EXHIBIT 10.1


                IPALCO ENTERPRISES, INC.
                LONG-TERM PERFORMANCE AND
             RESTRICTED STOCK INCENTIVE PLAN
   As Amended and Restated Effective January 1, 1998)


     Pursuant to Section 22 of the IPALCO Enterprises,
Inc. Long-Term Performance and Restricted Stock Incentive
Plan (the "Plan"), IPALCO Enterprises, Inc. ("IPALCO")
amends the Plan, effective as of January 1, 1998, to
provide, in its entirety, as follows:


                        SECTION 1
                            
                         PURPOSE

     The purpose of the amended Plan (as such term is
described below) is to provide an incentive to selected
key executives of the Company (as such term is described
below), by providing an opportunity to earn long-term
incentive compensation, based upon the attainment of
Company performance goals.  In addition, the restricted
stock component of the Plan is intended to provide the
key executives with a means of acquiring or increasing a
proprietary interest in IPALCO so that they shall have an
increased incentive to work toward the attainment of the
long term growth and profit objectives of IPALCO and its
affiliated companies.  Specifically, the Plan is designed
to:

          A.   Link, directly and indirectly, executive
     and shareholder interests.

          B.   Attract and retain individuals of
     outstanding ability.

          C.   Encourage key Company officers to render
     superior performance.


                        SECTION 2
                            
                       DEFINITIONS

     The terms defined in this Section 2 shall, for
purposes of this Plan, have the meanings herein
specified, unless the context expressly or by necessary
implication otherwise requires:

     A.   Acquisition of Control:  An "Acquisition of
Control" means:

          (1)  The acquisition by any individual, entity
     or group (within the meaning of Section 13(d)(3) or
     14(d)(2) of the Securities Exchange Act of 1934, as
     amended (the "Exchange Act")) (a "Person") of
     beneficial ownership (within the meaning of Rule 13d-
     3 promulgated under the Exchange Act) of twenty
     percent (20%) or more of either (A) the then
     outstanding shares of common stock of IPALCO (the
     "Outstanding IPALCO Common Stock") or (B) the
     combined voting power of the then outstanding voting
     securities of IPALCO entitled to vote generally in
     the election of directors (the "Outstanding IPALCO
     Voting Securities"); provided, however, that the
     following acquisitions shall not constitute an
     Acquisition of Control:  (i) any acquisition
     directly from IPALCO (excluding an acquisition by
     virtue of the exercise of a conversion privilege),
     (ii) any acquisition by IPALCO, (iii) any
     acquisition by any employee benefit plan (or related
     trust) sponsored or maintained by IPALCO, IPL or any
     corporation controlled by IPALCO or (iv) any
     acquisition by any corporation pursuant to a
     reorganization, merger or consolidation, if,
     following such reorganization, merger or
     consolidation, the conditions described in clauses
     (A), (B) and (C) of subsection (3) of this Section
     2.A. are satisfied;

     (2)  Individuals who, as of the date hereof,
constitute the Board of Directors of IPALCO (the
"Incumbent Board") cease for any reason to constitute at
least a majority of the Board of Directors of IPALCO;
provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or
nomination for election by IPALCO's shareholders, was
approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any
such individual whose initial assumption of office occurs
as a result of either an actual or threatened election
contest (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) or
other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board
of Directors; or

     (3)  Approval by the shareholders of IPALCO of a
reorganization, merger or consolidation, in each case,
unless, following such reorganization, merger or
consolidation, (A) more than sixty percent (60%) of,
respectively, the then outstanding shares of common stock
of the corporation resulting from such reorganization,
merger or consolidation and the combined voting power of
the then outstanding voting securities of such
corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or
indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners,
respectively, of the Outstanding IPALCO Common Stock and
Outstanding IPALCO Voting Securities immediately prior to
such reorganization, merger or consolidation in
substantially the same proportions as their ownership,
immediately prior to such reorganization, merger or
consolidation, of the Outstanding IPALCO Stock and
Outstanding IPALCO Voting Securities, as the case may be,
(B) no Person (excluding IPALCO, any employee benefit
plan or related trust of IPALCO, IPL or such corporation
resulting from such reorganization, merger or
consolidation and any Person beneficially owning,
immediately prior to such reorganization, merger or
consolidation, directly or indirectly, twenty percent
(20%) or more of the Outstanding IPALCO Common Stock or
Outstanding IPALCO Voting Securities, as the case may be)
beneficially owns, directly or indirectly, twenty percent
(20%) or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from
such reorganization, merger or consolidation or the
combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally
in the election of directors and (C) at least a majority
of the members of the board of directors of the
corporation resulting from such reorganization, merger or
consolidation were members of the Incumbent Board at the
time of the execution of the initial agreement providing
for such reorganization, merger or consolidation;

