<PAGE>

          NOTE:  THIS TABLE OF CONTENTS IS NOT PART OF THE CINERGY
          CORP. UNION EMPLOYEES' PENSION PLAN; INSTEAD, THIS TABLE OF
          CONTENTS IS MERELY FOR CONVENIENCE OF REFERENCE


<TABLE>
<CAPTION>

                                 TABLE OF CONTENTS

                                                                                 PAGE
<S>         <C>                                                                  <C>
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1

ARTICLE 1   DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2

ARTICLE 2   EFFECTIVE DATE OF PLAN . . . . . . . . . . . . . . . . . . . . . . . . 30

ARTICLE 3   ELIGIBILITY AND PARTICIPATION. . . . . . . . . . . . . . . . . . . . . 30
     3.1    Date of Participation. . . . . . . . . . . . . . . . . . . . . . . . . 30
     3.2    Leased Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
     3.3    Transfers of Employment. . . . . . . . . . . . . . . . . . . . . . . . 31
     3.4    Transfers of Participants and Plan Assets to and from the Cinergy
            Corp. Non-Union Employees' Pension Plan and Cinergy Corp. Union
            Employees' Retirement Income Plan. . . . . . . . . . . . . . . . . . . 32

ARTICLE 4   AMOUNT OF LIFE-ONLY PENSION. . . . . . . . . . . . . . . . . . . . . . 33
     4.1    Normal Retirement Pension Formula. . . . . . . . . . . . . . . . . . . 33
     4.2    Normal Retirement Benefits for Pre-1998 Participants . . . . . . . . . 34
     4.3    General Method of Computing Accrued Benefit Under the Plan's Pre-1998
            Formulas for Normal Retirement . . . . . . . . . . . . . . . . . . . . 37
     4.4    General Method of Computing Annual Pension for Retirement at
            Early Retirement Date. . . . . . . . . . . . . . . . . . . . . . . . . 38
     4.5    General Method of Computing Annual Pension for a Terminated Vested
            Participant. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
     4.6    Maximum Pension. . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

ARTICLE 5   SEVERANCE FROM SERVICE-VESTING . . . . . . . . . . . . . . . . . . . . 49
     5.1    Vesting Requirement. . . . . . . . . . . . . . . . . . . . . . . . . . 49
     5.2    Severance from Service before Vesting. . . . . . . . . . . . . . . . . 50
     5.3    Severance from Service after Vesting . . . . . . . . . . . . . . . . . 50

ARTICLE 6   SPOUSE'S BENEFIT . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
     6.1    Determination of Spouse's Benefit. . . . . . . . . . . . . . . . . . . 50
     6.2    Method of Payment of Spouse's Benefit. . . . . . . . . . . . . . . . . 53


                                                                   Exhibit 10-uu

<PAGE>

ARTICLE 7   FORMS OF PENSION . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
     7.1    Normal Forms of Pension. . . . . . . . . . . . . . . . . . . . . . . . 53
     7.2    Optional Forms of Retirement Income. . . . . . . . . . . . . . . . . . 55

ARTICLE 8   PAYMENT OF PENSION . . . . . . . . . . . . . . . . . . . . . . . . . . 65
     8.1    Timing of Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . 65
     8.2    Method of Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . 66
     8.3    Small Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
     8.4    Facility of Payment. . . . . . . . . . . . . . . . . . . . . . . . . . 67
     8.5    Benefits for Late Retirees, Reemployed Retirees and Reemployed
            Terminated Vested Participants . . . . . . . . . . . . . . . . . . . . 67
     8.6    Required Payment of Benefits . . . . . . . . . . . . . . . . . . . . . 69
     8.7    Direct Rollovers of Eligible Distributions . . . . . . . . . . . . . . 73

ARTICLE 9   RETIREE MEDICAL/DENTAL BENEFITS. . . . . . . . . . . . . . . . . . . . 74
     9.1    Purpose. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
     9.2    Eligibility. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
     9.3    Separate Account . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
     9.4    Impossibility of Diversion Prior To Satisfaction of All Liabilities. . 75
     9.5    Reversion Upon Satisfaction of All Liabilities . . . . . . . . . . . . 75
     9.6    Forfeitures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
     9.7    Employer Contributions To The Medical/Dental Benefits Account. . . . . 75
     9.8    Medical/Dental Benefits. . . . . . . . . . . . . . . . . . . . . . . . 76

ARTICLE 10  NONALIENATION OF BENEFITS. . . . . . . . . . . . . . . . . . . . . . . 76

ARTICLE 11  ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
     11.1   Administrator. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
     11.2   Removal and Replacement of Committee Members . . . . . . . . . . . . . 77
     11.3   Qualification and Resignation. . . . . . . . . . . . . . . . . . . . . 77
     11.4   Chairperson, Services, and Counsel . . . . . . . . . . . . . . . . . . 77
     11.5   Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
     11.6   Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
     11.7   Action Without Meeting . . . . . . . . . . . . . . . . . . . . . . . . 78
     11.8   Notice to Trustee of Changes in Membership . . . . . . . . . . . . . . 78
     11.9   Correction of Defects. . . . . . . . . . . . . . . . . . . . . . . . . 79
     11.10  Reliance Upon Legal Counsel. . . . . . . . . . . . . . . . . . . . . . 79
     11.11  Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
     11.12  Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
     11.13  Powers and Duties of Committee . . . . . . . . . . . . . . . . . . . . 80
     11.14  Matters Specifically Excluded from Jurisdiction. . . . . . . . . . . . 81



                                                                   Exhibit 10-uu
                                       ii

<PAGE>

ARTICLE 12  BENEFIT CLAIMS PROCEDURES. . . . . . . . . . . . . . . . . . . . . . . 81

ARTICLE 13  FUNDING POLICY AND METHOD. . . . . . . . . . . . . . . . . . . . . . . 83

ARTICLE 14  MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
     14.1   No Enlargement of Employee Benefits. . . . . . . . . . . . . . . . . . 83
     14.2   Reemployment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
     14.3   Qualified Military Service . . . . . . . . . . . . . . . . . . . . . . 84
     14.4   Notice of Address. . . . . . . . . . . . . . . . . . . . . . . . . . . 84
     14.5   Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
     14.6   No Individual Liability. . . . . . . . . . . . . . . . . . . . . . . . 85
     14.7   Participant's Statement of Agreement . . . . . . . . . . . . . . . . . 85
     14.8   No Diversion of Assets . . . . . . . . . . . . . . . . . . . . . . . . 85
     14.9   Governing Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
     14.10  Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
     14.11  Interpretation and Regulation of Plan. . . . . . . . . . . . . . . . . 86
     14.12  Communications by Participants . . . . . . . . . . . . . . . . . . . . 86
     14.13  Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
     14.14  Accrued Benefit Not to be Decreased by Amendment . . . . . . . . . . . 87

ARTICLE 15  TRUSTS AND INSURANCE CONTRACTS . . . . . . . . . . . . . . . . . . . . 87
     15.1   Trusts and Insurance Contracts . . . . . . . . . . . . . . . . . . . . 87
     15.2   Irrevocability . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
     15.3   Sufficiency of Pension Fund. . . . . . . . . . . . . . . . . . . . . . 88

ARTICLE 16  CONTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89

ARTICLE 17  APPROVAL UNDER INTERNAL REVENUE CODE . . . . . . . . . . . . . . . . . 89

ARTICLE 18  AMENDMENT AND TERMINATION. . . . . . . . . . . . . . . . . . . . . . . 89
     18.1   Right to Amend or Terminate. . . . . . . . . . . . . . . . . . . . . . 89
     18.2   Effect of Termination. . . . . . . . . . . . . . . . . . . . . . . . . 90
     18.3   Merger and Consolidation of Plan . . . . . . . . . . . . . . . . . . . 92
     18.4   Post-Change in Control Merger, Consolidation, or Transfer of
            Pension Plan Assets or Liabilities . . . . . . . . . . . . . . . . . . 93
     18.5   General Protection of Benefits in the Event of a Change in
            Control. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
     18.6   Post-Change in Control Surplus Reversion . . . . . . . . . . . . . . . 94

ARTICLE 19  AUTHORIZED TRANSACTION . . . . . . . . . . . . . . . . . . . . . . . . 95



                                                                   Exhibit 10-uu

                                       iii

<PAGE>


ARTICLE 20  PARTICIPATION BY OTHER EMPLOYERS . . . . . . . . . . . . . . . . . . . 95
     20.1   Adoption of Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
     20.2   Withdrawal from Participation. . . . . . . . . . . . . . . . . . . . . 95
     20.3   Cinergy as Agent for Employers . . . . . . . . . . . . . . . . . . . . 96

ARTICLE 21  CONTINUANCE BY A SUCCESSOR . . . . . . . . . . . . . . . . . . . . . . 97

</TABLE>

















                                                                   Exhibit 10-uu

                                       iv

<PAGE>

                                  ADOPTED PURSUANT TO RESOLUTIONS OF THE CINERGY
                                CORP. BOARD OF DIRECTORS DATED DECEMBER 18, 1997


                                CINERGY CORP. UNION

                              EMPLOYEES' PENSION PLAN

                (As Amended and Restated Effective January 1, 1998)


                                     INTRODUCTION


Effective March 1, 1941, PSI Energy, Inc. (formerly named Public Service
Company of Indiana, Inc.) ("PSI") adopted a pension plan for the exclusive
benefit of its eligible employees.  Prior to May 1, 1970, the pension plan,
as amended from time to time, was embodied in Group Annuity Contract No.
34GAC between PSI and John Hancock Mutual Life Insurance Co.  Effective May
1, 1970, the pension plan was amended and restated in a document entitled
"Public Service Company of Indiana, Inc. Pension Plan" (the "Plan").

This Plan is maintained for the exclusive benefit of the Eligible Employees.
The purpose of the Plan is to provide retirement income for Eligible
Employees. The Plan is designed to satisfy the requirements of Code
subsection 401(a) and the applicable requirements of ERISA.  The Plan has
been restated on several occasions in order to comply with applicable legal
requirements and to make other changes.  This document is a continuation and
complete restatement of the Plan, effective January 1, 1998.  Effective
January 1, 1998, the Plan is renamed the Cinergy Corp. Union Employees'
Pension Plan.  Also, effective as of December 31, 1997, the assets and
liabilities attributable to exempt employees and non-exempt employees who
were participants in the Plan as of that date were spun off from the Plan and
transferred to the Cinergy Corp. Non-Union Employees' Pension Plan.





                                                                   Exhibit 10-uu

<PAGE>

                                    ARTICLE 1
                                   DEFINITIONS


As used in this document, the following words and phrases, when capitalized,
will have the meanings set forth below, unless a different meaning is plainly
required by the context.


1.1    "Absence from Service" means, with respect to each Employee, his absence
       from service (with or without pay) with his Employer for any reason other
       than a quit, resignation, discharge, retirement, or death, including, but
       without limitation because of enumeration, vacation, holiday, sickness,
       disability, leave of absence (unless otherwise required by applicable
       law), or other layoff.  If an Employee is totally disabled and qualifies
       for benefits under Cinergy's Long-Term Disability Plan, the expiration of
       his Absence from Service will not occur until the later of (a) the date
       he no longer qualifies for benefits under Cinergy's Long-Term Disability
       Plan, or (b) his Normal Retirement Date, Early Retirement Date, or Actual
       Separation Date, whichever is applicable.


1.2    "Accrued Vacation Pay" means, with respect to an Employee, the
       compensation received at his Severance from Service for unused accrued
       vacation pursuant to the Employer's applicable policy.


1.3    "Active Participant" means a Participant for whom benefits are being
       accrued under the Plan on the applicable date.


1.4    "Actual Separation Date" means:


       (a)    with respect to a Participant who either (1) retires on or after
              his Normal Retirement Date, or (2) who retires on an Early
              Retirement Date, the first day of the calendar month coincident
              with or following the date of the Participant's Severance from
              Service; or




                                       2                           Exhibit 10-uu

<PAGE>

       (b)    with respect to a Participant who incurs a Severance from Service
              before he reaches age 50 and who is entitled to benefits
              determined under the provisions of Section 5.3 (Severance from
              Service after Vesting), the date of the Participant's Severance
              from Service.


1.5    "Actuarial Equivalent" means a benefit having the same actuarially
       determined value as the benefit that the Actuarial Equivalent replaces.
       The determination of an Actuarial Equivalent will be based on the
       following actuarial assumptions, except as provided in Subsection (c) or
       (d) below:


       (a)    MORTALITY:


              Participants in accordance with the UP-1984 Table, with no rating
              of ages;
              Spouses and Contingent Annuitants in accordance with the UP-1984
              Table, with ages rated down three years;


       (b)    INTEREST:


              7-1/2% per annum, compounded annually.


       (c)    With respect to any lump sum payment that may be payable under the
              Plan during a Plan Year, the Actuarial Equivalent will be
              calculated using the mortality table as prescribed from time to
              time by the Secretary of the Treasury (currently the 1983 Group
              Annuity Mortality Table with a 50/50 mix of males and females) and
              an interest rate equal to the annual rate of interest on 30 year
              Treasury securities as specified by the Commissioner of Internal
              Revenue for the second full calendar month preceding the first day
              of the Plan Year.


       (d)    In the case of a Participant who had an accrued benefit under the
              Plan as of December 31, 1997, and who has a Severance from Service
              Date after December 31, 1997, no benefit determination will
              produce an amount that is less


                                       3                           Exhibit 10-uu

<PAGE>

              than that which would have been produced utilizing both the
              actuarial assumptions specified in the Plan as in effect on
              December 31, 1997, and the annual pension accrued as of December
              31, 1997, determined under the provisions of the Plan as then in
              effect.


1.6    "Additional Separation Date" means, with respect to a Participant who has
       an Initial Separation Date and who is later reemployed by an Employer,
       the first day of the calendar month coincident with or following the
       Participant's next Severance from Service Date.  However, if the
       Participant has multiple Severance from Service Dates after his Initial
       Separation Date, then he will have an Additional Separation Date for each
       Severance from Service, which will be the first day of the calendar month
       coincident with or following the Participant's applicable Severance from
       Service Date.


1.7    "Affiliate" means any employer that together with the Employer is under
       common control or a member of an affiliated service group as determined
       under Code subsections 414(b), (c), (m), and (o).  In determining whether
       an employer is a member of a controlled group for purposes of Section 4.6
       (Maximum Pension), the rules of Code subsections 414(b) and (c) will be
       applied as modified by Code subsection 415(h).


1.8    "Annual Addition" means, with respect to a Participant for a Plan Year,
       the following amounts credited to a Participant's accounts in any
       Qualified Defined Contribution Plan maintained by the Employer or an
       Affiliate for the Plan Year: employer contributions, employee
       contributions (other than rollover contributions); forfeitures; amounts
       allocated, after March 31, 1984, to an individual medical account, as
       defined in Code paragraph 415(l)(2), that is part of a pension or annuity
       plan maintained by the Employer or an Affiliate; and amounts derived from
       contributions paid or accrued after March 31, 1984, that are attributable
       to post-retirement medical benefits, allocated to the separate account of
       a Key Employee, under a welfare benefit fund, as defined in Code
       subsection 419(e), maintained by the Employer or an Affiliate.

1.9    "Annual Pension" means, with respect to a Participant, the amount of the
       Participant's pension, expressed as an annual benefit for the
       Participant's lifetime.


                                       4                           Exhibit 10-uu

<PAGE>

1.10   "Annual Primary Social Security Amount" means, with respect to a
       Participant, the annual amount available under the provisions of Title II
       of the Social Security Act as in effect on December 31, 1989
       (December 31, 1988, for a Highly Compensated Participant), determined
       without regard to any increases in benefit levels, wage base increases,
       or changes in the types of benefits that take effect after that date, but
       including any recomputation in benefits due solely to the Participant's
       "wages" and "remuneration," as defined in the Social Security Act, in
       calendar year 1989 or 1988, whichever is applicable.


1.11   "Annual Performance Cash Award" means, with respect to an Employee, the
       cash award received by the Employee under the provisions of an Employer's
       annual bonus or incentive pay plan or program, including, but without
       limitation because of enumeration, the Union Employees' Incentive Plan,
       or any successor Plan.


1.12   "Annuity Starting Date" means, with respect to a Participant, the first
       day of the first period for which a Plan benefit is paid as an annuity
       or, in the case of a benefit not payable in the form of an annuity, the
       first day on which all events have occurred that entitle the Participant
       to the benefit.


1.13   "Base Wage" means, with respect to an Employee, the hourly or weekly base
       rate of pay received as remuneration for services performed for the
       relevant period, exclusive of any allowances, premiums, bonuses,
       overtime, or other forms or types of compensation, multiplied by his
       hours worked during the applicable period.


1.14   "Beneficiary" means, with respect to each Participant, the person or
       persons who are to receive benefits under the Plan after the
       Participant's death.


1.15   "Board of Directors" means the duly constituted board of directors of
       Cinergy on the applicable date.


                                       5                           Exhibit 10-uu

<PAGE>

1.16   "Break in Service" means, with respect to an Employee, a Period of
       Severance of at least 12 consecutive months.


1.17   "Change in Control" means any of the following events have occurred:


       (a)    Any "person" or "group" (within the meaning of subsection 13(d)
              and paragraph 14(d)(2) of the Securities Exchange Act) is or
              becomes the "beneficial owner" (as defined in Rule 13d-3 under the
              Securities Exchange Act), directly or indirectly, of securities of
              Cinergy (not including in the securities beneficially owned by
              such person or group any securities acquired directly from Cinergy
              or an Affiliate) representing 50% or more of the combined voting
              power of Cinergy's then outstanding securities, excluding any
              person or group who becomes such a beneficial owner in connection
              with a transaction described in Paragraph (1) of Subsection (b)
              below;


       (b)    There is consummated a merger or consolidation of Cinergy or any
              direct or indirect subsidiary of Cinergy with any other
              corporation, other than (1) a merger or consolidation that would
              result in the voting securities of Cinergy outstanding immediately
              prior to the merger or consolidation continuing to represent
              (either by remaining outstanding or by being converted into voting
              securities of the surviving entity or any parent thereof) at least
              50% of the combined voting power of the securities of Cinergy or
              such surviving entity or any parent thereof outstanding
              immediately after the merger or consolidation, or (2) a merger or
              consolidation effected to implement a recapitalization of Cinergy
              (or similar transaction) in which no person is or becomes the
              beneficial owner, directly or indirectly, of securities of Cinergy
              (not including in the securities beneficially owned by such person
              any securities acquired directly from Cinergy or its Affiliates
              other than in connection with the acquisition by Cinergy or its
              Affiliates of a business) representing 25% or more of the combined
              voting power of Cinergy's then outstanding securities;


                                       6                           Exhibit 10-uu
<PAGE>

       (c)    During any period of two consecutive years, individuals who at the
              beginning of that period constitute the Board of Directors and any
              new director (other than a director whose initial assumption of
              office is in connection with an actual or threatened election
              context, including but not limited to a consent solicitation,
              relating to the election of directors of Cinergy) whose
              appointment or election by the Board of Directors or nomination
              for election by Cinergy's shareholders was approved or recommended
              by a vote of at least two-thirds (2/3) of the directors then still
              in office who either were directors at the beginning of that
              period or whose appointment, election or nomination for election
              was previously so approved or recommended cease for any reason to
              constitute a majority of the Board of Directors; or

       (d)    The shareholders of Cinergy approve a plan of complete liquidation
              or dissolution of Cinergy or there is consummated an agreement for
              the sale or disposition by Cinergy of all or substantially all of
              Cinergy's assets, other than a sale or disposition by Cinergy of
              all or substantially all of Cinergy's assets to an entity, at
              least 60% of the combined voting power of the voting securities of
              which are owned by shareholders of Cinergy in substantially the
              same proportions as their ownership of Cinergy immediately prior
              to such sale.

