AMENDED AND RESTATED
TERMINATION BENEFITS AGREEMENT
As of July 29, 1994, INDIANA ENERGY, INC., an Indiana
corporation having its principal executive offices at ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
("ENERGY"), INDIANA GAS COMPANY, INC., an Indiana
corporation having its principal executive offices at ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ("INDIANA
GAS") (both ENERGY and INDIANA GAS being collectively
referred to herein as the "Company"), and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
an Indiana resident whose mailing address is ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (the
"Executive") entered into a Termination Benefits Agreement
(the "Agreement"). Pursuant to Section 4(f) of the Agreement
and effective as of March 15, 1996, the Company and
Executive amend and completely restate the Agreement to
provide, in its entirety, as follows:
R E C I T A L S
The following facts are true:
A. The Executive is serving the Company as a key
executive officer, and is expected to continue to make a
major contribution to the profitability, growth, and
financial strength of the Company;
B. The Company considers the continued services of the
Executive to be in the best interests of the Company and its
shareholders, and desires to assure itself of the
availability of such continued services in the future on an
objective and impartial basis and without distraction or
conflict of interest in the event of an attempt to obtain
control of the Company.
C. Effective as of March 15, 1996 Executive shall
become a key executive officer of PROLIANCE ENERGY, L.L.C.
("PROLIANCE"), fifty percent (50%) of which is currently
owned by IGC Energy, Inc. an indirect wholly-owned
subsidiary of Energy.
D. The Executive is willing to remain in the employ of
the Company upon the understanding that the Company will
provide him with income security upon the terms and subject
to the conditions contained herein if his employment is
terminated by the Company without cause or if he voluntarily
terminates his employment for good reason. For purposes of
this Agreement, employment with and compensation paid by
PROLIANCE shall be deemed employment with or compensation
paid by the Company unless IGC Energy, Inc., Energy or any
direct or indirect subsidiary of Energy ceases to own any
interest in PROLIANCE.
E. If, subsequent to March 15, 1996, Executive's
employment with PROLIANCE is terminated and Executive
resumes employment with the Company within thirty (30) days
following his termination of employment with PROLIANCE, this
Agreement shall continue in full force and effect for
Executive.
A G R E E M E N T
In consideration of the premises and the mutual
covenants and agreements hereinafter set forth, the Company
and the Executive agree as follows:
1. Undertaking. The Company agrees to pay to the
Executive the termination benefits specified in paragraph 2
hereof if (a) control of ENERGY is acquired (as defined in
paragraph 3(a) hereof) during the term of this Agreement (as
described in paragraph 5 hereof) and (b) within three (3)
years after the acquisition of control occurs (i) the
Company terminates the employment of the Executive for any
reason other than Cause (as defined in paragraph 3(b)
hereof), death, the Executive's attainment of age sixty-five
(65) or total and permanent disability, or (ii) the
Executive voluntarily terminates his employment with the
Company for Good Reason (as defined in paragraph 3(c)
hereof) or without reason during the Window Period (as
defined in paragraph 3(d) hereof); provided, however, that
if after an acquisition of control of Energy, Executive
ceases to be employed by PROLIANCE but within seven (7)
calendar days resumes employment with Energy, Indiana Gas or
any of their successors at approximately the same total
compensation and benefits as received from PROLIANCE,
Executive shall not be entitled to benefits under this
Agreement by reason of his termination of employment with
PROLIANCE; provided, further, that Executive may still be
entitled to benefits under this Agreement consistent with
this paragraph if his employment with the Company is
subsequently terminated.
2. Termination Benefits. If the Executive is entitled
to termination benefits pursuant to paragraph 1 hereof, the
Company agrees to pay to the Executive as termination
benefits in a lump sum payment within five (5) calendar days
of the termination of the Executive's employment an amount
to be computed by multiplying (i) the Executive's average
annual compensation (as determined consistent with the
provisions of Section 280G(d)(l) of the Internal Revenue
Code of 1986, as amended (the "Code") in effect on July 29,
1994) payable by the Company which was includable in the
gross income of the Executive for the most recent five (5)
calendar years ending coincident with or immediately before
the date on which control of the Company is acquired (or
such portion of such period during which the Executive was
an employee of the Company), by (ii) two hundred ninety-nine
and ninety-nine one hundredths percent (299.99%). For the
purposes of this Agreement, employment and compensation paid
by any direct or indirect subsidiary of the Company will be
deemed to be employment and compensation paid by the
Company.
