Exhibit 4.2


 


Execution Copy


 




 


 





PSI ENERGY, INC.


 


AND


 


FIFTH THIRD BANK,


Trustee


 


 












 


Eighth Supplemental Indenture


 


Dated as of September 23, 2003


 


To


 


Indenture


 


Dated as of November 15, 1996


 












 


 


5.00% Debentures due 2013


 




 





 

















 


EIGHTH
SUPPLEMENTAL INDENTURE, dated as of September  23, 2003, between PSI
Energy, Inc., a corporation duly organized and existing under the laws of the
State of Indiana (herein called the “Company”), having its principal office at
1000 East Main Street, Plainfield, Indiana 46168, and Fifth Third Bank, an Ohio
banking corporation, as Trustee (herein called the “Trustee”) under the
Indenture, dated as of November 15, 1996, between the Company and the
Trustee, as supplemented (the “Indenture”).


 


Recitals of the Company


 


The
Company has executed and delivered the Indenture to the Trustee to provide for
the issuance from time to time of its unsecured debentures, notes or other
evidences of indebtedness (the “Securities”), to be issued in one or more
series as provided in the Indenture.


 


Pursuant
to the terms of the Indenture, the Company desires to provide for the
establishment of a new series of its Securities to be known as its 5.00%
Debentures due 2013 (herein called the “Debentures”), in this Eighth
Supplemental Indenture.


 


All
things necessary to make this Eighth Supplemental Indenture a valid agreement
of the Company  have been done.


 


Now,
Therefore, This Eighth Supplemental Indenture Witnesseth:


 


For
and in consideration of the premises and the purchase of the Debentures by the
Holders thereof, it is mutually agreed, for the equal and proportionate benefit
of all Holders of the Debentures, as follows:


 


ARTICLE ONE


 


Terms of the Debentures


 


Section 101.  There is hereby authorized a series of
Securities designated the “5.00% Debentures due 2013”.  The Debentures shall mature and the
principal shall be due and payable together with all accrued and unpaid
interest thereon on September 15, 2013 and shall be issued in the form of
a registered Global Security without coupons, registered in the name of Cede
& Co., as nominee of The Depository Trust Company (the “Depository”).


 


The
initial issue of Debentures shall be limited in aggregate principal amount to
$400,000,000 (except as provided in Section 301(2) of the Indenture).  However, the Company may, from time to time,
without notice to or the consent of the registered holders of the Debentures
then outstanding, issue additional Debentures without limitation as to the
aggregate principal amount thereof.


 


Section 102.  The provisions of Section 305 of the
Indenture applicable to Global Securities shall apply to the Debentures.


 


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Section 103.  Interest on each of the Debentures shall be
payable semiannually on March 15 and September 15 in each year (each
an “Interest Payment Date”), commencing on March 15, 2004, at the rate per
annum specified in the designation of Debentures from September 23, 2003,
or from the most recent Interest Payment Date to which interest has been paid or
duly provided for.  The interest so
payable, and punctually paid or duly provided for, on any Interest Payment Date
will be paid to the Person in whose name such Debenture (or one or more
Predecessor Securities) is registered at the close of business on the Regular Record
Date for such interest, which shall be the Business Day immediately preceding
such Interest Payment Date. The amount of interest payable for any period will
be computed on the basis of a 360-day year of twelve 30-day months.  As used herein, “Business Day” means any day
other than a Saturday or Sunday or a day on which banking institutions in New
York, New York are authorized or obligated by law or executive order to be
closed.


 


Section 104.  Subject to agreements with or the rules of
the Depository or any successor book-entry security system or similar system
with respect to Global Securities, payments of interest will be made by check
mailed to the Holder of each Debenture at the address shown in the Security
Register, and payments of the principal amount of each Debenture will be made
at maturity by check against presentation of the Debenture at the office or
agency of the Trustee.


 


Section 105.  The Debentures shall be issued in
denominations of $1,000 or any integral multiple of $1,000.


 


Section 106.  Principal and interest on the Debentures
shall be payable in the coin or currency of the United States of America,
which, at the time of payment, is legal tender for public and private debts.


 


Section 107.  The Debentures shall be subject to defeasance
and covenant defeasance, at the Company’s option, as provided for in Sections
1302 and 1303 of the Indenture.