     (4)  Approval by the shareholders of IPALCO of (A) a
complete liquidation or dissolution of IPALCO or (B) the
sale or other disposition of all or substantially all of
the assets of IPALCO, other than to a corporation, with
respect to which following such sale or other disposition
(i) more than sixty percent (60%) of, respectively, the
then outstanding shares of common stock of such
corporation and the combined voting power of the then
outstanding voting securities of such corporation
entitled to vote generally in the election of directors
is then beneficially owned, directly or indirectly, by
all or substantially all of the individuals and entities
who were the beneficial owners, respectively, of the
Outstanding IPALCO Common Stock and Outstanding IPALCO
Voting Securities immediately prior to such sale or other
disposition in substantially the same proportion as their
ownership, immediately prior to such sale or other
disposition, of the Outstanding IPALCO Common Stock and
Outstanding IPALCO Voting Securities, as the case may be,
(ii) no Person (excluding IPALCO and any employee benefit
plan or related trust of IPALCO, IPL or such corporation
and any Person beneficially owning, immediately prior to
such sale or other disposition, directly or indirectly,
twenty percent (20%) or more of the Outstanding IPALCO
Common Stock or Outstanding IPALCO Voting Securities, as
the case may be) beneficially owns, directly or
indirectly, twenty percent (20%) or more of,
respectively, the then outstanding shares of common stock
of such corporation and the combined voting power of the
then outstanding voting securities of such corporation
entitled to vote generally in the election of directors
and (iii) at least a majority of the members of the board
of directors of such corporation were members of the
Incumbent Board at the time of the execution of the
initial agreement or action of the Board of Directors
providing for such sale or other disposition of assets of
IPALCO; or

     (5)  The closing, as defined in the documents
relating to, or as evidenced by a certificate of any
state or federal governmental authority in connection
with, a transaction approval of which by the shareholders
of IPALCO would constitute an "acquisition of control"
under subsection (3) or (4) of this Section 2.A. of this
Plan.

Notwithstanding anything contained in this Plan to the
contrary, if a Participant's employment is terminated
before an "Acquisition of Control" as defined in this
subsection (A) and the Participant reasonably
demonstrates that such termination (i) was at the request
of a third party who has indicated an intention or taken
steps reasonably calculated to effect an Acquisition of
Control and who effectuates an "Acquisition of Control"
or (ii) otherwise occurred in connection with, or in
anticipation of, an Acquisition of Control which actually
occurs, then for all purposes of this Plan, the date of
an Acquisition of Control with respect to such
Participant shall mean the date immediately prior to the
date of such termination of the Participant's employment.

     B.   Administrative Guidelines:  The guidelines
established for each Program used to administer this Plan
as now in effect or as modified from time to time by the
Committee.

     C.   Base Salary:  The aggregate base salary paid to
a Participant in a Fiscal Year.

     D.   Board of Directors:  The Board of Directors of
IPALCO.

     E.   Committee:  The Compensation Committee of the
Board of Directors.

     F.   Company:  IPALCO and its subsidiaries, or
successors.

     G.   Cost Effective Service: The three (3) year
average, as applicable, of net income of the Company as a
percentage of the sum of the Company's total operating
revenues and other income.  The Company's net income,
total operating revenues and other income shall be as
reported in the Company's Uniform Statistical Report;
provided, however, that the total operating revenues and
other income shall include gross IPL revenues but, with
respect to the non-utility businesses, shall only include
their net income.  Cost Effective Service shall cease to
be a Performance Measure effective January 1, 1998.

