December 7, 1995
Office of Applications and Report Services
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
We are transmitting herewith Indiana Energy, Inc.'s
1995 Proxy Statement.
The $125.00 filing fee was transmitted via FEDWIRE on
December 6, 1995.
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 26, 1996
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
Friday, January 26, 1996, at 10:30 a.m. (Eastern Standard
Time), for the following purposes:
1. To elect four directors of the Company to serve for a
term of three 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 20, 1995, 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 8, 1995
CONTENTS
PURPOSES OF MEETING
VOTING SECURITIES
ELECTION OF DIRECTORS
COMMON STOCK OWNERSHIP BY DIRECTORS
AND EXECUTIVE OFFICERS
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
DIRECTORS' COMPENSATION
EXECUTIVE COMPENSATION AND OTHER INFORMATION
COMPENSATION COMMITTEE REPORT
A. Executive Compensation Policy.
B. Components of Executive Compensation.
C. Chief Executive Officer Compensation.
D. Miscellaneous.
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
COMPENSATION
Summary Compensation Table
CORPORATE PERFORMANCE
Total Return to Shareholders
Return on Equity
RETIREMENT SAVINGS PLAN
RETIREMENT PLANS
EMPLOYMENT AND TERMINATION BENEFITS AGREEMENTS
INDEPENDENT PUBLIC ACCOUNTANTS OF THE COMPANY
COST AND METHOD OF SOLICITATION
ANNUAL REPORT
REVOCATION RIGHTS
SHAREHOLDERS' PROPOSALS FOR 1997 ANNUAL MEETING
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 Friday, January 26, 1996, at 10:30
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 day and time for the annual meeting have been
changed from prior years, when the annual meeting was held on
the second Monday in January commencing at 11:00 o'clock A.M.
(Eastern Standard Time). The proxy and this proxy statement
were first mailed to the shareholders on or about December 8,
1995.
PURPOSES OF MEETING
As of this date, the only known business to be presented
at the 1996 annual meeting of shareholders is the election of
four directors of the Company to serve for a term of three
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, 1995, of 22,561,605 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 20, 1995, 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,
1995, the Hulman Interests beneficially owned an aggregate of
2,749,122 shares of the Company which comprised 12.18 percent
of the outstanding common stock of the Company. At September
30, 1995, 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>
Nature of
Name and Number of Shares Beneficial Percent
Title of Class Address of Beneficially Ownership of
Beneficial Owned Class
Owner
<S> <C> <C> <C> <C>
Common Hulman & 1,622,435 Voting & 7.19%
Company Investment
900 Wabash
Avenue
Terre Haute,
Indiana 47807
</TABLE>
As a result of the attribution to certain persons of shares
held by Hulman & Company, the following persons are deemed to
be beneficial owners of more than 5 percent of the outstanding
common stock of the Company:
<TABLE>
Name of Number of Shares
Title of Beneficial Owner Beneficially Percent of
Class Owned Class
<S> <C> <C> <C>
Common Mary F. Hulman 1,966,920 8.72%
Common Mari H. George 2,055,631 9.11%
Common Anton H. George 1,848,338 8.19%
Common Katherine M. 1,629,084 7.22%
George
Common Laura K. George 1,848,338 8.19%
Common Nancy L. George 1,629,888 7.22%
Common M. Josephine 1,627,383 7.21%
George
</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 1,622,435 shares
held by Hulman & Company as to which each, as a director of
Hulman & Company, 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 Forms 3, 4 and 5 filed
through September 30, 1995. 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: Gerald L.
Bepko, Lawrence A. Ferger, Anton H. George and James C. Shook,
who are nominees for election with terms expiring in 1999;
Paul T. Baker, Otto N. Frenzel III, Don E. Marsh and Richard
P. Rechter, whose terms expire in 1998; and Duane M. Amundson,
Howard J. Cofield* , Niel C. Ellerbrook and Loren K. Evans,
whose terms expire in 1997. 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 26, 1996.
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 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.
* On October 16, 1995, Mr. Howard J. Cofield passed away.
Presently, his seat on the board is vacant. Pursuant to the
Company's Articles of Incorporation and Code of By-Laws the
remaining members of the board are empowered to fill this
vacancy for the remainder of Mr. Cofield's term. Because this
Proxy Statement was required to be finalized in mid-November,
and the next board meeting will not be held until January 26,
1996, at this time Mr. Cofield's successor has not been
selected and elected to fill the remainder of his term.
Accordingly, references herein to Mr. Cofield reflect
circumstances existing as of the end of fiscal year 1995.
