Exhibit 99-o
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1993
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
Commission File Number 1-9941
PSI RESOURCES, INC.
EMPLOYEE STOCK PURCHASE AND SAVINGS PLAN
(Full title of the plan)
PSI RESOURCES, INC.
(Name of issuer of the securities held pursuant to the plan)
1000 East Main Street
Plainfield, Indiana 46168
(Address of principal executive offices)
FINANCIAL STATEMENTS AND EXHIBITS
Page No.
(a) Financial Statements
Report of Independent Public Accountants 3
Statements of Financial Condition as of
December 31, 1993 and 1992 4
Statements of Income and Other Changes in Plan Equity
for the Years Ended December 31, 1993, 1992, and 1991 5
Notes to Financial Statements 6-8
Financial Statement Schedules:
Schedules I, II, and III are not applicable
(b) Exhibits
1) Consent of Independent Public Accountants
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Plan Administrator of
the PSI Resources, Inc. Employee
Stock Purchase and Savings Plan:
We have audited the accompanying statements of financial condition of the PSI
RESOURCES, INC. EMPLOYEE STOCK PURCHASE AND SAVINGS PLAN as of December 31,
1993 and 1992, and the statements of income and other changes in plan equity
for each of the three years in the period ended December 31, 1993. These
financial statements are the responsibility of the Plan Administrator. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by the Plan Administrator, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Plan as of December 31,
1993 and 1992, and the results of its operations and changes in plan equity
for each of the three years in the period ended December 31, 1993, in
conformity with generally accepted accounting principles.
ARTHUR ANDERSEN & CO.
Indianapolis, Indiana,
April 22, 1994
PSI RESOURCES, INC.
EMPLOYEE STOCK PURCHASE AND SAVINGS PLAN
STATEMENTS OF FINANCIAL CONDITION
December 31
1993 1992
Cash (Purchase Savings Accounts) $1 691 098 $474 872
Plan Equity $1 691 098 $474 872
The accompanying notes are an integral part of these financial statements.
PSI RESOURCES, INC.
EMPLOYEE STOCK PURCHASE AND SAVINGS PLAN
STATEMENTS OF INCOME AND OTHER CHANGES IN PLAN EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992, AND 1991
1993 1992 1991
Interest income (Purchase
Savings Accounts) $ 29 807 $ 71 697 $ 96 618
Contributions from participants
(Note C) 1 245 118 1 462 710 1 803 760
Purchases of PSI Resources, Inc.
common stock and
terminations (Note E) (58 699) (3 741 897) (261 365)
Income and other changes in Plan
equity for the period $1 216 226 $(2 207 490) $1 639 013
Plan equity at beginning of the
period 474 872 2 682 362 1 043 349
Plan equity at end of the period $1 691 098 $ 474 872 $2 682 362
The accompanying notes are an integral part of these financial statements.
PSI RESOURCES, INC.
EMPLOYEE STOCK PURCHASE AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
Note A - Plan Description
PSI Resources, Inc.'s (Resources) Employee Stock Purchase and Savings
Plan (Plan) is an employee stock purchase plan, established in
1990, in which eligible employees of Resources and its subsidiaries
may be granted stock options within the meaning of Section 423 of the
Internal Revenue Code of 1986 (Code), as amended, to purchase
Resources' common stock (Common Stock). The administrative expenses
of the Plan are paid by PSI Energy, Inc. (Energy), Resources'
principal subsidiary. Further details of the Plan are provided in
the Plan prospectus which has been distributed to all Plan
participants.
Note B - Accounting Principles
The accounts of the Plan are maintained on an accrual basis.
Note C - Investment Program
Under the Plan, funds withheld from an employee's compensation during
a 26 month offering period are deposited in an interest-bearing
savings account (Purchase Savings Account) with NBD Bank, N.A.
At the end of the offering period, each employee specifies the
portion of the Purchase Savings Account, including interest, to be
applied to the purchase of Common Stock at the price established on
the first day of the offering period. Funds not used to purchase
Common Stock are returned to the employee.
Under the Plan, the purchase price of each share of Common Stock is
equal to the fair market value of a share of Common Stock on the
first date of the offering period, less five percent. The fair
market value of a share of Common Stock is the closing price of the
Common Stock as reported in the "New York Stock Exchange Composite
Transactions" published in The Wall Street Journal for such date or,
if no trading occurs on such date, the last date prior to the date on
which trading occurred.
The initial offering under the Plan allowed eligible employees the
option to purchase Common Stock at $16.506 per share on August 31,
1992. The second offering under the Plan allows for the purchase of
Common Stock at $18.05 per share on October 31, 1994. With respect
to the second offering, eligible employees purchased 71,188 shares of
Common Stock at $18.05 per share on February 2, 1994. This
accelerated opportunity was a result of the approval of the merger
with The Cincinnati Gas & Electric Company (CG&E) by Resources'
shareholders in November 1993 (see Note F beginning on page 7).
The number of employees enrolled in the Plan at December 31, 1993,
1992, and 1991 were 721, 774, and 1,066, respectively.