     H.   Fiscal Year:  The calendar year.

     I.   IPALCO:  IPALCO Enterprises, Inc. or its
successor.

     J.   IPL:  Indianapolis Power & Light Company or its
successor.

     K.   Market Price:  For a Fiscal Year, the prices of
a company's common stock on the New York Stock Exchange,
or other appropriate exchange, if the company's common
stock is not traded on the New York Stock Exchange, as
published in The Wall Street Journal, at the close of
trading on the last trading date in such Fiscal Year.

     L.   Participant:  The employees of the Company
designated by the Committee to receive an award under the
Plan.  The employees eligible for designation include
officers of the Company and other employees who the
Committee expect to contribute to the strategic growth of
the Company.

     M.   Peer Group:  The entities included as part of
the S&P 500 Index.

     N.   Performance Incentive Award:  The incentive
award amount for a Performance Period established by the
Committee and expressed as a number of Shares determined
in relation to a Participant's average annual Base Salary
for the entire three (3) year period or, if lesser, the
portion of such three (3) year period that he was
employed; provided, however, that for purposes of making
the Share grants at the beginning of each Performance
Period, the Share grants shall be based on the
Participant's rate of base compensation in effect on the
first (1st) calendar day of the Performance Period;
provided, further, that the number of Shares awarded
shall be increased or decreased as soon as practicable
after the end of the Performance Period to reflect the
actual annual Base Salary paid to the Participant in such
Performance Period.  The maximum number of Shares
(including any additional Shares awarded in accordance
with Section 16 based on Performance Period Performance
Measure results) shall not exceed the lesser of:

          (1)  the annualized Base Salary of a
     Participant in effect on the first (1st) calendar
     day of the Performance Period divided by four (4),
     or

          (2)  the average annual Base Salary of the
     Participant during the Performance Period divided by
     five (5);

provided, however, that in applying these share limits,
dividends paid on restricted Shares shall be disregarded.
Notwithstanding anything contained in this Paragraph to
the contrary, the Committee may establish the Performance
Incentive Awards for various groups of Participants by
job title or officer class.  To the extent the Committee
establishes Performance Incentive Awards by job title or
officer groups and a Participant's job title or officer
group provides for a lower or higher number of Shares as
the Participant's Performance Incentive Award, the
Participant's Performance Incentive Award shall be
automatically adjusted at the end of the Performance
Period to reflect the different number of Shares
applicable for such new job title or officer class based
on the number of full calendar months remaining in the
Performance Period at the effective date on which such
Participant's job title or officer class is modified.
For example, if a Participant's job title is changed to a
title which results in an increase of the number of
Shares to be included as the Participant's Performance
Incentive Award from twenty (20) to twenty-five (25)
Shares with eighteen (18) full calendar months remaining
in the Performance Period at the time of the change, the
Participant shall have the number of Shares included as
his Performance Incentive Award adjusted at the end of
the Performance Period to twenty-two and one-half (22
1/2).

     O.   Performance Incentive Award Schedule: The
schedule, attached hereto as Appendix A, containing the
ranking of Total Return to Shareholders versus the Peer
Group, and a percent of the Performance Incentive Award
for each of the levels of achievement listed.

     P.   Performance Measures:  The measures used in
determining the amount of any Program Incentive Payment.
Effective January 1, 1998, Total Return to Shareholders
shall be the only Performance Measure.

     Q.   Performance Period:  A period of three (3)
consecutive Fiscal Years, commencing on the first (1st)
day of the first (1st) Fiscal Year of a Program, over
which the Performance Measures are to be taken.  A new
Performance Period shall begin on January 1, 2001 and
January 1, 2004. Performance Periods shall not overlap.

     R.   Period of Restriction:  The period during which
the transfer of shares are restricted pursuant to the
Plan.

     S.   Plan:  This Long-Term Performance and
Restricted Stock Incentive Plan, as now in effect and as
amended from time to time.

     T.   President:  The President of IPALCO.

     U.   Program:  One (1) Performance Period with its
respective Performance Incentive Awards, Performance
Incentive Award Schedule, and Participants.

     V.   Shares:  Shares of common stock of IPALCO.

     W.   Total Return to Shareholders:  The average
return on investment to shareholders from stock price
appreciation and dividends paid during each Fiscal Year
of the Performance Period.


