EXHIBIT 99.05








                    KENTUCKY UTILITIES COMPANY
                   EMPLOYEE SAVINGS PLAN TRUST






                   (Effective January 2, 1997)





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                                 TABLE OF CONTENTS


                                                                            Page
  Section 1:  Establishment of Trust  . . . . . . . . . . . . . . . . . . .    1

  Section 2:  General Duties of the Company and Plan Committee;
              Indemnification . . . . . . . . . . . . . . . . . . . . . . .    2

  Section 3:  General Duties of Trustee . . . . . . . . . . . . . . . . . .    2

  Section 4:  Power and Duties of Trustee with Respect to Trust
              Fund  . . . . . . . . . . . . . . . . . . . . . . . . . . . .    3

  Section 5:  Payment of Taxes  . . . . . . . . . . . . . . . . . . . . . .    6

  Section 6:  Investment Managers . . . . . . . . . . . . . . . . . . . . .    6

  Section 7:  Disbursement of Trust Funds . . . . . . . . . . . . . . . . .    7

  Section 8:  Investment Fund Directions  . . . . . . . . . . . . . . . . .    8

  Section 9:  Common Trust Funds  . . . . . . . . . . . . . . . . . . . . .    8

  Section 10: Expenses of the Plan and Trust  . . . . . . . . . . . . . . .    8

  Section 11: Accounts of the Trustee . . . . . . . . . . . . . . . . . . .    9

  Section 12: Resignation, Removal and Substitution of Trustee  . . . . . .    9

  Section 13: Amendment and Termination of Trust  . . . . . . . . . . . . .   10

  Section 14: Action of Company and Plan Committee  . . . . . . . . . . . .   11

  Section 15: Miscellaneous Provisions  . . . . . . . . . . . . . . . . . .   11


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              KENTUCKY UTILITIES COMPANY EMPLOYEE SAVINGS PLAN TRUST

        THIS TRUST AGREEMENT, made as of the 2nd day of January, 1997, by and
  between KENTUCKY UTILITIES COMPANY (hereinafter called the "Company") and CG
  TRUST COMPANY, a trust company organized under the laws of the State of
  Illinois with its principal office and place of business in the City of
  Chicago, Illinois (hereinafter called the "Trustee").


                                    WITNESSETH:

        WHEREAS, the Company has heretofore adopted for its eligible employees
  the Kentucky Utilities Company Employee Savings Plan (which, as amended from
  time to time, is hereinafter called the "Plan");

        WHEREAS, the Kentucky Utilities Company Master Retirement and Employee
  Savings Plan Trust (the "Master Trust") was established to serve as the
  funding medium for the Plan and certain other plans maintained by the Company;

        WHEREAS, the Company desires to separate the equitable share of the
  Master Trust attributable to the Plan and to transfer it, effective January 2,
  1997 or as soon thereafter as is practicable, to a separate trust established
  under the Plan; and

        WHEREAS, the Company desires the Trustee to serve as the trustee of such
  separate trust and the Trustee is willing to do so pursuant to the terms of
  this Trust Agreement;

        NOW, THEREFORE, in consideration of the premises and mutual covenants
  herein contained, the parties hereto do hereby mutually declare and agree as
  follows:

        Section 1:  Establishment of Trust.

        (a)   In order to carry out the purposes of the Plan, the Company hereby
  creates and establishes a trust to be known as the "Kentucky Utilities Company
  Employee Savings Plan Trust" (hereinafter called the "Trust").  The Trustee
  accepts this Trust and agrees to act as Trustee hereunder, but only on the
  terms and conditions set forth in this Trust Agreement.  Subject to the terms
  and conditions of this Trust Agreement, all right, title and interest in and
  to the assets held under the Trust shall be vested exclusively in the Trustee.
  This Trust shall be effective on January 2, 1997.

        (b)   The Trustee shall hold hereunder all contributions and other
  property acceptable to it and received from or at the direction of the
  Company.  All assets so received, together with the income therefrom and any
  other increment thereon, shall be held by the Trustee pursuant to the terms of
  this Trust Agreement without distinction between principal and income.  All
  money and other property held under the Trust Agreement at any time of
  reference is hereinafter called the "Trust Fund."  The Trust Fund shall be
  invested only through those investment vehicles or options as the Trustee
  accepts in writing from time to time.  The Company acknowledges and agrees
  that it is responsible for effectuating the transfer to the Trustee of assets
  held under the Master Trust that are attributable to the Plan.


