December 2, 1994
Office of Applications and Report Services
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
We are transmitting herewith Indiana Energy, Inc.'s
1994 Proxy Statement.
The $125.00 filing fee was transmitted via FEDWIRE on
November 30, 1994.
Sincerely,
/s/Ronald E. Christian
Ronald E. Christian
REC:rs
IEI
INDIANA ENERGY, INC.
1630 North Meridian Street
Indianapolis, Indiana 46202-1496
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 9, 1995
TO THE SHAREHOLDERS OF
INDIANA ENERGY, INC.
The annual meeting of shareholders of Indiana Energy, Inc.
(Company), will be held at the principal office of the Company, 1630
North Meridian Street, Indianapolis, Indiana 46202 on Monday, January
9, 1995, at 11 a.m. (Eastern Standard Time), for the following
purposes:
1. To elect four directors of the Company to serve for a term of
three (3) years or until their successors are duly elected and
qualified; and
2. To transact such other business as may properly come before
the meeting, or any adjournment of the meeting.
As allowed by the code of by-laws, the board of directors has
fixed the close of business on November 21, 1994, as the record date
for determining the shareholders entitled to notice of and to vote at
the meeting and at any adjournment of the meeting.
It is important that your stock be represented at this meeting to
assure a quorum. Whether or not you now expect to be present at the
meeting, please fill in, date and sign the enclosed proxy and return
it promptly to the Company in the accompanying addressed envelope. No
stamp is required if mailed in the United States. You have the
unconditional right to revoke your proxy at any time before the
authority granted by it is exercised.
By order of the board of directors.
INDIANA ENERGY, INC.
By RONALD E. CHRISTIAN
Secretary
Indianapolis, Indiana
December 2, 1994
CONTENTS
PURPOSES OF MEETING 1
VOTING SECURITIES 1
ELECTION OF DIRECTORS 3
COMMON STOCK OWNERSHIP BY DIRECTORS
AND EXECUTIVE OFFICERS 7
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS 9
DIRECTORS' COMPENSATION 10
EXECUTIVE COMPENSATION AND OTHER INFORMATION 12
Compensation Committee Report 12
Compensation Committee Interlocks and Insider
Participation 13
Compensation 14
Summary Compensation Table 14
Long Term Incentive Plan-Awards In Last Fiscal Year Table 16
Annual Management Incentive Plan 17
Executive Restricted Stock Plan 18
Corporate Performance 18
Total Return to Shareholders 19
Return on Equity 20
Retirement Savings Plan 20
Retirement Plans 21
Employment And Termination Benefits Agreements 22
INDEPENDENT PUBLIC ACCOUNTANTS OF THE COMPANY 23
COST AND METHOD OF SOLICITATION 23
ANNUAL REPORT 24
REVOCATION RIGHTS 24
SHAREHOLDERS' PROPOSALS FOR 1996 ANNUAL MEETING 24
INDIANA ENERGY, INC.
1630 North Meridian Street
Indianapolis, Indiana 46202-1496
(317) 926-3351
PROXY STATEMENT
The following information is furnished in connection with
the solicitation of the enclosed proxy by and on behalf of the
board of directors of the Company. The proxy will be used at the
annual meeting of shareholders to be held at the principal office
of the Company, 1630 North Meridian Street, Indianapolis,
Indiana, on Monday, January 9, 1995, at 11:00 o'clock A.M.
(Eastern Standard Time), and at any adjournment of the meeting
for the matters to be acted upon under its authority. The proxy
and this proxy statement were first mailed to the shareholders on
or about December 2, 1994.
PURPOSES OF MEETING
As of this date, the only known business to be presented at
the 1995 annual meeting of shareholders is the election of four
directors of the Company to serve for a term of three (3) years
or until their successors are duly elected and qualified.
However, the enclosed proxy authorizes the proxy holders to vote
on all other matters that may properly come before the meeting,
and it is the intention of the proxy holders to take any such
action utilizing their best judgment.
VOTING SECURITIES
The Company has one class of capital stock outstanding,
consisting as of September 30, 1994, of 22,556,942 shares of
common stock without par value. The holders of the outstanding
shares of common stock are entitled to one vote for each share
held of record on each matter presented to a vote of the
shareholders at the meeting. Only shareholders of record at the
close of business on November 21, 1994, will be entitled to vote
at the meeting or at any adjournment of the meeting.
In connection with the Company's acquisition of Richmond Gas
Corporation ("Richmond") and Terre Haute Gas Corporation ("Terre
Haute"), shares of common stock of the Company were issued to
certain members of the Anton Hulman, Jr. family, certain
corporations controlled by them, certain trusts established for
their benefit and certain other persons with personal or business
relationships with the family (collectively, the "Hulman
Interests"). At September 30, 1994, the Hulman Interests
beneficially owned an aggregate of 2,806,023 shares of the
Company which comprised 12.44 percent of the outstanding common
stock of the Company. At September 30, 1994, the following
beneficial owners held more than 5 percent of the outstanding
common stock of the Company, the only class of voting securities
outstanding:
<TABLE>
Name and Number of Nature of
Address of Shares Beneficial
Title of Beneficial Beneficially Ownership Percent of
Class Owner Owned Class
____________ ____________ ____________ ____________ ____________
<S> <C> <C> <C> <C>
Common Hulman and 1,685,946 <F1> Voting & 7.5%
Company Investment
900 Wabash
Avenue
Terre Haute,
Indiana
47807
<FN>
<F1> The shares beneficially owned by Hulman and Company include
168,605 shares held by Indiana Gas & Chemical Corporation as to
which Hulman and Company, as 62 percent owner of Indiana Gas &
Chemical Corporation, may be deemed to share voting power and
investment power. As a result of the attribution to certain
persons of shares held by Hulman and Company and Indiana Gas &
Chemical Corporation, the following persons are deemed to be
beneficial owners of more than 5 percent of the outstanding
common stock of the Company:
</FN>
</TABLE>
<TABLE>
Name of Number of
Title of Beneficial Owner Shares Percent of
Class Beneficially Class
Owned
___________ ________________ ______________ ___________
<S> <C> <C> <C>
Common Mary F. Hulman 2,029,131 9.0%
Common Mari H. George 2,116,733 9.4%
Common Anton H. George 1,909,066 8.5%
Common Katherine M. George 1,692,595 7.5%
Common Laura K. George 1,909,066 8.5%
Common Nancy L. George 1,693,352 7.5%
Common M. Josephine George 1,690,879 7.5%
</TABLE>
The number of shares held beneficially by Mary F. Hulman, Mari H.
George, Anton H. George, Katherine M. George, Nancy L. George and
M. Josephine George each includes 1,517,341 shares held by Hulman
and Company as to which each, as a director of Hulman and
Company, may be deemed to share voting power and investment
power; and 168,605 shares held by Indiana Gas & Chemical
Corporation as to which each, as a director of Hulman and Company
(and, in the case of Anton H. George, as a director of Indiana
Gas & Chemical Corporation) may be deemed to share voting power
and investment power. The number of shares held beneficially by
Mary F. Hulman, Mari H. George and Anton H. George each includes
217,398 shares held by Rose-Hulman Institute of Technology ("Rose-
Hulman") as to which Mary F. Hulman and Anton H. George, as
members of the Investment Management Committee of the Board of
Managers of Rose-Hulman, and as to which Mari H. George, as a
member of the Board of Managers, may be deemed to share voting
power and investment power, and as to which each disclaims
beneficial ownership. Laura K. George is the wife of Anton H.