<TABLE>
Principal Occupation During Has been a Director
Name and Business the Past 5 Years and Other of Indiana Gas or
Location Age Information (1) the
Company Since
<S> <C> <C> <C>
Nominees For Election Whose Terms Will Expire in 1999
GERALD L. BEPKO 55 Vice President, Indiana 1990
Indianapolis, University and Chancellor
Indiana of Indiana University-
Purdue University at
Indianapolis since 1986. He
is also a Director of First
Indiana, Inc. and Circle
Income Shares, Inc.
LAWRENCE A. FERGER 61 President and Chief 1984
Indianapolis, Executive Officer of the
Indiana Company and Indiana Gas
since 1987. He is also
Director of National City
Bank, Indiana.
ANTON H. GEORGE 36 President since December 1990
Indianapolis, 1989 and a Director of
Indiana Indianapolis Motor Speedway
Corporation (auto racing);
President since January,
1994, and prior to that
time Executive Vice
President since June 1989,
and a Director of Hulman &
Company (manufacturer and
distributor of baking
powder). He is also a
Director of First Financial
Corporation.
JAMES C. SHOOK 64 President, the Shook 1983
Lafayette, Indiana Agency, Inc. (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.
Principal Occupation Has been a Director
Name and Business During the of
Location Age Past 5 Years and Other Indiana Gas or the
Information (1) Company Since
Directors Continuing In Office Whose Terms Will Expire 1998
PAUL T. BAKER 54 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 65 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 57 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 and Nash-Finch
Company.
RICHARD P. 56 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 and Monroe
Bancorp.
Principal Occupation Has been a
Name and Business During the Director of
Location Age Past 5 Years and Other Indiana Gas or the
Information (1) Company Since
Directors Continuing In Office Whose Terms Will Expire 1997
DUANE M. AMUNDSON 70 Chairman of the Board of 1978
Indianapolis, Directors of the Company
Indiana and Chairman of the Board
of Directors of Indiana
Gas.
HOWARD J. COFIELD 69 Of counsel to the law 1984
Indianapolis, firm of Barnes &
Indiana Thornburg since January
1, 1993, and prior to
that a partner.
NIEL C. 46 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 67 Retired. Before 1993, 1988
Columbus, Indiana Vice Chairman since 1991
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.
</TABLE>
Other executive officers of the Company are Anthony E. Ard,
age 54, and Carl L. Chapman, age 40. In 1995, Mr. Ard was
made Senior Vice President of Corporate Affairs for Indiana
Gas. Prior to 1995 and since 1993, he was 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. In 1995, Mr. Chapman was made
Senior Vice President of Corporate Development for Indiana
Gas. Since 1986, he has been the Assistant Treasurer for the
Company, and prior to 1995 he was Vice President of Planning
for Indiana Gas.
(1) 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.
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, 1995:
Name of Individuals or Shares Owned
Identity of Group Beneficially (1)
DUANE M. AMUNDSON
Indianapolis, Indiana 16,181 (2)(4)(7)
ANTHONY E. ARD
Indianapolis, Indiana 15,302 (3)
PAUL T. BAKER
Indianapolis, Indiana 22,204 (3)
GERALD L. BEPKO
Indianapolis, Indiana 1,693 (2)(7)
CARL L. CHAPMAN
Indianapolis, Indiana 12,438 (3)
HOWARD J. COFIELD
Indianapolis, Indiana 7,704 (7)
NIEL C. ELLERBROOK
Indianapolis, Indiana 22,573 (3)
LOREN K. EVANS
Columbus, Indiana 3,343 (2)(7)
LAWRENCE A. FERGER
Indianapolis, Indiana 67,251 (3)(5)
OTTO N. FRENZEL III
Indianapolis, Indiana 17,974 (7)(8)
ANTON H. GEORGE
Indianapolis, Indiana 1,848,338 (1)(7)
DON E. MARSH
Indianapolis, Indiana 4,435 (7)
RICHARD P. RECHTER
Bloomington, Indiana 6,813 (2)(7)
JAMES C. SHOOK
Lafayette, Indiana 39,552 (6)(7)
All directors and executive
officers as a group (14 2,085,801 (1)
persons)
(1) Except for Anton H. George, no director or executive
officer owned beneficially as of September 30, 1995, more than
.30 percent of common stock of the Company. Excluding Anton
H. George, all directors and executive officers owned
beneficially an aggregate of 237,463 shares or 1.05 percent of
common stock of the Company outstanding as of that date. The
beneficial ownership by Anton H. George of 1,848,338 shares or
8.19 percent of common stock of the Company is discussed
above in "Voting Securities."