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        Section 2:  General Duties of the Company and Plan Committee;
  Indemnification.

        (a)   The Company, as Plan administrator and a named fiduciary under the
  Plan for purposes of the Employee Retirement Income Security Act of 1974, as
  amended ("ERISA"), shall control and manage the operation of the Plan as
  provided therein.  The committee (hereinafter called the "Committee")
  appointed pursuant to the provisions of the Plan, the members of which are
  named fiduciaries for purposes of ERISA, shall be responsible for determining
  benefit rights under the Plan, instructing the Trustee in the disbursement of
  benefits, and performing those Plan administration functions specified in the
  Plan.

        (b)   The Company shall act as custodian with respect to promissory
  notes, mortgages and related documents given in connection with Plan loans, if
  any, and the Company shall hold in safekeeping all such promissory notes,
  mortgages and related documents.

        (c)   The Trustee shall be indemnified and saved harmless by the Company
  from and against any and all claims, losses, damages, expenses (including
  reasonable counsel fees) and liability to which the Trustee may be subjected
  by reason of (i) any act done or omitted to be done in acting in reliance upon
  the instructions or directions of the Company or the Committee, or any
  delegate of the Company or the Committee, issued in accordance with the Trust
  Agreement or on directions properly given by a Plan participant or
  beneficiary, where the provisions of this Trust Agreement permit such
  direction or (ii) the Company's or Committee's, or such delegate's or a Plan
  participant's or beneficiary's, as the case may be, failure to instruct or
  direct where authorized to do so pursuant to the terms of the Trust Agreement.
  Any reference herein to directions or instructions from the Company or the
  Committee shall include directions or instructions from any delegate of the
  Company or the Committee, as the case may be.

        (d)   In addition to and in no way in limitation of the indemnification
  of Section 2(c) above, the Company hereby agrees to indemnify and hold
  harmless the Trustee from and against any claims, losses, damages, expenses
  (including reasonable counsel fees) and liability to which the Trustee may be
  subject by reason of any act or omission of any prior or subsequent trustee or
  any other existing trustee of the Plan.

        Section 3:  General Duties of Trustee.

        (a)   The Trustee shall receive, hold, manage, invest and reinvest the
  Trust Fund pursuant to the provisions of this Trust Agreement.  The Trustee
  shall have no duty to determine any facts or the propriety of any action taken
  or omitted by it in good faith pursuant to instructions from persons issued in
  accordance with this Trust Agreement.

        (b)   The Trustee shall be responsible only for all contributions as are
  actually received by it as Trustee hereunder.  The Trustee shall have no duty
  or authority to ascertain whether any contributions should be made to it
  pursuant to the Plan or to bring any action to enforce any obligation to make
  any such contribution, nor shall it have any responsibility concerning the
  amount of any contribution or the application of the Plan's contribution
  formula.

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        (c)   The duties and obligations of the Trustee hereunder shall be
  limited to those expressly imposed upon it by this Trust Agreement
  notwithstanding (unless otherwise specifically provided herein) any reference
  herein to the Plan, and no further duties or obligations of the Trustee shall
  be implied.  The Trustee shall not be liable in discharging its duties
  hereunder if it acts in good faith and in accordance with the terms of this
  Trust Agreement and in accordance with applicable Federal or state laws, rules
  and regulations.

        Section 4:  Power and Duties of Trustee with Respect to Trust Fund. The
  Trustee shall have the following powers and duties regarding the Trust Fund:

        (a)   To hold title to the assets of the Trust Fund, which may include
  entering into depository or custodial arrangements for the safekeeping of
  records relevant to the ownership of such assets with any bank or banks as the
  Trustee may choose.  Except as permitted by ERISA, the Trustee shall not
  maintain the indicia of ownership of any assets of the Trust Fund outside the
  jurisdiction of the district courts of the United States.