                        SECTION 3
                            
                     ADMINISTRATION

     The Plan shall be administered by the Committee.  No
member of the Committee shall be eligible, at any time
when he or she is such a member or within one (1) year
prior to his or her appointment to the Committee, to be
granted Shares under the Plan; provided, however, that
notwithstanding the preceding clause of this sentence, a
member of the Committee shall not be precluded from
participating in, the IPALCO Enterprises, Inc. 1991
Directors' Stock Option Plan. The decision of a majority
of the members of the Committee shall constitute the
decision of the Committee, and the Committee may act
either at a meeting at which a majority of its members
are present or by a written consent signed by all of its
members.  The Committee may appoint individuals to act on
its behalf in the administration of the Plan; provided,
however, that except as otherwise provided by the Plan,
the Committee shall have the sole, final and conclusive
authority to administer, construe and interpret the Plan.

                        SECTION 4
                            
          NUMBER OF SHARES SUBJECT TO THE PLAN

     The total number of Shares that may be granted under
the Plan may not exceed One Million and Five Hundred
Thousand (1,500,000) Shares subject to adjustment as
provided in Section 6 hereof.  Those Shares may consist,
in whole or in part, of authorized but unissued Shares or
Shares reacquired by IPALCO, including Shares purchased
in the open market, not reserved for any other purpose;
provided, however, that the Shares granted hereunder
shall be authorized and unissued unless the Committee, in
its sole discretion, takes action to utilize open market
Shares.


                        SECTION 5
                            
                      UNUSED SHARES

     In the event any Shares subject to grants made under
the Plan are forfeited pursuant to Section 16 hereof,
such forfeited Shares shall again become available for
issuance under the Plan.


                        SECTION 6
                            
              ADJUSTMENTS IN CAPITALIZATION

     In the event of any change in the outstanding Shares
by reason of a stock dividend, stock split,
recapitalization, merger, consolidation, combination,
stock rights plan or exchange of shares or other similar
corporate change, the aggregate number of Shares issuable
under the Plan shall be appropriately adjusted by the
Committee, whose determination shall be conclusive.  In
such event, the Committee shall also have discretion to
make appropriate adjustments in the number and type of
shares subject to restricted Share grants then
outstanding under the Plan pursuant to the terms of such
grants or otherwise.



                        SECTION 7
                            
                      PARTICIPATION

     A.   Prior to the commencement of each Fiscal Year,
Participants shall be recommended by the President and
approved by the Committee. Participants are to be those
key employees who, in the opinion of the Committee, are
in a position to make a significant contribution to the
long-term success of the Company.  Participants for each
Program shall be notified of their participation prior to
the beginning of the first (1st) Fiscal Year of a
Program. Participation in one (1) Program does not
guarantee participation in subsequent Programs.

     B.   The Committee, in its sole discretion, may
select additional Participants to participate in the
final one (1) or two (2) Fiscal Years of a Program.  The
Committee approval shall include the establishment of the
Performance Incentive Award for any new Participant.  If
a Participant is added during a Program, the first (1st)
Fiscal Year of his participation shall be substituted for
the first (1st) Fiscal Year of the Performance Period for
purposes of determining the number of Shares awarded
under Section 9.

     C.   The Committee, in its sole discretion, may
discontinue the participation of a Participant for the
final one (1) or two (2) Fiscal Years of a Program.  If a
Participant's participation is discontinued during a
Program, he shall forfeit, as soon as practicable after
the effective date of his participation termination, two-
thirds (2/3) of the Shares granted to him for such
Program if his participation is discontinued for the
final two (2) Fiscal Years of the Program or one-third
(1/3) of the Shares granted to him for such Program if
his participation is discontinued for the final Fiscal
Year of the Program.  At the end of a Program, the
reduced share grant shall be adjusted in accordance with
Section 16.


                        SECTION 8
                            
           PERFORMANCE INCENTIVE AWARD GRANTS

     A.   Each Program shall be subject to the
limitations and terms provided in the Plan.  A new
Program shall commence on the third (3rd) annual
anniversary date of the preceding Program.  These
Programs shall be of three (3) year duration.

