Exhibit 99-a
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, 1994
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 1-11377
CINERGY CORP.
DIRECTORS' DEFERRED COMPENSATION PLAN
(Full title of the plan)
CINERGY CORP.
(Name of issuer of the securities held pursuant to the plan)
139 East Fourth Street
Cincinnati, Ohio 45202
(Address of principal executive offices)
FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements
Report of Independent Public Accountants
Statements of Financial Condition as of
December 31, 1994 and 1993
Statements of Income and Other Changes in Plan Equity
for the Years Ended December 31, 1994, 1993, and 1992
Notes to Financial Statements
Financial Statement Schedules:
Schedules I, II, and III are not applicable
(b) Exhibits
1) Consent of Independent Public Accountants
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
We have audited the accompanying statements of financial condition of the
CINERGY CORP. DIRECTORS' DEFERRED COMPENSATION PLAN as of December 31, 1994
and 1993, and the statements of income and other changes in plan equity for
each of the three years in the period ended December 31, 1994. 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, 1994 and 1993, and the results of its operations and changes in plan
equity for each of the three years in the period ended December 31, 1994,
in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Cincinnati, Ohio,
April 14, 1995
CINERGY CORP.
DIRECTORS' DEFERRED COMPENSATION PLAN
STATEMENTS OF FINANCIAL CONDITION
Stock Cash
Accounts Accounts Total
AS OF DECEMBER 31, 1994
ASSETS
Amounts due from participating
employers (Note A) $ 185 182 $ 28 284 $ 213 466
PLAN EQUITY $ 185 182 $ 28 284 $ 213 466
AS OF DECEMBER 31, 1993
ASSETS
Amounts due from participating
employers (Note A) $ 14 250 $ 1 750 $ 16 000
PLAN EQUITY $ 14 250 $ 1 750 $ 16 000
<FN>
The accompanying notes are an integral part of these financial statements.
CINERGY CORP.
DIRECTORS' DEFERRED COMPENSATION PLAN
STATEMENTS OF INCOME AND OTHER CHANGES IN PLAN EQUITY
Stock Cash
Accounts Accounts Total
PLAN EQUITY AT DECEMBER 31, 1991 $ 668 051 $ 297 116 $ 965 167
Investment income (Note C)
Dividends earned 43 933 - 43 933
Interest earned - 12 207 12 207
Net investment income 43 933 12 207 56 140
Unrealized appreciation (Note G) 113 968 - 113 968
Contributions from participants (Note C) 166 750 29 250 196 000
PLAN EQUITY AT DECEMBER 31, 1992 992 702 338 573 1 331 275
Investment income (Note C)
Dividends earned 62 430 - 62 430
Interest earned - 11 158 11 158
Net investment income 62 430 11 158 73 588
Unrealized appreciation (Note G) 283 591 - 283 591
Contributions from participants (Note C) 195 500 31 750 227 250
Participant withdrawals (1 519 973) (379 731) (1 899 704)
PLAN EQUITY AT DECEMBER 31, 1993 14 250 1 750 16 000
Investment income (Note C)
Dividends earned 3 476 - 3 476
Interest earned - 534 534
Net investment income 3 476 534 4 010
Unrealized appreciation (Note G) 7 578 - 7 578
Contributions from participants (Note C) 161 878 26 000 187 878
Participant withdrawals (2 000) - (2 000)
PLAN EQUITY AT DECEMBER 31, 1994 $ 185 182 $ 28 284 $ 213 466
<FN>
The accompanying notes are an integral part of these financial statements.
CINERGY CORP.
DIRECTORS' DEFERRED COMPENSATION PLAN
NOTES TO FINANCIAL STATEMENTS
Note A - Plan Description
The CINergy Corp. Directors' Deferred Compensation Plan (the Plan) was
established to enable non-employee directors of CINergy Corp. (the
Company) and its subsidiaries to defer the receipt of all or a portion
of the compensation payable for services performed as a member of the
board of directors of the Company or any of its subsidiaries. The
Plan is not a funded plan; thereby, the Company and its subsidiaries
have only a contractual obligation to make payments to participants as
and when due. The administrative expenses of the Plan are paid by the
Company. Further details of the Plan are provided in the Plan
prospectus which has been distributed to all eligible Plan
participants.
In conjunction with the merger of PSI Resources, Inc., (PSI) with and
into the Company on October 24, 1994, the PSI Resources, Inc.
Directors' Deferred Compensation Plan (the PSI Plan) was merged into
the Plan. The PSI Plan contained provisions substantially similar to
the Plan.
Note B - Accounting Principles
The accounts of the Plan are maintained on an accrual basis. Activity
and balances related to the PSI Plan are reflected in the financial
statements as though the PSI Plan has always been part of the Plan.
Note C - Investment Program
Under the Plan, eligible participants may elect to defer all or any
portion of the compensation payable for services performed as a member
of the board of directors of the Company or its subsidiaries. Each
participant elects to have the amounts deferred credited among two
different accounts - a "Stock Account" and a "Cash Account" - as
follows:
Stock Account -
A participant may elect to have any portion of deferred amounts
treated as if invested in a number of shares of CINergy Corp.