1.18   "Cinergy" means Cinergy Corp., a Delaware corporation, and any
       corporation that succeeds to its business and adopts the Plan.

1.19   "Claimant" means a person submitting a claim for benefits under the Plan.

1.20   "Code" means the Internal Revenue Code of 1986, as amended from time to
       time, and interpretive rulings and regulations.

1.21   "Committee" means the benefits committee established pursuant to
       Article 11 (Administration) to serve as Plan administrator.

                                       7                           Exhibit 10-uu
<PAGE>

1.22   "Contingent Annuitant" means, with respect to any Participant electing a
       contingent pension option under Section 7.2 (Optional Forms of Retirement
       Income), the person designated by the Participant to receive a contingent
       pension after the Participant's death.

1.23   "Covered Compensation" means, with respect to a Participant, the average
       (without indexing) of the annual Social Security taxable wage bases under
       the Social Security Act for each year during the 35 calendar years ending
       with the last day of the calendar year in which the Participant reaches
       his Social Security Retirement Age.

1.24   "Defined Benefit Plan Fraction" means, with respect to an individual
       participating in one or more Qualified Defined Benefit Plans for any
       calendar year, the fraction, the numerator of which is the individual's
       Projected Annual Benefit under the Qualified Defined Benefit Plans
       (determined as of the end of the calendar year), and the denominator of
       which is the lesser of:  (a) the product of 1.25 multiplied by the dollar
       limitation in effect under Code subparagraph 415(b)(1)(A) for that
       calendar year, or (b) the product of 1.4 multiplied by the amount that
       may be taken into account under Code subparagraph 415(b)(1)(B) with
       respect to the individual under the Qualified Defined Benefit Plans for
       the calendar year.

1.25   "Defined Contribution Plan Fraction" means, with respect to an individual
       participating in one or more Qualified Defined Contribution Plans for any
       calendar year, the fraction, the numerator of which is the sum of the
       Annual Additions with respect to the Participant (determined as of the
       close of the calendar year), and the denominator of which is the lesser
       of the following amounts (determined for that calendar year and for each
       prior calendar year of service with the Employer):  (a) the product
       of 1.25 multiplied by the dollar limitation in effect under Code
       subparagraph 415(c)(1)(A) for the calendar year (determined without
       regard to Code paragraph 415(c)(6)), or (b) the product of 1.4 multiplied
       by the amount that may be taken into account under Code
       subparagraph 415(c)(1)(B) with respect to that individual under all
       Qualified Defined Contribution Plans for the calendar year.

                                       8                           Exhibit 10-uu
<PAGE>

1.26   "Dependent" means any individual who is eligible for coverage under the
       Medical/Dental Plan as the "spouse" or "dependent" of an Eligible
       Retiree.

1.27   "Direct Rollover" means a payment by the Plan to the Eligible Retirement
       Plan specified by the Distributee.

1.28   "Disability Date" means, with respect to a Participant, the date the
       Participant is first determined to be totally disabled under Cinergy's
       Long Term Disability Plan, as amended from time to time.  With respect to
       a Participant who participated in the Plan prior to January 1, 1998,
       "Disability Date" means the date prior to January 1, 1998, that the
       Participant is first determined to be totally disabled by reason of a
       particular disability under PSI's Long Term Disability Plan, as amended
       from time to time.

1.29   "Distributee" means an Employee or former Employee.  In addition, the
       Employee's or former Employee's surviving Spouse, and the Employee's or
       former Employee's Spouse who is the alternate payee under a Qualified
       Domestic Relations Order are Distributees with regard to the interest of
       the Spouse or former Spouse.

1.30   "Early Retirement Date" means, with respect to each Participant who has
       satisfied the Vesting Requirement, and whose Severance from Service
       occurs on or after his 50th birthday but prior to his Normal Retirement
       Date, the first day of the calendar month coincident with or following
       his Severance from Service.

1.31   "Earnings" means, with respect to any Employee for any period of
       reference, the sum of the Employee's: (a) Base Wage, (b) Overtime Pay,
       (c) Shift Premiums, (d) Holiday Premiums, (e) Accrued Vacation Pay, (f)
       Sabbatical Vacation Pay, (g) Service Watch Payments, and (h) Annual
       Performance Cash Awards. "Earnings" does not include (a) reimbursements
       or other expense allowances, (b) fringe benefits (cash and noncash) other
       than those named in the preceding sentence, (c) moving and relocation
       expenses, (d) deferred compensation, (e) welfare benefits, (f) Long-Term
       Performance Awards, (g) other forms of compensation or remuneration that
       are not specifically named in the

                                       9                           Exhibit 10-uu
<PAGE>

       preceding sentence, or (h) any payments received by an Employee from any
       Affiliate that is not an Employer.

       Notwithstanding the foregoing provisions of this Section, an Employee's
       Earnings taken into account for any Plan Year will not exceed $150,000,
       as adjusted pursuant to Code paragraph 401(a)(17).

1.32   "Eligible Employee" means an Employee other than a Leased Employee whose
       pay is customarily computed on an hourly, weekly, or bi-weekly basis;
       whose employment is subject to FLSA overtime and recordkeeping
       provisions; and who is assigned to an employment position that is
       governed by a collective bargaining agreement to which the Employer is a
       party and which provides for participation in this Plan.

1.33   "Eligible Individual" means an Eligible Retiree or a Dependent.

1.34   "Eligible Retiree" means an individual who:

       (a)    is a Retired Participant who is also eligible to participate in
              the Medical/Dental Plan, and

       (b)    is not a Key Employee at any time during the current Plan Year and
              has not been a Key Employee at any time during any previous Plan
              Year for which contributions were made for that individual's
              benefit to the Medical/Dental Benefits Account.

1.35   "Eligible Retirement Plan" means an individual retirement account
       described in Code subsection 408(a), an individual retirement annuity
       described in Code subsection 408(b), an annuity plan described in Code
       subsection 403(a), or a qualified trust described in Code
       subsection 401(a), that accepts the Distributee's Eligible Rollover
       Distribution.  However, in the case of an Eligible Rollover Distribution
       to a surviving Spouse, an Eligible Retirement Plan is an individual
       retirement account or individual retirement annuity.

                                       10                          Exhibit 10-uu
<PAGE>

1.36   "Eligible Rollover Distribution" means any distribution of all or a
       portion of the balance to the credit of the Distributee, except that an
       Eligible Rollover Distribution does not include:  any distribution that
       is one of a series of substantially equal periodic payments (not less
       frequently than annually) made for the life (or life expectancy) of the
       Distributee or the joint lives (or joint life expectancies) of the
       Distributee and the Distributee's Beneficiary, or for a specified period
       of ten years or more; any distribution to the extent that the
       distribution is required under Code paragraph 401(a)(9); and the portion
       of any distribution that is not includable in gross income (determined
       without regard to the exclusion for net unrealized appreciation with
       respect to employer securities).

1.37   "Employee" means any person who is employed by an Employer, other than as
       an employee classified by his Employer as a summer laborer or summer
       employee, and who receives compensation that the Employer initially
       reports on a federal wage and tax statement (Form W-2).  For purposes of
       crediting Service for vesting and, except as otherwise provided, for
       purposes of the rules set out in Section 4.6 (Maximum Pension), the term
       "Employee" includes a Leased Employee.

1.38   "Employer" means Cinergy and any Affiliate that, with the consent of the
       Board of Directors, elects to participate in the Plan pursuant to
       Section 20.1 (Adoption of Plan) and any successor corporation or other
       organization or entity that adopts the Plan pursuant to Article 21
       (Continuance by a Successor).  If any Affiliate withdraws from
       participation in the Plan pursuant to Section 20.2 (Withdrawal from
       Participation), that Affiliate will cease to be an Employer.

1.39   "Employment Commencement Date" means, with respect to each Employee, the
       date as of which the Employee is first entitled to be credited with an
       Hour of Service.

1.40   "ERISA" means the Employee Retirement Income Security Act of 1974, as
       amended from time to time, and interpretive rulings and regulations.

                                       11                          Exhibit 10-uu
<PAGE>

1.41   "FLSA" means the Fair Labor Standards Act of 1938, as amended from time
       to time, and interpretive rulings and regulations.

1.42   "Group Annuity Contract" means Group Annuity Contract No. 9599GAC issued
       by John Hancock Mutual Life Insurance Company, as amended or replaced
       from time to time.

1.43   "Highest Average Earnings" means a Participant's highest average annual
       Earnings for any three consecutive calendar years out of his last ten
       years of Participation.  However, if the Participant completes fewer than
       three years of Participation, his Highest Average Earnings will mean his
       average annual Earnings for his total years of Participation.  If a
       Participant is totally disabled and qualifies for benefits under
       Cinergy's Long Term Disability Plan until his Normal Retirement Date,
       Early Retirement Date, or Actual Separation Date, whichever is
       applicable, his Severance from Service Date will be deemed for purposes
       of this section to be his Disability Date.

       For purposes of this Section, if a Participant's Severance from Service
       Date is other than December 31, the following periods will be treated as
       a period of three consecutive calendar years:

       (a)    His months of Participation in the calendar year that includes his
              Severance from Service Date; plus

       (b)    The two (or fewer) full calendar years of Participation prior to
              his Severance from Service Date; plus

       (c)    From the calendar year immediately preceding the period described
              in Subsection (b), the lesser of (1) the Participant's months of
              Participation in that year, or (2) the number of months equal to
              12 minus the number of months included pursuant to Subsection (a).
              A Participant's Earnings will be deemed to have been earned
              ratably throughout the period described in this Subsection (c).

                                       12                          Exhibit 10-uu
<PAGE>

1.44   "Highly Compensated Participant" means a highly compensated active
       Employee and a highly compensated former Employee.  A highly compensated
       active Employee includes any Employee who performs service for the
       Employer during the Plan Year and who (a) is a 5% owner for that Plan
       Year or was a 5% owner for the prior Plan Year; or (b) for the preceding
       Plan Year received compensation from the Employer in excess of $80,000
       (as adjusted pursuant to Code subsection 415(d)).  The Employer does not
       elect to require that a highly compensated active Employee must be a
       member of the Employer's top-paid group for the preceding Plan Year.

       A highly compensated former Employee includes any Employee who terminated
       employment (or was deemed to have terminated employment) prior to the
       Plan Year, performs no service for the Employer during the Plan Year, and
       was a highly compensated active Employee for either the Plan Year during
       which he terminated employment or any Plan Year ending on or after the
       Employee's 55th birthday.

       The determination of who is a Highly Compensated Participant, including
       the determination of the number and identity of Employees in the top-paid
       group and the compensation that is considered, will be made in accordance
       with Code subsection 414(q).

1.45   "Holiday Premiums" means, with respect to an Employee, the compensation
       received as a premium for services performed for the relevant period for
       working on a holiday recognized by the Employer pursuant to its
       applicable policy.

1.46   "Hour of Service" means, with respect to any Employee, any of the
       following:

       (a)    each hour for which he is paid, or entitled to payment, by an
              Employer for the performance of duties for that Employer;

       (b)    each other hour for which back pay, irrespective of mitigation of
              damages, has been either awarded to him or agreed to be paid to
              him by an Employer;

                                       13                          Exhibit 10-uu
<PAGE>

       (c)    each other hour for which he is absent from his normal period of
              employment with his Employer due to an approved military leave,
              maternity leave, paternity leave, adoption leave, worker's
              compensation leave, personal leave of six consecutive months or
              less, or sick leave of six consecutive months or less, or a total
              disability that qualifies him for benefits under Cinergy's
              Long-Term Disability Plan; and

       (d)    each other hour for which he is paid, or entitled to payment, by
              an Employer for a period of time during which he does not perform
              any duties for that Employer (irrespective of whether or not his
              employment relationship with that Employer has terminated) due to
              vacation, holiday, illness, incapacity (including disability),
              layoff, jury duty, witness duty, military duty, or leave of
              absence.

       In computing an Hour of Service, the Plan may use the equivalencies set
       forth in paragraph (e) of 29 C.F.R. Section 2530.200b-3.  However, if
       different equivalencies are used for different classifications of
       Employees, then those classifications must be reasonable and consistently
       applied.  Each Hour of Service will be credited to the Employee for the
       appropriate computation period in accordance with the provisions of
       paragraphs (b) and (c) of 29 C.F.R. Section 2530.200b-2, and each Hour of
       Service, when aggregated for a particular computation period, will
       constitute the Hours of Service credited to the Employee for that
       computation period.  However, no Employee will be credited under
       Subsection (d) either with more than 501 Hours of Service on account of
       any single continuous period during which the Employee performs no duties
       for an Employer irrespective of whether or not that period occurs in a
       single computation period, or with an hour for which the Employee is
       paid, or entitled to payment, by an Employer if that payment is made
       solely for the purposes of either reimbursing the Employee for medical or
       medically related expenses incurred by the Employee or complying with
       applicable worker's compensation, unemployment compensation, or
       disability insurance laws.  However, the crediting of Hours of Service
       for back pay awarded or agreed to with

                                       14                          Exhibit 10-uu
<PAGE>

       respect to periods described in Subsection (d) of this Section will be
       subject to the same limitations set forth in the immediately preceding
       sentence with respect to Subsection (d).

1.47   "Initial Separation Date" means, with respect to a Participant who is
       entitled to benefits under the provisions of Section 5.1 (Vesting
       Requirement), Section 5.2 (Severance from Service before Vesting), or
       Section 5.3 (Severance from Service after Vesting), the first day of the
       calendar month coincident with or following the Participant's initial
       Severance from Service Date.

1.48   "Insurance Company" means any insurance company holding any part of the
       Pension Fund.

1.49   "Key Employee" means an Employee or former Employee of an Employer who,
       at any time during the determination period, is:

       (a)    an officer of an Employer having annual Section 415 Compensation
              from his Employer greater than 50 percent of the amount in effect
              under Code subparagraph 415(b)(1)(A) for any Plan Year;

       (b)    one of the ten Employees having annual Section 415 Compensation
              from his Employer of more than the limitation in effect under Code
              subparagraph 415(c)(1)(A) and owning (or considered as owning
              within the meaning of Code section 318) the largest interests in
              the Employer.

       (c)    the owner (or considered as the owner within the meaning of Code
              section 318) either of more than five percent of the outstanding
              stock of Cinergy, or stock possessing more than five percent of
              the total combined voting power of all stock of Cinergy; or

       (d)    the recipient of at least $150,000 in annual Section 415
              Compensation from the Employer and who owns (or is considered as
              owning within the meaning of Code

                                       15                          Exhibit 10-uu
<PAGE>

              section 318) either more than one percent of the outstanding stock
              of Cinergy or stock possessing more than one percent of the total
              combined voting power of all stock of Cinergy.

       However, no more than 50 Employees of an Employer will be deemed to be
       officers for any particular Plan Year.  Also, the term Key Employee
       includes the beneficiaries of a Key Employee.  For purposes of
       Subsection (b) above, if two Employees have the same interest in the
       Employer, the Employee having greater annual Earnings from his Employer
       will be treated as having a larger interest.  The determination of who is
       a Key Employee will be made in accordance with Code paragraph 416(i)(1).

1.50   "Leased Employee" means any person who performs services for another
       person, the "recipient," but who is not an employee of the recipient, if
       (a) the services are provided pursuant to an agreement between the
       recipient and any other person, (b) the person has performed the services
       for the recipient (or for the recipient and related persons) on a
       substantially full-time basis for a period of at least one year, and
       (c) the services are performed under the primary direction and control of
       the recipient.  A Leased Employee will not be considered an employee of
       the recipient if:

       (a)    that employee is covered by a money purchase pension plan
              providing:

              (1)    a non-integrated employer contribution rate of at least
                     10 percent of compensation, as defined in Code
                     paragraph 415(c)(3), which includes amounts contributed
                     pursuant to a salary reduction agreement that are
                     excludable from the Employee's gross income under Code
                     section 125, Code paragraph 402(a)(8), or Code
                     subsections 402(h) or 403(b);

              (2)    immediate participation;

              (3)    full and immediate vesting; and

                                       16                          Exhibit 10-uu

<PAGE>

       (b)    leased employees do not constitute more than 20 percent of the
              recipient's non-highly compensated work force.

1.51   "Long-Term Performance Awards" means, with respect to an Employee, the
       cash or stock-based award received by the Employee pursuant to the
       provisions of an Employer's long-term bonus or incentive pay plan or
       program, including, but without limitation because of enumeration, the
       Cinergy 1996 Long-Term Incentive Compensation Plan.

1.52   "Medical/Dental Benefits" means the benefits specified and payable under
       Section 9.8 (Medical/Dental Benefits) from the Medical/Dental Benefits
       Account.

1.53   "Medical/Dental Benefits Account" means the separate account established
       pursuant to Article 9 (Retiree Medical/Dental Benefits) for contributions
       to fund benefits payable under Article 9 (Retiree Medical/Dental
       Benefits).

1.54   "Medical/Dental Plan" means any plan or program that is established by
       the Employer to provide medical or dental insurance coverage or medical
       or dental expense reimbursements to Eligible Individuals.