     B.   The Committee shall determine for each
Participant his Performance Incentive Award for each
Program.  Only one (1) grant shall be made to each
Participant during each Program.  Participants shall
generally be notified of their individual Performance
Incentive Award before the beginning of each Program.


                        SECTION 9
                            
                     GRANT OF SHARES

     Concurrently with the beginning of each Performance
Period and subject to the limits established by Section
2.N., the Committee shall cause the Secretary of IPALCO
to issue to each Participant a number of restricted
Shares based on the Participant's Performance Incentive
Award for such Performance Period.  Notwithstanding
anything contained herein to the contrary, the Share
grants for the Performance Period beginning on January 1,
1998 are conditioned upon the amended and restated Plan
being approved by IPALCO's shareholders in accordance
with Section 28 hereof.  At the end of each Performance
Period, the Share grants shall be adjusted, upward or
downward, based on the Participant's actual Base Salary
and, if applicable, change in job title or officer class.


                       SECTION 10
                            
          ESTABLISHMENT OF PERFORMANCE MEASURES

     A.   The Performance Measure to be used is IPALCO's
ranking versus the Peer Group on Total Return to
Shareholders.

     B.   A Performance Incentive Award Schedule shall
contain various levels of performance and corresponding
Performance Incentive Award values.

     C.   If the Company disposes of a significant part
of the business of IPL, or acquires through purchase,
merger, or otherwise the capital assets of any other
company, the Committee may, in its sole and absolute
discretion, adjust the Total Return to Shareholder
targets of a Performance Incentive Award Schedule for a
Performance Period so as to reflect the financial impact
of the acquisition or disposition.


                       SECTION 11
                            
          DETERMINATION OF PERFORMANCE RESULTS

     A.   Upon the completion of a Performance Period,
the Shares awarded for each Participant shall be adjusted
based upon the Performance Incentive Award Schedule.

     B.   For each Performance Period, the Total Return
to Shareholders of IPALCO shall be compared with the
Total Return to Shareholders of the members of the Peer
Group.  Total Return to Shareholders for IPALCO and each
member of the Peer Group shall be measured by the
following formula (with appropriate adjustments for
changes in capital structure due to stock dividends,
stock splits, recapitalization, mergers, or other events
having significant distorting effect on IPALCO or on any
member of the Peer Group):

          1.   For each Fiscal Year of the Performance
     Period:

               (a)  Subtract the Market Price of each
          company's common stock for the prior Fiscal
          Year from the Market Price of the company's
          common stock for the current Fiscal Year.

               (b)  Add to the result obtained in Step
          (a) the amount of all cash dividends paid by
          the company with respect to its common stock
          during the current Fiscal Year.

               (c)  Divide the result obtained in Step
          (b) by the Market Price of the company's common
          stock for the prior Fiscal Year.

          2.   The calculated values from Step 1 for the
     Fiscal Years in the Performance Period shall then be
     converted to an annual average for the Performance
     Period.

     IPALCO's ranking shall be determined by its
performance ranking versus the Peer Group.


                       SECTION 12
                            
             RESTRICTIONS ON TRANSFERABILITY

     Until the lifting of the restrictions on the Shares
granted hereunder, no Shares granted under the Plan may
be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated, otherwise than by will or by
the laws of descent and distribution until the
termination of the applicable Period of Restriction.


                       SECTION 13
                            
                   CERTIFICATE LEGEND

     Each certificate representing restricted Shares
granted pursuant to this Plan shall bear the following
legend:

          "The sale or other transfer of the shares
     represented by this certificate, whether voluntary,
     involuntary, or by operation of law, is subject to
     certain restrictions on transfer set forth in the
     IPALCO Enterprises, Inc. Long-Term Performance and
     Restricted Stock Plan and rules of administration
     adopted pursuant to such Plan.  A copy of the
     Restricted Stock Plan and the rules of such Plan may
     be obtained from the Secretary of IPALCO
     Enterprises, Inc."

Once the restricted Shares are released from the
restrictions, the Participant shall be entitled to have
the legend required by this Section 13 removed from such
Share certificate(s).


                       SECTION 14
                            
                      VOTING RIGHTS

     During the Period of Restriction, Participants
holding restricted Shares granted hereunder may exercise
full voting rights with respect to those Shares.