George, and the shares listed for her are those beneficially
owned by Mr. George. Laura K. George disclaims beneficial
ownership of all such shares. The information furnished here
regarding beneficial ownership is derived from the Schedule 13D,
as amended most recently on June 29, 1994, filed by the Hulman
Interests with the Securities and Exchange Commission, and Form 4s
filed through September 30, 1994. The filing of the Schedule 13D
by the Hulman Interests did not affirm the existence of a "group"
within the meaning of Section 13(d)(3) of the Securities Exchange
Act of 1934 or the regulations promulgated under it.
ELECTION OF DIRECTORS
In connection with the Company's acquisition of Richmond and
Terre Haute, the Company entered into a standstill agreement with
the Hulman Interests. Under this agreement, the Company agreed
to cause one designee of the Hulman Interests to be elected to
the board of directors of the Company and, until the termination
of the standstill agreement (which is dependent upon the
occurrence of certain events specified in the agreement), to
include a designee of the Hulman Interests in the slate of
nominees recommended by the board at the annual meeting of
shareholders at which the term of the original designee expires.
At a regular meeting held on August 31, 1990, the board of
directors of the Company elected Anton H. George to the board and
he currently serves as a member of the board.
The board of directors of the Company consists of twelve
directors divided into three classes as follows: Paul T. Baker,
Otto N. Frenzel III, Don E. Marsh and Richard P. Rechter, who are
nominees for election with terms expiring in 1998; Duane M.
Amundson, Howard J. Cofield, Niel C. Ellerbrook and Loren K.
Evans, whose terms expire in 1997; and Gerald L. Bepko, Lawrence
A. Ferger, Anton H. George and James C. Shook, whose terms expire
in 1996. Indiana Energy, Inc. is a holding company, and each of
its directors also serves as a director of Indiana Gas Company,
Inc. ("Indiana Gas"), its principal subsidiary.
At each annual meeting of shareholders, directors are
elected to succeed those whose terms then expire for a term of
three years or until their successors are duly elected and
qualified. Accordingly, four directors are to be elected by a
plurality of votes cast at the annual meeting of shareholders to
be held on January 9, 1995.
The board of directors intends that the enclosed proxy will
be voted by the proxy holders in favor of the election of the
nominees named below for the office of director of the Company to
hold office for a term of three (3) years or until their
respective successors are duly elected and qualified. Each of
such nominees is now serving as a director of the Company and has
signified the willingness to serve if elected. Directors are
elected by a plurality of the votes cast. Plurality means that
the individuals who receive the largest number of votes cast are
elected up to the maximum number of directors to be chosen at the
meeting. Abstentions, broker non-votes, and instructions on the
accompanying proxy card to withhold authority to vote for one or
more of the nominees might result in some nominees receiving
fewer votes. However, the number of votes otherwise received by
the nominee will not be reduced by such action. If, however, any
situation should arise under which any nominee should be unable
to serve, the authority granted in the enclosed proxy may be
exercised by the proxy holders for the purpose of voting for a
substitute nominee. Certain information concerning the nominees
and the other directors of the Company is set forth below and
under the caption "Meetings and Committees of the Board of
Directors." Unless otherwise indicated, each nominee and
director has sole investment and voting power with respect to the
shares of common stock of the Company shown as beneficially owned
by him.
<TABLE>
Has been a
Principal Occupation Director of
Name and During the Indiana Gas
Business Past 5 Years and Other or the Company
Location Age Information <F1> Since
________________ ____ _______________________ _______________
<S> <C> <C> <C>
Nominees For Election Whose Terms Will Expire 1998
PAUL T. BAKER 53 Senior Vice President 1991
Indianapolis, and Chief Operating
Indiana Officer of Indiana Gas;
prior to 1991, Senior
Vice President of Gas
Supply & Customer
Services.
OTTO N. FRENZEL 64 Chairman of the Board 1967
III of National City Bank,
Indianapolis, Indiana. He is also a
Indiana Director of National
City Corporation,
American United Life
Insurance Company,
Baldwin & Lyons, Inc.
(insurance brokerage
firm), Indianapolis
Power and Light Company
and IPALCO Enterprises,
Inc., IWC Resources
Corporation and
Indianapolis Water
Company.
DON E. MARSH 56 Chairman, President and 1986
Indianapolis, Chief Executive Officer
Indiana and Director of Marsh
Supermarkets, Inc. He
is also a Director of
National City Bank,
Indiana.
RICHARD P. 55 Chairman of the Board 1984
RECHTER of Rogers Group, Inc.,
Bloomington, President and Chief
Indiana Executive Officer and
Director of Rogers
Management, Inc., and
President and Chief
Executive Officer and
Director, Mid-South
Stone, Inc. He is also
a Director of Monroe
County Bank, Monroe
Bancorp, and Weddle
Brothers Construction
Company.
Directors Continuing In Office Whose Terms Will Expire 1997
DUANE M. 69 Chairman of the Board of 1978
AMUNDSON Directors of the Company
Indianapolis, and Chairman of the
Indiana Board of Directors of
Indiana Gas.
HOWARD J. 68 Of counsel to the law 1984
COFIELD firm of Barnes &
Indianapolis, Thornburg since January
Indiana 1, 1993, and prior to
that a partner.
NIEL C. 45 Vice President and 1991
ELLERBROOK Treasurer and Chief
Indianapolis, Financial Officer of the
Indiana Company since 1986;
Senior Vice President
and Chief Financial
Officer of Indiana Gas
since 1987. He is also
a Director of Fifth
Third Bank of Central
Indiana.
LOREN K. EVANS 66 Retired. Before 1993, 1988
Columbus, Vice Chairman since 1991
Indiana and Director of Arvin
Industries, Inc. (an
Indiana company serving
global markets in more
than 100 countries);
President and Chief
Operating Officer from
1987. He was also a
Director of Irwin
Financial Corporation,
Columbus, Indiana until
April, 1994.
Directors Continuing in Office Whose Terms Will Expire in 1996
GERALD L. BEPKO 54 Vice President, Indiana 1990
Indianapolis, University and
Indiana Chancellor of Indiana
University-Purdue
University at
Indianapolis since 1986.
He is also a Director of
First Indiana
Corporation, Circle
Income Shares, Inc. and
State Life Insurance
Company.
LAWRENCE A. 60 President and Chief 1984
FERGER Executive Officer of the
Indianapolis, Company and Indiana Gas
Indiana since 1987. He is also
Director of National
City Bank, Indiana.
ANTON H. GEORGE 35 President since December 1990
Indianapolis, 1989 and a Director of
Indiana Indianapolis Motor
Speedway Corporation
(auto racing); Executive
Vice President since
June 1989 and a Director
of Hulman and Company
(grocery wholesaler and
manufacturer and
distributor of baking
powder). He is also a
Director of First
Financial Corporation.