        (b)   Subject to provisions of Section 6, Section 7(c) and Section 8, to
  invest and reinvest the assets of the Trust Fund in such investments or in
  such investment vehicles, including annuity or insurance contracts issued by
  affiliates of the Trustee, in accordance with directions received from the
  Company and to agree to amendments to such annuity or insurance contracts as
  directed by the Company.  The Trustee shall have no duty or responsibility to
  determine the appropriateness of any Plan investment, or to cause such
  investments to be changed.  Notwithstanding any other provisions of this Trust
  Agreement, all notices, proposed contract amendments, rate or fee changes or
  other communications regarding all group annuity contracts that are assets of
  the Trust Fund, including any group annuity contract issued by Connecticut
  General Life Insurance Company or other affiliate of the Trustee, will be sent
  directly by the issuer of the contract to the Company or forwarded by the
  Trustee to the Company, and the Trustee shall act on behalf of the Trust with
  respect to any such notice, proposed amendment, change or other communication
  only in accordance with the written direction of the Company.  Any rights of a
  contractholder, under any such group annuity contract to discontinue, amend or
  otherwise modify the contract shall be exercised only upon the specific
  written direction of the Company to the issuer of the contract or by the
  Trustee at the Company's specific written direction.

        (c)   To make disbursements from the Trust Fund as directed by the
  Committee or Company in accordance with this Trust Agreement.  The Trustee
  shall be entitled to rely on any such direction, and shall have no
  responsibility to ascertain whether the Plan permits such a disbursement.

        (d)   To delegate to third parties, including affiliates of the Trustee,
  any or all of its duties hereunder, including recordkeeping and reporting,
  provided that such delegation does not result in a violation of any applicable
  law (including, but not limited to, the Internal Revenue Code of 1986, as
  amended (the "Code") or ERISA), rule or regulation.  Also, the Trustee may
  utilize the services of outside custodians to hold on the Trustee's behalf any
  Plan assets.  Without limiting the generality of the foregoing, the Trustee
  hereby appoints the Company, and the Company hereby accepts appointment, to
  act as custodian with respect to promissory notes, mortgages and related
  documents given in connection with Plan loans, if any.

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        (e)   To make transfers among investment funds established under the
  Plan as directed by the Committee or by a Plan participant in accordance with
  Section 8.  The Trustee shall be entitled to rely on any such direction and
  shall have no responsibility to ascertain whether Plan permits such a
  transfer.

        (f)   At the direction of the person authorized to direct such action as
  referred to in Section 4(b) above and subject to the Trustee's acceptance in
  accordance with Section 1(b) above:

              (i)    to invest and reinvest the Trust Fund, together with the
                     income therefrom, in stocks, including, but not limited to,
                     stock of the Company, KU Energy Corporation or other
                     affiliate of the Company (hereinafter called "Company
                     Stock"), bonds, debentures, convertible debentures and
                     bonds, mortgages, notes, commercial paper and other
                     evidences of indebtedness (including those issued by the
                     Trustee), shares of mutual funds (which funds may be
                     sponsored, managed or offered by an affiliate of the
                     Trustee), guaranteed investment contracts, bank investment
                     contracts, other securities, policies of life insurance or
                     annuity contracts (including those issued by an affiliate
                     of the Trustee), options, options to buy or sell
                     securities,  or other assets, and all other property of any
                     type (personal, real or mixed, and tangible or intangible);

              (ii)   to deposit or invest all or any part of the assets of the
                     Trust in savings accounts or certificates of deposit or
                     other deposits in a bank or savings and loan association or
                     other depository institution;

              (iii)  to hold, manage, improve, repair and control all property,
                     real or personal, forming part of the Trust Fund; and to
                     sell, convey, transfer, exchange, partition, lease for any
                     term, even extending beyond the duration of this Trust, and
                     otherwise dispose of the same from time to time;

              (iv)   to have, respecting securities, all the rights, powers and
                     privileges of an owner, including the power to give
                     proxies, pay assessments and other sums necessary for the
                     protection of the Trust Fund; to vote any corporate stock
                     either in person or by proxy, with or without power of
                     substitution, for any purpose; to participate in voting
                     trusts, pooling agreements, foreclosure, reorganizations,
                     consolidations, mergers and liquidations, and in connection
                     therewith to deposit securities with or transfer title to
                     any protective or other committee; to exercise or sell
                     stock subscriptions or conversion rights; and, regardless
                     of any limitation elsewhere in this instrument relative to
                     investments by the Trustee, to accept and retain as an
                     investment any securities or other property received
                     through the exercise of any of the foregoing powers;
                     provided, however, that such voting and other rights in any
                     Company Stock held in the investment fund established under
                     the Plan designed to invest in Company Stock shall be voted

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                     or exercised in accordance with Section 10.10 of the Plan.