 


Section 108.  Subject to the terms of Article Eleven
of the Indenture, the Company shall have the right to redeem the Debentures, at
any time in whole or from time to time in part, as provided in the form of the
Debenture herein below set forth.


 


ARTICLE TWO


 


Form of the Debentures


 


Section 201.  The Debentures are to be substantially in
the following form and shall include substantially the legend shown so long as
the Debentures are Global Securities:


 


[THE REMAINDER OF THIS
PAGE HAS BEEN LEFT BLANK INTENTIONALLY.]


 


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(FORM OF FACE OF
DEBENTURE)


 


	
  No. R-

  	
   

  	
  $                       

  



 


CUSIP No.: 693627 AX 9


ISIN No.:  US693627AX97


 


PSI ENERGY, INC.


 


5.00% DEBENTURES DUE 2013


 


UNLESS THIS CERTIFICATE
IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A
NEW YORK CORPORATION (“DTC”), TO ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE, OR PAYMENT AND SUCH CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN.


 


PSI
ENERGY, INC., a corporation duly organized and existing under the laws of the
State of Indiana (herein called the “Company”, which term includes any
successor Person under the Indenture hereafter referred to), for value
received, hereby promises to pay to CEDE & CO., or registered assigns, the principal
sum of
                                        
and No/100 Dollars
($              )
on September 15, 2013, and to pay interest thereon from
September  23, 2003, or from the most recent Interest Payment Date to
which interest has been paid or duly provided for, semiannually, on
March 15, and September 15, in each year, commencing March 15,
2004, at the rate of 5.00% per annum, until the principal hereof is paid or
made available for payment.  The amount
of interest payable on any Interest Payment Date shall be computed on the basis
of a 360-day year of twelve 30-day months. 
The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in the Indenture, be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Record Date for such interest, which
shall be the Business Day immediately preceding such Interest Payment
Date.  Any such interest not so
punctually paid or duly provided for will forthwith cease to be payable to the
Holder on such Regular Record Date and may either be paid to the Person in
whose name this Security (or one or more Predecessor Securities) is registered
at the close of business on a Special Record Date for the payment of such
Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to
Holders of Securities of this series not less than 10 days prior to such
Special Record Date, or be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Securities of
this series may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in the Indenture.


 


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Payment of the principal of (and premium, if any)
and interest on this Security will be made at the corporate trust office of the
Trustee maintained for that purpose in the City of Cincinnati, in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that at the
option of the Company payment of interest may be made by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Security Register.


 


Any
payment on this Security due on any day which is not a Business Day in the City
of New York need not be made on such day, but may be made on the next
succeeding Business Day with the same force and effect as if made on the due
date and no interest shall accrue for the period from and after such date,
unless such payment is a payment at maturity or upon redemption, in which case
interest shall accrue thereon at the stated rate for such additional days.


 


As
used herein, “Business Day” means any day other than a Saturday or Sunday or a
day on which banking institutions in New York, New York are authorized or
obligated by law or executive order to be closed.


 


Reference
is hereby made to the further provisions of this Security set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.


 


Unless
the certificate of authentication hereon has been executed by the Trustee
referred to on the reverse hereof by manual signature, this Security shall not
be entitled to any benefit under the Indenture or be valid or obligatory for
any purpose.


 


In
Witness Whereof, the Company has caused this instrument to be duly executed.


 


	
   

  	
  PSI ENERGY, INC.

  
	
   

  
	
   

  
	
   

  	
  By

  	
   

  	
   

  



 


4

















 


CERTIFICATE OF
AUTHENTICATION


 


Dated:


 


This
is one of the Securities of the series designated therein referred to in the
within-mentioned Indenture.


 


	
   

  	
  FIFTH THIRD
  BANK,

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  



 


 


(FORM OF REVERSE OF
DEBENTURE)


 


This Security is one of a duly authorized issue of
securities of the Company (herein called the “Securities”), issued and to be
issued in one or more series under an Indenture, dated as of November 15,
1996 (as supplemented, herein called the “Indenture”, which term shall have the
meaning assigned to it in such instrument), between the Company and Fifth Third
Bank, as Trustee (herein called the 
“Trustee”, which term includes any successor trustee under the Indenture),
and reference is hereby made to the Indenture for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered.  This Security is one of the series
designated on the face hereof, which series is issuable without limitation as
to the aggregate principal amount thereof.