JAMES C. SHOOK 63 President, the Shook 1983
Lafayette, Agency, Inc.
Indiana (residential, commercial
and industrial real
estate brokerage). He is
also Director of NBD
Bank, N.A. (multi-bank
holding company),
Lafayette Life Insurance
Company, and Crossman
Communities, Inc.
Other executive officers of the Company are Anthony E. Ard and
Carl L. Chapman. Mr. Ard is 53 years of age and since 1993 has
been the Vice President of Corporate Affairs for Indiana Gas.
Prior to 1993, and since 1988, Mr. Ard was Vice President and
Secretary for Indiana Gas and Secretary for the Company. Mr.
Chapman is 39 years of age and since 1986 has been the Assistant
Treasurer for the Company, and since 1987 has been the Vice
President of Corporate Planning for Indiana Gas.
<FN>
<F1> Includes, but is not limited to, directorships in
corporations with a class of securities registered pursuant to
Section 12 of the Securities Exchange Act of 1934 or which are
subject to the requirements of Section 15(d) of that Act or in a
company registered as an investment company under the Investment
Company Act of 1940.
</FN>
</TABLE>
COMMON STOCK OWNERSHIP BY DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the number of shares of
common stock of the Company beneficially owned by the directors,
the chief executive officer, the four named executive officers,
and all directors and executive officers as a group, as of
September 30, 1994:
<TABLE>
Name of Individuals or Shares Owned
Identity of Group Beneficially <F1>
______________________ _________________
<S> <C>
DUANE M. AMUNDSON 15,690 (2)(4)(7)
Indianapolis, Indiana
ANTHONY E. ARD 16,047 (3)
Indianapolis, Indiana
PAUL T. BAKER 22,296 (3)
Indianapolis, Indiana
GERALD L. BEPKO 1,202 (2)(7)
Indianapolis, Indiana
CARL L. CHAPMAN 13,213 (3)
Indianapolis, Indiana
HOWARD J. COFIELD 7,704 (7)
Indianapolis, Indiana
NIEL C. ELLERBROOK 24,390 (3)
Indianapolis, Indiana
LOREN K. EVANS 2,852 (2)(7)
Columbus, Indiana
LAWRENCE A. FERGER 68,780 (3)(5)
Indianapolis, Indiana
OTTO N. FRENZEL III 17,238 (7)(8)
Indianapolis, Indiana
ANTON H. GEORGE 1,909,066 (1)(7)
Indianapolis, Indiana
DON E. MARSH 3,208 (7)
Indianapolis, Indiana
RICHARD P. RECHTER 5,283 (2)(7)
Bloomington, Indiana
JAMES C. SHOOK 34,552 (6)(7)
Lafayette, Indiana
All directors and executive 2,141,521 (1)
officers as a group (14
persons)
<FN>
<F1> Except for Anton H. George, no director or executive officer
owned beneficially as of September 30, 1994, more than .30
percent of common stock of the Company. Excluding Anton H.
George, all directors and executive officers owned beneficially
an aggregate of 232,455 shares or 1.03 percent of common stock of
the Company outstanding as of that date. The beneficial
ownership by Anton H. George of 1,909,066 shares or 8.5 percent
of common stock of the Company is discussed above in "Voting
Securities."
<F2> Some or all of the shares owned by Messrs. Amundson, Bepko,
Evans and Rechter are owned jointly with their wives.
<F3> Includes shares awarded to Messrs. Ard, Baker, Chapman,
Ellerbrook and Ferger under the Company's executive restricted
stock plan which are subject to certain transferability
restrictions and forfeiture provisions.
<F4> Includes 11,521 shares held in a trust, of which Mr.
Amundson's wife is trustee, and he disclaims beneficial interest
therein.
<F5> Includes 3,981 shares held by Mr. Ferger's wife, and he
disclaims beneficial interest therein.
<F6> Includes 1,500 shares held by Mr. Shook's wife, and he
disclaims beneficial interest therein.
<F7> Includes shares granted under the directors restricted stock
plan, some of which shares are subject to certain transferability
restrictions and forfeiture provisions.
<F8> Includes 3,774 shares held in a trust, of which Mr. Frenzel
is a co-trustee, and he disclaims beneficial interest therein.
</FN>
</TABLE>
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Company has the following standing committees of the
board of directors:
1. The Audit Committee. The members of this committee are
Loren K. Evans, chair, Gerald L. Bepko, Howard J. Cofield, and
Anton H. George. The committee makes recommendations to the
board as to the selection and retention of the independent
accountants, reviews the scope, conduct and results of audits
performed, and makes inquiry as to the differences of views, if
any, between such independent accountants and officers and
employees of the Company and subsidiaries with respect to the
financial statements and records and accounting policies,
principles, methods and systems. It further determines that
services performed by the independent accountants in addition to
the annual audit examination do not impair such accountants'
independence in performing the audit examination. Finally, the
committee reviews the policies and guidelines of the Company and
subsidiaries designed to ensure the proper use and accounting for
corporate assets, and the activities of the Internal Audit
department of Indiana Gas. There were two meetings of the
committee during the past fiscal year.
2. The Compensation Committee. The members of this
committee are Otto N. Frenzel III, chair, Duane M. Amundson and
Richard P. Rechter. None of the members is an officer or
employee of the Company. The committee has the responsibility of
formulating recommendations to the board as to the compensation
to be paid the officers of the Company and its subsidiaries. It
also administers the annual management incentive plan, the
executive restricted stock plan, and the directors restricted
stock plan of the Company. There were three meetings of the
committee during the past fiscal year.
3. The Nominating Committee. The members of this committee
are Lawrence A. Ferger, chair, Don E. Marsh and James C. Shook.
The duties and powers of the committee are to search for,
evaluate and make recommendations to the board of directors as to
nominees to be submitted annually to the shareholders for
election to the board as well as to fill vacancies occurring from
time to time on the board. In that connection, the committee is
authorized to act on behalf of the Company and the board in
receiving, giving consideration to and making recommendations to
the board respecting communications submitted to the Company from
shareholders relating to nominees for directors. Such
communications must be in writing and with respect to any annual
election must be received by the Company, addressed to the
secretary, prior to September 1 immediately preceding such
election. There was one meeting of the committee during the past
fiscal year.
Nominations of persons for election to the board of
directors of the Company may be made by any shareholder of the
Company entitled to vote for the election of directors at a
shareholders' meeting. Any such nominations must be made
pursuant to notice delivered to, or mailed and received at, the
principal office of the Company, not less than 50 days nor more
than 90 days prior to the meeting. However, in the event that
less than 60 days notice of the meeting is given, the
shareholder's notice must be received not later than the tenth
day following the date of notice of the meeting. Such
shareholder's notice must set forth, in addition to the name and
address of the shareholder submitting the nomination, 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 be 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.
4. The Public and Environmental Affairs Committee. The
members of this committee are Richard P. Rechter, chair, Howard
J. Cofield and James C. Shook. The duties and powers of the
committee are to review current policies, programs, procedures
and processes of the Company and its subsidiaries affected by
public policy and affecting the environment. It also reviews
reports from Company management on public policy and
environmental matters and monitors compliance with, and trends
and emerging policy developments in, business and environmental
regulation. In addition, the committee reports to the Board on
public policy and environmental issues affecting the Company and
its subsidiaries. There were two meetings of the committee
during the past fiscal year.