              (v)    to hold in cash, without liability for interest, such
                     portion of the Trust Fund which it is directed to so hold
                     in accordance with this Trust Agreement pending investment,
                     or payment of expenses, or the distribution of benefits;

              (vi)   to settle, compromise or abandon all claims and demands in
                     favor of or against the Trust Fund;

              (vii)  to invest in any common or collective trust fund of the
                     type referred to in Section 9 hereof maintained by the
                     Trustee or otherwise;

              (viii) to exercise all of the further rights, powers, options and
                     privileges granted, provided for, or vested in trustees
                     generally under the laws of the state in which the Trustee
                     is incorporated so that the powers conferred upon the
                     Trustee herein shall not be in limitation of any authority
                     conferred by law, but shall be in addition thereto;

              (ix)   to maintain accounts at and execute transactions through
                     any brokerage or other firm, including any firm which is an
                     affiliate of the Trustee; and

              (x)    to lend money to a Plan participant as directed by the
                     Committee.

        (g)   To the extent necessary or which it deems appropriate to implement
  its powers under this Section 4 or otherwise to fulfill any of its duties and
  responsibilities as Trustee of the Trust Fund, the Trustee shall have the
  following additional powers and authority:

              (i)    to register securities, or any other property, in its
                     name or in the name of any nominee, including the
                     name of any affiliate or the nominee name designated
                     by any affiliate, with or without indication of the
                     capacity in which property shall be held, or to hold
                     securities in bearer form and to deposit any
                     securities or other property in a depository or
                     clearing corporation;

              (ii)   to designate and engage the services of, and to
                     delegate powers and responsibilities to, such agents,
                     representatives, advisers, counsel and accountants as
                     the Trustee considers necessary or appropriate, any
                     of whom may be an affiliate of the Trustee or a
                     person who renders services to such an affiliate,
                     and, as a part of its expenses under this Trust
                     Agreement to the extent not prohibited under ERISA,
                     to pay their reasonable expenses and compensation;

              (iii)  to make, execute and deliver, as Trustee, any and all
                     deeds, leases, mortgages, conveyances, waivers,

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                     releases or other instruments in writing necessary or
                     appropriate for the accomplishment of any of the
                     powers listed in this Trust Agreement; and

              (iv)   generally to do all other acts which the Trustee
                     deems necessary or appropriate for the protection of
                     the Trust Fund.


        (h)   To establish a procedure for the timely dissemination to each
  person entitled to direct the Trustee as to a voting or other decision called
  for thereby or referred to therein of all proxy and other materials bearing on
  the decision.  In the case of Company Stock, at such times as proxy or other
  materials bearing thereon are disseminated generally to owners of Company
  Stock in accordance with applicable law, the Company shall cause a copy of
  such proxy or other materials to be delivered directly to the Trustee and,
  thereafter, shall promptly deliver to the Trustee or any other entity hired by
  the Company or Committee to handle shareholder solicitions and tabulations
  such number of additional copies of the proxy or other materials as the
  Trustee or such other entity may request for dissemination to Plan
  participants and beneficiaries.

        Section 5:  Payment of Taxes.  The Trustee shall pay out of the Trust
  Fund income taxes and other taxes of any and all kinds levied or assessed
  under existing or future laws against the Trust Fund.

        Section 6:  Investment Managers. The Company may direct the Trustee to
  segregate all or a portion of the Trust Fund in a separate investment account
  or accounts and may appoint an investment manager, as defined in ERISA, to
  direct the investment and reinvestment of such investment account or accounts
  in respect of which an investment manager has been appointed.  In such event,
  the Company shall notify the Trustee of the appointment of such investment
  manager.  Thereafter, the Trustee shall make every sale or investment in
  respect of such account or accounts only as directed in writing by the
  investment manager or, with the Trustee's consent, sales or investments may be
  communicated to and implemented by a broker/dealer designated by the
  investment manager.  Communication of any such direction to such a
  broker/dealer shall conclusively be deemed an authorization to the
  broker/dealer to implement the direction even though coming from a person
  other than the Trustee.  The Trustee shall, without question, comply with any
  directions given to it by the investment manager appointed pursuant to the
  preceding sentences of this Section 6 and shall not be accountable for any
  losses sustained by reason of any action taken or omitted pursuant to the
  provisions of the preceding sentences and no person dealing with the Trustee
  need inquire whether or not these provisions have been complied with.  The
  Trustee shall be under no duty to question any such direction of the
  investment manager, to review any securities or other property held in any
  investment account or accounts in respect of which an investment manager has
  been appointed or to make any recommendations to the investment manager with
  respect to such securities or other property.  The Trustee shall not be liable
  or responsible for any loss resulting to the Trust Fund by reason of any sale
  or investment made pursuant to the direction of an investment manager nor by
  reason of the failure to take any action with such direction in the absence of
  further directions of such investment manager.  Notwithstanding anything in
  the Trust Agreement to the contrary, the Trustee shall be indemnified and