(2) Some or all of the shares owned by Messrs. Amundson,
Bepko, Evans and Rechter are owned jointly with their wives.
(3) 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.
(4) Includes 11,521 shares held in a trust, of which Mr.
Amundson's wife is trustee, and he disclaims beneficial
interest therein.
(5) Includes 3,981 shares held by Mr. Ferger's wife, and he
disclaims beneficial interest therein.
(6) Includes 1,500 shares held by Mr. Shook's wife, and he
disclaims beneficial interest therein.
(7) Includes shares granted under the directors restricted
stock plan, some of which shares are subject to certain
transferability restrictions and forfeiture provisions.
(8) Includes 3,774 shares held in a trust, of which Mr.
Frenzel is a co-trustee, and he disclaims beneficial interest
therein.
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
two 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 the next annual election
must be received by the Company, addressed to the secretary,
no later than August 9, 1996. There were two meetings 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. Pursuant to the Company's Code of By-
Laws, 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 five meetings
during the last fiscal year. All directors attended at least
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, 1995, 55,046 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 manner 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, 1995, 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.
There are two unfunded plans that have been adopted by
the board of directors under which non-employee directors may
defer all or any part of fees received in cash until the
occurrence of certain conditions specified in each of the
plans. Under the first plan, which has been in place since
1981, amounts deferred earn a return each year equal to the
average commercial prime interest rate in effect for the
preceding calendar year. Under the second plan, which became
effective during fiscal year 1995, amounts deferred are
considered for accounting purposes to be invested in Company
stock. These amounts are tracked as phantom units of Company
stock and the value of amounts deferred change with the
receipt of dividends, as well as with fluctuations in the
price of Company stock.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
COMPENSATION COMMITTEE REPORT
The Compensation Committee is responsible for reviewing
and approving all elements of the total compensation program
for officers of the Company and its affiliates and serves as
the administrator of the Company's Annual Management Incentive
Compensation Plan ("Incentive Plan") and the Executive
Restricted Stock Plan ("Stock Plan"). The Committee is also
responsible for monitoring the Company's executive
compensation programs to ensure that they are aligned with the
Company's business strategies and financial goals.
A. Executive Compensation Policy.
The Company's total compensation program for officers
includes base salaries, annual incentive payments, and
restricted stock grants. The Committee's primary objective is
to achieve above-average performance by providing the
opportunity to earn above-average total compensation (base
salary, at-risk annual and long-term incentives) for above-
average performance. Each element of total compensation is
designed to work in concert. The total program is designed to
attract, motivate, reward and retain the broad-based
management talent required to serve customer, employee, and
shareholder interests. The Company believes that the program
also motivates the Company's officers to acquire and retain
appropriate levels of stock ownership and is competitive with
programs offered by the companies that are selected by the
Company's investment bankers and comprise the peer group
("Peer Group") included in the performance graph on page 18.
It is the opinion of the Committee that the total compensation
earned by Company officers in fiscal year 1995 achieves these
objectives and is fair and reasonable. Each aspect of the
total compensation program is discussed in greater detail
below.
B. Components of Executive Compensation.
Annual Compensation. The annual compensation program
consists of two components, base salary and an at-risk
incentive payment. Individual salaries are set within ranges
based on comparisons to actual pay for comparable positions
within the Peer Group, and industry in general. In
determining actual salaries within these ranges, the Committee
takes into consideration individual performance, experience,
potential, and changes in executive responsibilities.
Establishing industry based salary ranges provides an
objective standard by which to judge the reasonableness of the
Company's salaries, maintains the Company's ability to compete
for and retain qualified executives, and ensures that internal
responsibilities are properly rewarded.
All of the Company's officers, but particularly the five
highest paid officers, have a significant portion of their
total compensation at risk. Participation in the Incentive
Plan, which includes the chief executive officer, is extended
to those positions that play key roles in achieving annual
financial and operating objectives. Annual incentive
opportunities are also based on periodic reviews of prevailing
Peer Group practices for comparable positions. The potential
incentive award is determined annually by non-employee
directors and is based upon a percentage of each participant's
base salary. Incentive opportunities for executive officers,
excluding the chief executive officer, ranged from thirty to
forty percent of salary.