1.55   "Nine Months of Elapsed Time Service" means, with respect to a
       Participant who participated in the Plan as of December 31, 1997, the
       nine consecutive month period commencing on his Employment Commencement
       Date, provided that the Employee does not in that period incur a
       Severance from Service that is part of a Break in Service; or, the nine
       consecutive month period commencing on the Employee's Reemployment
       Commencement Date (or successive Reemployment Commencement Dates),
       provided that the Employee does not in that period incur a Severance from
       Service that is part of a Break in Service.  If the Employee does not
       incur a Severance from Service during the applicable nine consecutive
       month period, then the Employee will be deemed to have completed Nine
       Months of Elapsed Time Service as of the last day of the nine consecutive
       month period.

                                       17                          Exhibit 10-uu
<PAGE>

1.56   "Nonforfeitable" means, with respect to a Participant's claim for
       benefits under the Plan, that the claim is unconditional, legally
       enforceable, and not subject to divestment except in accordance with the
       Plan's specific provisions, including, but without limitation because of
       enumeration, the provisions of Section 15.3 (Sufficiency of Pension
       Fund).

1.57   "Normal Retirement Date" means, with respect to each Participant, the
       first day of the calendar month coincident with or following his
       65th birthday.

1.58   "Option Effective Date" means a Participant's Actual Separation Date,
       unless further extended with respect to a Participant making a timely
       election during the applicable election period, in which case the Option
       Effective Date will be the first day of the calendar month coincident
       with or following the last day of the applicable election period,
       provided he has timely elected the option on or before that date.

1.59   "Overtime Pay" means, with respect to an Employee, the compensation
       received as remuneration consistent with the requirements of the FLSA, or
       for services performed for the relevant period for hours worked beyond
       the Employee's regularly scheduled work hours pursuant to the Employer's
       applicable policy.

1.60   "Participant" means any Eligible Employee who has met the eligibility
       requirements set forth in Article 3 (Eligibility and Participation) and
       for whom benefits are to be provided under the Plan.

1.61   "Participation" means, with respect to an Eligible Employee, the period
       of time during which he is treated as a Participant in the Plan, the
       length of which will be determined as follows:

       (a)    Notwithstanding any other provision of this Plan to the contrary,
              an Eligible Employee who accrued Pre-1998 Years of Participation
              under the Plan will be credited with his Pre-1998 Years of
              Participation.

                                       18                          Exhibit 10-uu
<PAGE>

       (b)    An Eligible Employee will be credited with Participation for the
              period of time beginning with the later of (1) January 1, 1998, or
              (2) his Employment Commencement Date and ending on his Severance
              from Service Date.

       (c)    An Eligible Employee will be credited with Participation for any
              Period of Credited Severance during which he is a Participant or
              former Participant.

       (d)    In determining an Eligible Employee's total Participation for
              purposes of the Plan, all periods of service that are credited to
              the Eligible Employee under Subsections (a) through (c) above will
              be aggregated.  In no event will an Employee be credited more than
              once for the same period of Participation.  For purposes of
              determining an Eligible Employee's total Participation, the
              Eligible Employee will be credited with one month of Participation
              for each calendar month in which he is a Participant in the Plan
              and is credited with at least one Hour of Service.  An Eligible
              Employee will be credited with one year of Participation for each
              12 months of Participation with which he is credited pursuant to
              the preceding sentence.

       (e)    Notwithstanding Subsection (d), if an Eligible Employee is a
              Reemployed Retiree or a Reemployed Terminated Vested Participant,
              and his Pre-1998 Years of Participation were subject to a maximum
              under the pension formula applicable to the Eligible Employee at
              the time he incurred a Severance from Service, that Eligible
              Employee's total Participation when he again incurs a Severance
              from Service under the Plan will not exceed the sum of his maximum
              pre-1998 Years of Participation and the Eligible Employee's years
              of Participation during his period of reemployment.

1.62   "Participation Commencement Date" means, with respect to an Employee who
       was a  participant in the Plan prior to January 1, 1989, the date the
       Employee became a Participant under the Plan's terms as they existed
       prior to January 1, 1990, and with respect to an Employee who was not a
       Participant in the Plan prior to January 1, 1989, the

                                       19                          Exhibit 10-uu
<PAGE>

       later of (a) January 1, 1989, or (b) the first day of the calendar month
       coincident with or following the date the Employee first completes Nine
       Months of Elapsed Time Service and has attained his 21st birthday;
       provided that on the later date he is classified by his Employer as an
       Employee. If an Employee has completed Nine Months of Elapsed Time
       Service and has attained his 21st birthday, but is not classified by his
       Employer as an Employee on the later date, his Participation Commencement
       Date will be the first day of the calendar month coincident with or
       following the first day after the later date on which he is classified by
       his Employer as an Employee.

1.63   "Pension Fund" or "Fund" means the fund established in consequence of and
       for the purposes of the Plan to provide the benefits under the Plan,
       including all funds held in all trusts and group annuity contracts that
       are being used as funding media for the Plan.

1.64   "Period of Credited Severance" means, with respect to each Eligible
       Employee who has incurred a Severance from Service, and who, within
       12 Months of his Severance from Service Date, performs an Hour of
       Service, the Period of Severance commencing on the Eligible Employee's
       Severance from Service Date and ending on the date thereafter upon which
       he first performs an Hour of Service.  In the case of an Eligible
       Employee who has incurred a Severance from Service that occurs during an
       Absence from Service by reason of a maternity or paternity absence as
       defined in Subsection 1.88(b), the period between the first and second
       anniversaries of the first day of absence will not be a Period of
       Credited Severance.

1.65   "Period of Severance" means, with respect to each Eligible Employee, the
       period of time commencing on his Severance from Service Date and ending
       on the date thereafter upon which he first performs an Hour of Service.

1.66   "Plan" means the pension plan known as the "Cinergy Corp. Union
       Employees' Pension Plan," as amended, from time to time.  As effective
       January 1, 1998, this document sets forth the Plan.

1.67   "Plan Year" means the calendar year.

                                       20                          Exhibit 10-uu
<PAGE>

1.68   "Pre-1998 Covered Compensation" means, with respect to a Participant who
       participated in the Plan as of December 31, 1997, the average (without
       indexing) of the annual Social Security taxable wage bases under the
       Social Security Act for each year during the 35 calendar years ending
       with the last day of the calendar year in which the Participant attains
       his Social Security Retirement Age, but no later than December 31, 1997.

1.69   "Pre-1998 Highest Average Earnings" means, with respect to a Participant
       who participated in the Plan as of December 31, 1997, the Participant's
       highest average annual Earnings for any three consecutive calendar years
       out of the Participant's 10 or fewer Pre-1998 Years of Participation.
       However, if the Participant completes fewer than three Pre-1998 Years of
       Participation, his Pre-1998 Highest Average Earnings will mean his
       average annual Earnings for his total Pre-1998 Years of Participation.
       If Earnings for any Plan Year beginning before January 1, 1994 are taken
       into account in determining a Participant's Pre-1998 Highest Average
       Earnings, the Earnings for that Plan Year will be subject to the
       limitation of Code paragraph 401(a)(17) that was in effect for that Plan
       Year and the Participant's Nonforfeitable Annual Pension will not be less
       than the Participant's accrued benefit under the Plan as of December 31,
       1993.

1.70   "Pre-1998 Normal Retirement Date" means, with respect to each Participant
       who participated in the Plan as of December 31, 1997, the first day of
       the calendar month coincident with or following (a) his 65th birthday, or
       (b) the fifth anniversary date of his employment, whichever is later.

1.71   "Pre-1998 Years of Participation" means, with respect to each Participant
       who participated in the Plan as of December 31, 1997, the sum of the
       following whole and fractional years:

       (a)    with respect to the period prior to January 1, 1976, the number of
              years (to the last completed 1/12th year) of his "participating
              service" (as defined in the Plan as in effect on December 31,
              1975, except that the last sentence of Section 1.6 of the Plan
              will not apply) as of January 1, 1976; plus

                                       21                          Exhibit 10-uu
<PAGE>

       (b)    with respect to each Plan Year of his participation in the Plan on
              or after January 1, 1976, and before January 1, 1998 (excluding
              the Plan Years in which his Participation Commencement Date and
              his Reemployment Commencement Date, if applicable, occur, to the
              extent one or both of those dates are on or after January 1,
              1976), one Pre-1998 Year of Participation if he completes at least
              2,000 Hours of Service during that Plan Year; otherwise, a
              fraction of a Pre-1998 Year of Participation, the numerator of
              which is the number of Hours of Service which he completes during
              a Plan Year and the denominator of which is 2,000; provided,
              however, that if he completes less than 1,000 Hours of Service
              during a Plan Year, no portion of a Pre-1998 Year of Participation
              will be granted; plus

       (c)    with respect to the Plan Years during which his Participation
              Commencement Date and/or his Reemployment Commencement Date, if
              applicable, occur, to the extent one or both of the dates occur on
              or after January 1, 1976, and before January 1, 1998, either one
              Pre-1998 Year of Participation, or, if the month and day of his
              Participation Commencement Date or Reemployment Commencement Date
              within the Plan Year is after January 1, a fraction thereof, the
              numerator of which is the number of complete calendar months in
              that Plan Year during which he is a Participant and the
              denominator of which is 12.  However, if the number of Hours of
              Service that he completes as a Participant during the respective
              Plan Year is less than the product of 166-2/3 multiplied by the
              number of complete calendar months during which he is a
              Participant in the Plan Year, then the Pre-1998 Year of
              Participation, or fraction thereof, as otherwise determined
              pursuant to this Paragraph (c), will be multiplied by the ratio of
              the number of Hours of Service that he completes as a Participant
              during the Plan Year to 166-2/3 multiplied by the number of
              complete calendar months during which he is a Participant in the
              Plan Year.  If the number of Hours of Service that he completes as
              a Participant during the Plan Year is less than the product
              of 83-1/3 multiplied by the number of complete calendar months
              during which he is a Participant in the Plan Year, no portion of a
              Pre-1998 Year of Participation will be granted.

                                       22                          Exhibit 10-uu
<PAGE>

       With respect to any Plan Year wholly or partially included in a calendar
       year used to calculate the Participant's Pre-1998 Highest Average
       Earnings, if the Participant fails to complete at least 2,000 Hours of
       Service during that Plan Year, then, in lieu of any fraction of a
       Pre-1998 Year of Participation as otherwise determined under either
       Paragraph (b) or Paragraph (c), the Participant will be granted a
       fraction of Pre-1998 Year of Participation: the numerator of which is
       equal to the sum of the number of Hours of Service which the Participant
       completes as a Participant during those calendar months of the Plan Year
       that are not included in that calendar year, and the greater of (A) the
       number of Hours of Service that the Participant completes during those
       calendar months of the Plan Year that are included in such calendar year
       or (B) the product of 166-2/3 multiplied by the number of calendar months
       of the Plan Year that are included in the calendar year; and the
       denominator of which is 2,000. A Participant's Pre-1998 Years of
       Participation will be adjusted, if necessary, pursuant to Section 4.5
       (Special Adjustments) or Section 4.8 (Benefits Adjustment for
       Participants Covered by Certain Programs) of the Plan as in effect on
       December 31, 1997.

1.72   "Projected Annual Benefit" means, with respect to any Participant
       participating in a Qualified Defined Benefit Plan maintained by an
       Employer or an Affiliate, the annual straight life annuity benefit to
       which the Participant would be entitled under that Qualified Defined
       Benefit Plan based upon the following assumptions:

       (a)    the Participant will continue as an employee of an Employer until
              reaching the Participant's normal retirement age under the plan
              (or the Participant's current age if that is later);

       (b)    the Participant's compensation used to determine benefits under
              the plan for the calendar year under consideration will remain the
              same until the date the Participant attains the age described in
              Paragraph (a); and

                                       23                          Exhibit 10-uu
<PAGE>

       (c)    all other relevant factors used to determine benefits under the
              plan for the calendar year under consideration will remain
              constant for all future calendar years.

1.73   "PSI" means PSI Energy, Inc., an Indiana corporation, and any related
       company that had adopted the Plan as of December 31, 1997.

1.74   "Qualified Defined Benefit Plan" means any qualified defined benefit plan
       as defined in Code subsections 414(j) and 415(k).

1.75   "Qualified Defined Contribution Plan" means any qualified defined
       contribution plan as defined in Code subsections 414(i) and 415(k).

1.76   "Qualified Domestic Relations Order" means a qualified domestic relations
       order as defined in Code subsection 414(p).

1.77   "Reduced Primary Social Security Benefit" means the reduced amount of
       primary federal old age insurance benefit estimated by the Committee that
       is, or would be, payable or estimated to become payable to a Participant
       at his earliest eligibility date.  The estimate is based on the Social
       Security Act as in effect at the Participant's Option Effective Date.  If
       a Participant supplies documentation from the Social Security
       Administration of his or her actual Reduced Primary Social Security
       Benefit at least 60 days before his or her Option Effective Date, that
       amount will be used in lieu of the estimate referred to above.  A Reduced
       Primary Social Security Benefit calculated using actual documentation
       will not be recalculated.

1.78   "Reemployed Retiree" means a Participant, other than a Terminated Vested
       Participant, who is reemployed by an Employer after his Initial
       Separation Date or an Additional Separation Date.

                                       24                          Exhibit 10-uu
<PAGE>

1.79   "Reemployed Terminated Vested Participant" means a Terminated Vested
       Participant who is reemployed by an Employer after his Initial Separation
       Date or an Additional Separation Date.

1.80   "Reemployment Commencement Date" means, with respect to an Eligible
       Employee who incurs a Severance from Service and is later reemployed by
       an Employer, the date upon which the Eligible Employee first performs an
       Hour of Service after his reemployment.

1.81   "Retired Participant" means a former Participant, other than a Terminated
       Vested Participant, while alive on and after his Actual Separation Date.

1.82   "Sabbatical Vacation Pay" means, with respect to an Employee, the
       compensation received as remuneration for the weeks of accrued vacation
       accumulated pursuant to the Employer's applicable policy for the purpose
       of taking an extended vacation beyond the number of weeks of vacation to
       which the Employee would normally be entitled.

1.83   "Section 415 Compensation" means an Eligible Employee's earned income,
       wages, salaries, and fees for professional services, and other amounts
       received for personal services actually rendered in the course of
       employment with the Employer (including, but not limited to, commissions
       paid salesmen, compensation for services on the basis of a percentage of
       profits, commissions on insurance premiums, tips and bonuses) and, except
       as provided in the following sentence, excluding the following:
       (a) Employer contributions to a plan of deferred compensation that are
       not included in the Employee's gross income for the taxable year in which
       contributed or any distributions from a plan of deferred compensation;
       (b) amounts realized from the exercise of a nonqualified stock option, or
       when restricted stock (or property) held by the Employee either becomes
       freely transferable or is no longer subject to a substantial risk of
       forfeiture; and (c) amounts realized from the sale, exchange, or other
       disposition of stock acquired under a qualified stock option.
       Notwithstanding the foregoing, Section 415 Compensation will include any
       elective deferral as defined in Code paragraph 402(g)(3) and amounts
       contributed by an

                                       25                          Exhibit 10-uu
<PAGE>

       Employer pursuant to a salary reduction agreement that are excludable
       from the Employee's gross income under Code section 125 or 457.

1.84   "Securities Exchange Act" means the Securities Exchange Act of 1934, as
       amended from time to time, and interpretive rulings and regulations.

1.85   "Service" means, with respect to an Eligible Employee, the period of time
       during which the employment relationship exists between the Eligible
       Employee and the Employer, the length of which is determined as follows:

       (a)    Notwithstanding any other provision of the Plan to the contrary,
              any Eligible Employee who accrued "years of service" (as defined
              in the Plan as of December 31, 1997) under the Plan will be
              credited with Service for the "years of service" credited to him
              under the Plan before January 1, 1998.

       (b)    An Eligible Employee will be credited with Service for the period
              of time beginning with his Employment Commencement Date and ending
              on his Severance from Service Date.

       (c)    An Eligible Employee will be credited with Service for each Period
              of Credited Severance.

       (d)    An Eligible Employee will be credited with Service for any period
              of Service with an Affiliate after he has reached age 18, which
              will be determined as if he had been employed by the Employer
              during that period.

       (e)    In determining an Eligible Employee's total Service for purposes
              of the Plan, all periods of Service that are credited to the
              Employee under Subsections (a) through (d) above will be
              aggregated.  In no event will an Employee receive credit more than
              once for the same period of Service.  For purposes of determining
              an Eligible Employee's total Service, the Eligible Employee will
              be credited with one month

                                       26                          Exhibit 10-uu
<PAGE>

              of Service for each calendar month in which he is credited with at
              least one Hour of Service. An Eligible Employee will be credited
              with one year of Service for each 12 months of Service with which
              he is credited pursuant to the preceding sentence.

1.86   "Service Watch Payments" mean, with respect to an Employee, the
       compensation received as a premium for serving on stand-by duty for the
       relevant period pursuant to the Employer's applicable policy.

1.87   "Severance from Service" means, with respect to an Employee:

       (a)    the date of termination of his employment relationship with his
              Employer by reason of a quit, resignation, discharge, retirement,
              death, or layoff of the Employee for an indefinite period of time
              made without any expectation on the part of the Employer at the
              time of layoff to recall the Employee, for employment with the
              Employer as an Employee within 12 months from the date of the
              commencement of the layoff; or

       (b)    the first anniversary of the first date of the Employee's Absence
              from Service, or, if later, the expiration of an Absence from
              Service.  Notwithstanding the preceding sentence, if an Employee
              has an Absence from Service of more than one year by reason of a
              maternity or paternity absence, the Employee's Severance from
              Service occurs on the second anniversary of that absence.  For
              purposes of this Subsection, an Absence from Service for maternity
              or paternity reasons means an absence (1) by reason of the
              pregnancy of the individual, (2) by reason of the birth of a child
              of that individual, (3) by reason of the placement of a child with
              the individual in connection with the adoption of the child by
              that individual, or (4) for purposes of caring for the child for a
              period beginning immediately following its birth or placement.

                                       27                          Exhibit 10-uu
<PAGE>

       For purposes of this Subsection, the term "Employer" includes all
       Affiliates, and an Employee or former Employee will not be treated as
       having incurred a Severance from Service until the employment
       relationship between the Employee and all Employers and Affiliates is
       terminated.

1.88   "Severance from Service Date" means, with respect to each Employee, the
       date of his Severance from Service.

