Adopted by the Board of Directors of CINergy Corp. on October
18, 1994.
CINERGY CORP.
RETIREMENT PLAN FOR DIRECTORS
INTRODUCTION
On October 18, 1994, CINergy Corp. adopted the CINergy Corp.
Retirement Plan for Directors (the "Plan"). Upon the "Effective Time of the
Mergers" as defined in this document, CINergy Corp. will be the holding
company for PSI Energy, Inc. and The Cincinnati Gas & Electric Company. The
Plan is a retirement plan for directors of CINergy Corp., CINergy Services,
Inc., PSI Energy, Inc., and The Cincinnati Gas & Electric Company.
The Plan, effective as of the Effective Time of the Mergers, is set
forth in its entirety.
ARTICLE 1
DEFINITIONS
Whenever used in this document, the following terms shall have the
respective meanings set forth below, unless a different meaning is plainly
required by the context:
1.1 "Beneficiary" means, with respect to each Participant, the person or
persons who are to receive benefits under the Plan after the
Participant's death.
1.2 "CG&E" means The Cincinnati Gas & Electric Company, an Ohio corporation,
and its successors.
1.3 "CG&E's Board of Directors" means the duly constituted board of
directors of CG&E on the applicable date.
1.4 "CINergy" means CINergy Corp., a Delaware corporation, or any other
corporation whose common stock is registered and traded on The New York
Stock Exchange and which, as of the Effective Time of the Mergers, owns
all of the issued and outstanding common stock of PSI and CG&E.
1.5 "CINergy Services" means CINergy Services, Inc., a Delaware corporation,
and its successors.
1.6 "CINergy Services' Board of Directors" means the duly constituted board
of directors of CINergy Services on the applicable date.
1.7 "CINergy's Board of Directors" means the duly constituted board of
directors of CINergy on the applicable date.
1.8 "CINergy's Secretary" means the person holding the position of Secretary
of CINergy on the applicable date.
1.9 "Director" means any person duly selected to serve as a member of
CINergy's Board of Directors, CINergy Services' Board of Directors,
PSI's Board of Directors, or CG&E's Board of Directors.
1.10 "Effective Time of the Mergers" means "Effective Time" as defined in the
Amended and Restated Agreement and Plan of Reorganization by and among
GG&E, PSI Resources, Inc., PSI, CINergy Sub, Inc., and CINergy dated as
of December 11, 1992, as subsequently amended and restated.
1.11 "Fees" means (a) the amount of the annual retainer compensation paid to
a Director and (b) the product of the amount of the compensation paid to
a Director upon attending a meeting of Resources' Board of Directors,
CINergy Services' Board of Directors, PSI's Board of Directors, or
CG&E's Board of Directors multiplied by five.
1.12 "1934 Act" means the Securities Exchange Act of 1934, as amended from
time to time, and interpretive rulings and regulations.
1.13 "Participant" means any Director or former Director who meets the
eligibility requirements for participation described in Article 4
(Eligibility).
1.14 "Plan" means the retirement plan for Directors known as the "CINergy
Corp. Retirement Plan for Directors," as amended from time to time.
Effective as of the Effective Time of the Mergers, this document sets
forth the Plan.
1.15 "PSI" means PSI Energy, Inc., an Indiana corporation, and its
successors.
1.16 "PSI Resources" means PSI Resources, Inc., an Indiana corporation, and
its successors.
1.17 "PSI's Board of Directors" means the duly constituted board of directors
of PSI on the applicable date.
The uses of singular and masculine words are for practical purposes
only and shall be deemed to include the plural and feminine, respectively,
unless the context plainly indicates a distinction. Certain other
definitions, as required, appear in the following Articles of the Plan.
ARTICLE 2
EFFECTIVE DATE OF PLAN
The Plan's provisions, set forth in this document, are effective as
of the Effective Time of the Mergers.
ARTICLE 3
EFFECT OF PLAN ON OTHER PLANS
At the Effective Time of the Mergers, the "PSI Resources, Inc.
Retirement Plan for Directors" adopted effective February 1, 1990, as amended
from time to time, and the "CG&E Retirement Plan for Directors" adopted
effective March 17, 1993, as amended from time to time, shall be merged into
the Plan and entitlement to any benefits thereunder shall be administered in
accordance with the Plan.