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  saved harmless by the Company from and against any and all personal liability
  to which the Trustee may be subjected by carrying out any directions of an
  investment manager issued pursuant hereto or for failure to act in the absence
  of directions of the investment manager, including all expenses reasonably
  incurred in its defense in the event the Company fails to provide such
  defense; provided, however, the Trustee shall not be so indemnified if it
  participates knowingly in, or knowingly undertakes to conceal, an act or
  omission of an investment manager, having actual knowledge that such act or
  omission was a breach of fiduciary duty; provided further, however, that the
  Trustee shall not be deemed to have knowingly participated in or knowingly
  undertaken to conceal an act or omission of an investment manager with
  knowledge that such act or omission was a breach of fiduciary duty by merely
  complying with directions of an investment manager or for failure to act in
  the absence of directions of an investment manager or by reason of maintaining
  accounting records.  The Trustee shall not be charged with knowledge of the
  termination of the appointment of any investment manager until it receives
  written notice thereof from the Company.

        Section 7:  Disbursement of Trust Funds.

        (a)   Upon receipt of written direction of the Committee, the Trustee
  shall make payments from the Trust Fund to such persons or direct that such
  payments be made from any annuity contract held in the Trust Fund, in such
  manner and in such amounts as the Committee shall direct in writing, and
  amounts paid pursuant to such direction shall no longer constitute a part of
  the Trust Fund.  Notwithstanding the foregoing, in accordance with procedures
  agreed to by the Company and the Trustee, the Committee may provide direction
  directly to an insurance carrier regarding payments of Plan benefits or other
  disbursements to be made from an annuity contract issued by such carrier,
  which may include Connecticut General Life Insurance Company, that is held in
  the Trust Fund.

        (b)   Except as provided in Section 15(n) or in the Plan, at no time
  shall any part of the corpus or income of the Trust Fund be used for, or
  diverted to, purposes other than for the exclusive purpose of providing
  benefits to participants in the Plan and their beneficiaries, and defraying
  reasonable expenses of administering the Plan and Trust, and the assets of the
  Trust Fund shall never inure to the benefit of the Company or any other
  employer participating in the Plan (hereinafter called an "Employer").

        (c)   Loans to participants as provided for in the Plan shall be granted
  and administered by the Committee and may be initiated in accordance with
  Section 8.  The Trustee shall distribute cash to such participants who are
  granted loans in such amount and at such times as the Committee shall from
  time to time direct in writing.  Loan payments collected by the Company shall
  be forwarded to the Trustee identifying the principal and interest portions.


        Section 8:  Investment Fund Directions. Each Plan participant shall
  provide directions as to which investment funds the amounts allocable to his
  or her Plan accounts will be invested and may initiate a Plan loan from time
  to time in accordance with the terms of the Plan.  It shall be the
  responsibility of the Committee to accumulate, aggregate and transmit to the
  Trustee initial investment directions received in accordance with the Plan
  from Plan participants.  On and after the date as agreed upon by the Trustee

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  or its affiliates and the Committee for the implementation of a telephone
  response system under the Trust, each Plan participant shall make each and
  every investment direction change as to which investment funds amounts
  allocable to his or her Plan account shall be invested and may initiate Plan
  loan requests by use of, and subject to the written rules of, the telephone
  response system maintained for such purpose by the Trustee or its affiliate,
  unless the Trustee has been directed by the Committee in writing not to accept
  telephone directions from participants, in which event investment directions
  by the participants shall be transmitted to the Trustee by the Committee.  The
  Trustee shall process directions made via the telephone response system only
  after the identity of the Plan participant is verified by use of a personal
  identification number ("PIN") and social security number.