1.89   "Shift Premiums" mean, with respect to an Employee, the compensation
       received as a premium for services performed for the relevant period for
       working a shift other than the Employer's regular day shift pursuant to
       the Employer's applicable policy.

1.90   "Social Security Act" means the federal Social Security Act, 42 U.S.C.
       Section 301, ET SEQ., as amended from time to time, and interpretive
       rulings and regulations.

1.91   "Social Security Retirement Age" means respectively (a) age 65 for a
       Participant born before January 1, 1938; (b) age 66 for a Participant
       born after December 31, 1937, but before January 1, 1955; and (c) age 67
       for a Participant born after December 31, 1954.

1.92   "Spouse" means, with respect to any Participant, the Participant's
       lawfully married spouse, if any, on the applicable date.  The Plan will
       not recognize common law marriages or similar arrangements unless
       required to do so by federal law.  A former Spouse will also be
       considered a Spouse to the extent provided under a Qualified Domestic
       Relations Order.

1.93   "Terminated Vested Participant" means a Participant who is entitled to
       benefits under the provisions of Section 5.3 (Severance from Service
       After Vesting).

1.94   "Trust Fund" means the trust established by the Employer to fund the
       Plan.

                                       28                          Exhibit 10-uu
<PAGE>

1.95   "Trustee" means the person or entity designated by Cinergy to act as
       trustee of any trust forming a part of the Pension Fund.

1.96   "Vesting Requirement" means, with respect to each Participant, the
       requirements for the vesting of his accrued benefits under the Plan.

The uses of singular and masculine words are for practical purposes only and
will 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 original effective date of this Plan was March 1, 1941.  The effective
date of this Plan restatement is, unless otherwise specified, January 1,
1998, as to Cinergy, and will be effective with respect to any other Employer
as of the date that Employer elects to participate in the Plan pursuant to
Section 20.1 (Adoption of Plan).

This restatement applies only to Eligible Employees who are credited with at
least one Hour of Service on or after January 1, 1998.  This Plan will not
affect the rights of former Eligible Employees (and their Beneficiaries) who
retired, died, or otherwise terminated their employment with an Employer
prior to January 1, 1998.  The rights, if any, of those former Eligible
Employees (and their Beneficiaries), and the amounts of their benefits, if
any, will continue to be governed by the provisions of the Plan in effect
prior to January 1, 1998.

                                  ARTICLE 3
                        ELIGIBILITY AND PARTICIPATION

3.1    DATE OF PARTICIPATION

       Each Employee who is an Eligible Employee on January 1, 1998, and who was
       participating in the Plan as of December 31, 1997, will continue to be a
       Participant as of

                                       29                          Exhibit 10-uu
<PAGE>

       January 1, 1998. Each other Eligible Employee will automatically become a
       Participant on the latest of January 1, 1998, his Employment Commencement
       Date, or the date he reaches age 18. An Eligible Employee who becomes a
       Participant, subsequently incurs a Severance from Service, and is later
       reemployed by an Employer will again become a Participant on his
       Reemployment Commencement Date.

3.2    LEASED EMPLOYEES

       A Leased Employee will be excluded from participation in the Plan.
       However, if a Leased Employee is subsequently employed by an Employer as
       an Eligible Employee, his time as a Leased Employee of an Employer will
       be considered for purposes of determining eligibility under this Article
       and vesting under Article 5 (Severance from Service -- Vesting).

3.3    TRANSFERS OF EMPLOYMENT

       If a Participant is transferred from one Employer to another or from an
       Employer to an Affiliate, he will continue to participate in the Plan
       until an event occurs that would have terminated his participation had he
       continued in the service of an Employer, except that payments received by
       a Participant from any Affiliate that is not an Employer will not be
       treated as Earnings for purposes of determining the amount of retirement
       benefits to which the Participant will be entitled.  Any period of
       employment with an Affiliate that is not an Employer will be taken into
       account for purposes of determining when a Participant has satisfied the
       Vesting Requirement.

       If a Participant is transferred from an Employer to an Affiliate that has
       not elected to participate in the Plan pursuant to Section 20.1 (Adoption
       of Plan), the Participant's accrued benefit under the Plan as of the date
       of the transfer will be preserved.  The Participant's service after the
       transfer will not be considered in determining the Participant's years of
       Participation, but will be considered in determining the Participant's
       years of Service.

                                       30                          Exhibit 10-uu
<PAGE>

3.4    TRANSFERS OF PARTICIPANTS AND PLAN ASSETS TO AND FROM THE CINERGY CORP.
       NON-UNION EMPLOYEES' PENSION PLAN AND CINERGY CORP. UNION EMPLOYEES'
       RETIREMENT INCOME PLAN

       (a)    If a Participant in the Plan remains an Employee but becomes
              ineligible to participate in the Plan, he will become a
              participant in the Cinergy Corp. Non-Union Employees' Pension Plan
              or the Cinergy Corp. Union Employees' Retirement Income Plan, if
              he is an "eligible employee" as defined in either of those plans,
              as of the first day of the month during which his change in
              Employee status becomes effective.

       (b)    If a Participant in the Cinergy Corp. Non-Union Employees' Pension
              Plan or the Cinergy Corp. Union Employees' Retirement Income Plan
              remains an Employee but becomes ineligible to participate in his
              current plan, he will become a Participant in the Plan, if he is
              an Eligible Employee, as of the first day of the month during
              which his change in Employee status becomes effective.

       (c)    A transfer of assets between the Plan and the Cinergy Corp.
              Non-Union Employees' Pension Plan or the Cinergy Corp. Union
              Employees' Retirement Income Plan will follow the requirements of
              Code subsection 414(1). The value of the benefits to be
              transferred will be based upon the Plan's actuarial valuation
              assumptions at the time of the transfer. The actual transfer of
              assets will occur as soon as administratively practicable after
              the change in the Participant's Employee status.

       (d)    A Participant who has earned years and/or partial years of
              "participation" under the Cinergy Corp. Non-Union Employees'
              Pension Plan or the Cinergy Corp. Union Employees' Retirement
              Income Plan and who then becomes a Participant in this Plan, will
              be credited under this Plan with his total years of
              "participation" earned under the Cinergy Corp. Non-Union
              Employees' Pension Plan or the Cinergy Corp. Union Employees'
              Retirement Income Plan, as if they were earned

                                       31                          Exhibit 10-uu
<PAGE>

              under this Plan. A Participant will not be credited with more
              years of Participation than he would have earned if the total of
              all his years of Participation under the Plan and all his years of
              "participation" under the Cinergy Corp. Non-Union Employees'
              Pension Plan and the Cinergy Corp. Union Employees' Retirement
              Income Plan had been earned solely as a Participant of this Plan.
              The benefit paid to a Participant under this Plan will never be
              less than the benefit the Participant earned in the Cinergy Corp.
              Non-Union Employees' Pension Plan and/or the Cinergy Corp. Union
              Employees' Retirement Income Plan prior to his change in Employee
              status.

                                  ARTICLE 4
                         AMOUNT OF LIFE-ONLY PENSION

4.1    NORMAL RETIREMENT PENSION FORMULA

       Except as otherwise expressly provided in this Article, a Participant who
       retires on or after his Normal Retirement Date will be entitled to a
       Nonforfeitable Annual Pension under this Plan equal to the sum of (a)
       plus (b), where (a) is equal to:

              (1)    1.1 percent of the Participant's Highest Average Earnings
                     plus

              (2)    0.5 percent of the amount by which his Highest Average
                     Earnings exceed his applicable Covered Compensation,
                     multiplied by the number of his years of Participation not
                     in excess of 35;

       and (b) is equal to 1.4 percent of the Participant's Highest Average
       Earnings, multiplied by the number of his years of Participation in
       excess of 35.


4.2    NORMAL RETIREMENT BENEFITS FOR PRE-1998 PARTICIPANTS

                                       32                          Exhibit 10-uu
<PAGE>

       The normal retirement Nonforfeitable Annual Pension of a Participant who
       was a Participant in the Plan as of December 31, 1997, will be the
       greater of (a) or (b), where (a) is the Participant's Annual Pension
       calculated under Section 4.1 (Normal Retirement Pension Formula) and
       (b) is the Participant's annual accrued benefit calculated under the Plan
       as of December 31, 1997.  The applicable formulas used to calculate a
       Participant's annual accrued benefit under the Plan as in effect on
       December 31, 1997, are as follows:

       (a)    NORMAL RETIREMENT PENSION FORMULA 1

              The Annual Pension computed under Pension Formula 1 equals
              (1) 1.1 percent of the Participant's Pre-1998 Highest Average
              Earnings, plus (2) 0.5 percent of the amount by which his Pre-1998
              Highest Average Earnings exceed his applicable Pre-1998 Covered
              Compensation, multiplied by the number of his Pre-1998 Years of
              Participation, up to a maximum of 35.

       (b)    NORMAL RETIREMENT PENSION FORMULA 2

       The Annual Pension computed under Pension Formula 2 equals the excess of:

              (1)    1-2/3 percent of the Participant's Pre-1998 Highest Average
                     Earnings, multiplied by the number of his Pre-1998 Years of
                     Participation not in excess of 30; over

              (2)    1-2/3 percent of the Participant's Annual Primary Social
                     Security Amount that he is expected to be entitled to
                     receive either at his Pre-1998 Normal Retirement Date or at
                     his Disability Date if his disability continues to his
                     Pre-1998 Normal Retirement Date, in any event multiplied by
                     the number of his Pre-1998 Years of Participation not in
                     excess of 30.

       (c)    PSI NORMAL RETIREMENT PENSION FORMULA 3

                                       33                          Exhibit 10-uu
<PAGE>

              The Annual Pension computed under Pension Formula 3 equals the
       excess of:

              (1)    2 percent of the Participant's Pre-1998 Highest Average
                     Earnings, multiplied by the number of his Pre-1998 Years of
                     Participation not in excess of 25, over

              (2)    2 percent of the Participant's Annual Primary Social
                     Security Amount that he is expected to be entitled to
                     receive either upon the attainment of age 62 on the
                     assumption that he receives no "wages" or "remuneration,"
                     as defined in the Social Security Act, between December 31,
                     1989 (December 31, 1988, for a Highly Compensated
                     Participant), and his attainment of age 62, or if he is
                     still employed by his Employer on or after his attainment
                     of age 62, as of the earlier of December 31, 1989
                     (December 31, 1988, for a Highly Compensated Participant),
                     or his Pre-1998 Normal Retirement Date, or at his
                     Disability Date if his disability continues up until the
                     date otherwise determined under this Paragraph (2), in any
                     event multiplied by the number of his Pre-1998 Years of
                     Participation not in excess of 25.

       (d)    TERMINATED VESTED PENSION FORMULA 5

              The Annual Pension computed under Pension Formula 5 equals the
              excess of:

              (1)    2 percent of the Participant's Pre-1998 Highest Average
                     Earnings, multiplied by the number of his Pre-1998 Years of
                     Participation not in excess of 25, over

              (2)    a fraction, the numerator of which is his actual Pre-1998
                     Years of Participation and the denominator of which is the
                     Pre-1998 Years of Participation he would have accumulated
                     at his Pre-1998 Normal Retirement Date if during each year
                     after December 31, 1989

                                       34                          Exhibit 10-uu
<PAGE>

                     (December 31, 1988, for a Highly Compensated Participant)
                     he had completed at least 2,000 Hours of Service, of 50
                     percent of the Participant's Annual Primary Social Security
                     Amount that he is entitled to receive upon the attainment
                     of age 60 on the assumption that his rate of Earnings as of
                     December 31, 1989 (December 31, 1988, for a Highly
                     Compensated Participant), had continued unchanged until age
                     60.

       (e)    TERMINATED VESTED PENSION FORMULA 6

              The Annual Pension computed under Pension Formula 6 equals the
              excess of:

              (1)    1-2/3 percent of the Participant's Pre-1998 Highest Average
                     Earnings, multiplied by the number of his Pre-1998 Years of
                     Participation not in excess of 30; over

              (2)    a fraction, the numerator of which is his actual Pre-1998
                     Years of Participation and the denominator of which is the
                     Years of Participation he would have accumulated at his
                     Pre-1998 Normal Retirement Date if during each year after
                     December 31, 1989 (December 31, 1988, for a Highly
                     Compensated Participant) he had completed at least
                     2,000 Hours of Service, of 50 percent of the Participant's
                     Annual Primary Social Security Amount that he is entitled
                     to receive upon the attainment of age 60 on the assumption
                     that his rate of Earnings as of December 31, 1989
                     (December 31, 1988, for a Highly Compensated Participant),
                     had continued unchanged until age 60.

4.3    GENERAL METHOD OF COMPUTING ACCRUED BENEFIT UNDER THE PLAN'S PRE-1998
       FORMULAS FOR NORMAL RETIREMENT

       (a)    Subject to the following provisions of this Section, the amount of
              the accrued benefit under the Plan as of December 31, 1997, of a
              Participant who was a

                                       35                          Exhibit 10-uu
<PAGE>

              Participant in the Plan as of December 31, 1997, will be computed
              under Pension Formula 1 in Subsection 4.2(a) (Normal Retirement
              Benefits for Pre-1998 Participants).

       (b)    Notwithstanding any other provisions of this Section, the accrued
              benefit under the Plan as of December 31, 1997, of a Participant
              who became a Participant in the Plan prior to May 1, 1970,  will
              not be less than the amount computed under Pension Formula 3 in
              Subsection 4.2(c) (Normal Retirement Benefits for Pre-1998
              Participants) as of the following date:

              (1)    December 31, 1989, with respect to an Employee who is not a
                     Highly Compensated Participant; or

              (2)    December 31, 1988, with respect to a Highly Compensated
              Participant.

       (c)    Notwithstanding any other provisions of this Section, the accrued
              benefit under the Plan as of December 31, 1997, of a Participant
              who became a Participant in the Plan on or after May 1, 1970, will
              not be less than the amount computed under Pension Formula 2 in
              Subsection 4.2(b) (Normal Retirement Benefits for Pre-1998
              Participants) as of the following date:

              (1)    December 31, 1989, with respect to an Employee who is not a
                     Highly Compensated Participant; or

              (2)    December 31, 1988, with respect to a Highly Compensated
              Participant.

4.4    GENERAL METHOD OF COMPUTING ANNUAL PENSION FOR RETIREMENT AT EARLY
RETIREMENT DATE

       (a)    Subject to the following provisions of this Section, a Participant
              who retires on an Early Retirement Date, will be entitled to a
              Nonforfeitable Annual Pension computed under Section 4.1 (Normal
              Retirement Pension Formula).  The benefits will begin on the
              Employee's Normal Retirement Date, or, if the Employee so


                                       36                          Exhibit 10-uu

<PAGE>

              elects, at an earlier date on or after his Early Retirement Date.
              If the Employee elects to have the benefit begin before his 62nd
              birthday, the amount of the Employee's Nonforfeitable Annual
              Pension will be multiplied by the appropriate early payment factor
              as obtained from the following table:

                                        37

<PAGE>

<TABLE>
<CAPTION>

    EARLY                      EARLY                     EARLY
   PAYMENT                   PAYMENT                    PAYMENT
    PERIOD          EARLY     PERIOD           EARLY     PERIOD           EARLY
    ------         PAYMENT    ------          PAYMENT    ------          PAYMENT
  YR.    MO.        FACTOR   YR.   MO.         FACTOR  YR.    MO.         FACTOR
  ---    ---        ------   ---   ---         ------  ---    ---         ------
<S>      <C>        <C>      <C>   <C>         <C>     <C>    <C>         <C>
   0      0         1.0000    4     0          0.7333   8      0          0.5667
   0      1         0.9944    4     1          0.7278   8      1          0.5639
   0      2         0.9889    4     2          0.7222   8      2          0.5611
   0      3         0.9833    4     3          0.7167   8      3          0.5584
   0      4         0.9778    4     4          0.7111   8      4          0.5556
   0      5         0.9722    4     5          0.7056   8      5          0.5528
   0      6         0.9667    4     6          0.7000   8      6          0.5500
   0      7         0.9611    4     7          0.6944   8      7          0.5473
   0      8         0.9556    4     8          0.6889   8      8          0.5445
   0      9         0.9500    4     9          0.6833   8      9          0.5417
   0      10        0.9444    4     10         0.6778   8      10         0.5389
   0      11        0.9389    4     11         0.6722   8      11         0.5361
   1      0         0.9333    5     0          0.6667   9      0          0.5334
   1      1         0.9278    5     1          0.6639   9      1          0.5300
   1      2         0.9222    5     2          0.6611   9      2          0.5265
   1      3         0.9167    5     3          0.6584   9      3          0.5231
   1      4         0.9111    5     4          0.6556   9      4          0.5196
   1      5         0.9056    5     5          0.6528   9      5          0.5162
   1      6         0.9000    5     6          0.6500   9      6          0.5127
   1      7         0.8944    5     7          0.6473   9      7          0.5093
   1      8         0.8889    5     8          0.6445   9      8          0.5059
   1      9         0.8833    5     9          0.6417   9      9          0.5024
   1      10        0.8778    5     10         0.6389   9      10         0.4990
   1      11        0.8722    5     11         0.6361   9      11         0.4955
   2      0         0.8667    6     0          0.6334   10     0          0.4921
   2      1         0.8611    6     1          0.6306   10     1          0.4889
   2      2         0.8556    6     2          0.6278   10     2          0.4858
   2      3         0.8500    6     3          0.6250   10     3          0.4826
   2      4         0.8444    6     4          0.6223   10     4          0.4795
   2      5         0.8389    6     5          0.6195   10     5          0.4763
   2      6         0.8333    6     6          0.6167   10     6          0.4732
   2      7         0.8278    6     7          0.6139   10     7          0.4700
   2      8         0.8222    6     8          0.6111   10     8          0.4668
   2      9         0.8167    6     9          0.6084   10     9          0.4637
   2      10        0.8111    6     10         0.6056   10     10         0.4605
   2      11        0.8056    6     11         0.6028   10     11         0.4574
   3      0         0.8000    7     0          0.6000   11     0          0.4542
   3      1         0.7944    7     1          0.5973   11     1          0.4513
   3      2         0.7889    7     2          0.5945   11     2          0.4485
   3      3         0.7833    7     3          0.5917   11     3          0.4456
   3      4         0.7778    7     4          0.5889   11     4          0.4427
   3      5         0.7722    7     5          0.5861   11     5          0.4398
   3      6         0.7667    7     6          0.5834   11     6          0.4370
   3      7         0.7611    7     7          0.5806   11     7          0.4341
   3      8         0.7556    7     8          0.5778   11     8          0.4312
   3      9         0.7500    7     9          0.5750   11     9          0.4283
   3      10        0.7444    7     10         0.5723   11     10         0.4255
   3      11        0.7389    7     11         0.5695   11     11         0.4226
                                                        12     0          0.4197

</TABLE>

                                        38

<PAGE>

              In using the above table, the order of required steps is as
              follows:

              (1)    determine the Participant's "early payment period," which
                     is the number of whole calendar months by which the actual
                     commencement of his pension payments precedes the first day
                     of the calendar month coincident with or following his
                     62nd birthday;

              (2)    use the early payment period as determined in Step (1) to
                     identify the applicable early payment factor; and

              (3)    multiply the applicable early payment factor times the
                     amount of the Participant's Annual Pension determined under
                     Section 4.1 (Normal Retirement Pension Formula).

