant shall be permitted by written instructions to the
Secretary of the Company to change the investment directions of
any deferrals for one (1) or more of the previous Plan Year
Subaccounts. In such direction, the Participant needs to
designate the Plan Year Subaccounts for which the revised
election or elections apply. Changes shall be permitted in
twenty-five percent (25%) increments. If in accordance with
Section 3.05 a Participant is permitted to invest new deferrals
or transfer existing deferrals to his Interest Fund Subaccount,
the Company shall provide a special election period (commencing
as soon as practicable after the opinion from counsel required
under Section 3.05 is delivered to the Company) to the
Participants to effectuate investment changes before the next
January 1.
Section 3.03. Description of Interest Fund and Phantom
Stock Subaccounts.
(a) Interest Fund Subaccounts. Any monies credited
to a Participant's Interest Fund Subaccount shall be credited
with simple interest monthly at the Interest Fund Subaccount Rate
in effect for such month based on the amounts held in such
Subaccount as of the last day of the preceding calendar month.
(b) Phantom Stock Subaccount. As of the last day
of any calendar month during which amounts are credited to a
Participant's Phantom Stock Subaccount, the Company shall cause a
number of Phantom Stock Units to be credited to the Phantom Stock
Subaccount equal to a number determined by dividing the total
amount of the allocation for such month by the average of the
daily averages of the high and low sales price of shares of
Indiana Energy, Inc. common stock for each of the trading days in
such month (as reported in The Wall Street Journal). Any time
that there is a dividend paid on shares of Indiana Energy, Inc.
common stock, the Company shall cause each Participant's Phantom
Stock Subaccount to be credited with an amount equal to the
aggregate dividend which would have been payable to such
Subaccount during such month if such Subaccount was invested in
shares of Indiana Energy, Inc. common stock rather than Phantom
Shares (without regard to whether the Phantom Shares were
allocated to such Subaccount on the record date for such
dividend). Any dividend equivalent credits for a calendar month
shall be converted to Phantom Units, along with any additional
deferrals allocated in such month, in the manner described above.
(c) Special Adjustments. In the event of any change
in the outstanding common stock of Indiana Energy, Inc. 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
Phantom Units allocable to a Participant's Phantom Unit
Subaccount shall be appropriately adjusted by the Chief Executive
Officer of the Company, whose determination shall be conclusive,
consistent with the corporate transaction.
Section 3.04. Allocation and Distributions.
(a) Distributions. Distributions under Article IV for
each Plan Year Subaccount shall be charged proportionately
against the Participant's Interest Fund Subaccount and Phantom
Stock Subaccount based on the balances credited to such
Subaccounts as of the last day of the immediately preceding
month.
(b) Conversion of Phantom Units. For purposes of
effecting distributions from the Phantom Stock Subaccount, the
Phantom Stock Units to be distributed shall be deemed to have a
per unit value equal to average of the daily averages of the high
and low sales price of Indiana Energy, Inc. common stock for each
of the trading days in the calendar month immediately preceding
the month the distribution is to be effected.
Section 3.05. Special Investment Rules. Notwithstanding
anything contained in this Plan to the contrary, the only
investment option permitted for deferrals under the Plan shall be
investments in the Phantom Stock Subaccount until such time as
the Secretary of the Company receives an opinion from counsel
that the offering of other investment options under this Plan,
such as the Interest Fund Subaccount, shall not result in any
transactions relating to the Phantom Fund Subaccount being deemed
to be a "sale" or "purchase" of an "equity security" or a
"derivative security" under the Securities Exchange Act of 1934,
as amended; provided, however, that amounts credited to a
Participant's Participation Account prior to the date on which
such an opinion is delivered to the Secretary of the Company
shall not be subject to other investment options unless such
opinion expressly states that transfers of such existing amounts
between various investment funds shall also not result in "sales"
or "purchases" of an "equity security" or a "derivative
security".
ARTICLE IV
BENEFITS
Section 4.01. Death Benefits. If a Participant dies prior
to the commencement of his benefits under this Article IV, the
Beneficiary of that Participant, as determined pursuant to the
last Participation Agreement executed by that Participant, shall
receive the balance contained in his Participation Account.
Payments under this Section 4.01 shall be paid in a single lump
sum cash payment no later than the last day of the third (3rd)
calendar month following the date of the Participant's death.
Section 4.02. Other Distributions. A Participant's Plan
Year Subaccounts shall be paid to him on the date and in the
manner designated by that Participant in his Participation
Agreements; provided, however, that under no circumstances shall
payment commencement be deferred more than sixty (60) calendar
days after the date on which the Participant ceases to be a
director. If any or all of the benefits of a Participant are
being paid in installments and that Participant dies prior to
receiving the final installments due hereunder, the remaining
amounts in his Participation Account shall be paid to that
Participant's Beneficiary, as determined pursuant to the last
Participation Agreement executed by that Participant, in a single
lump sum cash payment.
ARTICLE V
ADMINISTRATION
Section 5.01. Delegation of Responsibility. The Company
may delegate duties involved in the administration of this Plan
to such person or persons whose services are deemed by it to be
necessary or convenient.
