AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this "Agreement")
made and entered into as of the 24th day of October, 1994, by and
among The Cincinnati Gas & Electric Company ("CG&E"), an Ohio
corporation, CINergy Corp. ("Old CINergy"), an Ohio corporation,
and CINergy Corp. ("CINergy"), a Delaware corporation, all having
their principal place of business located at 139 East Fourth
Street, Cincinnati, Ohio; PSI Resources, Inc. ("PSI Resources"),
an Indiana corporation and PSI Energy, Inc. ("PSI Energy"), an
Indiana corporation, both having their principal place of
business located at 1000 East Main Street, Plainfield, Indiana;
and Jackson H. Randolph (the "Executive") (Capitalized terms used
but not defined herein shall have the meanings ascribed to them
in the Amended and Restated Agreement and Plan of Reorganization
dated as of December 11, 1992, as further amended and restated to
date (the "Merger Agreement") by and among CG&E, PSI Resources,
PSI Energy, CINergy and CINergy Sub, Inc. ("CINergy Sub"), an
Ohio corporation);
WHEREAS, the Executive is currently serving as Chairman of
the Board, President and Chief Executive Officer of CG&E;
WHEREAS, CG&E, PSI Resources, PSI Energy and Old CINergy
entered into an employment agreement with the Executive dated
December 11, 1992 (the "1992 Employment Agreement") pursuant to
which Executive would have been employed by Old CINergy effective
upon the merger of each of CG&E, PSI Resources and PSI Energy
into Old CINergy pursuant to the Agreement and Plan of
Reorganization dated as of December 11, 1992 (the "Original
Merger Agreement");
WHEREAS, the Merger Agreement provides that, instead of
CG&E, PSI Resources and PSI Energy being merged into Old CINergy
as contemplated by the Original Merger Agreement, PSI will be
merged into CINergy and CINergy Sub will be merged into CG&E, so
that CINergy will become a holding company for CG&E and PSI
Energy; and
WHEREAS, the parties hereto desire to amend and restate the
1992 Employment Agreement to provide for Executive's employment
by CINergy as of the Effective Date, as hereinafter defined:
NOW, THEREFORE, IN CONSIDERATION of the mutual premises,
covenants and agreements set forth below, it is hereby agreed as
follows:
1. Employment and Term.
(a) CINergy agrees to employ the Executive, and the
Executive agrees to be employed by CINergy in accordance with the
terms and provisions of this Agreement for the period set forth
below (the "Employment Period").
(b) The Employment Period shall commence as of the
consummation date (the "Effective Date") of the mergers (the
"Mergers") pursuant to the terms of the Merger Agreement and
shall continue until the close of business on November 30, 2000.
2. Duties and Powers of Executive.
(a) Position; Location. From the Effective Date until
November 30, 1995, the Executive shall serve as the Chief
Executive Officer of CINergy. During the Employment Period, the
Executive shall have such authority, duties and responsibilities
as are set forth in Annex A hereto. Such titles, authority,
duties and responsibilities may be changed from time to time only
by mutual written agreement of the parties. During the
Employment Period, the Executive shall, without compensation
other than that herein provided, also serve and continue to
serve, if and when elected and reelected, as the Chairman of the
Board of Directors of CINergy (the "Board"). The Executive's
services shall be performed at the location where the Executive
is currently employed.
(b) Commencing on the Effective Date until November 30,
2000, CINergy shall annually in connection with the annual
meeting of stockholders of CINergy cause the Executive to be
nominated as Chairman of the Board.
3. Compensation.
The Executive shall receive the following compensation for
his services hereunder;
(a) Salary. The Executive's annual base salary ("Annual
Base Salary"), payable not less often than biweekly, shall be at
the annual rate of not less than the greater of $425,000 and the
amount in effect as of the day before the Effective Date. The
Board may from time to time direct such upward adjustments in
Annual Base Salary as the Board deems to be necessary or
desirable including without limitation adjustments in order to
reflect increases in the cost of living. Annual Base Salary
shall not be reduced after any increase thereof. Any increase in
Annual Base Salary shall not serve to limit or reduce any other
obligation of CINergy under this Agreement.