       (b)    Notwithstanding any other provision of this Section except
              Subsection (d), the early retirement Nonforfeitable Annual Pension
              payable to a Participant who (1) was a Participant in the Plan as
              of December 31, 1997, and (2) became a Participant in the Plan
              prior to May 1, 1970, will be computed under Section 4.2 (Normal
              Retirement Benefits for Pre-1998 Participants) and Section 4.3
              (General Method of Computing Accrued Benefit Under the Plan's
              Pre-1998 Formulas for Normal Retirement) and will be reduced by
              multiplying the amount of the Participant's Nonforfeitable Annual
              Pension by the early payment factor described in Subsection (a);
              provided, however, that his early retirement Nonforfeitable Annual
              Pension will not be less than the product of:

              (A)    the amount computed under Pension Formula 3 in
                     Subsection 4.2(c) (Normal Retirement Benefits for Pre-1998
                     Participants) as of the following date:

                     (i)    December 31, 1989, with respect to an Employee who
                            is not a Highly Compensated Participant; or


                                        39

<PAGE>

                     (ii)   December 31, 1988, with respect to a Highly
                            Compensated Participant; and

              (B)    the early payment factor determined as described in
                     Subsection (a), except that the early payment period will
                     be the number of whole calendar months by which the
                     commencement of the Participant's pension payments precedes
                     the first day of the calendar month coincident with or
                     following his 60th birthday.

       (c)    Notwithstanding any other provision of this Section except
              Subsection (d), the early retirement Nonforfeitable Annual Pension
              payable to a Participant who (1) was a Participant in the Plan as
              of December 31, 1997, and (2) became a Participant in the Plan on
              or after May 1, 1970, will be computed under Section 4.2 (Normal
              Retirement Benefits for Pre-1998 Participants) and Section 4.3
              (General Method of Computing Accrued Benefit Under the Plan's
              Pre-1998 Formulas for Normal Retirement) and will be reduced by
              multiplying the amount of the Participant's Nonforfeitable Annual
              Pension by the early payment factor described in Subsection (a);
              provided, however, that his early retirement Nonforfeitable Annual
              Pension will not be less than the product of:

              (1)    the amount computed under Pension Formula 2 in
                     Subsection 4.2(b) (Normal Retirement Benefits for Pre-1998
                     Participants) as of the following date:

                     (A)    December 31, 1989, with respect to an Employee who
                            is not a Highly Compensated Participant; or

                     (B)    December 31, 1988, with respect to a Highly
                            Compensated Participant; and

              (2)    the early payment factor determined as described in
                     Subsection (a).


                                        40

<PAGE>

       (d)    If, as of his applicable Severance from Service Date, a
              Participant has reached age 55, and the sum of his age (in whole
              years) attained as of that date and the number of his years of
              Service (in whole years) accumulated as of that date equals or
              exceeds 85, he will receive a Nonforfeitable Annual Pension
              computed under the appropriate early retirement Annual Pension
              formula described in this Section, but the amount of the
              Participant's pension will not be multiplied by the early payment
              factor that otherwise would be applicable.

       (e)    A Participant who is eligible to terminate employment voluntarily
              under the Redeployment Status Opportunity provisions of the
              Severance Opportunity Plan for Union Employees of Cinergy Corp.,
              as amended from time to time, is eligible to receive a
              Nonforfeitable Annual Pension computed under the appropriate early
              retirement Annual Pension formula described in this Section, but
              the amount of the Participant's pension will not be multiplied by
              the early payment factor that otherwise would be applicable,
              provided that:  (1) as of his applicable Severance from Service
              Date, the Participant has reached age 50, but not yet reached age
              55, (2) he elects under Article 8 (Payment of Pension) to defer
              receipt of his pension to at least age 55, and (3) the sum of his
              age (in whole years) attained as of the date that the receipt of
              the pension under the Plan begins pursuant to Paragraph (2) and
              his years of Service (in whole years) accumulated as of his
              Severance from Service Date equals or exceeds 85.

4.5    GENERAL METHOD OF COMPUTING ANNUAL PENSION FOR A TERMINATED VESTED
       PARTICIPANT

       (a)    Subject to the following provisions of this Section, the amount of
              Nonforfeitable Annual Pension payable to a former Participant who
              is described in Section 5.3 (Severance from Service After
              Vesting), and whose Actual Separation Date


                                        41

<PAGE>

              occurred on or before his Normal Retirement Date, will be computed
              under Section 4.1 (Normal Retirement Pension Formula). The
              benefits will begin on the Employee's Normal Retirement Date or,
              if the Employee so elects, at an earlier date on or after his
              Early Retirement Date. If the Employee elects to have the benefits
              begin before his Normal Retirement Date, the amount of the
              Employee's Nonforfeitable Annual Pension will be reduced by five
              percent for each calendar year (or .4166 percent for each calendar
              month) by which the commencement of his pension payments precedes
              his Normal Retirement Date.

       (b)    Notwithstanding any other provision of this Section, the
              terminated vested Nonforfeitable Annual Pension payable to a
              Participant who was a Participant in the Plan as of December 31,
              1997, will be the greater of the amounts calculated under (a) and
              (b) of Section 4.2 (Normal Retirement Benefits for Pre-1998
              Participants in the Plan), after those amounts are reduced for
              early payment as follows:

              (1)    The Participant's Annual Pension calculated under
                     Section 4.1 (Normal Retirement Pension Formula) is reduced
                     as described in Subsection (a).

              (2)    If the Participant elects to have his benefit begin before
                     his Normal Retirement Date, the Participant's annual
                     accrued benefit under the Plan as of December 31, 1997, is
                     reduced by multiplying that annual accrued benefit by the
                     appropriate early payment factor as obtained from the table
                     in Subsection 4.4(a) (General Method of Computing Annual
                     Pension for Retirement at Early Retirement Date).

       (c)    Notwithstanding any other provisions of this Section, the
              terminated vested Nonforfeitable Annual Pension payable to a
              Participant who (1) was a Participant in the Plan as of
              December 31, 1997, and (2) became a Participant in the Plan prior
              to May 1, 1970, will not be less than the product of:


                                        42

<PAGE>

              (A)    The amount computed under Pension Formula 5 in
                     Subsection 4.2(d) (Normal Retirement Benefits for Pre-1998
                     Participants) as of the following date:

                     (i)    December 31, 1989, with respect to an Employee who
                            is not a Highly Compensated Participant; or

                     (ii)   December 31, 1988, with respect to a Highly
                            Compensated Participant; and

              (B)    If the Participant elects to have his benefit begin before
                     his Normal Retirement Date, the early payment factor as
                     obtained from the table in Subsection 4.4(a) (General
                     Method of Computing Annual Pension for Retirement at Early
                     Retirement Date), except that the early payment period will
                     be the number of whole calendar months by which the
                     commencement of the Participant's pension payments precedes
                     the first day of the calendar month coincident or following
                     his 60th birthday.

       (d)    Notwithstanding any other provisions of this Section, the
              terminated vested Nonforfeitable Annual Pension payable to a
              Participant who (1) was a Participant in the Plan as of
              December 31, 1997, and (2) became a Participant in the Plan on or
              after May 1, 1970, will not be less than the product of:

              (1)    The amount computed under Pension Formula 6 in
                     Subsection 4.2(e) (Normal Retirement Benefits for Pre-1998
                     Participants) as of the following date:

                     (A)    December 31, 1989, with respect to an Employee who
                            is not a Highly Compensated Participant; or


                                        43

<PAGE>

                     (B)    December 31, 1988, with respect to a Highly
                            Compensated Participant; and

              (2)    If the Participant elects to have his benefit begin before
                     his Normal Retirement Date, the early payment factor
                     determined as obtained from the table in Subsection 4.4(a)
                     (General Method of Computing Annual Pension for Retirement
                     at Early Retirement Date).

4.6    MAXIMUM PENSION

       (a)    Each Participant whose Annual Pension as otherwise determined
              pursuant to the provisions of this Article and as modified by the
              applicable provisions of Section 7.1 (Normal Forms of Pensions)
              exceeds $1,000 multiplied by the Employee's years of Service with
              the Employer (not exceeding ten), or who has ever participated in
              a Qualified Defined Contribution Plan, will in no event be
              entitled to an Annual Pension (as determined on a Plan Year basis)
              that exceeds the lesser of:

              (1)    $90,000 (as adjusted for increases in the limitation
                     pursuant to Code subsection 415(d)); or

              (2)    100 percent of his highest average annual Section 415
                     Compensation from his Employer for any three consecutive
                     years of Service; provided, that if he has fewer than three
                     years of Service, then 100 percent of his highest average
                     annual Section 415 Compensation from his Employer for his
                     total years of Service will be construed as the limiting
                     amount.

       However, if a Participant has fewer than ten years of Participation at
       his Normal Retirement Date or Early Retirement Date, whichever is
       applicable, then the dollar limitation of Paragraph (1) will be
       multiplied by a fraction, the numerator of which is the number of the
       Participant's years of Participation (including fractional years of


                                        44

<PAGE>

       Participation) and the denominator of which is ten.  However, the maximum
       benefit will never be reduced to less than 1/10th of the applicable
       limitation.

       (b)    If any benefit under the plan begins before the Participant's
              Social Security Retirement Age, but on or after the Participant
              reaches age 62, the determination as to whether the $90,000 limit
              set forth in Subsection (a) has been satisfied will be made, in
              accordance with regulations prescribed by the Secretary, by
              reducing the limitation of Subsection (a).  The reduction under
              the preceding sentence will be made in the manner as the Secretary
              may prescribe that is consistent with the reduction for old-age
              insurance benefits commencing before the Social Security
              Retirement Age under the Social Security Act.  If any benefit
              under the Plan begins before the Participant reaches age 62, the
              determination as to whether the $90,000 limit set forth in
              Subsection (a) has been satisfied will be made, in accordance with
              regulations prescribed by the Secretary, by reducing the
              limitation of Subsection (a) so that the limitation (as reduced)
              equals an Annual Pension (beginning when the retirement income
              benefit begins) that is actuarially equivalent to the reduced
              $90,000 Annual Pension beginning at age 62 as determined under
              this Subsection.

       (c)    If any benefit under the Plan begins after the Participant's
              Social Security Retirement Age, the determination as to whether
              the $90,000 limitation set forth in Subsection (a) has been
              satisfied will be made, in accordance with regulations prescribed
              by the Secretary, by increasing, if necessary, the limitation of
              Subsection (a) so that the limitation (as increased) equals an
              Annual Pension (beginning when the retirement income benefit
              begins) that is actuarially equivalent to a $90,000 Annual Pension
              beginning at the Social Security Retirement Age.

       (d)    In general, the maximum annual benefit means a benefit payable
              annually in the form of a single life annuity (without ancillary
              benefits).  If a Participant's pension under the Plan is payable
              in any form other than a single life annuity, the


                                        45

<PAGE>

              determination as to whether the limitations of this Section have
              been satisfied will be made by adjusting the benefit so that it is
              the actuarial equivalent of a single life annuity. For purposes of
              this Section, any ancillary benefit not directly related to
              retirement income benefits, and that portion of any joint and
              survivor annuity that constitutes a Qualified Joint and Survivor
              Annuity under Subsection 7.1(b) (Normal Forms of Pension), will
              not be taken into account.

       (e)    For benefits commencing in Plan Years beginning on or after
              January 1, 1995, and except as provided in this Plan, the
              adjustments to the limitations under Subsections (b), (c), and (d)
              will be calculated as described in this Subsection.  For purposes
              of adjusting the limit for an Annual Pension commencing prior to
              age 62 under Subsection (b), the $90,000 limitation will be equal
              to the lesser of the equivalent $90,000 limitation that is
              computed using the interest rate and mortality table (or other
              tabular factor) specified in the Plan for equivalence for early
              retirement benefits, and the equivalent $90,000 limitation that is
              computed using a 5 percent interest rate assumption and the
              mortality table prescribed from time to time by the Secretary for
              this purpose.  For purposes of adjusting any form of optional
              benefit to a straight life annuity under Subsection (d), the
              actuarially equivalent life annuity will be equal to the greater
              of the annuity benefit that is computed using the interest rate
              and mortality table (or other tabular factor) specified in the
              Plan for adjusting benefits in the same form, and the annuity
              benefit that is computed using a 5 percent interest rate
              assumption and the mortality table prescribed from time to time by
              the Secretary for this purpose.  For purposes of adjusting for any
              form of benefit subject to Code paragraph 417(e)(3), an interest
              rate assumption equal to the annual rate of interest on 30 year
              Treasury securities for November of the preceding Plan Year, as
              specified by the Commissioner of Internal Revenue, will be
              substituted for the 5 percent interest rate assumption set forth
              in the preceding sentences.  For purposes of adjusting the limit
              under Subsection (c), the $90,000 limitation for an Annual Pension
              beginning after Social Security Retirement Age will be the lesser
              of the equivalent $90,000 limitation that is computed using the
              interest rate and mortality table (or


                                        46
<PAGE>

              other tabular factor) specified in the Plan for equivalence of
              delayed retirement benefits, and the eqivalent $90,000 limitation
              that is computed using a 5 percent interest rate assumption and
              the mortality table prescribed from time to time by the Secretary
              for this purpose. Notwithstanding the preceding provisions of this
              Subsection, this Subsection will not apply to the accrued benefit
              of any Participant under the Plan as of December 31, 1997, after
              applying Code section 415 as in effect on December 7, 1994, for
              each possible Annuity Starting Date and each optional form of
              benefit under the Plan.

       (f)    Notwithstanding the foregoing, the maximum annual benefit payable
              under this Section will not be less than the actuarial equivalent
              of the Participant's single life annuity, accrued under the Plan,
              as of December 31, 1997, determined by using the Plan's actuarial
              assumptions as in effect on December 31, 1997.

       (g)    If for any particular Plan Year, a Participant is also
              participating in one or more Qualified Defined Contribution Plans
              maintained by his Employer, then the sum of the Participant's
              aggregate Defined Benefit Plan Fraction and the Participant's
              aggregate Defined Contribution Plan Fraction will not exceed 1.0.
              If the sum exceeds 1.0, then the Employer will reduce the
              Participant's benefits in this Plan so that the sum equals 1.0.
              The Participant's maximum Annual Pension will be determined under
              the provisions of this Article without regard to the $10,000
              minimum amount referred to in the first paragraph of this Section.
              This Subsection will be repealed, effective January 1, 2000, for
              any Participant who is credited with at least one Hour of Service
              on or after January 1, 2000.

                                     ARTICLE 5

                           SEVERANCE FROM SERVICE-VESTING

5.1    VESTING REQUIREMENT


                                        47

<PAGE>

       A Participant will satisfy the Vesting Requirement under the Plan upon
       his completion of five years of Service and then will have a
       Nonforfeitable right to his accrued benefit under the Plan.  A
       Participant who is an Employee on his Normal Retirement Date will be
       deemed to satisfy the Vesting Requirement as of that date if he has not
       already satisfied the Vesting Requirement under the Plan.
       Notwithstanding the preceding provisions of this Subsection, the
       Nonforfeitable percentage of each Participant's right to his accrued
       benefit derived from Employer contributions, because of a change to the
       vesting schedule, will be not less than the Participant's vested
       percentage, computed under the Plan as of the date immediately prior to
       the change, without regard to the change.  Moreover, each Participant
       whose Nonforfeitable percentage of his accrued benefit derived from
       Employer contributions is determined under an amended vesting schedule,
       and who has completed at least three years of Service as of the date of
       the amendment may elect, within a reasonable period after the adoption of
       the amended vesting schedule, to have the Nonforfeitable percentage of
       his accrued benefit derived from Employer contributions determined
       without regard to the amendment if his Nonforfeitable percentage under
       the Plan as amended is, at any time, less than the percentage determined
       without regard to the amendment.

5.2    SEVERANCE FROM SERVICE BEFORE VESTING

       If a Participant incurs a Severance from Service before he has satisfied
       the Vesting Requirement and is not reemployed by an Employer, he will
       have no further interest in, or right to, any benefits under the Plan,
       except as otherwise provided in Section 14.2 (Reemployment).  If upon a
       Severance from Service, a Participant is zero percent vested in his
       benefits under the Plan, the vested portion of his Plan benefits will be
       deemed distributed to him as of his Severance from Service Date.


5.3    SEVERANCE FROM SERVICE AFTER VESTING


                                        48

<PAGE>

       If a Participant incurs a Severance from Service before his
       50th birthday, but after satisfying the Vesting Requirement, he will be
       entitled to receive a pension commencing on his 50th birthday, if he is
       then living, or the Participant may elect to begin receiving his benefit
       at any time on or after his Early Retirement Date.  Subject to the
       provisions of Section 4.6 (Maximum Pension) and Article 7 (Forms of
       Pension), the amount of Nonforfeitable Annual Pension payable will be
       determined pursuant to the provisions of Section 4.5 (General Method of
       Computing Annual Pension for a Terminated Vested Participant).

