THIRD AMENDMENT TO EMPLOYMENT AGREEMENT
This Third Amendment to Employment Agreement (the "Third Amendment")
dated effective June 1, 1998, is by and among Cinergy Corp., a Delaware
corporation ("Cinergy"), Cinergy Services, Inc., a Delaware corporation
("Cinergy Services"), The Cincinnati Gas & Electric Company, an Ohio corporation
("CG&E"), PSI Energy, Inc., an Indiana corporation ("PSI"), and John M. Mutz
(the "Executive"). Cinergy, Cinergy Services, CG&E, and PSI will sometimes be
referred to in this Third Amendment collectively as the "Company".
WHEREAS, the Executive has been employed by the Company pursuant to an
Employment Agreement dated effective as of October 4, 1993 (the "Employment
Agreement"), as amended by an Agreement dated August 30, 1996 (the "First
Amendment") and by a Second Amendment to Employment Agreement dated effective
January 29, 1997 (the "Second Amendment");
WHEREAS, the parties desire to extend the term of the Employment
Agreement that currently terminates October 3, 1998, for an additional period of
time upon certain terms and conditions;
NOW, THEREFORE, the parties have agreed to enter into this Third
Amendment which amends the Employment Agreement, as previously amended, as
follows:
1. The parties agree that Section 1(b) of the Employment Agreement is
hereby amended to reflect that the term of the Employment Agreement shall
continue until December 31, 1999, and that the term of the Agreement may
automatically be extended for one additional year if the Company shall have
given notice to the Executive of its intent to extend the Agreement prior to
December 31, 1999, and the Executive shall not have objected to such extension
in writing within ten (10) business days of receipt of the notice.
2. The parties agree that Section 2(a) of the Employment Agreement, as
previously amended by the First Amendment, is hereby amended to reflect that
during the remaining term of the Employment Agreement the Executive shall hold
the titles of Vice President of Cinergy Corp. and either President of PSI or
Vice Chairman of the Board of Directors of PSI, and that during the remaining
term of the Employment Agreement, the Executive shall lead the Company's
legislative effort in Indiana to enact deregulation legislation, represent the
Company to Indiana communities; lead the Company's economic and community
development effort in Indiana; serve as a member of the Company's management,
strategic planning, operating, and other committees as requested; assist in the
training of a successor to the title of President of PSI, conduct PSI Advisory
Board meetings; and that he shall have such other authority, duties and
responsibilities as may be mutually agreed upon, from time to time, by the
Executive and James E. Rogers, Vice Chairman and Chief Executive Officer of the
Company.
3. The parties agree that although the Executive will remain an
employee of the Company through December 31, 1999, and will perform services for
the Company on a regular, full-time basis during the 1999 legislative session of
the Indiana General Assembly, he will not be required to perform services for
the Company on more than one hundred fifty-six (156) days in 1999. Accordingly,
the parties agree that Section 3(a) of the Employment Agreement is hereby
amended to reflect that effective January 1, 1999, the Executive's annual base
salary shall be reduced to the annual rate of Two Hundred Forty-Nine Thousand
Dollars ($249,000).
4. The parties agree that Section 3(b) of the Employment Agreement is
hereby amended to reflect that effective January 1, 1999, the Executive is
eligible to receive an annual bonus paid by the Company of up to sixty percent
(60%) of the Executive's annual base salary pursuant to the terms of the
Company's Annual Incentive Plan (and such successor plans thereto as may be
adopted by the Company). The parties further agree that in calculating any
annual bonus paid by the Company to the Executive for 1999, such bonus shall be
based on an annual base salary of Two Hundred Forty-Nine Thousand Dollars
($249,000).
5. The parties further agree that Section 3(d) of the Employment
Agreement is hereby amended to reflect that any stock options granted to the
Executive pursuant to the stock option portion of the Company's Long-Term
Incentive Plan's first cycle covering the years 1997 through 1999 will be based
on an annual base salary of Two Hundred Forty-Nine Thousand Dollars ($249,000).
The parties further agree that the Executive's restricted stock grant made
pursuant to the terms of the Company's Long Term Incentive Plan's first cycle
covering the years 1997 through 1999 will not be reduced because of the
reduction in annual base salary that will become effective January 1, 1999.
Except as otherwise provided by this Third Amendment, the parties further agree
that during the remaining term of the Employment Agreement the Executive shall
continue 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 the
Company who are classified as Tier-II Executives for compensation purposes.
6. All other provisions of the Employment Agreement, First Amendment,
and Second Amendment remain unchanged by this Third Amendment.
IN WITNESS WHEREOF, the Executive and the Company have caused this
Third Amendment to Employment Agreement to be executed effective as of the day
and year first above written.
CINERGY CORP., CINERGY SERVICES, INC., THE CINCINNATI GAS & ELECTRIC COMPANY,
and PSI ENERGY, INC.
By: _________________________
James E. Rogers
Vice Chairman and
Chief Executive Officer
EXECUTIVE
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John M. Mutz