(b) Annual Incentive Plan Benefit. The Executive shall be
paid by CINergy an annual benefit of up to 55% of the Executive's
Annual Base Salary which benefit shall be determined and paid
pursuant to the terms of the Annual Incentive Plan of PSI
Resources in effect as of the day and year first written above.
(c) Stock Option. CINergy shall establish a stock option
plan (the "Stock Option Plan") which shall take effect when the
Mergers are consummated. As of the Effective Date, the Executive
shall be granted options pursuant to the terms of the Stock
Option Plan and agreement.
(d) Retirement, Incentive and Welfare Benefit Plans.
During the Employment Period and so long as the Executive is
employed by CINergy, he shall be eligible to participate in all
incentive, stock option, restricted stock, performance unit,
savings, retirement and welfare plans, practices, policies and
programs applicable generally to employees and/or other senior
executives of CINergy, including the Annual Incentive Plan, the
Performance Share Plan and the Executive Supplemental Life
Insurance Program or any successors thereto, except with respect
to any benefits under any plan, practice, policy or program to
which the Executive has waived his rights in writing; provided,
however, that benefits paid pursuant to the terms of the Annual
Incentive Plan shall be determined in accordance with (but not in
addition to the benefit described in) Section 3(b) of this
Agreement. In addition, CINergy shall assume and continue the
Deferred Compensation Agreement, effective as of January 1, 1992,
between the Executive and CG&E (the "Deferred Compensation
Agreement").
(e) Expenses. CINergy agrees to reimburse the Executive
for all expenses, including those for travel and entertainment,
properly incurred by him in the performance of his duties
hereunder in accordance with policies established from time to
time by the Board.
(f) Fringe Benefits. During the Employment Period and so
long as the Executive is employed by CINergy, he shall be
entitled to the following fringe benefits: (A) CINergy shall pay
the annual dues, assessments and other membership charges of the
Executive with respect to the Executive's membership in the clubs
and associations of the Executive's choice that are used for
business purposes, (B) CINergy shall furnish to the Executive
financial planning and tax preparation services, (C) CINergy
shall furnish an automobile to the Executive and pay all of the
related expenses for gasoline, insurance, maintenance and
repairs, and (D) CINergy shall provide paid vacation for five (5)
weeks per year (or longer if permitted by CINergy policy), in
each case of paragraphs (A) through (D) on a basis substantially
equivalent to such fringe benefits provided to the Executive in
the past. In addition, the Executive shall be entitled to
receive fringe benefits in accordance with the plans, practices,
programs and policies of CINergy from time to time in effect,
commensurate with his position and at least comparable to those
received by other senior executives of CINergy.
4. Termination of Employment.
(a) Death. The Executive's employment shall terminate
automatically upon the Executive's death during the Employment
Period.
(b) By CINergy for Cause. CINergy may terminate the
Executive's employment during the Employment Period for Cause.
For purposes of this Agreement, "Cause" shall mean the conviction
of the Executive for the commission of a felony which, at the
time of such commission, has a materially adverse effect on
CINergy.
(c) By the Executive Good Reason. The Executive may
terminate his employment during the Employment Period for Good
Reason. For purposes of this Agreement, "Good Reason" shall
mean:
(i) the reduction in the Executive's Annual Base
Salary as specified in Section 3(a) of this Agreement,
the Executive's Annual Incentive Plan benefit as
specified in Section 3(b) of this Agreement, or any
other benefit or payment described in Section 3 of this
Agreement;
(ii) the change without his consent of the
Executive's title, authority, duties or
responsibilities as specified in Section 2(a) of this
Agreement;
(iii) CINergy requiring the Executive without his
consent to be based at any office or location other
than the location where the Executive is currently
employed; or
(iv) any breach by CINergy of any other material
provision of this Agreement.