 


The
Securities of this series are subject to optional redemption at any time in
whole or from time to time in part, until maturity (such redemption, a
“Make-Whole Redemption,” at any time and the date thereof, the “Redemption
Date”), at a redemption price equal to the greater of (i) 100% of the principal
amount of the Securities being redeemed and (ii) the Make-Whole Amount (as
defined below), plus, in either case, accrued and unpaid interest on the
Securities being redeemed to the Redemption Date.


 


“Make-Whole
Amount” means the sum of the present value of the remaining scheduled payments
of principal and interest on the Securities to be redeemed (not including any
portion of such payments of interest accrued as of the Redemption Date),
discounted to the Redemption Date on a semi-annual basis (assuming a 360-day
year consisting of twelve 30-day months) at the Adjusted Treasury Rate.


 


“Adjusted
Treasury Rate” means, with respect to any Redemption Date, the rate per annum
equal to the semi-annual equivalent yield to maturity of the Comparable
Treasury Issue, calculated using a price for the Comparable Treasury Issue
(expressed as a percentage of its


 


5

















 


principal amount) equal
to the Comparable Treasury Price for such Redemption Date, calculated on the
third Business Day preceding the Redemption Date, plus in each case .15% (15
basis points).


 


“Comparable
Treasury Issue” means the United States Treasury security selected by the
Quotation Agent as having a maturity comparable to the remaining term from the
Redemption Date to the Stated Maturity of the Securities that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of the Securities.


 


“Quotation
Agent” means the Reference Treasury Dealer selected by the Trustee after
consultation with the Company.


 


“Comparable
Treasury Price” means, with respect to any Redemption Date, (i) the average of
the bid and asked prices for the Comparable Treasury Issue (expressed in each
case as a percentage of its principal amount) on the third Business Day
preceding such Redemption Date, as set forth in the daily statistical release
designated “H.15” (or any successor release) published by the Board of
Governors of the Federal Reserve System or (ii) if such release (or any
successor release) is not published or does not contain such prices on such
Business Day, (A) the average of the Reference Treasury Dealer Quotations for
such Redemption Date, after excluding the highest and lowest of such Reference
Treasury Dealer Quotations, or (B) if the Trustee obtains fewer than four such
Reference Treasury Dealer Quotations, the average of such Quotations.


 


“Reference
Treasury Dealer” means each of Banc of America Securities LLC and Lehman
Brothers Inc. and their respective successors, and two other firms that are
primary U.S. Government securities dealers (each a “Primary Treasury Dealer”)
which the Company will specify from time to time, provided however, that if any
of them ceases to be a Primary Treasury Dealer, the Company will substitute
another Primary Treasury Dealer.


 


“Reference
Treasury Dealer Quotations” means, with respect to each Reference Treasury
Dealer and any Redemption Date, the average, as determined by the Trustee
(after consultation with the Company), of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Trustee by such Reference Treasury
Dealer at 5:00 p.m., New York City time, on the third Business Day preceding
such Redemption Date.


 


Notice
of any redemption by the Company will be mailed at least 30 days but not more
than 60 days before any Redemption Date to each Holder of Securities to be
redeemed.  If less than all the
Securities are to be redeemed at the option of the Company, the Trustee shall
select, in such manner as it shall deem fair and appropriate, the Securities to
be redeemed.


 


Unless
the Company defaults in payment of the Redemption Price, on and after any
Redemption Date, interest will cease to accrue on the Securities or portions
thereof called for redemption.


 


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The
Indenture contains provisions for defeasance at any time of the entire
indebtedness of this Security or certain restrictive covenants and Events of
Default with respect to this Security upon compliance with certain conditions
set forth in the Indenture.


 


If an
Event of Default with respect to Securities of this series shall occur and be
continuing, the principal of the Securities of this series may be declared due
and payable in the manner and with the effect provided in the Indenture.