3. Definitions.
(a) As used in this Agreement, the "acquisition of control"
means:
(i) The acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Exchange
Act")) (a "Person") of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of
twenty percent (20%) or more of either (A) the then
outstanding shares of common stock of ENERGY (the
"Outstanding ENERGY Common Stock") or (B) the combined
voting power of the then outstanding voting securities of
ENERGY entitled to vote generally in the election of
directors (the "Outstanding ENERGY Voting Securities");
provided, however, that the following acquisitions shall not
constitute an acquisition of control: (A) any acquisition
directly from ENERGY (excluding an acquisition by virtue of
the exercise of a conversion privilege), (B) any acquisition
by ENERGY, (C) any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by ENERGY,
INDIANA GAS or any corporation controlled by ENERGY or (D)
any acquisition by any corporation pursuant to a
reorganization, merger or consolidation, if, following such
reorganization, merger or consolidation, the conditions
described in clauses (A), (B) and (C) of subsection (iii) of
this paragraph 3(a) are satisfied;
(ii) Individuals who, as of the date hereof,
constitute the Board of Directors of ENERGY (the "Incumbent
Board") cease for any reason to constitute at least a
majority of the Board of Directors of ENERGY (the "Board");
provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination
for election by ENERGY's shareholders, was approved by a
vote of at least a majority of the directors then comprising
the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of either an
actual or threatened election contest (as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act) or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than
the Board; or
(iii) Approval by the shareholders of ENERGY of a
reorganization, merger or consolidation, in each case,
unless, following such reorganization, merger or
consolidation, (A) more than sixty percent (60%) of,
respectively, the then outstanding shares of common stock of
the corporation resulting from such reorganization, merger
or consolidation and the combined voting power of the then
outstanding voting securities of such corporation entitled
to vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were
the beneficial owners, respectively, of the Outstanding
ENERGY Common Stock and Outstanding ENERGY Voting Securities
immediately prior to such reorganization, merger or
consolidation in substantially the same proportions as their
ownership, immediately prior to such reorganization, merger
or consolidation, of the Outstanding ENERGY Stock and
Outstanding ENERGY Voting Securities, as the case may be,
(B) no Person (excluding ENERGY, any employee benefit plan
or related trust of ENERGY, INDIANA GAS or such corporation
resulting from such reorganization, merger or consolidation
and any Person beneficially owning, immediately prior to
such reorganization, merger or consolidation and any Person
beneficially owning, immediately prior to such
reorganization, merger or consolidation, directly or
indirectly, twenty percent (20%) or more of the Outstanding
ENERGY Common Stock or Outstanding Voting Securities, as the
case may be) beneficially owns, directly or indirectly,
twenty percent (20%) or more of, respectively, the then
outstanding shares of common stock of the corporation
resulting from such reorganization, merger or consolidation
or the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in
the election of directors and (C) at least a majority of the
members of the board of directors of the corporation
resulting from such reorganization, merger or consolidation
were members of the Incumbent Board at the time of the
execution of the initial agreement providing for such
reorganization, merger or consolidation;
(iv) Approval by the shareholders of ENERGY of (A) a
complete liquidation or dissolution of ENERGY or (B) the
sale or other disposition of all or substantially all of the
assets of ENERGY, other than to a corporation, with respect
to which following such sale or other disposition (1) more
than sixty percent (60%) of, respectively, the then
outstanding shares of common stock of such corporation and
the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned,
directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners,
respectively, of the Outstanding ENERGY Common Stock and
Outstanding ENERGY Voting Securities immediately prior to
such sale or other disposition in substantially the same
proportion as their ownership, immediately prior to such
sale or other disposition, of the Outstanding ENERGY Common
Stock and Outstanding ENERGY Voting Securities, as the case
may be, (2) no Person (excluding ENERGY and any employee
benefit plan or related trust of ENERGY,INDIANA GAS or such
corporation and any Person beneficially owning, immediately
prior to such sale or other disposition, directly or
indirectly, twenty percent (20%) or more of the Outstanding
ENERGY Common Stock or Outstanding ENERGY Voting Securities,
as the case may be) beneficially owns, directly or
indirectly, twenty percent (20%) or more of, respectively,
the then outstanding shares of common stock of such
corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled
to vote generally in the election of directors and (3) at
least a majority of the members of the board of directors of
such corporation were members of the Incumbent Board at the
time of the execution of the initial agreement or action of
the Board providing for such sale or other disposition of
assets of ENERGY; or
(v) The closing, as defined in the documents relating
to, or as evidenced by a certificate of any state or federal
governmental authority in connection with, a transaction
approval of which by the shareholders of ENERGY would
constitute an "acquisition of control" under subsection
(iii) or (iv) of this section 3(a) of this Agreement.