(d) Notice of Termination. Any termination by CINergy for
Cause, or by the Executive for Good Reason, shall be communicated
by Notice of Termination to the other party hereto given in
accordance with Section 10(b) of this Agreement. For purposes of
this Agreement, a "Notice of Termination" means a written notice
which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, sets forth
in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive's employment
under the provision so indicated, and (iii) if the Date of
Termination (as defined in Section 4(e)) is other than the date
of receipt of such notice, specifies the termination date (which
date shall be not more than 30 days after the giving of such
notice). The failure by the Executive or CINergy to set forth in
the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive
any right of the Executive or CINergy hereunder or preclude the
Executive or CINergy from asserting such fact or circumstance in
enforcing the Executive's or CINergy's rights hereunder.
(e) Date of Termination. "Date of Termination" means
(i) if the Executive's employment is terminated by CINergy for
Cause, or by the Executive for Good Reason, the date of receipt
of the Notice of Termination or any later date specified therein,
as the case may be, (ii) if the Executive's employment is
terminated by CINergy other than for Cause, the Date of
Termination shall be the date on which CINergy notifies the
Executive of such termination and (iii) if the Executive's
employment is terminated by reason of death, the Date of
Termination shall be the date of death.
5. Obligations of CINergy Upon Termination.
(a) Termination Other Than For Cause. During the
Employment Period, if CINergy shall terminate the Executive's
employment (other than in the case of a termination for Cause),
the Executive shall terminate his employment for Good Reason or
the Executive's employment shall terminate by reason of death
(termination in any such case referred to as "Termination"):
(i) CINergy shall pay to the Executive a lump sum
amount in cash equal to the sum of (1) the Executive's
Annual Base Salary through the Date of Termination to
the extent not theretofore paid, (2) an amount equal to
the Annual Incentive Plan benefit described in Section
3(b) of this Agreement for the fiscal year that
includes the Date of Termination multiplied by a
fraction the numerator of which shall be the number of
days from the beginning of such fiscal year to and
including the Date of Termination and the denominator
of which shall be 365 and (3) any compensation
previously deferred by the Executive (together with any
accrued interest or earnings thereon) and any accrued
vacation pay, in each case to the extent not
theretofore paid. (The amounts specified in clauses
(1), (2) and (3) shall be hereinafter referred to as
the "Accrued Obligations"). The amounts specified in
this Section 5(a)(i) shall be paid within 30 days after
the Date of Termination; and
(ii) in the event of Termination other than by
reason of the Executive's death, then (a) CINergy shall
pay to the Executive a lump sum amount, in cash, equal
to the present value of the Annual Base Salary and the
Annual Incentive Plan benefit described in Section 3(b)
of this Agreement payable through the end of the
Employment Period each, at the rate, and using the same
goals and factors in effect at the time Notice of
Termination is given, paid within thirty (30) days of
such Date of Termination; (b) CINergy shall pay to the
Executive the value of all benefits to which the
Executive would have been entitled had he remained in
employment with CINergy until the end of the Employment
Period, under CINergy's Performance Shares Plan and
Executive Supplemental Life Insurance Program;
(c) CINergy shall pay the value of all deferred
compensation amounts and all executive life insurance
benefits whether or not then vested or payable; and
(d) CINergy shall continue medical and welfare benefits
to the Executive and/or the Executive's family at least
equal to those which would have been provided if the
Executive's employment had not been terminated
(excluding benefits to which the Executive has waived
his rights in writing), such benefits to be in
accordance with the most favorable medical and welfare
benefit plans, practices, programs or policies (the
"M&W Plans") of CINergy as in effect and applicable
generally to other senior executives of CINergy and
their families during the 90-day period immediately
preceding the Date of Termination or, if more favorable
to the Executive, as in effect generally at any time
thereafter with respect to other senior executives of
CINergy (but not on a prospective basis only unless and
then only to the extent, such more favorable M&W Plans
are by their terms retroactive), provided, however,
that if the Executive becomes reemployed with another
employer and is eligible to receive medical or other
welfare benefits under another employer-provided plan,
the benefits under the M&W Plans shall be secondary to
those provided under such other plan during such
applicable period of eligibility.