                                     ARTICLE 6

                                  SPOUSE'S BENEFIT

6.1    DETERMINATION OF SPOUSE'S BENEFIT

       Upon the death of either (a) an Active Participant who has satisfied the
       Vesting Requirement (an "Eligible Active Participant"), or (b) a former
       Participant who has satisfied the Vesting Requirement, whose employment
       with his Employer terminated before the Participant reached age 50, and
       whose pension under the Plan had not yet begun on the date of his death
       (an "Eligible Former Participant"), the Participant's Spouse on the date
       of his death, if living on the date of the first installment payable, as
       set forth below, will be entitled to receive a pension under the Plan as
       a Spouse's Benefit.  The annual amount of the Spouse's Benefit will be
       determined as follows:

       (a)    If, at the date of his death, the Participant was either an
              Eligible Active Participant or an Eligible Former Participant who
              had reached age 50, the Spouse's benefit will equal 100 percent of
              the Annual Pension that the Participant would have received,
              commencing on the first day of the calendar month coincident with
              or following the date of his death, if (1) he had retired as of
              the first day of the calendar month coincident with or following
              his death, thus establishing an Early Retirement Date, (2) the
              amount of Annual Pension commencing on the Early Retirement Date
              had been determined pursuant to the applicable provisions of


                                        49

<PAGE>

              Section 4.4 (General Method of Computing Annual Pension for
              Retirement at Early Retirement Date), and (3) his pension had been
              payable under the single-life option applicable to him pursuant to
              Subsection 7.1(a) (Normal Forms of Pension).  However, subject to
              Subsection (b), if the Participant's Spouse is more than
              eight years younger than the Participant, the Spouse will receive
              the actuarial equivalent of the benefit payable to a Spouse
              exactly eight years younger than the Participant, calculated by
              multiplying the Annual Pension that the Participant would have
              received times the appropriate early payment factor under
              Subsection 4.4(a) (General Method of Computing Annual Pension for
              Retirement at Early Retirement Date) and then multiplying the
              resulting product by the appropriate Spouse's benefit factor as
              obtained from the following table:

<TABLE>
<CAPTION>


               Participant's Age            Participant's Age at Death
         Less Spouse's Age (in years)       50-59           60 or older
         ----------------------------       -----           -----------
          <S>                               <C>             <C>
                    8 or less                1.00             1.00
                    9                         .91              .90
                   10                         .82              .81
                   11                         .75              .72
                   12                         .68              .65
                   13                         .62              .59
                   14                         .56              .54
                   15                         .51              .49
                   16                         .47              .44
                   17                         .43              .40
                   18                         .39              .36
                   19                         .36              .33
                   20                         .33              .30
                   21                         .30              .28
                   22                         .28              .26


                                        50

<PAGE>

                   23                         .26              .24
                   24                         .24              .22
                   25                         .22              .20

</TABLE>


       (b)    If, at the date of his death, the Participant was either an
              Eligible Active Participant or an Eligible Former Participant who,
              in either case, had not reached age 50, the Spouse's benefit will
              equal 100 percent of the Annual Pension that the Participant would
              have received commencing on the first day of the calendar month
              coincident with or following his 50th birthday, if (1) his
              Severance from Service Date, in the case of an Eligible Active
              Participant, had been the date of his death, (2) the amount of
              Annual Pension (including the appropriate early payment reduction
              factor) had been determined pursuant to the applicable provisions
              of Section 4.5 (General Method of Computing Annual Pension for
              Terminated Vested Participant), (3) he had survived and elected to
              begin receiving pension payments on the first day of the calendar
              month coincident with or following his 50th birthday, and (4) his
              pension had been payable under the 100 percent option applicable
              to him pursuant to Subsection 7.1(b) (Normal Forms of Pension).

6.2    METHOD OF PAYMENT OF SPOUSE'S BENEFIT

       A Spouse's benefit will be payable in equal monthly installments, each
       equal to 1/12th of the Annual Pension as determined pursuant to this
       Article.  If at the date of his death the Eligible Active Participant or
       Eligible Former Participant had reached age 50, the first monthly
       installment of the Spouse's benefit will be payable to the Participant's
       Spouse on the first day of the calendar month coincident with or
       following the date of the Participant's death, if his Spouse is then
       living, unless the Spouse elects to defer payment until the date the
       Participant would have reached age 62.  If at the date of his death the
       Participant had not reached age 50, the first monthly installment will be
       payable to the Participant's Spouse on the first day of the calendar
       month coincident with or following the date the Participant would have
       reached age 50, had he survived until that date, if his


                                        51

<PAGE>

       Spouse is then living, unless the Spouse elects to defer payment until
       the date the Participant would have reached age 65. In either event,
       subsequent monthly installments will be payable on the first day of each
       month and will cease upon the payment of the installment due on the first
       day of the calendar month in which the Spouse dies.

                                     ARTICLE 7

                                  FORMS OF PENSION

7.1    NORMAL FORMS OF PENSION

       (a)    UNMARRIED PARTICIPANTS

              The normal form of pension payable under the Plan to a Participant
              who is not married on his Annuity Starting Date and who does not
              otherwise elect an optional form of pension under Section 7.2
              (Optional Forms of Retirement Income), will be a single-life
              income payable in equal monthly installments throughout the
              Participant's lifetime, ceasing with the installment due on the
              first day of the calendar month in which his death occurs.  Each
              monthly installment will equal 1/12th of the Annual Pension as
              determined pursuant to Article 4 (Amount of Life-Only Pension), or
              Article 5 (Severance from Service-Vesting), whichever is
              applicable to the Participant.

       (b)    MARRIED PARTICIPANTS

              The normal form of pension payable under the Plan to a Participant
              who is married on his Annuity Starting Date and who does not
              otherwise elect an optional form of pension under Section 7.2
              (Optional Forms of Retirement Income) is a "Qualified Joint and
              Survivor Annuity," which will be paid as follows:

              (1)    To the Participant:


                                        52

<PAGE>

                     A reduced pension based on the 100 percent option in equal
                     monthly installments payable on his Annuity Starting Date
                     and on the first day of each calendar month thereafter.
                     The reduced amount payable to the Participant will be the
                     Actuarial Equivalent of the amount that would otherwise be
                     paid to the Participant if he were unmarried.  Payments
                     will cease with the installment due on the first day of the
                     calendar month in which the Participant dies.

              (2)    To his Spouse:

                     A pension payable in equal monthly installments, each
                     monthly installment being equal to 100 percent of the
                     monthly installment paid to the Participant.  The first
                     installment will be payable on the first day of the
                     calendar month following the Participant's death, if the
                     Spouse is then living; subsequent installments are payable
                     on the first day of each calendar month, ceasing with the
                     installment due on the first day of the calendar month in
                     which the Spouse dies.  If the Participant's Spouse
                     predeceases the Participant after reduced pension payments
                     under this Subsection have begun, payments will be made to
                     the Participant after the Spouse's death in the form of an
                     unreduced single life annuity pursuant to Subsection (a) as
                     of the first day of the month after the Participant
                     notifies the Committee of the Spouse's death.

                     If a Participant who is entitled to benefits under the
                     provisions of Section 4.4 (General Method of Computing
                     Annual Pension for Retirement at Early Retirement Date)
                     dies after his Actual Separation Date, but prior to the
                     commencement of pension payments, and if the Participant's
                     Actual Separation Date is on or after his 50th birthday,
                     under the normal form of pension applicable to him, his
                     Spouse will be entitled to receive, commencing on the first
                     day of the calendar month following


                                        53

<PAGE>

                     the Participant's death, if the Spouse is then living, a
                     monthly pension, with each monthly installment equal to the
                     amount that would have been payable to the Spouse following
                     the Participant's death pursuant to his election, or if no
                     election is made, then pursuant to the provisions of this
                     Paragraph (b)(2), if the Participant had begun receiving
                     pension benefits on the first day of the calendar month in
                     which the Participant died.

7.2    OPTIONAL FORMS OF RETIREMENT INCOME

       Subject to the following conditions, a Participant, by making a request
       to the Committee or its designee within the election period specified in
       this Section, may elect to receive, in lieu of the normal form of pension
       applicable to him under Section 7.1 (Normal Forms of Pension), one of the
       optional forms of pension specified under this Section (the "Contingent
       Pension Option").  Each election must be made by the Participant in a
       manner prescribed by the Committee or its designee.  The election of the
       Contingent Pension Option will take effect at a specified date, referred
       to as the "Option Effective Date."  The amount of pension payable under
       any optional form will be the Actuarial Equivalent of the pension to
       which the Participant would otherwise be entitled under the Plan.

       At least 30 days but no more than 90 days before a Participant's Annuity
       Starting Date, the Committee or its designee will provide the Participant
       whose normal form of pension applicable to him is described in
       Subsection 7.1(a) (Normal Forms of Pension) with a written explanation of
       (a) the terms and conditions of the normal form of pension benefits
       applicable to him under Subsection 7.1(a) (Normal Forms of Pension);
       (b) the Participant's ability to elect to receive, in lieu of the normal
       form of pension applicable to him under Subsection 7.1(a) (Normal Forms
       of Pension), an optional form of pension under this Section; (c) the
       relative financial effect of the election on his pension benefits;
       (d) the availability of additional information describing the particular
       financial effect of the election upon his pension benefit; and (e) the
       procedures the Participants must follow to obtain the additional
       information.


                                        54

<PAGE>

       The Committee or its designee will provide each Participant whose normal
       form of pension is a Qualified Joint and Survivor Annuity, at least
       30 days but no more than 90 days before the Participant's Annuity
       Starting Date, a written explanation of (a) the terms and conditions of
       the Qualified Joint and Survivor Annuity, (b) the Participant's right to
       make and the effect of an election to waive a Qualified Joint and
       Survivor Annuity, (c) the rights of a Participant's Spouse with respect
       to the selection of benefit forms, and (d) the right to make and the
       effect of a revocation of a previous election to waive the Qualified
       Joint and Survivor Annuity.  A Participant may elect to waive any
       requirement that the Applicable Election Period extend at least 30 days
       after the Committee provides the Participant with the written
       explanations described in this Section, if the distribution begins more
       than seven days after the applicable written explanation is provided.  If
       the Participant is married, the Participant's Spouse must consent to the
       waiver in writing before a notary public or a Plan representative.

       To be effective, an election to waive the Qualified Joint and Survivor
       Annuity must be made in writing during the 90 day period ending on the
       Annuity Starting Date and, if the Participant is married, it must be
       consented to by the Participant's Spouse.  The election must designate a
       Beneficiary (or a form of benefits) that may not be changed (except back
       to a Qualified Joint and Survivor Annuity) without the Spouse's consent,
       unless the Spouse's original consent expressly permits designations by
       the Participant without any requirements of further consent by the
       Spouse.  The Spouse's consent must be given in writing during the 90 day
       period ending on the Annuity Starting Date, must acknowledge the effect
       of the election and the consent, and must be witnessed by a Plan
       representative or notary public.  If the Participant establishes to the
       satisfaction of a Plan representative that the Spouse's written consent
       cannot be obtained because there is no Spouse or the Spouse cannot be
       located, the Spouse's consent will be deemed to have been given.  If a
       Participant is legally separated from his Spouse or has been abandoned by
       his Spouse (within the meaning of local law) and the Participant has a
       court order to such effect, the Spouse's consent will not be required
       unless a Qualified Domestic Relations Order provides otherwise.  Any
       Spousal consent will be valid only with respect


                                        55

<PAGE>

       to the Spouse who signs the consent, or in the event of a deemed consent,
       the designated Spouse. If a Participant's Spouse is legally incompetent
       to give consent, the Spouse's legal guardian (even if the guardian is the
       Participant) may give consent. A Participant may revoke a prior effective
       election at any time prior to the receipt of benefits.

       (a)    SINGLE-LIFE OPTION

              A married Participant whose normal form of pension is a Qualified
              Joint and Survivor Annuity may elect, in lieu of all payments
              otherwise payable, a single-life pension that provides payments to
              the Participant in equal monthly installments throughout his
              lifetime, ceasing with the installment due on the first day of the
              calendar month in which the Participant dies.  Each monthly
              installment will be equal to 1/12th of the Annual Pension as
              determined pursuant to Article 4 (Amount of Life-Only Pension),
              Article 5 (Severance from Service-Vesting) or Article 6 (Spouse's
              Benefit), whichever is applicable.

       (b)    CONTINGENT PENSION OPTION

              A Participant may elect, in lieu of all payments otherwise payable
              on and after the Option Effective Date, the Contingent Pension
              Option providing payments as follows:

              (1)    To the Participant:

                     A reduced pension beginning on the Option Effective Date,
                     with subsequent monthly payments payable on the first day
                     of each subsequent calendar month throughout his remaining
                     lifetime, terminating with the payment due on the first day
                     of the calendar month in which he dies.  The reduced amount
                     payable to the Participant will be determined in accordance
                     with the Participant's choice of the 100 percent, 66 2/3
                     percent, or 50 percent option and will be the Actuarial
                     Equivalent of the amount


                                        56
<PAGE>

                     that would otherwise be paid to the Participant under the
                     single-life annuity option applicable to him pursuant to
                     Subsection 7.2(a) (Optional Forms of Retirement Income). An
                     option cannot be elected, modified, or rescinded after the
                     Option Effective Date.

              (2)    To the Contingent Annuitant designated by the Participant
                     at the time he elects this option:

                     A contingent pension beginning on the first day of the
                     calendar month following the calendar month in which the
                     Participant's death occurs if the Participant dies on or
                     after the Option Effective Date, and if the Contingent
                     Annuitant is then living, with subsequent monthly payments
                     payable on the first day of each subsequent calendar month
                     throughout the Contingent Annuitant's remaining lifetime,
                     terminating with the monthly payment due on the first day
                     of the calendar month in which the Contingent Annuitant
                     dies.  However, if the Participant had elected to defer his
                     pension payments, the Contingent Annuitant may elect, at
                     any time prior to the date contingent pension payments
                     actually begin, to have the payments begin after the
                     Participant's death on the first day of any calendar month
                     coincident with or prior to the date the Participant had
                     elected to start receiving his pension payments.

                     The monthly amount payable to the Contingent Annuitant will
                     be a specified percentage of the reduced pension payable
                     under this option to the Participant, as specified by the
                     Participant.  This percentage will be either 100 percent,
                     66 2/3 percent, or 50 percent.  Notwithstanding the
                     foregoing, if the Contingent Annuitant is other than the
                     Participant's Spouse, the Contingent Pension Option may be
                     elected only if the requirements of 26 C.F.R. Section
                     1.401(a)(9)-2 are satisfied.


                                        57

<PAGE>

              An option will not become effective, and payments will be made as
              otherwise provided in the Plan as if this option had never been
              elected, if:  (a) the Participant is not living on the Option
              Effective Date, (b) the Participant does not, within 90 days after
              his election, and not later than the Option Effective Date,
              furnish evidence, satisfactory to the Committee, of the age of his
              Contingent Annuitant, or (c) the Participant elects, prior to the
              Option Effective Date, to cancel the option.  If the Participant's
              Contingent Annuitant predeceases the Participant after the
              contingent pension payments have begun, the option will be
              canceled and no longer effective, and payments will be made to the
              Participant in the form of an unreduced single-life annuity
              applicable to him pursuant to Subsection 7.2(a) (Optional Forms of
              Retirement Income) as of the first day of the month after the
              Participant notifies the Committee of the Contingent Annuitant's
              death.

       (c)    LIFE WITH TEN YEAR CERTAIN OPTION

              A Participant may, in lieu of all payments otherwise payable on
              and after the Option Effective Date, elect the Life with Ten Year
              Certain Option providing payments as follows:

              (1)    To the Participant:

                     A reduced pension beginning on the Option Effective Date
                     with subsequent monthly payments payable on the first day
                     of each calendar month thereafter for ten years or
                     throughout his remaining lifetime, whichever is longer,
                     terminating with the payment due on the first day of the
                     calendar month after the end of ten years or in which the
                     Participant dies, whichever is applicable.

                     If the Participant elects the Life with Ten Year Certain
                     Option, the amount of the Participant's Nonforfeitable
                     annual pension will be determined by multiplying his Annual
                     Pension by the appropriate Life with Ten Year Certain
                     Factor as obtained from the following table:


                                        58

<PAGE>

<TABLE>
<CAPTION>

                       LIFE WITH TEN YEAR CERTAIN FACTORS
                       ----------------------------------
                       Age       Factor    Age    Factor
                       ---       ------    ---    ------
                       <S>       <C>       <C>    <C>
                        50       .9869      70    .9065
                        51       .9855      71    .8977
                        52       .9839      72    .8883
                        53       .9823      73    .8780
                        54       .9803      74    .8670
                        55       .9783      75    .8553
                        56       .9760      76    .8429
                        57       .9734      77    .8299
                        58       .9706      78    .8163
                        59       .9674      79    .8021
                        60       .9639      80    .7875
                        61       .9601      81    .7723
                        62       .9558      82    .7569
                        63       .9511      83    .7413
                        64       .9461      84    .7253
                        65       .9407      85    .7090
                        66       .9347      86    .6925
                        67       .9285      87    .6758
                        68       .9217      88    .6591
                        69       .9145      89    .6424
                                            90    .6259

</TABLE>

              (2)    To the Beneficiary designated by the Participant at the
                     time he elects this option:


                                        59

<PAGE>

                     If the Participant dies prior to the end of ten years from
                     the date of his initial pension payment, a contingent
                     pension payable on the first day of the calendar month
                     following the calendar month in which the Participant dies
                     if the Participant's death is on or after the Option
                     Effective Date and if the Beneficiary is then living, with
                     subsequent monthly payments being payable on the first day
                     of each calendar month for the balance of ten years from
                     the date of the Participant's Option Effective Date.

       (d)    LIFE ANNUITY LEVEL INCOME OPTION

              A Participant who retires prior to reaching age 62 may elect, in
              lieu of all payments otherwise payable on and after the Option
              Effective Date, the Life Annuity Level Income Option, which
              provides payments to the Participant that are adjusted for the
              months before and after the Participant is eligible to receive
              benefits under the Social Security Act at age 62.

              The Participant will receive a reduced pension on the Option
              Effective Date, with subsequent monthly payments payable on the
              first day of each calendar month thereafter for his remaining
              lifetime, terminating with the payment due on the first day of the
              calendar month in which his death occurs.  The reduced pension the
              Participant receives will be calculated as follows:

              (1)    The Participant's Annual Pension will be determined under
                     Article 4 (Amount of Life-Only Pension), Article 5
                     (Severance From Service-Vesting), or Article 6 (Spouse's
                     Benefit), whichever is applicable.


                                        60

<PAGE>

              (2)    The Participant's Reduced Primary Social Security Benefit
                     will be multiplied by the appropriate Level Income Option
                     factor from the table in Addendum A to the Plan.

              (3)    The sum of the amounts determined under Paragraphs (1) and
                     (2) will equal the Level Income Option benefit payable to
                     the Participant prior to age 62, which is the first date he
                     is eligible to begin receiving Social Security Act
                     benefits.

              (4)    The Level Income Option benefit payable to the Participant
                     after he reaches age 62 will equal the amount determined in
                     Paragraph (3), minus the Participant's Reduced Primary
                     Social Security Benefit.