        Section 9:  Common Trust Funds.  The Trustee, or any bank or trust
  company acting as an investment manager pursuant to Section 6, is specifically
  authorized to invest and reinvest any part or all of the Trust Fund assets in
  any common, collective or pooled trust fund, including any such fund of which
  the Trustee or its affiliate or such bank or trust company is trustee, which
  is now or hereafter maintained as a medium for the collective investment of
  funds of pension, profit sharing or other employee benefit plans, and which
  are qualified under Section 401(a) and exempt from taxation under Section
  501(a) of the Code.  Any assets deposited with the trustee of a collective
  trust fund shall be held and invested by the trustee thereunder pursuant to
  all the terms and conditions of the trust agreement or declaration of trust
  establishing such trust fund, which agreement or declaration is hereby
  incorporated herein by reference and shall prevail over any contrary
  provisions of this Trust  Agreement.

        Section 10:  Expenses of the Plan and Trust. The Trustee shall be
  compensated in accordance with the fee schedule provided to and agreed upon by
  the Company.  If the Trustee sends the Company (to the attention of the
  Company's Vice President of Human Resources) written notice of a proposed
  amendment to its fee schedule and the Company fails to object thereto within
  90 days of the Company's actual receipt of such notice, the amended fee
  schedule shall be deemed accepted by the Company.  In addition, the Trustee
  shall be paid its reasonable expenses, including reasonable expenses of
  counsel and other agents employed by the Trustee, incurred in conjunction with
  the administration of the Trust Fund.  The expenses incurred by the Trustee in
  the administration of the Trust Fund, including fees for legal services
  rendered to the Trustee, such compensation to the Trustee as may be agreed
  upon from time to time between the Company and the Trustee, and all other
  proper charges and expenses incurred by the Company, the Employers and
  Committee in the administration of the Plan, including, but not limited to,
  accounting, legal and actuarial expenses, shall be paid from the Trust Fund
  except to the extent the Company or other Employers elect to pay such items.

        Section 11:  Accounts of the Trustee.  The Trustee has accepted this
  Trust on the condition that the Company has entered or is entering into a
  service agreement with Connecticut General Life Insurance Company whereby
  Connecticut General Life Insurance Company will provide recordkeeping services
  for all Plan assets held pursuant to this Trust Agreement.  Accordingly, the
  Trustee shall maintain or cause to be maintained accurate and detailed
  accounts of all investments, receipts, disbursements and other transactions
  hereunder, and all accounts, books and records relating thereto shall be open
  to inspection and audit at all reasonable times by any person designated by

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  the Company.  As of the close of each calendar year, or as of the close of
  such other accounting period as the Company may from time to time designate,
  and as of the date of the removal or resignation of the Trustee as provided in
  Section 12 hereof, the Trustee shall file or cause to be filed with the
  Company a written account setting forth all investments, receipts,
  disbursements and other transactions effected during the period from the date
  of its last such account and a list of the assets of the Trust Fund at the
  close of such period.  Such account may be in the form of monthly or quarterly
  statements which taken together reflect the matters set forth in the preceding
  sentence.  It shall be the duty of the Company to review such written account
  promptly within 90 days from the date of filing any such account and the
  Trustee shall be forever released and discharged from all liability and
  accountability to anyone with respect to the propriety of the acts and
  transactions shown in such account except with respect to any such acts or
  transactions as to which the Company shall within such 90-day period file
  written objections with the Trustee.  The approval of any accounting, act or
  procedure by the Company shall be a full acquittance and discharge to the
  Trustee with respect thereto.  Nothing herein contained, however, shall be
  deemed to preclude the Trustee's right to have its account judicially settled
  by a court of competent jurisdiction.

        Section 12:  Resignation, Removal and Substitution of Trustee.

        (a)   The Trustee may resign at any time by giving at least 30 days'
  written notice to the Company (unless the Company deems notice of a shorter
  duration to be adequate); except that in the event the Company terminates the
  recordkeeping service agreement with Connecticut General Life Insurance
  Company referred in Section 11, the Trustee shall be deemed to have resigned
  as of the effective date of such termination without the necessity of
  providing prior written notice to the Company.  The Company, by action of its
  Board of Directors, may remove the Trustee at any time by giving at least 30
  days' written notice to the Trustee (unless the Trustee deems notice of a
  shorter duration to be adequate).  Upon such removal or resignation of the
  Trustee, the Company shall appoint a successor trustee who shall have the same
  powers and duties as those conferred upon the Trustee hereunder.