The board of directors of the Company had six meetings
during the last fiscal year. Don E. Marsh and Anton H. George
attended fewer than 75 percent of the aggregate of board meetings
and meetings of committees of the board of which they are
members. No other incumbent director attended fewer than 75
percent of the aggregate of board meetings and meetings of
committees of the board of which they are members.
DIRECTORS' COMPENSATION
Non-employee directors of the Company and of Indiana Gas
receive combined fees totaling $15,000 per year for service on
the boards of both companies. The fees are paid under the
directors' restricted stock plan approved by the shareholders at
their January 13, 1992, meeting. Under the plan, $5,000 of the
combined directors' fees paid by the company and Indiana Gas to
non-employee directors' is paid in restricted shares of the
Company. The restricted shares are issued to each non-employee
director at the beginning of their three-year term, and the
number of restricted shares is determined by dividing $15,000
($5,000 for each year) by the per share market price of the
Company's stock during the period specified in the plan.
Directors may elect to receive the remaining $10,000 in
unrestricted shares or in cash. To receive the restricted
shares, a director must consent to the restrictions in writing.
To elect to receive unrestricted shares instead of cash, a
director must provide an irrevocable written election to the
secretary of the Company before the July 1 immediately preceding
the calendar year for which the election relates.
Restricted shares may not be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated, other than by
will or by the laws of descent and distribution until the first
to occur of: (1) the expiration of the director's term of office
for which the grant relates; (2) the grantee's death or
disability; (3) the grantee's termination of his status as a
director pursuant to the mandatory retirement policy for
directors; (4) the involuntary termination of the grantee's
status as a director; (5) approval by a majority of the other
directors of the grantee's voluntary termination of his status as
director because of his relocation of his principal place of
residence outside of Indiana; or (6) a change in control of the
Company. In no event, however, are the restricted shares
transferable and free of restrictions before the expiration of a
six-month period beginning the first day of the director's term
of office or, if later, the date of issuance of the shares.
All restricted shares bear a legend citing the restrictions
contained in the plan. When the restrictions lapse, the grantee
is entitled to have the legend removed from any shares or
certificates. Restrictions are lifted automatically upon the
expiration of the period to which the restrictions apply. If a
director voluntarily terminates his status as such before the
expiration of the period of restriction, any shares still subject
to restriction are immediately forfeited.
The Company has reserved 71,172 shares for grant under the
plan. As of September 30, 1994, 59,709 shares remain in reserve.
Those shares may consist of authorized but unissued shares or
shares reacquired by the Company including shares purchased in
the open market. If any shares subject to the grants are
forfeited, the forfeited shares become available for reissuance
under the plan.
The board may amend, modify, alter or terminate the plan at
any time. The plan may not, however, be amended more frequently
than once every six months. Amendments, modifications or
alterations which would (1) increase the number of shares
reserved for issuance under the plan, (2) materially modify the
class of individuals to whom grants of shares may be made, (3)
change the number in which shares are granted, or (4) materially
increase the benefits accruing to grantees under the plan, must
be approved by the Company's shareholders.
Non-employee directors also receive a fee of $375 for each
meeting of the board of directors of the Company attended and
$375 for each meeting of the board of directors of Indiana Gas
attended. Each non-employee member of a committee of the board
is paid a fee of $600 for each meeting of the committee attended,
and each non-employee chair of a committee is paid an additional
fee of $150 for each meeting attended.
During the fiscal year ended September 30, 1994, Duane M.
Amundson was also paid $45,000 for his services as chair of the
board of the Company and $45,000 for his services as chair of the
board of Indiana Gas.
Under an unfunded plan adopted by the board of directors, a
non-employee director may defer all or any part of fees received
in cash until the director ceases to be a director, attains the
age specified by the retirement income test under the Social
Security Act, or until the date of initial entitlement under the
act. Interest is payable on the amounts deferred at a rate
determined by the board.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Compensation Committee Report
The compensation committee of the board of directors
recommended, and the board approved, a total compensation system
for all officers intended to provide market-sensitive base
salaries and performance-based short- and long-term incentive
awards. The purpose of the total compensation system is to
accomplish two principal objectives. First, it should ensure
that changes in compensation reflect relative business
performance. Second, it should assure that the right quantity
and quality of executive skills are available to conduct the
business effectively, currently and in the future.
It is the judgment of the committee that base salaries for
the chief executive officer, and all other officers, must be
sufficiently competitive to assure the Company's ability to
retain its current executives and attract talented additions and
replacements. It is also the judgment of the committee that it
is essential to reward the chief executive officer and the other
officers based on the achievement of short-term and long-term
goals. Accordingly, the committee recommended, and the board
approved, an annual management incentive plan as the reward for
achievement of short-term goals. The plan is based on return on
equity and, except for the chief executive officer, individual
performance objectives. For the chief executive officer, any
reward under the plan is based entirely on return on equity.
Achievement of long-term goals is rewarded through the executive
restricted stock plan which is based upon total return to
shareholders.
The stated purpose of the executive restricted stock plan is
to retain and motivate the Company's principal officers and to
increase their incentive to work toward the attainment of the
Company's long-term growth and profit objectives by providing
them with a means of acquiring or increasing a proprietary
interest. The annual management incentive plan concept is
principally intended to tie executive incentives to the
performance of operations directly under management's control,
and, secondarily, to recognize differences in individual
contributions.
In 1985, the compensation committee concluded, partly
because of the introduction of competitive forces into what had
been an exclusively regulated environment in the natural gas
industry, that it was appropriate to consider how officer pay
could be more clearly linked to business performance. An outside
consultant was engaged by the committee to independently audit
and review the salary levels of the chief executive officer and
other senior officers to determine market-sensitive salary ranges
for key positions.
In making its recommendations to the compensation committee,
the outside consultant consistently utilized a peer group of
natural gas distribution companies, determined by the Company's
investment bankers, which are similar in business orientation for
pay and corporate performance comparisons. The proxy statements
for the peer group companies were reviewed and analyzed to
establish "top five" pay data guidelines for publicly-held
utility companies. Independent surveys were also reviewed for
additional data and comparisons, and measures of peer company
size were reviewed. Key comparative performance data were
reviewed to determine appropriateness and fairness of
compensation payouts.
The results of the consultant's study prompted the committee
to recommend, and the board to approve, the creation of the
annual management incentive plan and executive restricted stock
plan. The annual management incentive plan was initiated in
1987. The executive restricted stock plan was approved by the
board in 1987 and by the shareholders at their January 1988
annual meeting. Follow-up reviews and analysis by the outside
consultant were made in 1989, 1992, 1993 and 1994 to assess the
structure, effectiveness and continued competitiveness of the
plans.