       (e)    100 PERCENT CONTINGENT ANNUITANT LEVEL INCOME OPTION

              A Participant who retires prior to reaching age 62 may, in lieu of
              all payments otherwise payable on after the Option Effective Date,
              elect the 100 Percent Contingent Annuitant Level Income Option,
              which provides payments as follows:

              (1)    To the Participant:

                     A reduced pension that is adjusted for the months before
                     and after the Participant is eligible to receive benefits
                     under the Social Security Act at age 62.  The Participant
                     will receive a reduced pension on the Option Effective
                     Date, with subsequent monthly payments payable on the first
                     day of the calendar month thereafter for his remaining
                     lifetime, terminating with the payment due on the first day
                     of the calendar month in which the Participant dies.

                     The reduced pension the Participant receives under this
                     option will be calculated as follows:


                                        61

<PAGE>

                     (A)    The Participant's Annual Pension will be determined
                            under Article 4 (Amount of Life-Only Pension),
                            Article 5 (Severance From Service-Vesting), or
                            Article 6 (Spouse's Benefit), whichever is
                            applicable.

                     (B)    The Participant's Annual Pension will be converted
                            to a reduced pension based on the 100 percent
                            Contingent Pension Option under Subsection 7.2(b)
                            (Optional Forms of Retirement Income).

                     (C)    The Participant's Reduced Primary Social Security
                            Benefit will be multiplied by the appropriate Level
                            Income Option factor from the table in Addendum A to
                            the Plan.

                     (D)    The sum of the amounts determined under
                            Subparagraphs (B) and (C) will equal the Level
                            Income Option benefit payable to the Participant
                            prior to age 62, which is the first date he is
                            eligible to begin receiving Social Security Act
                            benefits.

                     (E)    The Level Income Option benefit payable to the
                            Participant after he attains age 62 will equal the
                            amount determined in Subparagraph (D), minus the
                            Participant's Reduced Primary Social Security
                            Benefit.

              (2)    To the Contingent Annuitant:

                     A contingent pension beginning on the first day of the
                     calendar month following the calendar month in which the
                     Participant dies if the Participant dies on or after the
                     Option Effective Date, and if the Contingent Annuitant is
                     then living; with subsequent monthly payments payable on
                     the first day of each subsequent calendar month throughout
                     the Contingent Annuitant's remaining lifetime, terminating
                     with the monthly


                                        62

<PAGE>

                     payment due on the first day of the calendar month in which
                     the Contingent Annuitant dies. However, if the Participant
                     had elected to defer his pension payments, the Contingent
                     Annuitant may elect at any time prior to the date
                     contingent pension payments actually begin, to have the
                     payments begin after the Participant's death on the first
                     day of any calendar month coincident with or prior to the
                     date the Participant had elected to start receiving
                     payments.

                     The monthly amount payable to the Contingent Annuitant will
                     equal 100 percent of the reduced pension that would have
                     been payable under this option to the Participant.

              An option will not become effective, and payments will be made as
              otherwise provided in the Plan as if this option had never been
              elected, if:  (a) the Participant is not living on the Option
              Effective Date, (b) the Participant does not, within 90 days after
              his election, but not later than the Option Effective Date,
              furnish evidence, satisfactory to the Committee, of the age of his
              Contingent Annuitant, or (c) the Participant elects, prior to the
              Option Effective Date, to cancel the option.  If the Participant's
              Contingent Annuitant predeceases the Participant after the
              contingent pension payments have begun, the option will be
              canceled and no longer effective, and payments will be made to the
              Participant in the form of a reduced single-life annuity level
              income option applicable to him pursuant to Subsection 7.2(d)
              (Optional Forms of Retirement Income) as of the first day of the
              month after the Participants notifies the Committee of the
              Contingent Annuitant's death.  An option cannot be elected,
              modified, or rescinded after the Option Effective Date.

                                     ARTICLE 8

                                 PAYMENT OF PENSION

8.1    TIMING OF PAYMENT


                                        63

<PAGE>

       This Section is subject to the provisions of Section 8.6 (Required
       Payment of Benefits).

       A Participant who ceases to be an Employee as of his Normal Retirement
       Date will begin receiving any pension payable to him under the Plan as of
       his Normal Retirement Date.  A Participant who continues as an Employee
       after his Normal Retirement Date will begin receiving the pension payable
       to him under the Plan as of the first day of the calendar month
       coincident with or following his Severance from Service.

       A Participant who ceases to be an Employee as of an Early Retirement Date
       will begin receiving his pension at his Normal Retirement Date unless he
       elects to begin receiving his pension on either his Early Retirement Date
       or the first day of a calendar month between his Early Retirement Date
       and his Normal Retirement Date (the "Deferred Pension Payment Date");
       provided he has made the required election, in a manner prescribed by the
       Committee, prior to the date he wants his pension to begin.

8.2    METHOD OF PAYMENT

       Unless specified elsewhere in the Plan, all pension payments under the
       Plan will normally be payable in equal monthly installments, with each
       monthly installment equal to 1/12th of the annual amount payable.
       Pension payments will be (a) made by check to the order of the
       Participant, his Spouse, his Beneficiary, or his Contingent Annuitant, as
       applicable, and mailed to that person's address as it appears on the
       Employer's records, or (b) deposited directly into an account of the
       Participant, his Spouse, his Beneficiary, or his Contingent Annuitant, as
       applicable, maintained by the recipient at a bank, savings and loan, or
       other financial institution, as directed by the recipient.

8.3    SMALL BENEFITS

       Notwithstanding the provisions of Sections 6.2 (Method of Payment of
       Spouse's Benefit) and 7.2 (Optional Forms of Retirement Income), where
       the Actuarial Equivalent present


                                        64

<PAGE>

       value of a Participant's Nonforfeitable pension or Spouse's benefit under
       Section 6.1 (Determination of Spouse's Benefit) does not exceed $5,000,
       the Committee or its designee will pay the Nonforfeitable pension or
       Spouse's benefit (if applicable) in a single-sum cash payment equal to
       the Actuarial Equivalent of the pension or Spouse's benefit otherwise
       payable.

8.4    FACILITY OF PAYMENT

       If any benefit under the Plan is payable to a person whom the Committee
       knows is a minor or otherwise under legal incapacity, the Committee or
       its designee may have the payment made to the legal guardian of that
       person or to the person or organization as a court of competent
       jurisdiction may direct.  To the extent permitted by law, any payment
       under this Section will be a complete discharge of any liability under
       the Plan to that person.

8.5    BENEFITS FOR LATE RETIREES, REEMPLOYED RETIREES AND REEMPLOYED TERMINATED
       VESTED PARTICIPANTS

       (a)    LATE RETIREES

              A Participant may postpone his retirement and continue his
              employment with an Employer after his Normal Retirement Date.  If
              a Participant continues employment after his Normal Retirement
              Date, he will continue to accrue years of Service and years of
              Participation during this time period up to the date of his actual
              retirement.  The Participant's benefit will be calculated under
              Article 4 (Amount of Life-Only Pension), Article 5 (Severance From
              Service-Vesting), or Article 6 (Spouse's Benefit), whichever is
              applicable, as of his Severance from Service Date.

       (b)    SUSPENSION OF RETIREMENT BENEFIT NOTICE FOR PARTICIPANT WHO
              CONTINUES EMPLOYMENT AFTER HIS NORMAL RETIREMENT DATE


                                        65

<PAGE>

              When a Participant continues in employment with an Employer beyond
              his Normal Retirement Date, benefits will not begin during that
              continued period of employment unless required under Section 8.6
              (Required Payment of Benefits).  The Participant will be sent a
              notification described in Section 2530.203-3(b)(4) of the
              Department of Labor regulations, provided that the suspension of
              benefits notice is limited to periods of service within the
              context of Section 2530.203-3(c) of the Department of Labor
              regulations.

       (c)    REEMPLOYED RETIREES AND REEMPLOYED VESTED TERMINATED PARTICIPANTS

              A Reemployed Retiree or Reemployed Vested Terminated Participant
              who resumes employment will continue to receive any pension
              benefit payments under the Plan to which he is entitled, and will
              begin to receive any pension benefit payments under the Plan, as
              if he were not reemployed.  When a Reemployed Retiree or
              Reemployed Terminated Vested Participant again incurs a Severance
              from Service, his Annual Pension will, subject to all of the
              provisions of the Plan, be recalculated by aggregating his years
              of Participation and by considering his Earnings during his period
              of reemployment; provided, however, that the Participant's
              benefits as recalculated will not be less than the Actuarial
              Equivalent of his Annual Pension prior to his reemployment.  The
              Participant's recalculated Annual Pension will be reduced by the
              Actuarial Equivalent of the pension benefits already paid to the
              Participant.  Any pension benefit payable to a Spouse or
              Contingent Annuitant will also be based on the Participant's
              pension benefit, as so recalculated and reduced.

       (d)    QUESTIONS CONCERNING EFFECT ON REEMPLOYMENT

              The Plan's benefit claims procedures may be used by an individual
              who has questions concerning the effect of reemployment by his
              Employer upon his pension benefit payments.


                                        66
<PAGE>

       (e)    ADDITIONAL RULES AND PROCEDURES


              The Committee is authorized to develop more fully the provisions
              of this Section by establishing, from time to time, various rules
              and procedures consistent with ERISA, the Code, and the Plan.


8.6    REQUIRED PAYMENT OF BENEFITS


       This Section has been included in the Plan to comply with the
       limitations imposed by Code paragraphs 401(a)(9) and 401(a)(14), and
       it will not be construed as providing for a form of benefit not
       otherwise provided under the Plan.  Notwithstanding any provision of
       this Plan to the contrary, any distribution under the Plan will be
       made in accordance with regulations under Code paragraph 401(a)(9),
       including proposed federal income tax regulation 1.401(a)(9)-2, and
       will comply with the following rules:


       (a)    Unless a Participant elects otherwise, the payment of his
              benefits under the Plan must begin not later than the 60th day
              after the end of the Plan Year in which occurs the latest of:
              (1) the Participant's 65th birthday; (2) the 10th anniversary
              of the Plan Year in which the Participant began participation
              in the Plan; or (3) termination of the Participant's employment
              with the Employer.


       (b)    For purposes of this Article, "required beginning date" means
              (1) with respect to a Participant who is not a 5 percent owner
              as described in Code section 416 and who did not reach age
              70 1/2 before January 1, 1997, April 1 of the calendar year
              following the later of (A) the calendar year in which the
              Participant reaches age 70 1/2, or (B) the calendar year in
              which the Participant retires; or (2) with respect to a
              Participant who is a 5 percent owner as described in Code
              section 416, or any Participant who reached age 70 1/2 before
              January 1, 1997, April 1 of the calendar

                                      67
<PAGE>

              year following the calendar year in which the Participant
              reaches age 70 1/2.  The Plan will provide an actuarial increase
              to a Participant's interest in the Plan for the period
              beginning on the April 1 of the calendar year following the
              calendar year in which the Participant reaches age 70 1/2 and
              ending on the date on which benefits begin after the
              Participant's retirement in an amount sufficient to satisfy
              Code paragraph 401(a)(9).  The benefits payable to the
              Participant at the end of the period described in the preceding
              sentence will be no less than the Actuarial Equivalent of the
              benefit that would have been payable to the Participant as of
              the April 1 of the calendar year following the calendar year in
              which the Participant reached 70 1/2.


       (c)    Notwithstanding any other provision of this Plan, the entire
              interest of each Participant will be distributed either:  (1)
              in a lump sum payment not later than the required beginning
              date, or (2) in a series of payments beginning not later than
              the required beginning date over the life of the Participant or
              over the lives of the Participant and the designated
              Beneficiary (or over a period not extending beyond the life
              expectancy of the Participant or the life expectancy of the
              Participant and a designated Beneficiary).  If the
              Participant's interest is to be paid in the form of annuity
              distributions under the Plan, payments under the annuity will
              satisfy the following requirements:


              (1)    The annuity distributions must be paid in periodic
                     payments made at intervals not longer than one year.


              (2)    For purposes of computing the distribution period, life
                     expectancies or joint and last survivor expectancies will
                     not be recalculated.


              (3)    Once payments have begun, the distribution period may not
                     be lengthened even if that period would be shorter than
                     the permitted maximum period.


              (4)    Payments must either be non-increasing or increase only as
                     follows:

                                      68
<PAGE>

                     (A)    with any percentage increase in a specified and
                            generally recognized cost-of-living index;


                     (B)    to the extent of the reduction to the amount of the
                            Participant's payments to provide for a survivor
                            benefit upon death, but only if the Beneficiary or
                            Contingent Annuitant whose life was being used to
                            determine the distribution period dies and the
                            payments continue otherwise over the life of the
                            Participant;


                     (C)    to provide cash refunds of employee contributions
                            upon the Participant's death; or


                     (D)    because of an increase in benefits under the Plan.


              (5)    If the annuity is a life annuity (or a life annuity with a
                     period certain not exceeding 20 years), the amount that
                     must be distributed on or before the Participant's
                     required beginning date (or, in the case of
                     distributions after the death of the Participant, the
                     date distributions are required to begin after the
                     Participant's death) will be the payment that is
                     required for one payment interval.  The second payment
                     need not be made until the end of the next payment
                     interval even if that payment interval ends in the next
                     calendar year.  Payment intervals are the periods for
                     which payments are received, e.g., bi-monthly, monthly,
                     semi-annually or annually.  If the annuity is a period
                     certain annuity without a life contingency (or is a life
                     annuity with a period exceeding 20 years), periodic
                     payments for each distribution calendar year will be
                     combined and treated as an annual amount.  The amount
                     that must be distributed by the Participant's required
                     beginning date (or, in the case of distributions after
                     the death of the Participant, the date distributions are
                     required to begin after the Participant's death) is the
                     annual amount for the first distribution calendar

                                      69
<PAGE>

                     year. The annual amount for other distribution calendar
                     years, including the annual amount for the calendar year
                     in which the Participant's required beginning date (or
                     the date distributions are required to begin after the
                     Participant's death) occurs, must be distributed on or
                     before December 31 of the calendar year for which the
                     distribution is required.


       (d)    If (1) the distribution of a Participant's interest has begun in
              accordance with Subsection (c), and (2) the Participant dies
              before his entire interest has been distributed to him, the
              remaining portion of his interest will be distributed at least as
              rapidly as under the method of distribution being used under
              Subsection (c) as of the date of his death.


       (e)    Except as provided in Subsection (f), if a Participant dies
              before the distribution of his interest has begun in accordance
              with Subsection (c), the Participant's entire interest will be
              distributed within five years after his death.


       (f)    For purposes of Subsection (c), any portion of a distribution
              that is payable to (or for the benefit of) a designated
              Beneficiary will be treated as completely distributed on the
              date on which distribution began if:


              (1)    that portion is to be distributed (in accordance with
                     regulations prescribed by the Secretary) over the life of
                     the designated Beneficiary (or over a period not extending
                     beyond the life expectancy of the Beneficiary), and


              (2)    distributions begin by the latest of (A) one year after
                     the date of the Participant's death, (B) any later date
                     that the Secretary may establish by regulations, or (C)
                     if the Beneficiary is the Participant's surviving
                     Spouse, the date on which the Participant would have
                     attained age 70 1/2.

                                      70
<PAGE>

       (g)    If the designated Beneficiary is the Participant's surviving
              Spouse, and if the surviving Spouse dies before the
              distributions to the Spouse begin, Subsections (c), (e), and
              (f) will be applied as if the surviving Spouse were the
              Participant.


       (h)    For purposes of Subsection (f), payment will be calculated by use
              of the expected return multiples specified in Tables V and VI
              of 26 C.F.R. Section 1.72-9.  The life expectancy of a
              designated Beneficiary will be calculated at the time payment
              first commences without further recalculation.


       (i)    For purposes of Subsections (c), (d), (e), and (f), if any
              amounts payable to a child of the Participant becomes payable
              to the Participant's surviving Spouse and the child reaches the
              age of majority, that amount will be treated as if it had been
              paid to the surviving Spouse.


       (j)    Unless paid to the surviving Spouse under a Qualified Joint and
              Survivor Annuity, the method of distribution selected must assure
              that at least 50 percent of the present value of the amount
              available for distribution is paid within the Participant's life
              expectancy.


       (k)    If a Participant reaches age 70 1/2 on or after January 1, 1997,
              but before January 1, 1999, the Plan will deem the
              Participant's "required beginning date" to be April 1 of the
              calendar year following the calendar year in which the
              Participant reaches age 70 1/2 unless the Participant elects,
              with his Spouse's consent, to defer commencement of his Plan
              benefits until a date no later than April 1 of the calendar
              year following the calendar year in which the Participant
              retires.


8.7    DIRECT ROLLOVERS OF ELIGIBLE DISTRIBUTIONS


       Notwithstanding any provision of the Plan to the contrary that would
       otherwise limit a Distributee's election under this Section, a
       Distributee may elect, at the time and in the manner prescribed by the
       Committee, to have any portion of an Eligible Rollover

                                      71
<PAGE>

       Distribution paid directly to an Eligible Retirement Plan specified by
       the Distributee in a Direct Rollover.


                                      ARTICLE 9

                          RETIREE MEDICAL/DENTAL BENEFITS


9.1    PURPOSE


       This Article provides for the payment of certain Medical/Dental Benefits
       to Eligible Retirees and to their Dependents under the Plan.  The
       Medical/Dental Benefits described in this Article are intended to meet
       the requirements of Code subsection 401(h) and its interpretive
       regulations.


9.2    ELIGIBILITY


       Only Eligible Individuals will be eligible to receive Medical/Dental
       Benefits (or to have Medical/Dental Benefits paid on their behalf) under
       this Article.


9.3    SEPARATE ACCOUNT


        A Medical/Dental Benefits Account will be established and maintained
       with respect to contributions made to fund the benefits payable under
       this Article, which will be kept separate (for recordkeeping purposes
       only) from the amounts contributed to the Plan to fund all other
       benefits.  The funds in the Medical/Dental Benefits Account may be
       invested with funds contributed to the Plan to fund other benefits
       without identification of which assets of the Plan are allocable to
       the Medical/Dental Benefits Account and which are allocable to fund
       other benefits.  Where the assets are not so allocated, however, the
       earnings on the assets will be allocated in a reasonable manner
       between the Medical/Dental Benefits Account and the amounts funding
       other benefits under the Plan.