Notwithstanding anything contained in this Agreement
to the contrary, if the Executive's employment is terminated
before an "acquisition of control" as defined in this
section 3(a) and the Executive reasonably demonstrates that
such termination (i) was at the request of a third party who
has indicated an intention or taken steps reasonably
calculated to effect an "acquisition of control" and who
effectuates an "acquisition of control" (a "Third Party") or
(ii) otherwise occurred in connection with, or in
anticipation of, an "acquisition of control" which actually
occurs, then for all purposes of this Agreement, the date of
an "acquisition of control" with respect to the Executive
shall mean the date immediately prior to the date of such
termination of the Executive's employment.
(b) As used in this Agreement, the term "Cause" means
fraud, dishonesty, theft of corporate assets, or other gross
misconduct by the Executive. Notwithstanding the foregoing,
the Executive shall not be deemed to have been terminated
for cause unless and until there shall have been delivered
to him a copy of a resolution duly adopted by the
affirmative vote of not less than a majority of the entire
membership of the Board at a meeting of the Board called and
held for the purpose (after reasonable notice to him and an
opportunity for him, together with his counsel, to be heard
before the Board), finding that in the good faith opinion of
the Board the Executive was guilty of conduct set forth
above in the first sentence of the subsection and specifying
the particulars thereof in detail.
(c) As used in this Agreement, the term "Good Reason"
means, without the Executive's written consent, (i) a
demotion in the Executive's status, position or
responsibilities which, in his reasonable judgment, does not
represent a promotion from his status, position or
responsibilities as in effect immediately prior to the
change in control; (ii) the assignment to the Executive of
any duties or responsibilities which, in his reasonable
judgment, are inconsistent with such status, position or
responsibilities; or any removal of the Executive from or
failure to reappoint or reelect him to any of such
positions, except in connection with the termination of his
employment for total and permanent disability, death or
Cause or by him other than for Good Reason; (iii) a
reduction by the Company in the Executive's base salary as
in effect on the date hereof or as the same may be increased
from time to time during the term of this Agreement or the
Company's failure to increase (within twelve (12) months of
the Executive's last increase in base salary) the
Executive's base salary after a change in control in an
amount which at least equals, on a percentage basis, the
average percentage increase in base salary for all executive
and senior officers of the Company effected in the preceding
twelve (12) months; (iv) the relocation of the principal
executive offices of ENERGY, INDIANA GAS, or PROLIANCE,
whichever entity on behalf of which the Executive performs a
principal function of that entity as part of his employment
services, to a location outside the Indianapolis, Indiana
metropolitan area or the Company's requiring him to be based
at any place other than the location at which he performed
his duties prior to a change in control, except for required
travel on the Company's business to an extent substantially
consistent with his business travel obligations at the time
of a change in control; (v) the failure by the Company to
continue in effect any incentive, bonus or other
compensation plan in which the Executive participates
immediately prior to the change in control, including but
not limited to the Company's stock option and restricted
stock plans, if any, unless an equitable arrangement
(embodied in an ongoing substitute or alternative plan),
with which he has consented, has been made with respect to
such plan in connection with the change in control, or the
failure by the Company to continue his participation
therein, or any action by the Company which would directly
or indirectly materially reduce his participation therein;
(vi) the failure by the Company to continue to provide the
Executive with benefits substantially similar to those
enjoyed by him or to which he was entitled under any of the
Company's pension, profit sharing, life insurance, medical,
dental, health and accident, or disability plans in which he
was participating at the time of a change in control, the
taking of any action by the Company which would directly or
indirectly materially reduce any of such benefits or deprive
him of any material fringe benefit enjoyed by him or to
which he was entitled at the time of the change in control,
or the failure by the Company to provide him with the number
of paid vacation and sick leave days to which he is entitled
on the basis of years of service with the Company in
accordance with the Company's normal vacation policy in
effect on the date hereof; (vii) the failure of the Company
to obtain a satisfactory agreement from any successor or
assign of the Company to assume and agree to perform this
Agreement; (viii) any purported termination of the
Executive's employment which is not effected pursuant to a
Notice of Termination satisfying the requirements of
paragraph 4(c) hereof (and, if applicable, paragraph 3(b)
hereof); and for purposes of this Agreement, no such
purported termination shall be effective; or (ix) any
request by the Company that the Executive participate in an
unlawful act or take any action constituting a breach of the
Executive's professional standard of conduct.