        (b)   Any successor trustee hereunder may be either a corporation
  authorized and empowered to exercise trust powers or may be one or more
  individuals.

        (c)   Upon the acceptance of the appointment of a successor trustee, the
  resigning or removed Trustee shall execute, acknowledge and deliver all
  documents and written instruments necessary to transfer and deliver the Trust
  Fund and all rights and privileged therein to the successor trustee.  No
  successor Trustee shall be personally liable for any act or omission of any
  predecessor.  Upon the transfer and delivery of the Trust Fund to the
  successor Trustee and the approval or settlement of the accounts of the
  resigning or removed Trustee as provided in Section 11, the resigning or
  removed Trustee shall be discharged from further accountability for the Trust
  Fund with respect to the propriety of the acts and transactions shown in such
  account and the resigning or removed Trustee shall be under no further duty,
  obligation or responsibility for the disposition by such successor Trustee of
  the Trust Fund or any part thereof.



                                      -335-
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        (d)   In the event that any corporate Trustee hereunder shall be
  converted into, shall merge or consolidate with, or shall sell or transfer
  substantially all of its assets and business to, another corporation, state or
  federal, the corporation resulting from such conversion, merger or
  consolidation, or the corporation to which such sale or transfer shall be
  made, shall thereupon become and be the Trustee of the Trust with the same
  effect as through specifically so named.

        Section 13:  Amendment and Termination of Trust.

        (a)   The Company, by action of its Board of Directors, and the Trustee
  may mutually agree at any time to amend this Trust Agreement and the Trust
  created hereby to any extent deemed advisable.  No amendment to this Trust
  Agreement shall be effective unless mutually agreed to in writing by the
  Company and the Trustee; provided, however, that the Trustee's fee schedule
  may be amended as provided in Section 10.

        (b)   The Company, by action of its Board of Directors, may at any time
  revoke this Trust Agreement and terminate the Trust hereby created.  Such
  revocation and termination shall become effective upon receipt by the Trustee
  or its delegate of a written instrument of such revocation and termination
  executed by the Company.  Upon any such termination being implemented in
  connection with the termination of the Plan, disposition of the assets of the
  Trust Fund shall be governed by the terms of the Plan; provided, however, that
  the Trustee shall not distribute any portion of the Trust Fund after such
  termination unless the Company first obtains a determination from the Internal
  Revenue Service that such termination will not affect adversely the qualified
  status of the Plan.  In lieu of an Internal Revenue Service determination,
  assets of the Trust Fund may be distributed if the Company agrees in writing
  with the Trustee to indemnify the Trust Fund for any taxes or other penalties
  which may be assessed against it as a result of such termination or agrees to
  provide a bond to secure payment of any such taxes or penalties.

        (c)   This Trust Agreement shall terminate in its entirety when there is
  no asset included in the Trust Fund.

        Section 14:  Action of Company and Plan Committee.

        (a)   Any action by the Company, pursuant to any of the provisions of
  this Trust Agreement, except as provided in Section 12(a), 13(a) or 13(b)
  hereof, shall be by written instruction signed by its President or one of its
  Vice Presidents, or by written instrument executed by any person authorized by
  any one of the above to take such action; and the Trustee shall be fully
  protected in acting in accordance with any such written instrument received by
  it.

        (b)   All notices, orders, requests and instructions of the Committee
  under the Plan to the Trustee shall be in writing signed by any one of its
  members or by its Secretary and the Trustee shall act and shall be fully
  indemnified and saved harmless by the Company pursuant to Section 2(c) of this
  Trust Agreement in acting in reliance upon and in accordance with such
  notices, orders, requests and instructions, and shall have no duty to see to
  the application of any funds paid in accordance therewith.  The Company by any
  one of its officers will certify to the Trustee the appointment and
  termination of office of members of the Committee and the Committee's

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<PAGE>

  Secretary and the Trustee shall not be charged with knowledge thereof until it
  receives such notice.

        Section 15:  Miscellaneous Provisions.

        (a)   This Trust Agreement and the Trust hereby created shall be
  governed, construed, administered and regulated in all respects under the laws
  of the State of Illinois insofar as such laws are not preempted by the laws of
  the United States.

        (b)   The titles of the Sections in this Trust Agreement are for
  convenience of reference only and, in case of any conflict, the text of this
  instrument, rather than such titles, shall control.