The compensation committee of the board includes only
outside directors. It is charged by the board with the
responsibility to formulate and make recommendations as to the
total compensation for the officers of the Company. During each
fiscal year, the committee meets at least twice. In fiscal year
1994, the committee met on October 29, 1993 to consider the
Company's performance during the prior three fiscal years as it
relates to the executive restricted stock plan. The Committee
met next on December 13, 1993 to consider recommendations for
changes in officers' salaries and payouts to officers and other
participating employees under the annual management incentive
plan. The Committee met again on July 29, 1994 to consider
recommendations on corporate performance levels and maximum
individual performance levels for the annual management incentive
plan, and a proposal to enter into termination benefits
agreements with officers of the Company and Indiana Gas. Also,
before the start of each measurement period under the executive
restricted stock plan, the committee considers recommendations
for total return to shareholders performance targets and goals
for that period, as well as officers' participation levels. All
recommendations approved by the committee are referred to the
board for its approval.
Detailed explanations of the annual management incentive
plan and executive restricted stock plan are contained on pages
17 and 18. Data on annual, long-term and all other compensation
for the chief executive officer and the other senior officers is
contained on pages 14 through 17. Total compensation for
Lawrence A. Ferger, president and chief executive officer, for
the current fiscal year and two immediately preceding fiscal
years is shown in the Summary Compensation Table. Increases in
salary over the three years reflect the committee's effort to
gradually align Mr. Ferger's base salary with the median base
salaries of chief executive officers of peer group companies.
Changes in Bonus reflect comparative corporate performance over
the same period. Data on corporate performance is contained on
pages 18 through 20. The Total Return graph relates to the
executive restricted stock plan. The Return on Equity graph
relates to the annual management incentive plan.
Otto N. Frenzel III, Chair
Duane M. Amundson
Richard P. Rechter
Compensation Committee Interlocks and Insider Participation
Lawrence A. Ferger is a director of National City Bank,
Indiana. Otto N. Frenzel III, chair of the Company's
compensation committee, is chairman of the board of directors and
an executive officer of National City Bank, Indiana. During the
past fiscal year, Indiana Gas had a bank line of credit agreement
with National City Bank, Indiana for borrowing by Indiana Gas not
to exceed $25 million at any one time. At September 30, 1994,
there was $5,750,000 outstanding under such line. The interest
on borrowing under such line of credit has been at a rate not to
exceed the prime lending rate at such bank which in the opinion
of the board of directors is fair. Similar bank lines of credit
agreements have been in effect between Indiana Gas and the bank
in the normal course of business for many years. Moreover,
during the past fiscal year, Energy Realty, Inc., an indirect
subsidiary of the Company, secured two loans in an aggregate
amount of $5,927,800 from National City Bank, Indiana at variable
rates of interest tied to commercially-recognized benchmarks
which in the opinion of the board of directors are fair.
None of the Company's executive officers is a member of the
Compensation Committee. Prior to his retirement in 1987, Duane
M. Amundson served as the chief executive officer for the Company
and Indiana Gas.
Compensation
The following tabulation shows for the fiscal years ended
September 30, 1992, 1993 and 1994, the compensation paid by the
Company and its subsidiaries to each of the five most highly
compensated executive officers of the Company (considering for
this purpose Mr. Ard and Mr. Baker, executive officers of Indiana
Gas, to be executive officers of the Company) in all capacities
in which they served.
<TABLE>
Summary Compensation Table
Long-Term
Compensation
Annual Compensation Payouts
___________________________________________________________
(a) (b) (c) (d) (e) (h) (i)
Other Annual All Other
Name and Principal Compensation LTIP Payouts Compensation
Position in Group Year Salary Bonus<F1> <F2> <F3> <F4>
________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
1992 $277,146 $111,550 $23,950 $110,891 $15,377
Lawrence A.Ferger, 1993 294,257 138,573 19,300 132,939 15,971
President and CEO 1994 321,769 147,129 43,780 182,313 17,028
Paul T. Baker,
Senior Vice 1992 174,077 38,196 9,332 60,092 11,096
President and Chief 1993 193,923 63,249 6,666 72,094 12,457
Operating Officer, 1994 222,308 74,552 12,647 48,257 13,939
Indiana Gas
Niel C. Ellerbrook, 1992 144,412 47,442 12,253 70,122 9,964
Vice President and 1993 151,782 55,359 9,197 84,122 10,485
Treasurer and Chief 1994 165,769 58,605 17,635 75,207 11,708
Financial Officer
Anthony E. Ard 1992 111,023 25,588 6,567 34,604 4,919
Vice President of 1993 115,781 31,457 5,079 41,530 5,123
Corporate Affairs, 1994 125,977 33,962 9,906 44,301 9,419
Indiana Gas
Carl L. Chapman, 1992 97,938 22,317 5,281 27,583 7,659
Assistant Treasurer 1993 107,166 27,313 4,097 33,040 8,398
1994 117,489 31,197 9,837 35,994 9,470
<FN>
<F1> The amounts shown in this column are bonuses paid under the
annual management incentive plan, which is discussed below under
"Annual Management Incentive Plan". Amounts paid in any fiscal
year are attributable to the Company's performance in the
immediately prior fiscal year. Bonuses earned in fiscal year
1994 have not been determined and approved for distribution by
the Company's compensation committee. The Company's performance
over the last five years is depicted on page 20.
<F2> The amounts shown in this column are dividends paid to
executive officers on restricted shares issued under the
executive restricted stock plan, which is discussed below under
"Executive Restricted Stock Plan".
<F3> The amounts shown in this column represent the value of
shares issued under the executive restrictive stock plan and for
which restrictions were lifted in each of those fiscal years.
For instance, the amounts shown for fiscal year 1994 represent
the value of one-third of the Second Measuring Period shares
issued under the executive restricted stock plan and for which
restrictions were lifted as of September 30, 1994. After the
lifting of those restrictions, the executive officers, as a
group, held 71,647 shares, with an aggregate market value of
those shares as of that date of $1,423,986. Those shares
continue to be subject to restrictions imposed by the executive
restricted stock plan, and they represent the remaining two-
thirds of the Second Measuring Period shares and all of the Third
Measuring Period shares. The number and value of restricted
shares held by each executive officer on September 30, 1994 was
as follows: Lawrence A. Ferger-33,332 shares, $662,474; Paul T.
Baker-9,851 shares, $195,789; Niel C. Ellerbrook-13,337 shares,
$265,073; Anthony E. Ard-7,388 shares, $146,837; and Carl L.
Chapman-7,739 shares, $153,813.
<F4> This category includes Company contributions to the
Retirement Savings Plan and for fiscal year 1994 the dollar value
of insurance premiums paid by, or on behalf of, Indiana Gas with
respect to term life insurance for the benefit of executive
officers.
</FN>
</TABLE>
The following tabulation shows, by executive officer, the
awards in fiscal year 1994 under the Company's executive
restricted stock plan, which, for this purpose, is considered to
be a long-term incentive plan.
