Iei's Directors Restricted Stock Plan 5/1/97

SECOND AMENDMENT TO AND COMPLETE RESTATEMENT OF
THE INDIANA ENERGY, INC.
DIRECTORS RESTRICTED STOCK PLAN
(EFFECTIVE MAY 1, 1997)


Pursuant to rights reserved under Section 17 of the Indiana Energy, Inc. Directors' Restricted Stock Plan (the "Plan"), the Board of Directors of Indiana Energy, Inc. hereby amends and completely restates the Plan, effective May 1, 1997, to provide, in its entirety, as follows:


Section 1. Establishment. Indiana Energy, Inc. and Indiana Gas Company, Inc. established this restricted stock plan for their respective outside directors, as described herein, which shall be known as the Indiana Energy, Inc. Directors' Restricted Stock Plan.


Section 2. Definitions. Whenever used herein, the following terms shall have the meanings set forth below:


(a) "Attendance Fees" mean any remuneration paid to a
Director from the Participating Companies for attending
Board meetings and meetings of the Board committees.


(b) "Board" means the Board of Directors of Energy, Indiana
Gas or any other Participating Company, whichever is
applicable.


(c) "Change in 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 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 a Change in Control: (i) any
acquisition directly from Energy (excluding an
acquisition by virtue of the exercise of a
conversion privilege), (ii) any acquisition by
Energy, (iii) any acquisition by any employee
benefit plan (or related trust) sponsored or
maintained by Energy, Indiana Gas Company, Inc. or
any corporation controlled by Energy 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 are satisfied;


(2) Individuals who, as of April 25, 1997, constitute
the Board of Directors of Energy (the "Incumbent
Energy Board") cease for any reason to constitute
at least a majority of the Board of Directors of
Energy (the "Energy 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 Energy
Board shall be considered as though such
individual were a member of the Incumbent Energy
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 Energy
Board; or


(3) 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
Company, Inc. 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 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 Energy Board at the time of the
execution of the initial agreement providing for
such reorganization, merger or consolidation;


(4) 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 (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 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, (ii)
no Person (excluding Energy and any employee
benefit plan or related trust of Energy, Indiana
Gas Company, Inc. 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 ...