Prior to the start of the fiscal year the Committee
recommends to the board, and the board (excluding Company and
Indiana Gas employees) determines, minimum, target, and
maximum corporate performance levels. The performance that is
measured is the Company's financial performance, as determined
by the Company's consolidated return on equity, relative to
the average return on equity of companies in the Peer Group.
Target performance levels are set in excess of Peer Group
performance in order to ensure the linkage between financial
performance and executive rewards. Depending upon the
Company's financial performance, the size of this component
can range from zero to the maximum level established for each
participant in the Incentive Plan. In determining the cash
payment that was received by executive officers for the past
fiscal year, the Company's consolidated return on equity
exceeded the target performance level but was less than
maximum as determined by the board. Incentive payouts
correspondingly exceeded target but were less than maximum.
The second and smaller performance component is based
upon each executive's achievement of individual goals, which
are consistent with the Company's overall objectives and which
are established prior to the beginning of the fiscal year.
Individual performance is monitored and evaluated subjectively
throughout the fiscal year. Overall performance is measured
after the end of the fiscal year by the chief executive
officer. Among the executive officers, no person has more
than one-third of their total potential incentive under the
Incentive Plan dependent upon the attainment of individual
objectives.
Long-Term Incentive. The purpose of the 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. Under the Stock Plan, the Committee recommends to
the board, and the board (excluding Company and Indiana Gas
employees) determines, the executive officers, as well as
other 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. Among the
executive officers, excluding the chief executive officer, the
percentages of each officer's base salary range from twenty
percent to thirty percent. Like the potential cash payment
that may be received under the Incentive Plan, this component
of total compensation is also performance driven and totally
at-risk.
The Stock Plan provides for a grant to eligible officers
at the outset of each measuring period and also provides for
grants of shares to be made to newly eligible principal
officers during a measuring period. The measuring periods are
consecutively running three-year periods. Shares were
allocated under the stock 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 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 two primary
criteria: (i) certain measurements of the total return to the
Company's shareholders in comparison to the total return of
shareholders of the companies in the Peer Group; and (ii) the
continued employment of the officer during the period of
restriction.
For each three-year measuring period under the Stock
Plan, depending upon the total return provided to the
Company's shareholders relative to the total return provided
by each of the companies in the Peer Group, there are three
possible outcomes. If the Company's total return places it in
the bottom quartile, all of the shares are forfeited. If the
Company's total return places it in the second or third
quartiles, the original grant is vested, subject to continuing
employment by the officers during the remaining period of
restriction. If the Company's total return places it in the
top quartile, the original grant is doubled and vested,
subject to continuing employment by the officers during the
remaining period of restriction.
For the First Measuring Period ended September 30, 1990,
and for the Second Measuring Period ended September 30, 1993,
the number of shares originally granted were doubled under the
Stock Plan because the Company's total return to shareholders
placed it in the top quartile compared to the total return
performance of the Peer Group 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.
It is the opinion of the Committee that the Stock Plan
meets its objective of providing executive officers, as well
as other principal officers, with the appropriate long-term
interest in maximizing shareholder value. A participant's
increased level of equity in the Company is contingent upon
the additional enhancement of shareholder value relative to
the performance of companies in the Peer Group. In addition,
the vesting restrictions provide an incentive for all plan
participants to remain with the Company.
C. Chief Executive Officer Compensation.
The compensation of Lawrence A. Ferger, President and
Chief Executive Officer, consists of the same components as
for other executive officers, namely base salary, an at-risk
payment under the Incentive Plan, and an at-risk grant of
restricted stock under the Stock Plan.
In establishing Mr. Ferger's total compensation for
fiscal year 1995, the Committee considered the total
compensation of other chief executive officers in the Peer
Group, the financial and business performance of the Company,
and a subjective evaluation of the leadership role provided by
Mr. Ferger.
Mr. Ferger's payment received under the Incentive Plan
during fiscal year 1995 was based entirely upon the financial
performance of the Company as measured by its consolidated
return on equity relative to the average return on equity of
companies in the Peer Group. This method of measurement
ensures the linkage of this aspect of Mr. Ferger's
compensation to Company performance. Under the Incentive
Plan, the maximum award Mr. Ferger was eligible to receive was
an amount equal to fifty percent of his base salary. As
discussed above with respect to other executive officers,
during the past fiscal year the Company's consolidated return
on equity exceeded the target performance level but was less
than maximum as determined by the board. Incentive payouts
correspondingly exceeded target but were less than maximum.
Mr. Ferger's receipt of restricted shares under the Stock
Plan is likewise directly linked to the Company's performance.