Common Stock, $.01 par value (Common Stock). When a participant
elects to have amounts treated as if invested in Common Stock,
the deferred amounts are deemed to be invested in a number of
theoretical shares of Common Stock determined using the market
price per share existing on the date each amount would otherwise
have been payable to the participant. Dividends on the
theoretical shares are assumed to be reinvested into additional
theoretical shares determined using the existing market price per
share as and when dividends on Common Stock are paid. A total of
7,880.100 and 552.711 theoretical shares were allocated to
participants' Stock Accounts at December 31, 1994 and 1993,
respectively.
Cash Account -
A participant may elect to have any portion of deferred amounts
treated as if invested in an interest-bearing account. When a
participant elects to have amounts treated as if invested in an
interest-bearing account, the deferred amounts are deemed to be
invested in a theoretical account on the date each amount would
otherwise have been payable to the participant. Interest is
accrued on and credited to the theoretical account at a rate that
is equivalent to the interest rate for a one year certificate of
deposit of $100,000 as quoted in The Wall Street Journal. The
rate of interest is adjusted and compounded quarterly.
Upon six-month prior notice, a participant may change the amount of
compensation to be deferred and the allocation of amounts among the
two accounts. However, any change in allocation among the two
accounts will only apply to future deferred amounts, and not to
existing account balances.
At December 31, 1994, 1993 and 1992, there were four, five and six
active participants with Stock Accounts, respectively, and one active
participant with a Cash Account each.
Note D - Income Tax Status
The Plan is not an "employee benefit plan" under the Employee
Retirement Income Security Act of 1974, as amended, and is not a
qualified plan under Section 401(a) of the Internal Revenue Code of
1986, as amended. The Plan is subject to Federal income taxes;
however, the unfunded nature of the Plan precludes the occurrence of a
taxable event arising from the Plan's operation.
Amounts deferred, along with any dividends and interest accrued
thereon, are not considered taxable income to a participant until
distributed (see Note E). Amounts distributed from the Plan are
considered compensation taxable as ordinary income in the year
distributed, in an amount equal to the total of all cash and the
existing fair market value of all shares of Common Stock distributed.
Subsequent dispositions of shares of Common Stock received from the
Plan may result in capital gains (losses) equal to the amount realized
over (under) the tax basis in the shares. The tax basis is generally
considered to be the amount of ordinary income recognized in
conjunction with the distribution from the Plan of the shares of
Common Stock. To qualify as a long-term capital gain the shares must
be held at least one year after distribution from the Plan.
Note E - Participant Withdrawals
At the participant's election, amounts deferred under the Plan,
together with earnings thereon, will be distributed either in a single
lump sum payment or in equal annual installments of two to ten years.
At the participant's election, the single lump sum payment or the
first installment payment will be payable on the first business day of
the calendar year immediately following the year in which the
participant either (a) ceases to be a director, or (b) attains that
age specified by Paragraph 203(f)(3) of the Social Security Act or its
equivalent then in effect. Any additional installment(s) will be
payable on the first business day of each succeeding year.
All payments to be made under the Plan from a participant's Stock
Account are to be made in the form of new issue shares of Common Stock
or shares of Common Stock purchased on the open market, as determined
by the Company, and cash in lieu of any fractional shares. All
payments to be made under the Plan from a participant's Cash Account
are to be be paid in cash.
In the event of the death of a participant, all amounts due the
participant are to be distributed within 90 days of the participant's
death to the designated beneficiary or to the decedent's estate in
accordance with the preceding paragraph.
Note F - Change in Control, Amendment, Termination and Forfeiture
In the event of a "change in control" of CINergy, as defined in the
Plan prospectus, all compensation deferred under the Plan will be
immediately payable. In accordance with the foregoing provision, all
amounts accumulated under the PSI Plan were disbursed to participants
in December 1993 as a result of the approval of the CINergy merger by
PSI's shareholders. Such approval constituted a "change in control".
CINergy, at any time by action of its board of directors, may alter,
amend, modify, revoke or terminate the Plan, or suspend payment of
benefits under the Plan, except with respect to provisions relating to
a "change in control" for a three year period following such "change
in control".
Any amounts remaining in a participant's Stock Account or Cash Account
will be forfeited if the participant becomes affiliated with any
utility or other company in Indiana, Ohio or Kentucky that competes
with CINergy or its subsidiaries. Amounts will also be forfeited if a
participant refuses a reasonable request to become a consultant after
retiring as a member of the Company's or its subsidiaries' boards of
directors.
Note G - Unrealized Appreciation of Stock Accounts
The unrealized appreciation of assets included in the Plan equity of
the Stock Accounts is as follows:
BALANCE AS OF DECEMBER 31, 1991 $ 89 797
Change for 1992 113 968
BALANCE AS OF DECEMBER 31, 1992 203 765
Change for 1993 283 591
Less unrealized appreciation
on 1993 distributions 487 356
BALANCE AS OF DECEMBER 31, 1993 -
Change for 1994 7 578
BALANCE AS OF DECEMBER 31, 1994 $ 7 578
SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities Exchange Act
of 1934, the Plan Committee has duly caused this annual report to be signed
on its behalf by the undersigned hereunto duly authorized.
CINERGY CORP. DIRECTORS' DEFERRED
Date: April 24, 1995 COMPENSATION PLAN
---------------------------------
(The Plan)
/s/ Van P. Smith
---------------------------------
(Van P. Smith,
Chairman, Compensation Committee)
EXHIBIT 99-a-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 CINergy Corp.'s
previously filed Registration Statement File No. 33-56089.
ARTHUR ANDERSEN LLP
Indianapolis, Indiana,
April 24, 1995.