Notwithstanding anything in this paragraph 3(c) to the
contrary, the Executive's right to terminate his employment
pursuant to this paragraph 3(c) shall not be affected by his
incapacity due to physical or mental illness.
(d) As used in this Agreement, the "Window Period"
shall mean the 30-day period immediately following the first
anniversary of the acquisition of control.
4. Additional Provisions.
(a) Enforcement of Agreement. The Company is aware
that upon the occurrence of a change in control the Board of
Directors or a shareholder of the Company may then cause or
attempt to cause the Company to refuse to comply with its
obligations under this Agreement, or may cause or attempt to
cause the Company to institute, or may institute, litigation
seeking to have this Agreement declared unenforceable, or
may take or attempt to take other action to deny the
Executive the benefits intended under this Agreement. In
these circumstances, the purpose of this Agreement could be
frustrated. It is the intent of the Company that the
Executive not be required to incur the expenses associated
with the enforcement of his rights under this Agreement by
litigation or other legal action, nor be bound to negotiate
any settlement of his rights hereunder, because the cost and
expense of such legal action or settlement would
substantially detract from the benefits intended to be
extended to the Executive hereunder. Accordingly, if
following a change in control it should appear to the
Executive that the Company has failed to comply with any of
its obligations under this Agreement or in the event that
the Company or any other person takes any action to declare
this Agreement void or unenforceable, or institutes any
litigation or other legal action designed to deny, diminish
or to recover from the Executive the benefits entitled to be
provided to the Executive hereunder, and that the Executive
has complied with all of his obligations under this
Agreement, the Company irrevocably authorizes the Executive
from time to time to retain counsel of his choice, at the
expense of the Company as provided in this paragraph 4(a),
to represent the Executive in connection with the initiation
or defense of any litigation or other legal action, whether
such action is by or against the Company or any director,
officer, shareholder, or other person affiliated with the
Company, in any jurisdiction. Notwithstanding any existing
or prior attorney-client relationship between the Company
and such counsel, the Company irrevocably consents to the
Executive entering into an attorney-client relationship with
such counsel, and in that connection the Company and the
Executive agree that a confidential relationship shall exist
between the Executive and such counsel. The reasonable fees
and expenses of counsel selected from time to time by the
Executive as hereinabove provided shall be paid or
reimbursed to the Executive by the Company on a regular,
periodic basis upon presentation by the Executive of a
statement or statements prepared by such counsel in
accordance with its customary practices, up to a maximum
aggregate amount of $500,000. Any legal expenses incurred by
the Company by reason of any dispute between the parties as
to enforceability of or the terms contained in this
Agreement, notwithstanding the outcome of any such dispute,
shall be the sole responsibility of the Company, and the
Company shall not take any action to seek reimbursement from
the Executive for such expenses.
(b) Severance Pay: No Duty to Mitigate. The amounts
payable to the Executive under this Agreement shall not be
treated as damages but as severance compensation to which
the Executive is entitled by reason of termination of his
employment in the circumstances contemplated by this
Agreement. The Company shall not be entitled to set off
against the amounts payable to the Executive any amounts
earned by the Executive in other employment after
termination of his employment with the Company, or any
amounts which might have been earned by the Executive in
other employment had he sought such other employment.
(c) Notice of Termination. Any purported termination by
the Company or by the Executive for Good Reason or by the
Executive without any reason during the Window Period shall
be communicated by written Notice of Termination to the
other party hereto in accordance with paragraph 4(j) hereof.
For purposes of this Agreement, a "Notice of Termination"
shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of
his employment under the provision so indicated. For
purposes of this Agreement, no such purported termination
shall be effective without such Notice of Termination.