(b) Termination by CINergy for Cause or by the Executive
Other than for Good Reason. Subject to the provisions of Section
6 of this Agreement, if the Executive's employment shall be
terminated for Cause during the Employment Period, or if the
Executive terminates employment during the Employment Period
other than a termination for Good Reason, CINergy shall have no
further obligations to the Executive under this Agreement other
than the obligation to pay to the Executive Annual Base Salary
through the Date of Termination plus the amount of any
compensation previously deferred by the Executive, in each case
to the extent theretofore unpaid.
(c) Deferred Compensation Agreement. Notwithstanding
anything in this Agreement to the contrary, upon the termination
of the Executive's employment for any reason, he shall be
entitled to receive all benefits provided for him or his
beneficiaries under the terms of the Deferred Compensation
Agreement.
6. Non-exclusivity of Rights.
Nothing in this Agreement shall prevent or limit the
Executive's continuing or future participation in any benefit,
plan, program, policy or practice provided by CINergy and for
which the Executive may qualify (except with respect to any
benefit to which the Executive has waived his rights in writing),
nor shall anything herein limit or otherwise affect such rights
as the Executive may have under any other contract or agreement
entered into after the Effective Date with CINergy. Amounts
which are vested benefits or which the Executive is otherwise
entitled to receive under any benefit, plan, policy, practice or
program of, or any contract or agreement entered into after the
date hereof with, CINergy at or subsequent to the Date of
Termination, shall be payable in accordance with such benefit,
plan, policy, practice or program or contract or agreement except
as explicitly modified by this Agreement.
7. Full Settlement; Mitigation.
CINergy's obligation to make the payments provided for in
this Agreement and otherwise to perform its obligations hereunder
shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which CINergy may have
against the Executive or others. In no event shall the Executive
be obligated to seek other employment or take any other action by
way of mitigation of the amounts (including amounts for damages
for breach) payable to the Executive under any of the provisions
of this Agreement and, except as provided in Section 5(a)(2)(d)
of this Agreement, such amounts shall not be reduced whether or
not the Executive obtains other employment. If the Executive
finally prevails with respect to any dispute between CINergy, the
Executive or others as to the interpretation, terms, validity or
enforceability of (including any dispute about the amount of any
payment pursuant to this Agreement), CINergy agrees to pay all
legal fees and expenses which the Executive may reasonably incur
as a result of any such dispute.
8. Confidential Information.
The Executive shall hold in a fiduciary capacity for the
benefit of CINergy all secret, confidential information,
knowledge or data relating to CINergy or any of its affiliated
companies, and their respective businesses, which shall have been
obtained by the Executive during the Executive's employment by
CG&E and CINergy or any of their affiliated companies and that
shall not have been or now or hereafter have become public
knowledge (other than by acts by the Executive or representatives
of the Executive in violation of this Agreement). During the
Employment Period, the Executive shall not, without the prior
written consent of CINergy or as may otherwise be required by law
or legal process, communicate or divulge any such information,
knowledge or data to anyone other than CINergy and those
designated by it.
9. Successors.
(a) This Agreement is personal to the Executive and,
without the prior written consent of CINergy, shall not be
assignable by the Executive otherwise than by will or the laws of
descent and distribution. This Agreement shall inure to the
benefit of and be enforceable by the Executive's legal
representatives.
(b) This Agreement shall inure to the benefit of and be
binding upon CINergy and its respective successors and assigns.
(c) CINergy shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all
or substantially all of the business and/or assets of CINergy to
assume expressly and agree to perform this Agreement in the same
manner and to the same extent that CINergy would be required to
perform it if no such succession had taken place. As used in
this Agreement, "CINergy" shall mean CINergy as hereinbefore
defined and any successor to its businesses and/or assets as
aforesaid that assumes and agrees to perform this Agreement by
operation of law, or otherwise.