                       SECTION 15
                            
            DIVIDENDS AND OTHER DISTRIBUTIONS

     During the Period of Restriction, Participants
holding restricted Shares granted hereunder shall be
entitled to receive all dividends and other distributions
paid with respect to those Shares while they are so held.
If any such dividends or distributions are paid in
Shares, such Shares shall be subject to the same
restrictions on transferability as the restricted Shares
with respect to which they were paid.


                       SECTION 16
                            
                 LIFTING OF RESTRICTIONS

     The restricted Share grants under the Plan shall be
subject to restrictions as to transferability and shall
also be subject to forfeiture provisions.  The lifting of
the transferability restrictions and the forfeitability
provisions shall be dependent on the Performance Measures
during each Performance Period and on the continued
employment of the Participant during the Period of
Restriction.
     
     As soon as practicable after the end of a
Performance Period, the Committee shall determine the
adjustments, if any, that are required to be made to the
Share grants for the Performance Period based on actual
results of IPALCO under the Performance Measures for such
Performance Period. This evaluation shall be completed no
later than the July 1 immediately following the end of
the Performance Period or such earlier date established
by the Committee after it completes the required grant
adjustments for the Performance Period (the July 1 or
earlier date established by the Committee shall for each
Performance Period be referred to as the "Initial Vesting
Date"). After the adjustments are made in the Share
grants consistent with the Performance Incentive Award
Schedule for the Performance Period and after
effectuating the adjustments described above rounding up
or down any fractional share to the nearest whole share,
the restrictions on the Shares held by a Participant at
the end of the Performance Period (after adjusted as
described above) shall be lifted on one-third (1/3) of
the Shares as of the Initial Vesting Date for the
Performance Period and shall be lifted in additional one-
third (1/3) increments on the first business day of each
of the next two calendar years immediately following the
Initial Vesting Date for the Performance Period;
provided, however, that except as provided in Section 17,
18 or 19 hereof:
     
          (1)  the restriction shall be lifted on an
     Initial Vesting Date or, if applicable for the other
     one-third (1/3) increments, the first business day
     in January only if the Participant is still employed
     by the Company on such date, and

          (2)  if a Participant ceases to be employed by
     the Company before the restrictions lapse on the
     Shares held by him, the Shares still subject to
     restrictions shall be immediately forfeited.

     Notwithstanding anything contained in this Plan to
the contrary, the Committee shall have the complete
discretion to delay the lifting of the restrictions on
Shares under this Plan (including restrictions that lapse
under Sections 17 and 18) for a Participant to the extent
it determines such delay is necessary to avoid the non-
deductibility of the awards under Section 162(m) of the
Internal Revenue Code of 1986, as amended; provided,
however, that any decision to delay the lifting of the
restrictions shall be required to be made and
communicated to the affected Participant in writing
before the beginning of the calendar year during which
the restrictions would have been lifted but for the
delay.


                       SECTION 17
                            
           EFFECT OF PARTICIPANT'S RETIREMENT

     Except as provided in the next paragraph, for
Performance Periods beginning before January 1, 1998 and
notwithstanding anything contained in Section 16 hereof
to the contrary, if a Participant attains age 65 before
his employment with the Company is terminated and before
the end of a Performance Period but after completing at
least one (1) full Fiscal Year of employment during such
Performance Period, the remaining restrictions on any
Shares attributable to such Performance Period held by
the Participant (after the number of Shares are adjusted
pursuant to the Performance Measure adjustments described
in Section 16 and Base Salary adjustment described in
Section 2.N. and Section 9 hereof are completed for such
Performance Period) shall lapse on the last calendar day
of such Performance Period; provided, however, that if a
Participant's employment with the Company is terminated,
voluntarily or involuntarily, before his completion of at
least two (2) Fiscal Years of employment, the Participant
shall only be entitled to two-thirds (2/3) of the
restricted Shares granted to him for such Performance
Period (after the Performance Measure adjustments
described in Section 16 and Base Salary adjustment
described in Section 2.N. and Section 9 hereof are
completed for such Performance Period), rounding up or
down any fractional Share to the nearest whole Share, and
the remaining one-third (1/3) of the Shares shall be
forfeited as soon as practicable after the end of the
Performance Period.