        (c)   In case any provisions of this Trust Agreement shall be held
  illegal or invalid for any reason, their illegality or invalidity shall not
  affect the remaining parts of this Trust Agreement, and this Trust Agreement
  shall be construed and enforced as if the illegal and invalid provisions had
  never been a part of the Trust Agreement.

        (d)   This Trust Agreement may be executed in any number of
  counterparts, each of which shall be deemed an original.  The counterparts
  shall constitute one and the same instrument and may be sufficiently evidenced
  by any one counterpart.

        (e)    This Trust Agreement shall be binding upon the respective
  successors and assigns of the Company and the Trustee.

        (f)   Neither the gender nor the number (singular or plural) of any word
  shall be construed to exclude another gender or number when a different gender
  or number would be appropriate.

        (g)   In the event of any conflict between provisions of the Plan and
  those of this Trust Agreement, this Trust Agreement shall prevail.

        (h)   Communications to the Trustee shall be sent to the Trustee's
  principal offices or such address as the Trustee may specify in writing.
  Communications to the Company shall be sent to the Company's principal offices
  or such address as the Company may specify in writing.  No communication shall
  be binding upon the Trustee or the Company until it is received by the Trustee
  or the Company, as the case may be, or its delegate.

        (i)   In the event of the merger or consolidation of the Company or any
  Employer or other circumstances whereby a successor person, firm or company
  shall continue to carry on all or a substantial part of its business, and such
  successor shall elect to carry on the provisions of the Plan as therein
  provided, such successor, subject to the consent of the Company with respect
  to an Employer other than the Company, shall be substituted for the Company or
  such Employer, as the case may be, hereunder, upon the filing in writing of
  its election so to do with the Trustee.  The Trustee may, but need not, rely
  on the certification of an officer of the Company, and a certified copy of a
  resolution of the Board of Directors of such successor, reciting the facts,
  circumstances and consummation of such succession and the election of such
  successor to continue the Plan as conclusive evidence thereof, without
  requiring any additional evidence.

                                       -337-
<PAGE>

        (j)   Subject to the provisions if ERISA relating to parties entitled to
  participate in proceedings relating to the Plan and Trust, necessary parties
  to any accounting, litigation or other proceedings shall include only the
  Trustee and the Company and the settlement or judgment in any such case in
  which the Company is duly served or cited shall be binding upon all Plan
  participants, and their beneficiaries and estates, and upon all persons
  claiming by, through or under them.

        (k)   The right to distributions directed to be made hereunder may not,
  except as provided in the Plan, be voluntarily or involuntarily sold,
  transferred or assigned by any Plan participant, or by any beneficiary, nor
  shall distributions be in any way liable to the claim of any creditor of any
  such person.  The foregoing sentence shall not preclude the creation,
  assignment or recognition of a right to any benefit under the Plan or Trust,
  pursuant to the provision of a "qualified domestic relations order" as defined
  in Section 414(p)(1)(A) of the Code.

        (l)   If any payment of a benefit hereunder has been mailed by U.S. Mail
  to the last address of the payee furnished the Trustee by the Committee is
  returned and unclaimed, the Trustee shall notify the Committee or the Company
  and shall discontinue further payments to such payee until it receives the
  further instructions of the Committee.

        (m)   Notwithstanding any provision in this Trust Agreement to the
  contrary, contributions made by the Company or any Employer shall be returned
  to the Company or said Employer if the Company certifies that such return is
  in compliance with Section 403(c) of ERISA.

        (n)   The Company intends that the Trust herein created shall qualify as
  an "Exempt Organization" with the meaning of Section 501(a) of the Code or
  under any comparable section of any future legislation which amends,
  supplements or supersedes said Section, and until advised to the contrary, the
  Trustee may assume that the Trust is so qualified and is entitled to tax
  exemption.

        IN WITNESS WHEREOF, this Trust Agreement has been executed on the dates
  indicated below to be effective January 2, 1997.  The persons executing this
  Trust Agreement represent that they are duly authorized to do so.















                                      -338-
<PAGE>


  Attest                                    KENTUCKY UTILITIES COMPANY


  /s/ George S. Brooks II                   By /s/ Michael R. Whitley
                                                 Its Chairman, President and CEO


                                            Date November 26, 1996


  Attest                                    CG TRUST COMPANY


  /s/ Sharon Grigas                         By /s/ Jeananne G. Digan
                                                 Its Trust Officer


                                            Date  January 6, 1997










                                      -339-