 


The
Indenture permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Company and
the rights of the Holders of the Securities of each series to be affected under
the Indenture at any time by the Company and the Trustee with the consent of
the Holders of a majority in principal amount of the Securities at the time
Outstanding of each series to be affected. 
The Indenture also contains provisions permitting the Holders of a
majority in principal amount of the Securities of each series at the time
Outstanding, on behalf of the Holders of all Securities of such series, to
waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be conclusive and
binding upon such Holder and upon all future Holders of this Security and of
any Security issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Security.


 


As
provided in and subject to the provisions of the Indenture, the Holder of this
Security shall not have the right to institute any proceeding with respect to
the Indenture or for the appointment of a receiver or trustee or for any other
remedy thereunder, unless such Holder shall have previously given the Trustee
written notice of a continuing Event of Default with respect to the Securities
of this series, the Holders of not less than 35% in principal amount of the
Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonably satisfactory indemnity,
and the Trustee shall not have received from the Holders of a majority in
principal amount of Securities of this series at the time Outstanding a
direction inconsistent with such request, and shall have failed to institute
any such proceeding, for 60 days after receipt of such notice, request and offer
of indemnity. The foregoing shall not apply to any suit instituted by the
Holder of this Security for the enforcement of any payment of principal hereof
or any premium or interest hereon on or after the respective due dates
expressed herein.


 


No
reference herein to the Indenture and no provision of this Security or of the
Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.


 


As
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of this Security is registrable in the Security Register, upon
surrender of this Security for registration of transfer at the office or agency
of the Company in any place where the principal of (and premium, if any) and
interest on this Security are payable, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the


 


7

















 


Security Registrar duly
executed by, the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Securities of this series and of like tenor, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.


 


The
Securities of this series are issuable only in registered form without coupons
in denominations of $1,000 and any integral multiple thereof. As provided in
the Indenture and subject to certain limitations therein set forth, Securities
of this series are exchangeable for a like aggregate principal amount of
Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same. No service
charge shall be made for any such registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.


 


Prior
to due presentment of this Security for registration of transfer, the Company,
the Trustee and any agent of the Company or the Trustee may treat the Person in
whose name this Security is registered as the owner hereof for all purposes,
whether or not this Security be overdue, and neither the Company, the Trustee
nor any such agent shall be affected by notice to the contrary.


 


All
terms used in this Security which are defined in the Indenture shall have the
meanings assigned to them in the Indenture.


 


8

















 


ARTICLE THREE


 


Original Issue of Debentures


 


Section 301.  An initial issue of the Debentures in the
aggregate principal amount of $400,000,000, may, upon execution of this Eighth
Supplemental Indenture, or from time to time hereafter, be executed by the
Company and delivered to the Trustee for authentication, and the Trustee shall
thereupon authenticate and deliver said Debentures upon a Company Order without
any further action by the Company. 
Additional Debentures may be issued by the Company pursuant to the terms
of the Indenture and this Eighth Supplemental Indenture.


 


ARTICLE FOUR


 


Paying Agent and Security Registrar


 


Section 401.  Fifth Third Bank will be the Paying Agent
and Security Registrar for the Debentures.


 


ARTICLE FIVE


 


Sundry Provisions


 


Section 501.  Except as otherwise expressly provided in
this Eighth Supplemental Indenture or in the form of Debenture or otherwise
clearly required by the context hereof or thereof, all terms used herein or in
said form of Debenture that are defined in the Indenture shall have the several
meanings respectively assigned to them thereby.


 


Section 502.  The Indenture, as supplemented by this
Eighth Supplemental Indenture, is in all respects ratified and confirmed, and
this Eighth Supplemental Indenture shall be deemed part of the Indenture in the
manner and to the extent herein and therein provided.


 












 


This
instrument may be executed in any number of counterparts, each of which so
executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.


 


 


9

















 


IN
WITNESS WHEREOF, the parties hereto have caused this Eighth Supplemental
Indenture to be duly executed as of the day and year first above written.


 


 


	
   

  	
  PSI ENERGY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Wendy L.
  Aumiller

  	
   

  
	
   

  	
   

  	
  Wendy L.
  Aumiller

  
	
   

  	
   

  	
  Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FIFTH THIRD
  BANK, as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Christine M.
  Schaub

  	
   

  
	
   

  	
   

  	
  Christine M. Schaub

  
	
   

  	
   

  	
  Vice President

  
							



 


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