Note D - Income Tax Status
The Plan is an employee stock purchase plan under Section 423 of the
Code. Amounts withheld from an employee's compensation for deposit
to the employee's Purchase Savings Account are from after tax
dollars. Interest on the Purchase Savings Account is taxable in the
year earned. Dividends paid after the shares are purchased are
taxable in the year received.
Gains or losses on sales of Common Stock purchased pursuant to the
Plan must be reported to the Internal Revenue Service by the
participant in the year of sale. Gains and losses may be
characterized as ordinary or capital, as described below.
Capital losses are available for offset against any capital gains,
and in addition, any excess capital losses, whether long- or short-
term, are allowed to offset up to $3,000 of ordinary income. Excess
capital losses can be carried over to offset income in future years,
subject to the same limitations.
Section 423 of the Code imposes a holding period of two (2) years
from the commencement of the offering period and one (1) year from
the date of purchase. If the holding period is met, then the
difference between the purchase price and the lesser of the fair
market value of the Common Stock (i) on the first day of the offering
period, or (ii) at the date of sale, is taxed as ordinary income in
the year the Common Stock is sold. Any remaining gain is taxed as
long-term capital gain. If the Common Stock is sold for less than
the purchase price, the employee has a long-term capital loss.
If the holding period is not met, then the difference between the
purchase price and the fair market value at the time of purchase is
taxed as ordinary income. The difference between the selling price
and the purchase price plus the amount of ordinary income is a
capital gain or loss.
Note E - Purchases of Common Stock and Terminations
An employee may at any time, before the end of the offering period,
terminate participation in the Plan. Upon termination, all funds,
including interest, in the employee's Purchase Savings Account are
returned to the employee. Requests for termination received but not
yet processed by the Plan have not been included in the financial
statements and total $2,826 in 1993, $629 in 1992, and $12,064 in
1991.
If an employee's employment is terminated, all funds, including
interest, in the employee's Purchase Savings Account will be returned
to the employee. If termination is due to retirement, the employee
may purchase all or fewer than all of the shares of Common Stock
which may be purchased with the funds then on deposit in the
employee's Purchase Savings Account. Funds not applied to purchase
Common Stock will be returned to the employee.
If termination is due to death, the employee's estate or beneficiary
may purchase all or fewer than all of the shares of Common Stock
which may be purchased with the funds then on deposit in the deceased
employee's Purchase Savings Account. Funds not applied to purchase
Common Stock will be paid to the deceased employee's estate or
beneficiary.
Note F - Change in Control
Resources is a party to a Master Trust Agreement whereby all
accrued benefit payments or awards under certain employee benefit
plans are to be funded in the event of a "potential change in
control" (as defined in the Master Trust Agreement). The Master
Trust Agreement provides for the payment of amounts which may become
due under such plans, subject only to claims of general creditors of
Resources in the event Resources were to become bankrupt or
insolvent. As of December 31, 1993, Resources had issued to the
trustee of its Master Trust Agreement 69,520 shares of Common Stock
for all employees participating in the Plan. This issuance was
required as a result of the announcement of the merger with CG&E
(see Note G below).
In the event of a "change in control" of Resources (as
defined in the Plan), each employee has the right within three (3)
months from the change in control or the "purchase date" (as defined
in the Plan), whichever is earlier, to elect to purchase all, or
fewer, of the shares the employee has the right to purchase.
Note G - Pending Merger with CG&E
Resources, Energy, and CG&E entered into an Agreement and Plan of
Reorganization dated as of December 11, 1992, which was subsequently
amended and restated on July 2, 1993, and as of September 10, 1993
(as amended and restated, the "Merger Agreement"). Under the Merger
Agreement, Resources will be merged with and into a newly formed
corporation named CINergy Corp. (CINergy) and a subsidiary of CINergy
will be merged with and into CG&E (collectively referred to as the
"Mergers"). Pursuant to the terms of the Merger Agreement, CINergy
will adopt a replacement plan (Replacement Plan) substantially in the
form of the Plan, with such changes therein that shall be required to
extend the requirements for eligibility to participate in such plan
to eligible employees of CG&E and any of its subsidiaries,
together with such other and further changes that may be deemed
necessary or appropriate by CINergy. CINergy shall reserve for
issuance 2,000,000 shares of CINergy common stock under its
Replacement Plan. The Replacement Plan shall amend and supersede
the Plan, and the Plan shall, as of the effective date of the
Mergers, be merged with and into the Replacement Plan. With respect
to the second offering under the Plan, if the Mergers are
consummated prior to October 31, 1994, the exchange ratio provided
for in the Merger Agreement will be applied to the previously
established price of $18.05 per share, and eligible Energy employees
will have the option to purchase CINergy common stock at the price
computed from this exchange ratio.
EXHIBIT 1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation of our report included in this Form 11-K into PSI Resources,
Inc.'s previously filed Registration Statement File Nos. 33-28820, 33-29407,
33-34456, 33-56882, and 33-51255.
ARTHUR ANDERSEN & CO.
Indianapolis, Indiana,
April 28, 1994.