10. Miscellaneous.
(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio, without reference
to principles of conflict of laws. The captions of this
Agreement are not part of the provisions hereof and shall have no
force or effect. This Agreement may not be amended, modified,
repealed, waived, extended or discharged except by an agreement
in writing signed by the party against whom enforcement of such
amendment, modification, repeal, waiver, extension or discharge
is sought. No person, other than pursuant to a resolution of the
Board or a committee thereof, shall have authority on behalf of
CINergy to agree to amend, modify, repeal, waive, extend or
discharge any provision of this Agreement or anything in
reference thereto.
(b) All notices and other communications hereunder shall be
in writing and shall be given by hand delivery to the other party
or by registered or certified mail, return-receipt requested,
postage prepaid, addressed as follows:
If to the Executive:
Jackson H. Randolph
If to CINergy:
CINergy Corp.
139 East Fourth Street
Cincinnati, Ohio 45202
or to such other address as either party shall have furnished to
the other in writing in accordance herewith. Notice and
communications shall be effective when actually received by the
addressee.
(c) The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.
(d) CINergy may withhold from any amounts payable under
this Agreement such federal, state or local taxes as shall be
required to be withheld pursuant to any applicable law or
regulation.
(e) The Executive's or CINergy's failure to insist upon
strict compliance with any provision hereof or any other
provision of this Agreement or the failure to assert any right
the Executive or CINergy may have hereunder, including, without
limitation, the right of the Executive to terminate employment
for Good Reason pursuant to Section 4(c) of this Agreement, or
the right of CINergy to terminate the Executive's employment for
Cause pursuant to Section 4(b) of this Agreement shall not be
deemed to be a waiver of such provision or right or any other
provision or right of this Agreement.
(f) This instrument contains the entire agreement of the
Executive and CINergy with respect to the subject matter hereof,
and, subject to (i) the provisions of Section 1(b) hereof and
(ii) any agreements evidencing the stock option grant described
in Section 3(c) hereof, all promises, representations,
understandings, arrangements and prior agreements are merged
herein and superseded hereby.
IN WITNESS WHEREOF, the Executive and, pursuant to due
authorization from their respective Board of Directors, CG&E, PSI
Resources, PSI Energy, Old CINergy and CINergy have caused this
Agreement to be executed as of the day and year first above
written.
PSI RESOURCES, INC.
_____________________________
Name: James E. Rogers
Title: Chairman and Chief
Executive Officer
PSI ENERGY, INC.
_____________________________
Name: James E. Rogers
Title: Chairman, President and
Chief Executive Officer
THE CINCINNATI GAS & ELECTRIC
COMPANY
______________________________
Name: Oliver W. Birckhead
Title: Chairman of the
Compensation Committee
of the Board of
Directors
CINERGY CORP. (OHIO)
______________________________
Name: James E. Rogers
Title: President and Chief
Operating Officer
CINERGY CORP. (DELAWARE)
______________________________
Name: James E. Rogers
Title: President and Chief
Operating Officer
EXECUTIVE
_____________________________
Jackson H. Randolph
Annex A
to Employment Agreement
DUTIES OF EXECUTIVE
Chairman of the Board
The Chairman of the Board shall be a director and shall
preside at all meetings of the Board of Directors and shall,
subject to their direction and control, be their representative
and medium of communication, and shall perform such duties as may
from time-to-time be assigned to him by the Board of Directors.
The Chairman shall direct the long-term strategic planning
process of the corporation and shall also lend his expertise and
experience to the President, as may be requested from
time-to-time by the President. The Chairman shall be a member of
the Executive Committee.
Chief Executive Officer
The Chief Executive Officer shall be a director and shall
preside at all meetings of the stockholders, shall submit a
report of the operations of the corporation for the fiscal year
to the stockholders at their annual meeting and from time-to-time
shall report to the Board of Directors all matters within his
knowledge which the interests of the corporation may require be
brought to their notice. The Chief Executive Officer shall be
the chairman of the Executive Committee and an ex officio member
of all standing committees. The President and the Internal
Auditing Department will report directly to the Chief Executive
Officer.