ARTICLE 4 ELIGIBILITY
With the exception of any Director who, as of February 1, 1990, was
a former employee of PSI Resources or PSI, each Director who is not also an
employee or former employee of CINergy, its subsidiaries, or affiliates with
vested rights under a pension plan sponsored by CINergy, its subsidiaries, or
affiliates is eligible to participate in the Plan.
An eligible Director shall become a Participant in the Plan
commencing with the sixth year of service as a Director of CINergy. Service
as a Director of CINergy, CINergy Services, PSI, CG&E, or Resources prior to
the Effective Time of the Mergers shall be applied in determining eligibility.
ARTICLE 5
VESTING
Each eligible Director shall be fully vested in benefits accrued
under the Plan immediately upon becoming a Participant.
ARTICLE 6
AMOUNT OF RETIREMENT BENEFITS
Each Participant shall be entitled to receive an annual benefit,
payable annually, equal to the Fees payable to a Participant in effect on the
day preceding the date of the Participant's retirement as a Director.
ARTICLE 7
COMMENCEMENT OF BENEFITS
7.1 Payment to the Participant if Living
The annual benefit shall be payable on the first business day of
February each year, beginning with the February following the later of (a)
the date the Participant ceases to be a Director, or (b) the Participant's
attainment of age 65.
7.2 Payment to the Participant's Beneficiary
If a Participant dies before the payment of benefits has commenced
under Section 7.1 (Payment to the Participant if Living), then the annual
benefit shall be payable on the first business day of February each year,
beginning with the February following the Participant's date of death.
ARTICLE 8
DURATION OF BENEFITS
The annual benefit shall be payable for a term certain equal to the
number of completed full years a Participant served as a Director as of the
date of the Participant's retirement as a Director.
ARTICLE 9
DESIGNATION OF BENEFICIARY
AND PAYMENT OF ANNUAL BENEFIT UPON DEATH
9.1 Designation of Beneficiary
A Participant may designate a Beneficiary or Beneficiaries (which
may be an entity other than a natural person) to receive any annual benefit
payments to be made under Articles 6 (Amount of Retirement Benefits) and 7
(Commencement of Benefits) upon the Participant's death. A Participant may
change or cancel his Beneficiary designation at any time without the consent
of the Beneficiary. Any Beneficiary designation, change, or cancellation must
be by written notice filed with CINergy's Secretary and shall not be effective
until received by CINergy's Secretary. If the Participant designates more
than one Beneficiary, any annual benefit payments under Articles 6 (Amount of
Retirement Benefits) and 7 (Commencement of Benefits) to a Beneficiary shall
be made in equal shares unless the Participant has designated otherwise, in
which case the annual benefit payments shall be made in shares designated by
the Participant. If no Beneficiary has been named by the Participant, the
payments shall be made to the Participant's estate.
9.2 Payments Upon Death of Participant
Upon the Participant's death, payment shall be made to the
Participant's designated Beneficiary for the balance of the number of
completed full years the Participant served as a Director for which the
Participant had not received payment at the date of his death. Upon the
Beneficiary's death, any remaining annual benefit payments shall be paid to
the Beneficiary's estate.
ARTICLE 10
NONALIENATION OF BENEFITS
The Plan shall not in any manner be liable for, or subject to, the
debts and liabilities of any Participant or Beneficiary. No payee may assign
the annual benefit payments due him under the Plan. No benefits at any time
payable under the Plan shall be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, attachment, garnishment, levy,
execution, or other legal or equitable process or covenants of any kind.
ARTICLE 11
FUNDING POLICY
The Plan shall be totally unfunded so that CINergy is under merely
a contractual duty to make annual benefit payments when due under the Plan.
The promise to pay shall not be represented by notes and shall not be secured
in any way. No contributions to the Plan by Participants shall be required or
permitted under the Plan.
ARTICLE 12
AMENDMENT AND TERMINATION
CINergy, by resolution duly adopted by CINergy's Board of
Directors, shall have the right, authority, and power to alter, amend, modify,
revoke, or terminate the Plan at any time. However, no termination or
amendment shall deprive any Participant or Beneficiary of any benefits accrued
under the Plan prior to the termination or amendment.
ARTICLE 13
MISCELLANEOUS
13.1 Forfeitability
If a Director or former Director becomes a director, proprietor,
officer, partner, or employee of, or otherwise becomes affiliated with, any
utility in the States of Indiana, Ohio, or Kentucky that competes with
CINergy, its subsidiaries, or affiliates, or if a former Director shall refuse
a reasonable request from CINergy, its subsidiaries, or affiliates to perform
consulting services after he retires from CINergy's Board of Directors,
CINergy Services' Board of Directors, PSI's Board of Directors, or CG&E's
Board of Directors, any annual benefit payments remaining payable to the
Participant under the Plan shall be forfeited.