<TABLE>
Long Term Incentive Plan-Awards in Last Fiscal Year
Estimated Future Payouts
under Non-Stock Price-Based Plans
__________________________________
(a) (b) (c) (d) (e) (f)
Performance or
Number of Other Periods
Name and Principal Shares, Until Threshold Target Maximum
Position in Group Units or Other Maturation or Number of Number of Number of
Rights <F1> Payout <F2> Shares <F3> Shares <F4> Shares <F5>
___________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Lawrence A. Ferger, 28,746 - 0 14,986 29,972
President and CEO
Paul T. Baker, Senior
Vice President and 8,637 - 0 4,995 9,990
Chief Operating
Officer, Indiana Gas
Niel C. Ellerbrook 11,445 - 0 5,769 11,538
Vice President and
Treasurer and Chief
Financial Officer
Anthony E. Ard, 6,274 - 0 2,930 5,860
Vice President of
Corporate Affairs,
Indiana Gas
Carl L. Chapman, 6,834 - 0 4,117 8,234
Assistant Treasurer
<FN>
<F1> This column shows the restricted shares awarded during
fiscal year 1994 under the executive restricted stock plan. The
manner for determining the awards under the plan, and
other terms and conditions of that plan, are discussed below in
"Executive Restricted Stock Plan." The market value of the
shares on the dates of the grants is determined according to a
formula in the plan based on an average price over a period of
time preceding the grant. Dividends are paid directly to the
holders of the stock. Included are performance grant shares for
the Second Measuring Period, and the new grant shares for the
Third Measuring Period. As explained above in footnote (3) to
the Summary Compensation Table, one third of the Second Measuring
Period performance grant shares became unrestricted as of
September 30, 1994, and the dollar value of those shares is shown
in the fiscal year 1994 data in column (h) of the Summary
Compensation Table.
<F2> The restrictions are lifted in 33 1/3 percent increments on
the fourth, fifth, and sixth anniversaries of the calendar day
immediately preceding the first day of the measuring period. The
granting of additional shares, if any, and the application of
forfeiture provisions depends upon certain measurements of the
total return to shareholders in comparison to the total return to
shareholders of a predetermined group of comparable companies.
<F3> The Third Measuring Period grant shares, which are included
in the total number of shares shown in column (b) and are set
forth separately in column (e), are subject to forfeiture. If
the Company's performance compared to the peer group during this
measuring period places it in the bottom quartile, the executive
officers will forfeit all of the shares granted for this period.
<F4> The Third Measuring Period grant shares, which are included
in the total number of shares in column (b), are presented in
this column. If the Company's performance compared to the peer
group during this measuring period places it in the middle two
quartiles, these shares will vest. As indicated in footnote (1),
in addition to these shares, column (b) includes the Second
Measuring Period performance grant shares. These performance
grant shares will generally vest upon the expiration of the
relevant time periods specified in the executive restricted plan
and are no longer subject to risk of forfeiture, provided
performance goals are satisfied.
<F5> Under the executive restricted plan, if the Company's
performance compared to the peer group during the Third Measuring
Period places it in the top quartile, an additional performance
grant equal to the original Third Measuring Period grant will be
made. In that event, the shares shown in column (e) will be
doubled.
</FN>
</TABLE>
Annual Management Incentive Plan
The Company has an annual management incentive plan for
certain officers and key employees of the Company and certain of
its subsidiaries. Under this plan, annual payments are
determined on a fiscal year basis for officers and key employees
selected by the non-employee members of the Company's board of
directors ("Independent Directors"). The payments are determined
based on both (i) corporate performance, as measured by comparing
the Company's consolidated return on equity with the average
return on equity of a group of comparable companies designated by
the Independent Directors prior to the start of each year, and
(ii) individual performance, as evaluated by the chief executive
officer of the Company, based upon specific individual goals
established prior to the start of each year. However, the
payment to the chief executive officer is determined solely on
corporate performance. Under the plan, prior to the start of
each year the Independent Directors are required to adopt
performance payment ranges for each eligible employee, return on
equity targets, and a maximum individual performance payment for
each eligible employee. The performance payments established by
the Independent Directors for the current fiscal year beginning
October 1, 1994, would permit the eligible employee with the
greatest potential percentage payment to earn a payment of up to
50 percent of the employee's gross wages.
Executive Restricted Stock Plan
The Company has an executive restricted stock plan and has
reserved 541,498 shares of its common stock for issuance as
awards under the plan. As of September 30, 1994, 375,026 shares
remain in reserve. The Independent Directors determine the
principal officers to whom grants will be made and the percentage
of each officer's base salary to be used for determining the
number of shares to be granted. The principal officers of the
Company and certain of its subsidiaries are eligible to receive
grants. The plan contemplates that the Independent Directors
will make a grant to eligible officers at the outset of each
measuring period and may provide for additional grants of shares
to be made to other eligible principal officers during a
measuring period. The measuring periods are consecutively
running three-year periods. Shares were allocated under this
plan effective October 1, 1987, for the "First Measuring Period,"
October 1, 1990, for the "Second Measuring Period," and October
1, 1993, for the "Third Measuring Period."
To be eligible for a grant, a principal officer must consent
in writing to observe the restrictions imposed on the shares.
The shares may not be sold, transferred, pledged, or assigned
until such restrictions are lifted. The restrictions are lifted
in 33 1/3 percent increments on the fourth, fifth, and sixth
anniversaries of the calendar day immediately preceding the first
calendar day of the measuring period.
The granting of additional shares, if any, and the
application of forfeiture provisions depends upon certain
measurements of the total return to shareholders in comparison to
the total return to shareholders of a predetermined group of
comparable companies and upon the continued employment of the
officer during the period of restriction. For the First
Measuring Period ended on September 30, 1990, and for the Second
Measuring Period ended on September 30, 1993, the number of
shares originally granted was doubled because of the performance
of common stock of the Company compared to the performance of the
common stock of comparable companies. Among all of the companies
in the peer group, the Company was the sole peer group member to
perform in the top quartile for both measuring periods.
Corporate Performance
The following Total Return to Shareholders graph compares
the performance of Indiana Energy, Inc., with that of the S&P 500
Composite, the S&P Utilities Index and a group of peer gas
distribution companies, with the return weighted based on market
capitalization. The Return on Equity graph compares the
performance of Indiana Energy, Inc. with the same peer group.
For fiscal year 1994, companies in the peer group are as follows:
Atlanta Gas Light Co., Atmos Energy Corp., Bay State Gas Co.,
Brooklyn Union Gas, Cascade Natural Gas Corp., CMS Energy Corp.,
Connecticut Natural Gas Corp., Energen Corp., Laclede Gas Co.,
MCN Corp., National Fuel Gas Co., New Jersey Resources Corp.,
NICOR, Inc., Northwest Natural Gas Co., NUI Corp., Pacific
Enterprises, Pennsylvania Enterprises, Inc., Peoples Energy
Corp., Piedmont Natural Gas Co., Inc., Public Service Co. of
North Carolina, Inc., South Jersey Industries, Inc., Southeastern
Michigan Gas Enterprises, Inc., Southern Union Co., Southwestern
Gas Corp., Southwestern Energy Co., UGI Corp., Washington Energy
Co., Washington Gas Light Co., and WICOR, Inc. The companies to
be included in the peer group were determined by the Company's
investment bankers and approved by the Compensation Committee.