Whether stock is received and, if so, in what amount, will
depend upon the measurement of the total return provided to
the Company's shareholders in comparison to the total return
provided to the shareholders of companies in the Peer Group.
As discussed above with respect to the other executive
officers, fiscal year 1995 is the second year of the three
year measuring period presently in effect under the Stock
Plan. Depending upon the Company's total return performance
to be measured at the conclusion of the Third Measuring Period
ending September 30, 1996, that stock may be forfeited, vested
as conditionally granted, subject to Mr. Ferger's continued
employment during the remaining period of restriction, or
doubled in amount and vested, again subject to Mr. Ferger's
continued employment during the remaining period of
restriction.
For the same reasons expressed above with respect to the
conclusion regarding the appropriateness of the total
compensation provided other executive officers, it is the
opinion of the Committee that Mr. Ferger's total compensation
is reasonable and appropriate.
D. Miscellaneous.
To assist the Committee, the services of an independent
compensation consultant are utilized. The consultant assists
by evaluating the total compensation system relative to the
compensation systems employed by companies in the Peer Group.
The consultant also provides an additional measure of
assurance that the system is a reasonable and appropriate
means to achieve the Company's objectives.
As described below on page 21 under the heading
"EMPLOYMENT AND TERMINATION BENEFIT AGREEMENTS," the Company
and Indiana Gas have entered into such agreements with each of
the executive officers. Neither form of agreement affects in
any manner the recommendations of the Committee and the
determinations by the board (excluding Company and Indiana Gas
employees) with respect to the total compensation provided the
executive officers.
In 1993, Congress enacted Section 162(m) of the Internal
Revenue Code that disallows corporate deductibility for
"compensation" paid in excess of One Million Dollars to the
individual executives named in the Summary Compensation Table,
unless the compensation is payable solely on account of
achievement of an objective performance goal. The Committee
does not anticipate that the compensation paid to executive
officers in the form of base salaries and incentive
compensation will exceed One Million Dollars in the near
future. However, as part of its ongoing responsibilities with
respect to executive compensation, the Committee will monitor
this issue to determine what actions, if any, should be taken
as a result of the limitation on deductibility.
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 $25,000,000 at any one
time. At September 30, 1995, there was $2,250,000 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, as of September 30,
1995, Energy Realty, Inc., an indirect subsidiary of the
Company, had two loans outstanding in an aggregate amount of
$5,857,817 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. Finally,
on July 31, 1995, Energy Realty, Inc. and National City Bank,
Indiana each invested $806,250 in the Lebanon Housing
Partnership, L.P. As a result of these investments, each
company owns 37.125% of the partnership.
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, 1993, 1994 and 1995, 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>
<CAPTION>
Summary Compensation Table
(a) (b) (c) (d) (e) (h) (i)
Long-Term
Compensation All Other
Annual Compensation Payouts Compensation
Other Annual
Name and Principal Compensation LTIP Payouts
Position in Group Year Salary Bonus (1) (2) (3) (4)
<S> <C> <C> <C> <C> <C> <C>
Lawrence A. Ferger, 1993 $294,257 $138,573 $19,300 $132,939 $15,971
President and Chief 1994 321,769 147,129 43,780 182,313 17,028
Executive Officer 1995 347,615 139,439 35,665 198,336 15,790
Paul T. Baker, 1993 193,923 63,249 6,666 72,094 12,457
Sr. V.P. and Chief 1994 222,308 74,552 12,647 48,257 13,939
Operating Officer, 1995 236,077 75,093 10,541 52,506 13,050
Indiana Gas
Niel C. Ellerbrook, 1993 151,782 55,359 9,197 84,122 10,485
V.P. and Treasurer 1994 165,769 58,605 17,635 75,207 11,708
and Chief Financial 1995 175,885 56,179 14,271 81,829 11,700
Officer
Anthony E. Ard, 1993 115,781 31,457 5,079 41,530 5,123
Sr. V.P. of Corp. 1994 125,977 33,962 9,906 44,301 9,419
Affairs, Indiana 1995 133,962 32,755 7,905 48,202 10,926
Gas
Carl. L. Chapman, 1993 107,166 27,313 4,097 33,040 8,398
Assistant Treasurer 1994 117,489 31,197 9,837 35,994 9,470
and Sr. V.P. of 1995 125,096 29,765 8,281 39,163 9,614
Corp. Development,
Indiana Gas
</TABLE>
(1) The amounts shown in this column are payments under the
annual Incentive Plan, which was discussed above in Parts B
and C of the Compensation Committee Report relating to "Annual
Compensation". Amounts paid in any fiscal year are
attributable to the Company's performance in the prior fiscal
year. Payments earned in fiscal year 1995 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 18.