13.2 No Right to Continue as a Director
Nothing in this Plan shall be construed as conferring upon a
Participant any right to continue as a member of CINergy's Board of Directors,
CINergy Services' Board of Directors, PSI's Board of Directors, CINergy
Services' Board of Directors, or CG&E's Board of Directors.
13.3 No Right to Corporate Assets
Nothing in this Plan shall be construed as giving the Participant,
his Beneficiaries, or any other person any equity or interest of any kind in
the assets of CINergy, CINergy Services, PSI, or CG&E or creating a trust of
any kind or a fiduciary relationship of any kind between CINergy, CINergy
Services, PSI, or CG&E and any person. As to any claim for payments due under
the provisions of the Plan, a Participant, a Beneficiary, and any other
persons having claim for payments shall be unsecured creditors of CINergy,
CINergy Services, PSI, or CG&E.
13.4 No Limit on Further Corporate Action
Nothing contained in the Plan shall be construed to prevent
CINergy, CINergy Services, PSI, or CG&E from taking any corporate action which
is deemed by CINergy, CINergy Services, PSI, or CG&E to be appropriate or in
its best interest.
13.5 Governing Law
The Plan shall be construed and administered according to the laws
of the State of Delaware to the extent that those laws are not preempted by
the laws of the United States of America.
13.6 Headings
The headings of articles, sections, subsections, paragraphs, or
other parts of the Plan are for convenience of reference only and do not
define, limit, construe or otherwise affect the Plan's contents.
ARTICLE 14
ADMINISTRATION
CINergy's Board of Directors shall be responsible for the
administration of the Plan. CINergy's Board of Directors reserves the right
to interpret and regulate the Plan, by exercise of discretionary authority,
and its interpretation and regulation shall be effective and binding on all
parties concerned.
ARTICLE 15
PAYMENTS UPON CHANGE IN CONTROL
Notwithstanding anything contained in the Plan to the contrary,
following a Change in Control of CINergy, each Participant (or Beneficiary, if
appropriate) shall be entitled to receive a lump sum payment of the actuarial
equivalent of benefits accrued and remaining unpaid as of the date of the
Change in Control. The lump sum equivalent shall be calculated assuming the
interest rate used by the Pension Benefit Guaranty Corporation in determining
the value of immediate benefits as of the immediately preceding January 1.
A Change in Control of CINergy shall occur if (a) any "person" or
"group" (within the meaning of Sections 13(d) and 14(d)(2) of the 1934 Act)
becomes the "beneficial owner" (as defined in Rule 13d-3 under the 1934 Act)
of more than 50 percent of the then outstanding voting stock of CINergy,
otherwise than through a transaction arranged by, or consummated with the
prior approval of, CINergy's Board of Directors; (b) CINergy's shareholders
approve a definitive agreement to merge or consolidate CINergy with or into
another corporation in a transaction in which neither CINergy nor any of its
subsidiaries or affiliates will be the surviving corporation, or to sell or
otherwise dispose of all or substantially all of CINergy's assets to any
person or group other than CINergy or any of its subsidiaries or affiliates,
other than a merger or a sale which will result in the voting securities of
CINergy outstanding prior to the merger or sale continuing to represent at
least 50 percent of the combined voting power of the voting securities of the
corporation surviving the merger or purchasing the assets; or (c) during any
period of two consecutive years, individuals who at the beginning of that
period constitute CINergy's Board of Directors (and any new director whose
election by the Board of Directors or whose nomination for election by
CINergy's shareholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the beginning of
that period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of CINergy's Board of
Directors. Notwithstanding the provisions of Article 12 (Amendment and
Termination), the provisions of this Article may not be amended by an
amendment to the Plan effected within three years following a Change in
Control.
IN WITNESS WHEREOF, CINergy Corp. has caused this Plan document to
be executed and approved by its duly authorized officers effective as of the
Effective Time of the Mergers.
CINERGY CORP.
BY: Jackson H. Randolph
(JACKSON H. RANDOLPH)
Chairman and
Chief Executive Officer
and
BY: James E. Rogers, Jr.
(JAMES E. ROGERS, JR.)
Vice Chairman, President and
Chief Operating Officer
APPROVED:
( )
CINERGY CORP.
RETIREMENT PLAN FOR DIRECTORS