From year to year, the Company's investment bankers review
the composition of the peer group to ensure comparability among
the member companies. If in the judgment of those investment
bankers a company is determined not to be comparable, it will be
removed from the peer group, and, if possible, replaced with a
comparable company. Companies can also be removed if they are
acquired or merged out of existence. For instance, in 1994,
based upon an assessment of the comparability of the existing
peer group, the Company's investment bankers changed the peer
group used for fiscal year 1993 (the "1993 Peer Group") by
deleting Equitable Resources, Inc. and ONEOK, Inc. and replacing
them with CMS Energy Corp. and Southeastern Michigan Gas
Enterprises, Inc (the "1994 Peer Group"). The following graphs
reflect comparisons of total return for the 1994 Peer Group and
1993 Peer Group.
<TABLE>
Total Return To Shareholders <F1>
1989 1990 1991 1992 1993 1994
<S> <C> <C> <C> <C> <C> <C>
Indiana Energy 0.00% 7.18% 44.53% 67.55% 109.08% 86.58%
1994 Peers 0.00% -5.56% -1.84% 13.93% 60.21% 43.00%
1993 Peers 0.00% -2.48% 6.62% 25.06% 68.91% 53.75%
S&P 500 0.00% -9.24% 21.93% 32.98% 45.98% 49.67%
S&P Utilities 0.00% -1.01% 14.86% 29.23% 53.66% 40.56%
<FN>
<F1> The total return on investment (change in the year end stock
price plus reinvested dividends) for each of the periods for the
Company, the peer group, the S&P 500 Composite and the S&P
Utilities Index is based on the stock price or composite index at
the end of fiscal 1989.
</FN>
</TABLE>
<TABLE>
Return on Equity
1989 1990 1991 1992 1993
<S> <C> <C> <C> <C> <C>
Indiana Energy 15.56% 15.22% 11.32% 11.46% 14.68%
Peer Group 11.49% 10.87% 9.79% 9.45% 10.34%
</TABLE>
(1) Under the annual management incentive plan, payments are
awarded on the basis of the Company's average return on equity
compared to that of the peer group in any fiscal year and are
paid in the first quarter of the succeeding fiscal year.
Accordingly, payments paid to executive officers in the first
quarter of fiscal year 1994 were based on the Company's
comparative average return on equity during the fiscal year 1993,
and so on, back to 1988, the first year in which bonuses were
paid.
(2) Average return on equity for fiscal year 1990 shown above
for the Company excludes the effects of the acquisition in July
1990 of Terre Haute and Richmond. For purposes of the plan,
average return on equity for both the Company and the peer group
has been computed using the simple average of beginning and
ending common equity as of September 30.
(3) The peer group return on equity by fiscal year reflects the
peer group for each of those years as determined by the Company's
investment bankers and approved by the Compensation Committee.
See the discussion above under "Corporate Performance."
Retirement Savings Plan
As of October 1, 1994, Indiana Gas merged its Retirement
Savings Plan for bargaining employees (Bargaining Savings Plan)
into its Retirement Savings Plan for non-bargaining employees
(Savings Plan). The primary objective for this action is to
reduce the level of resources required to administer two plans.
In general, the Savings Plan permits participants to elect to
have not more than 15 percent of their qualified compensation
(subject to certain maximums imposed on highly compensated
employees by the Internal Revenue Code) invested on a tax-
deferred basis in shares of the Company's common stock, a fixed
income fund, an equity fund or a balanced fund held and invested
by the trustee. Non-bargaining participants in the Savings Plan
have matching company contributions made to the plan on their
behalf equal to 100 percent of their contributions not in excess
of 3 percent of their individual redirected compensation, and 50
percent of their contributions in excess of 3 percent but not in
excess of 8 percent of their individual redirected compensation.
Also, a 2.5 percent lump sum company contribution is made to the
Savings Plan for all eligible non-bargaining employees at the end
of each year.
The Summary Compensation Table shows the value of Indiana
Gas contributions made to the plan for executive officers in the
column marked "All Other Compensation."
Retirement Plans
Indiana Gas has two defined benefit pension plans covering
full-time employees of the Company and certain of its
subsidiaries who meet certain age and service requirements. One
such plan covers salaried employees, including executive
officers, and provides fixed benefits at normal retirement age
based upon compensation and length of service, the costs of which
are fully paid by the employers and are computed on an actuarial
basis. The pension plan also provides for benefits upon death,
disability and early retirement under conditions specified
therein. The remuneration covered by this plan includes all
compensation for regular work periods (excluding overtime,
bonuses and other forms of additional compensation). Effective
July 1, 1991, the retirement plans maintained by Terre Haute and
Richmond were merged into, and became part of, the Indiana Gas
defined benefit pension plans.
Indiana Gas has a supplemental pension plan covering the
principal officers of Indiana Gas. The supplemental pension plan
provides fixed benefits at normal retirement age based upon
compensation and is computed on an actuarial basis. The
supplemental pension plan also provides for benefits upon death,
disability and early retirement under conditions specified
therein, including service requirements. This supplemental
pension plan also provides a reduced benefit to a participant who
voluntarily terminates his employment with Indiana Gas before
normal retirement age (65) but following a change in control of
the Company. The remuneration covered by the supplemental
pension plan includes all compensation for regular work periods
(including bonuses and other forms of additional compensation).
Upon retirement at or after age 65, any participant in the
supplemental pension plan will, in general, be entitled to an
annual pension for life which, when added to primary Social
Security benefits, benefits paid under the Indiana Gas defined
benefit pension plan described above and benefits under the
Retirement Savings Plan attributable to Indiana Gas
contributions, will equal approximately 65 percent of the
participant's average annual compensation during the 60
consecutive calendar months immediately preceding the
participant's retirement date. The amounts paid under the
supplemental pension plan are unfunded and are paid from the
general assets of Indiana Gas.
The following table illustrates the estimated normal annual
retirement benefits payable to a covered participant retiring at
age 65 under the supplemental pension plan and under the Indiana
Gas defined benefit plan based on the specified remuneration and
under the Retirement Savings Plan attributable to Indiana Gas
contributions. The compensation included in the Summary
Compensation Table under salary and bonuses qualifies as
remuneration for purposes of these plans. The amounts shown do
not reflect reductions, which would result from joint and
survivor elections.
<TABLE>
Pension Table
15 or More Years of Service <f1)
Amount of
Remuneration Level Benefits <F2>
__________________ ____________
<S> <C>
$125,000 $ 81,250
150,000 97,500
175,000 113,750
200,000 130,000
225,000 146,250
250,000 162,500
300,000 195,000
350,000 227,500
400,000 260,000
450,000 292,500
500,000 325,000
<FN>
<F1> The compensation covered by the plans includes the
salary and bonus amounts shown on the Summary Compensation Table.
Years of service are not used in calculating the benefit amount
under the Supplemental Executive Retirement Plan. The amounts
shown above are offset by Social Security and benefits under the
Retirement Savings Plan attributable to Indiana Gas
contributions.