Section 5.02. Payment of Benefits. The amounts allocated
to a Participant's Participation Account and payable as benefits
under this Plan shall be paid solely from the general assets of
the Employers. The payment of benefit obligation shall be
allocated between the Employers based on the portion of the
Compensation which would have been paid by each Employer but for
the deferral. No Participant shall have any interest in any
specific assets of an Employer under the terms of this Plan.
This Plan shall not be considered to create an escrow account,
trust fund or other funding arrangement of any kind or a
fiduciary relationship between any Participant and the Employers.
An Employer's obligation under this Plan is purely contractual
and shall not be funded or secured in any way.
ARTICLE VI
AMENDMENT OR TERMINATION OF PLAN
Section 6.01. Termination. The Company may at any time
terminate this Plan. As of the first Plan Year beginning after
the date on which this Plan is terminated, no additional amounts
shall be deferred from any Participant's Compensation. The
Company shall direct the Employers to pay to each such
Participant the balance contained in his Participation Account at
such time and in the manner designated by that Participant in the
Participation Agreements executed by that Participant.
Section 6.02. Amendment. The Company may amend the
provisions of this Plan at any time; provided, however, that no
amendment shall adversely affect the rights of Participants or
their Beneficiaries with respect to the balances contained in
their Participation Accounts immediately prior to the amendment.
ARTICLE VII
MISCELLANEOUS
Section 7.01. Successors. This Plan shall be binding upon
the successors of the Employers.
Section 7.02. Choice of Law. This Plan shall be construed
and interpreted pursuant to, and in accordance with, the laws of
the State of Indiana.
Section 7.03. No Employment Contract. This Plan shall not
be construed as affecting in any manner the rights or obligations
of the Employers or of any Participant to continue or to
terminate director status at any time.
Section 7.04. Non-Alienation. No Participant or his
Beneficiary shall have any right to anticipate, pledge, alienate
or assign any of his rights under this Plan, and any effort to do
so shall be null and void. The benefits payable under this Plan
shall be exempt from the claims of creditors or other claimants
and from all orders, decrees, levies and executions and any other
legal process to the fullest extent that may be permitted by law.
Section 7.05. Gender and Number. Words in one (1) gender
shall be construed to include the other genders where
appropriate; words in the singular or plural shall be construed
as being in the plural or singular where appropriate.
Section 7.06. Disclaimer. The Employers make no
representations or assurances and assume no responsibility as to
the performance by any parties, solvency, compliance with state
and federal securities regulation or state and federal tax
consequences of this Plan or participation therein. It shall be
the responsibility of the respective Participants to determine
such issues or any other pertinent issues to their own
satisfaction.
Section 7.07. Designation of Beneficiaries. Each
Participant shall designate his the Participation Agreement his
Beneficiary and his contingent Beneficiary to whom death benefits
due hereunder at the date of his death shall be paid; provided,
however, that the Beneficiary and Contingent Beneficiary
designated by a Participant in the last Participation Agreement
executed by that Participant shall supersede all other
Beneficiary or Contingent Beneficiary designations made by that
Participant in any earlier Employee's Participation Agreement
executed by that Participant. If any Participant fails to
designate a Beneficiary or if the designated Beneficiary
predecease any Participant, death benefits due hereunder at that
Participant's death shall be paid to his contingent Beneficiary
or, if none, to the deceased Participant's surviving spouse, if
any, and if none to the deceased Participant's estate.
This Plan has been executed on this day of ,
1994, and shall be effective as of January 1, 1995.
INDIANA GAS COMPANY, INC.
By:
Title:
Attest:
By:
INDIANA ENERGY,INC.
By:
Title:
Attest:
By:
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from Indiana
Energy, Inc.'s consolidated financial statements as of September 30, 1994,
and for the fiscal year then ended and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1994
<PERIOD-END> SEP-30-1994
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 533,016
<OTHER-PROPERTY-AND-INVEST> 6,905
<TOTAL-CURRENT-ASSETS> 100,646
<TOTAL-DEFERRED-CHARGES> 26,246
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 666,813
<COMMON> 144,515
<CAPITAL-SURPLUS-PAID-IN> 0
<RETAINED-EARNINGS> 126,730
<TOTAL-COMMON-STOCKHOLDERS-EQ> 271,245
0
0
<LONG-TERM-DEBT-NET> 158,766
<SHORT-TERM-NOTES> 34,350
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 213
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 202,239
<TOT-CAPITALIZATION-AND-LIAB> 666,813
<GROSS-OPERATING-REVENUE> 475,297
<INCOME-TAX-EXPENSE> 19,467
<OTHER-OPERATING-EXPENSES> 407,987
<TOTAL-OPERATING-EXPENSES> 427,454
<OPERATING-INCOME-LOSS> 47,843
<OTHER-INCOME-NET> 2,635
<INCOME-BEFORE-INTEREST-EXPEN> 50,478
<TOTAL-INTEREST-EXPENSE> 16,037
<NET-INCOME> 34,441
0
<EARNINGS-AVAILABLE-FOR-COMM> 34,441
<COMMON-STOCK-DIVIDENDS> 23,086
<TOTAL-INTEREST-ON-BONDS> 14,798
<CASH-FLOW-OPERATIONS> 89,315
<EPS-PRIMARY> 1.53
<EPS-DILUTED> 1.53
</TABLE>