     Notwithstanding anything contained in Section 16
hereof to the contrary but only to the extent expressly
approved by the Committee, the provisions contained in
the preceding paragraph of this Section 17 shall also
apply, in whole or in part, with respect to a Participant
whose employment is terminated after meeting the
requirements for early or normal retirement under the
Employees' Retirement Plan of Indianapolis Power & Light
Company (or any successor plan) to the extent the
Committee waives the continued employment requirements;
provided, however, that under no circumstances shall the
waiver affect the Performance Measures adjustments
provided in Section 11; provided, further, that until
such time, if ever, that the Committee waives the
restrictions, the retired Participant shall cease to have
voting or dividend rights with respect to the restricted
Shares.


                       SECTION 18
                            
       EFFECT OF TERMINATION OF EMPLOYMENT DUE TO
                   DEATH OR DISABILITY

     Notwithstanding anything contained in Section 16
hereof to the contrary, if a Participant's employment
with the Company is terminated by reason of his death or
total and permanent disability (as such term is defined
in the Employees' Retirement Plan of Indianapolis Power &
Light Company or in any successor retirement plan
thereto) that occurs after the end of the Performance
Period but before the restrictions lapse on the Shares
granted for such Performance Period, the remaining
restrictions on any Shares attributable to such
Performance Period held by the Participant (after the
Performance Measure adjustments described in Section 16
hereof are completed for such Performance Period) shall
immediately lapse on the date of his death or total and
permanent disability, whichever is applicable.

     Notwithstanding anything contained in Section 16
hereof to the contrary, if a Participant's employment
with the Company is terminated by reason of his death or
total and permanent disability that occurs before the end
of the Performance Period, the Participant shall be
entitled to a pro rata number of Shares (as determined
below) granted to him at the beginning of the Performance
Period (as adjusted for Performance Periods to reflect
the actual Base Salary paid to such Participant during
the Performance Period that he was employed), no further
adjustments shall be effected with respect to such
Shares, and such Shares shall be fully vested and
transferable by such Participant or, if deceased, his
legal representative.  The number of Shares that the
disabled or deceased Participant is entitled shall be
determined by multiplying the number of Shares granted to
the Participant at the beginning of the Performance
Period or, if later, at the date as of which his
participation in the Performance Period commenced (as
adjusted to reflect the actual Base Salary paid to such
Participant during the Performance Period) by a fraction,
the numerator of which is the number of full calendar
months of the Performance Period during which he was a
Participant and employed by the Company and the
denominator of which is thirty-six (36) or, if the
Participant became a Participant after the beginning of a
Performance Period, the number of months remaining in the
Performance Period beginning with the month during which
his participation commenced.


                       SECTION 19
                            
                 ACQUISITION OF CONTROL

     In the event that there is an Acquisition of Control
and notwithstanding anything contained in Section 16 to
the contrary, the lifting of the restrictions based on
continued employment on the restricted Shares held by a
Participant who was employed by the Company immediately
preceding the date of the Acquisition of Control shall
immediately occur.  In addition, the Performance Period
during which the Acquisition of Control occurs shall be
deemed terminated at the date of the Acquisition of
Control, IPALCO performance for such Performance Period
shall be measured as of the date of the Acquisition of
Control, and the Committee shall effect the adjustments
required by Section 16 as soon as practicable after the
Acquisition of Control.  The restrictions on all Shares
provided to the Participants after completing the
adjustments described above shall be lifted immediately.
     

                       SECTION 20
                            
                 ELECTIVE SALE OF SHARES

     Participants shall also be permitted to cash-in up
to fifty percent (50%) of the Shares (after the
adjustments required by Section 16 are completed) that
cease to be subject to the continued employment
requirements under Section 16 (the "Eligible Shares") by
following the procedures established by the Committee.


                       SECTION 21
                            
                 NO EMPLOYMENT CONTRACT

     The Plan is not and is not intended to be an
employment contract with respect to any of the
Participants, and IPALCO's and IPL's rights to continue
or to terminate the employment relationship of any
Participant shall not be affected by the Plan.