<F2> Although the benefit attributable to the Savings Plan
will be paid in a single lump sum payment, it has been converted
to an annual benefit for purposes of this table. The estimated
aggregate annual pension plan benefit may be greater than the
amounts in the table to the extent that the Savings Plan benefit,
after conversion to an annual benefit and when added to the
annual benefit under the applicable Indiana Gas defined benefit
plan, exceeds the amount specified in the table. Since the
Savings Plan has only been in effect for a few years, it is
unlikely in the near future that the aggregated Savings Plan
benefit and defined benefit plan benefits will exceed the amount
specified in the table.
</FN>
</TABLE>
Employment And Termination Benefits Agreements
The Company and Indiana Gas, with approval of their boards
of directors, have entered into employment agreements with the
executive officers listed in the Summary Compensation Table.
Each agreement continues unless notice of termination is given by
either party, in which event the agreement will terminate three
years from the date of the notice. The period between notice and
termination is defined as an "employment period" under each
agreement. Each officer is entitled to compensation consisting
of the annual aggregrate base salary or salaries, and such
additional compensation as the board determines throughout the
employment period. Each agreement is also subject to termination
in the event of disability, death, or voluntary retirement by the
individual or his termination for cause.
The Company and Indiana Gas, with approval of their boards
of directors, have entered into termination benefits agreements
with each of the executive officers listed in the Summary
Compensation Table. The agreements provide that if there is an
acquisition of control of the Company (as defined in the agreements),
the Company and Indiana Gas are obligated to pay the termination
benefits under the following conditions:
bullet Within three years the Company terminates the employment of
the executive for any reason (other than cause, death, the
executive's attainment of age 65, or the executive's total and
permanent disability); or
bullet Within three years the executive voluntarily terminates his
employment for good reason (i.e., certain material changes in the
terms of the executive's employment); or
bullet The executive voluntarily terminates his employment without
reason during the 30-day period immediately following the first
anniversary of the acquisition of control.
The termination benefits payment is the executive's average
annual compensation for the most recent five calendar years
multiplied by 299.99%. The initial term of the agreements
expires on October 1, 1999 and shall be automatically extended
for one (1) year periods unless the Company notifies the
executive prior to October 1 of each succeeding year that the
Agreement will terminate at the end of the five (5) year period
that begins with October 1 following the date of such written
notice.
INDEPENDENT PUBLIC ACCOUNTANTS OF THE COMPANY
Arthur Andersen LLP, Indianapolis, has been selected by the
board of directors as the independent public accountants of the
Company and its subsidiaries for fiscal year 1995. The selection
was made upon the recommendation of the Audit Committee of the
board of directors. See "Meetings and Committees of the Board of
Directors." Arthur Andersen LLP has served as auditors for the
Company since 1986 and for Indiana Gas since its organization in
1945. A representative of that firm will be present at the
annual meeting, will have the opportunity to make a statement and
will be available to respond to questions.
COST AND METHOD OF SOLICITATION
The cost of preparing, assembling, printing and mailing this
proxy statement, the enclosed proxy and any other material which
may be furnished to shareholders in connection with the
solicitation of proxies for the meeting will be borne by the
Company. The Company has retained Corporate Investor
Communications Co. to assist in soliciting proxies from
shareholders, including brokers' accounts, at an estimated fee of
$5,000 plus reasonable out-of-pocket expenses. In addition, some
of the officers and regular employees of the Company, who will
receive no compensation therefor in addition to their regular
salaries, may solicit proxies by telephone, telegraph or personal
visits, and it is estimated that the cost of such additional
solicitation, if any, will not exceed $500, and will be borne by
the Company. The Company expects to reimburse banks, brokerage
houses and other custodians of stock for their reasonable charges
and expenses in forwarding proxy material to beneficial owners.
ANNUAL REPORT
A copy of the Company's annual report, including
consolidated financial statements for the fiscal year ended
September 30, 1994, was mailed to shareholders on or about
December 2, 1994.
REVOCATION RIGHTS
A shareholder executing and delivering the enclosed proxy
may revoke it by written notice delivered to the secretary of the
Company, or in person at the annual meeting, at any time before
the authority granted by it is exercised.
SHAREHOLDERS' PROPOSALS FOR 1996 ANNUAL MEETING
Under Rule 14a-8 under the Securities Exchange Act of 1934,
shareholders of the Company may present proper proposals for
inclusion in the Company's proxy statement and for consideration
at the 1996 annual meeting of its shareholders by submitting
their proposals to the Company in a timely manner. In order to
be so included for the 1996 annual meeting, shareholder proposals
must be received at the Company's principal office, 1630 North
Meridian Street, Indianapolis, Indiana 46202-1496, Attention:
Corporate Secretary, no later than August 3, 1995, and must
otherwise comply with the requirements of Rule 14a-8.
By order of the board of directors.
Indianapolis, Indiana
December 2, 1994
INDIANA ENERGY, INC.
By RONALD E. CHRISTIAN
Secretary
Please fill in, date and sign the enclosed proxy and return
it in the accompanying addressed envelope. No further postage is
required if mailed in the United States. If you attend the
annual meeting and wish to vote your shares in person, you may do
so. Your cooperation in giving this matter your prompt attention
will be appreciated.
[SIDE 1]
INDIANA ENERGY, INC. PROXY/VOTING INSTRUCTION CARD
COMMON STOCK
This proxy is solicited on behalf of the Board of Directors for the
Annual Meeting on January 9, 1995.
ANTHONY E. ARD, CARL L. CHAPMAN, and RONALD E. CHRISTIAN and each of
them, are hereby appointed proxies of the undersigned, with power of
substitution, to vote all of the shares of Common Stock of INDIANA
ENERGY, INC., owned by the undersigned, at the Annual Meeting of
Shareholders to be held on January 9, 1995, and at any adjournments
thereof, on the matters and in the manner specified on the reverse
side of this proxy.
Receipt of Notice of Annual Meeting of Shareholders, dated December
2, 1994, and Proxy Statement attached thereto is hereby acknowledged.
This proxy will be voted as directed. If no direction is given, this
proxy will be voted FOR the proposal.
Election of Directors (three-year term):
Nominees: Paul T. Baker, Otto N. Frenzel III, Don E. Marsh, and
Richard P. Rechter.
You are encouraged to specify your choices by marking the appropriate
box on the reverse side.
PLEASE SIGN AND DATE ON THE REVERSE SIDE AND MAIL PROMPTLY IN THE
ENCLOSED ENVELOPE.
[SIDE 2]
x
Please mark your votes as in this example.
This proxy when properly executed will be voted in the
manner directed herein by the undersigned stockholder(s). If no
direction is made, this proxy will be voted FOR the proposal.
The board of Directors recommends a vote FOR the Election of Directors.
FOR WITHHELD authority for all Nominees
1. Election of To withhold authority to vote
Directors. _____ _____ for any specific nominee(s), mark the
"FOR" box and write the name of each
nominee for whom you are withholding
authority to vote on the line provided
below.
________________________
2. In their discretion, the proxies are authorized to vote upon such
business as may properly come before the meeting.
Please sign exactly as your name(s)
appears hereon. All joint tenants
should sign. When signing as attorney,
executor, administrator, trustee or
guardian, give full title as such. If
a corporation, sign the full corporate
name by an authorized officer. If a
partnership, sign in partnership name
by authorized person.
_______________________________________
_______________________________________
Signature(s) Date