(d) Internal Revenue Code. Notwithstanding anything in
this Agreement to the contrary (other than this paragraph),
in the event that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Co. (or its successor)
determines that any payment by the Company to or for the
benefit of the Executive pursuant to the terms of this
Agreement would be nondeductible by the Company for federal
income tax purposes because of Section 280G of the Code,
then the amount payable to or for the benefit of the
Executive pursuant to this Agreement shall be reduced (but
not below zero) to the maximum amount payable without
causing the payment to be nondeductible by the Company
because of Section 280G of the Code; provided, however, that
notwithstanding the preceding clause of this sentence, if
Section 280G of the Code is amended after the date on which
this Agreement has been executed and if the amendment has
the effect of reducing the amount of deductible payments
that may be made by the Company to the Executive under
Section 280G of the Code to an amount less than what would
have been deductible by the Company under Section 280G of
the Code as in effect on July 29, 1994, the maximum amount
payable to the Executive under this paragraph 4(d) shall be
determined without regard to any amendment to Section 280G
of the Code; provided, further, that if solely by reason of
any amendment to Section 280G of the Code an excise tax is
imposed on the Executive under Section 4999 of the Code as a
result of payments made under this Agreement, the Company
shall increase the benefit payable to the Executive under
this Agreement by an amount ("Make Whole Payment") which,
after taking into account the additional federal, state and
local income taxes or the amount (including the Code Section
4999 excise tax that would be imposed on the Make Whole
Payment), would reimburse the Executive fully for the Code
Section 4999 tax that is imposed on the other payments made
hereunder and put the Executive in same net after-tax
position with respect to this Agreement that he would have
been but for the excise tax. Such determination by ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ & Co. (or its successor) shall be conclusive and
binding upon the parties.
(e) Assignment. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their
respective executors, administrators, heirs, personal
representatives, successors, and assigns, but neither this
Agreement nor any right hereunder may be assigned or
transferred by either party hereto, any beneficiary, or any
other person, nor be subject to alienation, anticipation,
sale, pledge, encumbrance, execution, levy, or other legal
process of any kind against the Executive, his beneficiary
or any other person. Notwithstanding the foregoing, the
Company shall assign this Agreement to any corporation or
other business entity succeeding to substantially all of the
business and assets of the Company by merger, consolidation,
sale of assets, or otherwise and shall obtain the assumption
of this Agreement by such successor.
(f) Amendment. This Agreement shall not be
amended, modified, or supplemented without the written
agreement of the parties at the time of such amendment,
modification, or supplement.
(g) Governing Law. This Agreement shall be governed by
and subject to the law of the state of Indiana.
(h) Severability. The invalidity or unenforceability of
any particular provision of this Agreement shall not affect
the other provisions, and this Agreement shall be construed
in all respects as if such invalid or unenforceable
provision had not been contained herein.
(i) Captions. The captions in this Agreement are for
convenience and identification purposes only, are not an
integral part of this Agreement, and are not to be
considered in the interpretation of any part hereof.
(j) Notices. Except as otherwise specifically provided
in this Agreement, all notices and other communications
hereunder shall be in writing and shall be deemed to have
been duly given if delivered in person or sent by registered
or certified mail, postage prepaid, addressed as set forth
above, or to such other address as shall be furnished in
writing by any party to the others.
(k) Waivers. Except as otherwise specifically provided
in this Agreement, no waiver by either party hereto of any
breach by the other party hereto of any condition or
provision of this Agreement to be performed by such other
party shall be deemed to be a valid waiver unless such
waiver is in writing or, even if in writing, shall be deemed
to be a waiver of a subsequent breach of such condition or
provision or a waiver of a similar or dissimilar provision
or condition at the same or at any prior or subsequent time.
5. Term of this Agreement. This Agreement shall remain
in effect until October 1, 1999 or until the expiration of
any extension thereof. The term of this Agreement shall be
automatically extended for one (1) year periods without
further action of the parties as of October 1, 1995 and each
succeeding October 1 thereafter, unless ENERGY shall have
served written notice to the Executive prior to October 1,
1995 or prior to October 1 of each succeeding year, as the
case may be, of its intention that the Agreement shall
terminate at the end of the five (5) year period that begins
with the October 1 following the date of such written
notice.
IN WITNESS WHEREOF, the parties have
executed this Amended and Restated Agreement on
this 15th day of March, 1996.
INDIANA ENERGY, INC.
By: /s/O. N. ▇▇▇▇▇▇▇ III
O. N. ▇▇▇▇▇▇▇ III, as
Chairman of the Compensation Committee
Attest:
/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Secretary or Assistant Secretary
INDIANA GAS COMPANY, INC.
By: /s/▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President or Vice President
Attest:
/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Secretary or Assistant Secretary
EXECUTIVE
/s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