                       SECTION 22
                            
                AMENDMENT AND TERMINATION

     The Board may at any time amend, modify, alter, or
terminate the Plan; provided, however, that without the
approval of the IPALCO shareholders:

     (a)  the number of Shares which may be reserved for
issuance under the Plan may not be increased except as
provided in Section 6 hereof; and
     
     (b)  the class of employees to whom grants may be
granted under the Plan shall not be modified materially;
provided, further, that except for the modifications
expressly permitted by the last paragraph of Section 16
hereof, any amendment, modification, alteration or
termination to the Plan which increases the restrictions
as to transferability or forfeitability of any restricted
Shares granted hereunder to a Participant, including any
Performance Measure adjustments which occur at the end of
a Performance Period, shall not become effective until
the first (1st) Performance Period following the
Performance Period during which such amendment,
modification, alteration or termination to the Plan is
adopted without the written consent of the majority of
the Participants adversely affected by the change.

                       SECTION 23
                            
                     INDEMNIFICATION

     Each person who is or shall have been a member of
the Board of Directors or the Committee shall be
indemnified and held harmless by IPALCO against and from
any loss, cost, liability, or expense that may be imposed
upon or reasonably incurred by him in connection with or
resulting from any claim, action, suit, or proceeding to
which he may be a party or in which he may be involved by
reason of any action taken or failure to act under the
Plan and against and from any and all amounts paid by him
in settlement thereof with IPALCO's approval, or paid by
him in satisfaction of a judgment in any such action,
suit or proceeding against him, provided he shall give
IPALCO an opportunity, at its own expense, to handle and
defend the same before he undertakes to handle and defend
it on his behalf.  The foregoing right of indemnification
shall not be exclusive of any other rights of
indemnification to which such persons may be entitled
under the IPALCO Articles of Incorporation or Code of By-
Laws, as a matter of law, or otherwise, or any power that
IPALCO may have to indemnify them or hold them harmless.


                       SECTION 24
                            
                      GOVERNING LAW

     The Plan, and all grants and other documents
delivered hereunder, shall be construed in accordance
with and governed by the laws of Indiana.


                       SECTION 25
                            
                    EXPENSES OF PLAN

     The expenses of administering the Plan shall be
borne by IPALCO.


                       SECTION 26
                            
                       SUCCESSORS

     The Plan shall be binding upon the successors and
assigns of the participating Employers.

                       SECTION 27
                            
                     TAX WITHHOLDING

     IPALCO or IPL, as appropriate, shall have the right
to require the Participant or other person receiving
Shares to pay to IPALCO or IPL the amount of any federal,
state or local taxes which IPALCO or IPL are required to
withhold with respect to such Shares.  If permitted by
the Committee and pursuant to rules established by the
Committee, a Participant may make a written election to
have Shares having an aggregate fair market value, as
determined by the Committee, sufficient to satisfy the
applicable withholding taxes, withheld from the Shares
otherwise to be received at the end of the Period of
Restriction.


                       SECTION 28

           EFFECTIVE DATE AND DURATION OF PLAN

     This amended and restated Plan shall be effective
January 1, 1998; provided, however, that the granting of
Shares are conditioned upon the approval of the Plan by
the holders of a majority of the Shares present, or
represented, and entitled to vote at IPALCO's 1998 annual
shareholder meeting.  Except for the provisions set forth
in Section 16 which are also applicable for the January
1, 1995 grants, the Performance Periods beginning before
January 1, 1998 shall be governed by the provisions of
the Plan in effect before January 1, 1998.
                                               APPENDIX A


          PERFORMANCE INCENTIVE AWARD SCHEDULE

              AWARD AS A PERCENT OF TARGET

S&P 500 Index Ranking: 3 year cumulative Total Return to
                    Shareholder (TRS)





                    IPALCO         Award
                    Ranking: TRS   Percentage
                    
                       1-31        400%
                      32-62        375%
                      63-93        350%
                     94-125        325%
                    126-156        300%
                    157-187        275%
                    188-218        250%
                    219-250        225%
                    251-281        200%
                    282-312        175%
                    313-343        150%
                    344-375        125%
                    376-406        100%
                    407-437         75%
                    438-468         50%
                    469-500          0%