(2) The amounts shown in this column are dividends paid on
restricted shares issued under the Stock Plan, which was
discussed above in Parts B and C of the Compensation Committee
Report relating to "Long-Term Incentive Compensation".
(3) The amounts shown in this column represent the value of
shares issued under the Stock Plan and for which restrictions
were lifted in each of those fiscal years. For instance, the
amounts shown for fiscal year 1995 represent the value of one-
third of the Second Measuring Period shares issued under the
Stock Plan and for which restrictions were lifted as of
September 30, 1995. After the lifting of those restrictions,
the executive officers, as a group, held 52,222 restricted
shares, with an aggregate market value of those shares as of
that date of $1,129,300. Those shares continue to be subject
to restrictions imposed by the Stock Plan, and they represent
the remaining one-third 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, 1995 was as follows: Lawrence A. Ferger-24,159
shares, $522,438; Paul T. Baker-7,423 shares, $160,522; Niel
C. Ellerbrook-9,553 shares, $206,584; Anthony E. Ard-5,159
shares, $111,563 and Carl L. Chapman-5,928 shares, $128,193.
(4) The amounts shown in this column are Company
contributions to the Retirement Savings Plan and for fiscal
year 1995 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.
During fiscal year 1995, there were no awards under the
Stock Plan, which is considered to be a long-term incentive
plan. Accordingly, in this Proxy Statement there is no table
reflecting the Long-Term Annual Incentive Plan Award in Last
Fiscal Year.
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 1995, 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 their
judgment 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. This peer group, as revised,
was used in the Company's Proxy Statement last year, and the
same group was used during fiscal year 1995 ("1995 Peer
Group"). The following graphs reflect comparisons of total
return for the 1995 Peer Group, the 1993 Peer Group, the S&P
500 and the S&P Utilities.
<TABLE>
Total Return To Shareholders (1)
1990 1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C> <C>
IEI 0.00% 34.85% 56.32% 95.07% 74.08% 100.20%
1995 PEERS 0.00% 1.41% 14.08% 59.34% 42.33% 61.29%
1993 PEERS (1) 0.00% 7.78% 23.53% 66.57% 47.01% 66.59%
S&P 500 0.00% 31.17% 45.66% 64.60% 70.67% 121.43%
S&P UTILITIES 0.00% 15.87% 32.52% 64.89% 43.29% 82.82%
</TABLE>
(1) The total return on investment (change in the year end
stock price plus reinvested dividends) for each of the periods
for the Company, the respective peer groups, 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 1990.
<TABLE>
Return on Equity
1990 1991 1992 1993 1994
<S> <C> <C> <C> <C> <C>
INDIANA ENERGY 15.22% 11.32% 11.46% 14.68% 13.00%
PEER GROUP 10.87% 9.79% 9.45% 10.34% 11.40%
</TABLE>
(1) Under the annual 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 1995 were based on the Company's comparative
return on equity during the fiscal year 1994, and so on, back
to 1988, the first year in which payments were made.
(2) 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, or various investment funds. 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
payments under the annual Incentive Plan qualifies as
remuneration for purposes of these plans. The amounts shown
do not reflect reductions, which would result from joint and
survivor elections.
Pension Table
15 or More Years of Service (1)
Remuneration Level Amount of Benefits
(2)
$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
(1) The compensation covered by the plans includes the
salary and incentive payments 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.
(2) 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.
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 aggregate 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 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 year period that begins
with October 1 following the date of such written notice.
INDEPENDENT PUBLIC ACCOUNTANTS OF THE COMPANY
Arthur Andersen, L.L.P., Indianapolis, has been selected
by the board of directors as the independent public
accountants of the Company and its subsidiaries for fiscal
year 1996. 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,
L.L.P. 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, Inc. 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, 1995, was mailed to shareholders on or about
December 8, 1995.
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 1997 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 1997 annual meeting of its shareholders
by submitting their proposals to the Company in a timely
manner. In order to be so included for the 1997 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 9, 1996, and must otherwise
comply with the requirements of Rule 14a-8.
By order of the board of directors.
Indianapolis, Indiana
December 8, 1995
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 26, 1996.
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 26, 1996, 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 8,
1995, 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: Gerald L. Bepko, Lawrence A. Ferger, Anton H. George, and
James C. Shook.
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
"WITHHELD" 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