9.4    IMPOSSIBILITY OF DIVERSION PRIOR TO SATISFACTION OF ALL LIABILITIES

                                      72
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       Prior to the satisfaction of all liabilities under this Article to
       provide for the payment of Medical/Dental Benefits, no part of the
       corpus or income of the Medical/Dental Benefits Account may be (within
       the taxable year or thereafter) used for, or diverted to, any purpose
       other than providing Medical/Dental Benefits or paying any reasonable
       expenses attributable to the administration of the Medical/Dental
       Benefits Account.


9.5    REVERSION UPON SATISFACTION OF ALL LIABILITIES


       Notwithstanding the provisions of Section 14.8 (No Diversion of
       Assets), any amounts that are contributed to fund Medical/Dental
       Benefits and that remain in the Medical/Dental Benefits Account upon
       the satisfaction of all liabilities arising out of the operation of
       this Article are to be returned to Eligible Retirees, in proportion to
       their respective total contributions to the Medical/Dental Benefits
       Account.

9.6    FORFEITURES


       In the event an Eligible Individual's interest in the Medical/Dental
       Benefits Account is forfeited prior to termination of the Plan, an
       amount equal to the amount of the forfeiture will be applied as soon
       as possible to reduce Employer contributions to the Plan to fund the
       Medical/Dental Benefits under this Article.

9.7    EMPLOYER CONTRIBUTIONS TO THE MEDICAL/DENTAL BENEFITS ACCOUNT


       For each Plan Year, the Employer will contribute to the Medical/Dental
       Benefits Account the amount necessary to fund Medical/Dental Benefits,
       as determined by the Plan's actuaries, provided that the contributions
       mandated by this sentence will be reasonable, and will be reduced (but
       not below zero) as required so that the aggregate actual contributions
       made to the Medical/Dental Benefits Account will not exceed 25% of the
       total aggregate actual contributions (other than any contributions to
       fund past service credits) made to the Plan.  All contributions to the
       Medical/Dental Benefits Account will be paid to the Trustee, who will
       hold them in Trust for the payment of Medical/Dental

                                      73
<PAGE>

       Benefits under this Article. At the time an Employer makes a
       contribution to the Plan, it will designate the portion allocable to
       the Medical/Dental Benefits Account.


9.8    MEDICAL/DENTAL BENEFITS


       The Medical/Dental Benefits under the Plan will be those benefits
       payable to or on behalf of Eligible Individuals in accordance with the
       terms of a Medical/Dental Plan.


                                     ARTICLE 10

                             NONALIENATION OF BENEFITS


The Pension Fund will not in any manner be liable for, or subject to, the
debts or liabilities of any Participant, Beneficiary, Contingent Annuitant,
or Spouse, or any other person entitled to any benefit.  No payee may assign
any payment due him under the Plan.  No pension or other benefits at any time
payable from the Pension Fund will be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, attachment, garnishment,
levy, execution, or other legal or equitable process or encumbrance of any
kind.  Any attempt to alienate, sell, transfer, assign, or otherwise encumber
any such benefit, whether presently or thereafter payable, will be void.
However, the payment of benefits under the Plan will be made in accordance
with the applicable requirements of any Qualified Domestic Relations Order
entered by a court of competent jurisdiction or a state administrative
agency.  The Committee will establish procedures to determine whether the
domestic relations orders are Qualified Domestic Relations Orders and to
administer distributions under Qualified Domestic Relations Orders.


                                   ARTICLE 11

                                 ADMINISTRATION


11.1   ADMINISTRATOR

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       The Committee will be the administrator of the Plan.  The Committee
       will consist of the number of members, not fewer than three, that is
       specified from time to time by the Board of Directors.  All members of
       the Committee will be Employees or officers of an Employer.  All
       members of the Committee will serve without compensation.

11.2   REMOVAL AND REPLACEMENT OF COMMITTEE MEMBERS


       The members of the Committee will serve at the pleasure of the Board of
       Directors and may be removed by the Board of Directors with or without
       cause.  Any vacancy among the members will be filled by the Board of
       Directors.


11.3   DISQUALIFICATION AND RESIGNATION


       On the date when a Committee member is neither an Employee nor an officer
       of an Employer, he will be disqualified from membership on the Committee.
       A member of the Committee may resign by delivering his written
       resignation to any other member of the Committee.  A resignation will
       become effective on the date specified in the instrument of resignation.


11.4   CHAIRPERSON, SERVICES, AND COUNSEL


       The members of the Committee will elect one of their members as
       Chairperson and will elect a Secretary, who may be, but need not be, one
       of the members of the Committee.  Cinergy will provide the Committee, at
       Cinergy's expense, with such clerical, accounting, actuarial, and other
       services as may be reasonably required by the Committee in carrying out
       its responsibilities.  The Committee may employ counsel, who may be, but
       need not be, counsel to Cinergy.


11.5   MEETINGS

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<PAGE>

       The Committee will hold meetings upon such notice, at the places, and at
       the times as the Committee may from time to time determine, but no less
       often than quarterly.


11.6   QUORUM


       A majority of the members of the Committee at the time holding office
       will constitute a quorum for the transaction of business.  All
       resolutions and other action taken by the Committee at any meeting will
       be by the vote of the majority of the members of the Committee present at
       the meeting.


11.7   ACTION WITHOUT MEETING


       Any decision, order, direction, or other action, including orders and
       directions to the Trustee or Insurance Company, made in writing signed by
       a majority of the members of the Committee at the time holding office
       will constitute valid and effective action of the Committee, whether or
       not the matter to which that decision, order, direction, or other action
       pertains had already been acted upon at a duly called and held meeting of
       the Committee.


11.8   NOTICE TO TRUSTEE OF CHANGES IN MEMBERSHIP


       The Trustee will not be charged with notice of any change in the
       membership of the Committee unless and until it has received a certified
       copy of the resolution or vote of the Board of Directors effecting the
       change.


11.9   CORRECTION OF DEFECTS


       The Committee may correct any defect or supply any omission or reconcile
       any error or inconsistency in its previous proceedings, decisions,
       orders, directions, or other actions in a manner and to such extent as it
       will deem advisable to carry out the purposes of the Plan.

                                      76
<PAGE>

11.10  RELIANCE UPON LEGAL COUNSEL


       The members of the Committee, and Cinergy, and Cinergy's officers and
       directors, will be entitled to rely upon all opinions given by legal
       counsel selected by the Committee.


11.11  EXPENSES


       In the performance of its duties, the Committee is authorized to incur
       reasonable expenses, including counsel fees.  All operating expenses of
       the Plan, including insurance premiums payable to the Pension Benefit
       Guaranty Corporation, fees for professional services, and technical or
       clerical assistance, will be paid from the Pension Fund, to the extent
       not paid by the Employer.  Investment expenses and any federal, state, or
       local taxes that may be levied against the Pension Fund will also be paid
       from the Pension Fund.


11.12  INDEMNIFICATION


       Cinergy agrees to indemnify and hold harmless each member of the
       Committee against any cost, expense, or liability (including any sum paid
       in settlement of any claim with the approval of the Board of Directors)
       arising out of any act or omission to act as a member of the Committee,
       except only acts and omissions representing willful misconduct, fraud, or
       lack of good faith.


11.13  POWERS AND DUTIES OF COMMITTEE


       Subject to the specific limitations stated in this document, the
       Committee will have the following powers, duties, and responsibilities:


       (a)    to carry out the Plan's general administration;

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<PAGE>

       (b)    to cause to be prepared all forms necessary or appropriate for the
              Plan's administration;


       (c)    to keep appropriate books and records, including minutes of the
              Committee's meetings;


       (d)    to determine, consistent with the provisions of this document, the
              manner in which the Pension Fund will be allocated and disbursed;


       (e)    to give directions to the Trustee or Insurance Company as to the
              amounts to be disbursed to Participants and others under the
              Plan's provisions;


       (f)    to determine, with discretionary authority and consistent with the
              provisions of this document, all questions of the eligibility,
              rights, and status of Participants and others under the Plan;


       (g)    to exercise all other powers and duties specifically conferred
              upon the Committee elsewhere in this document and the Trust
              Agreement or Group Annuity Contract;


       (h)    to exercise all duties and responsibilities imposed by ERISA upon
              the Committee as the Plan's administrator;


       (i)    to interpret, with discretionary authority, the provisions of the
              Plan and to resolve, with discretionary authority, all disputed
              questions of Plan interpretation and benefit eligibility;


       (j)    to employ agents to assist it in performing its administrative
              duties; and


       (k)    to allocate and delegate its fiduciary responsibilities in
              accordance with ERISA section 405.

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<PAGE>

       The Committee will at all times make similar decisions on similar
       questions involving similar circumstances.  Subject to the provisions of
       ERISA and to the provisions of Article 12 (Benefit Claims Procedures)
       relating to claims, all decisions of the Committee made in good faith on
       all matters within the scope of its authority under the provisions of
       this document will be final and binding upon all persons.


11.14  MATTERS SPECIFICALLY EXCLUDED FROM JURISDICTION


       Notwithstanding any other provision of this document, the Committee will
       have no power, duty, or authority with respect to determination of the
       amounts to be contributed by the Employer to the Pension Fund or Trust
       Fund.


                                     ARTICLE 12

                             BENEFIT CLAIMS PROCEDURES


Claims for benefits under the Plan will be made in writing to the Committee or
its designee.  If a claim for benefits is wholly or partially denied, the
Committee or its designee will notify the Claimant of the claim's denial within
a reasonable period of time not to exceed 90 days after the claim's receipt,
unless special circumstances require an extension of time for processing, in
which case notification will be rendered as soon as possible, but not later than
180 days after the claim's receipt.  If an extension of time for processing is
required, written notice of the extension will be furnished to the Claimant
prior to the termination of the initial 90 day period.  The extension notice
will indicate the special circumstances requiring an extension of time and the
date by which the Plan expects to render final notification.  The notice of
denial will be written in a manner calculated to be understood by the Claimant
and will set forth (a) the specific reason or reasons for the denial, (b) a
specific reference to the pertinent Plan provisions on which the denial is
based, (c) a description of any additional material or information necessary for
the Claimant to perfect the claim and an explanation of why that material or
information is necessary, and (d) appropriate information as to the steps to be
taken if the Claimant wishes to submit the claim for review.  The Committee or
its designee is authorized to develop more fully

                                      79

<PAGE>

the Plan's benefit claims procedures by establishing from time to time, various
rules and procedures consistent with ERISA.


Within 60 days after the Claimant's receipt of written notice of the claim's
denial, the Claimant, or his duly authorized representative, may file a written
request with the Committee requesting a full and fair review of the denial of
the Claimant's claim for benefits.  In connection with the Claimant's appeal of
the denial of his claim for benefits, the Claimant may review pertinent
documents in the Committee's possession and may submit issues and comments in
writing.  The Committee will make a decision on review promptly, but not later
than the date of the Committee meeting that immediately follows the receipt of
the Claimant's request for review, unless the request for review is filed within
30 days before the date of that meeting.  In that case, a decision will be made
as soon as possible, but not later than the date of the second Committee meeting
following receipt of the request for review.  If special circumstances require a
further extension of time for processing, a decision will be rendered not later
than the third Committee meeting following receipt of the Claimant's request for
review.  If an extension of time for review is required because of special
circumstances, written notice of the extension will be sent to the Claimant
before the extension begins.  The extension notice will indicate the special
circumstances requiring an extension of time and the date by which the Committee
expects to render the final decision.  The decision on review will be in writing
and written in a manner calculated to be understood by the Claimant, will set
forth the specific reason or reasons for the decision, and will contain a
specific reference to the pertinent Plan provisions on which the decision is
based.  If the decision on review is not furnished to the Claimant within
60 days of receipt of the request for review, or within 120 days after its
receipt if special circumstances required an extension of time, the claim will
be deemed denied on review.


                                     ARTICLE 13

                             FUNDING POLICY AND METHOD


Cinergy will establish and carry out a funding policy and method for the Plan
consistent with (a) the Plan's past experience, (b) the Plan's anticipated
experience, (c) the Plan's objectives, (d) the requirements of ERISA, and
(e) the requirements of the Code.  Cinergy will

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<PAGE>

(a) communicate the funding policy and method to the Committee, (b) periodically
review the funding policy and method, and (c) document all action taken with
respect to the funding policy and method.


                                     ARTICLE 14

                                   MISCELLANEOUS


14.1   NO ENLARGEMENT OF EMPLOYEE BENEFITS


       This Plan is strictly a voluntary undertaking on the part of each
       Employer and will not be deemed to constitute a contract between an
       Employer and any Employee or to be consideration for, or an inducement
       to, or a condition of, the employment of any Employee.  Nothing contained
       in the Plan will be deemed to give any Employee the right to be retained
       in the service of an Employer or to interfere with the right of the
       Employer to discharge any Employee at any time.  No Employee, prior to
       his retirement under conditions of eligibility for pension benefits or
       prior to his satisfying the Vesting Requirement will have any right to,
       or interest in, any portion of any fund arising from his Employer's
       contributions under this Plan or, in any event, other than as
       specifically provided in the Plan.  No person will have any right to
       pension benefits except to the extent provided in the Plan.

14.2   REEMPLOYMENT


       If an Eligible Employee incurs a Severance from Service and is later
       reemployed by an Employer, his two (or more) periods of employment will,
       subject to all of the provisions of the Plan, be aggregated for the
       purpose of determining his years of Participation, and his years of
       Service.


14.3   QUALIFIED MILITARY SERVICE

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<PAGE>

       Notwithstanding any provision of this Plan to the contrary,
       contributions, benefits, and service credits with respect to qualified
       military service will be provided in accordance with Code subsection
       414(u).


14.4   NOTICE OF ADDRESS


       Each Participant, Retired Participant, Terminated Vested Participant,
       Beneficiary, Contingent Annuitant, and Spouse entitled to benefits under
       the Plan must submit to the Committee or its designee his post office
       address and each change of post office address.  Any communication,
       statement, or notice addressed to a person at his latest post office
       address filed with the Committee or its designee will, upon deposit in
       the United States mail with postage prepaid, be binding upon that person
       for all purposes of the Plan, and neither the Insurance Company, the
       Committee, nor the Trustee will be obliged to search for, or to ascertain
       the whereabouts of, any person.


14.5   DATA


       Participants, Retired Participants, Terminated Vested Participants,
       Beneficiaries, Contingent Annuitants, and Spouses must furnish to the
       Committee, the Insurance Company, and the Trustee any documents,
       evidence, or information that the Committee, the Insurance Company, or
       the Trustee considers necessary or desirable for the purpose of
       administering the Plan, or to protect the Committee, the Insurance
       Company, or Trustee; and it will be a condition of the Plan that each
       person must furnish this information promptly and sign required documents
       before any benefits become payable under the Plan.


14.6   NO INDIVIDUAL LIABILITY


       It is the express purpose and intention of the Plan that, except as
       otherwise required by law, no individual liability whatever will attach
       to, or be incurred by, the shareholders, officers, or members of the
       board of directors of any Employer, or the Committee, or its

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<PAGE>

       members, or any fiduciary designated pursuant to Section 11.13 (Powers
       and Duties of Committee), or any representatives appointed by Cinergy
       under the Plan, under or by reason of any of the terms or conditions of
       the Plan.


14.7   PARTICIPANT'S STATEMENT OF AGREEMENT


       Cinergy will have the right, at any time, to require any Participant to
       agree in writing to be bound by the Plan's provisions.  However, the
       absence of an agreement will not relieve any Participant from being
       legally bound by the provisions of the Plan.


14.8   NO DIVERSION OF ASSETS


       None of the assets of the Pension Fund may be used for, or diverted to,
       purposes other than the exclusive benefit of the Participants and their
       Beneficiaries.  However, nothing in this Section will prohibit the return
       to the Employers, in accordance with the provisions of ERISA
       subsection 403(c), of a contribution (or a portion of a contribution) by
       the Employers to the Pension Fund if the contribution is (a) made by
       reason of mistake of fact, (b) conditioned on the initial qualification
       of the Plan under Code subsection 401(a), or (c) conditioned upon its
       deductibility under Code section 404 and the deduction is not fully
       allowed.

14.9   GOVERNING LAWS


       The Plan will be construed and administered according to the internal
       laws of the State of Ohio to the extent that those laws are not preempted
       by federal law.


14.10  SEVERABILITY


       If any part of the Plan is adjudged by a court of competent jurisdiction
       to be contrary to the laws governing the Plan, then the Plan will, in all
       other respects, be and remain legally effective and binding to the full
       extent permissible under the law.

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<PAGE>

14.11  INTERPRETATION AND REGULATION OF PLAN


       Cinergy, by action of the Committee, reserves the right to interpret and
       regulate the Plan, by exercise of discretionary authority, and its
       interpretation and regulation will be legally effective and binding on
       all parties concerned.


14.12  COMMUNICATIONS BY PARTICIPANTS


       All communications by Participants and other concerned parties concerning
       the Plan will be in writing and directed to the Committee or its
       designee.


14.13  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 contents of this
       document.


14.14  ACCRUED BENEFIT NOT TO BE DECREASED BY AMENDMENT


       Notwithstanding any other provisions of the Plan to the contrary, no
       accrued benefit of a Participant under the Plan will be decreased by an
       amendment to the Plan, other than an amendment described in Code
       paragraph 412(c)(8) or ERISA section 4281.  For purposes of this
       Subsection, an amendment to the Plan that has the effect of:


       (a)    eliminating or reducing an early retirement benefit or a
              retirement-type subsidy (as defined in the regulations under Code
              paragraph 411(d)(6)), or


       (b)    eliminating an optional form of benefit, with respect to benefits
              attributable to service before the amendment,

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<PAGE>

       will be treated as reducing the accrued benefit of a Participant. In the
       case of any retirement-type subsidy, the preceding sentence will apply
       only with respect to a Participant who satisfies (either before or after
       the amendment) the preamendment conditions for the subsidy.


                                     ARTICLE 15

                           TRUSTS AND INSURANCE CONTRACTS


15.1   TRUSTS AND INSURANCE CONTRACTS


       As part of the Plan, the Employers have established a Pension Fund.  The
       Pension Fund may consist of a trust, or a fund under a group annuity
       contract issued by an Insurance Company, or a combination of each.
       Benefits may, however, be provided through other trusts or insurance
       contracts as Cinergy, in its sole discretion, may establish or cause to
       be established or entered into for the purposes of carrying out the Plan.
       Cinergy will determine the form and terms of any trust and will also
       determine the terms and provisions of any group annuity contract.
       Cinergy may also, in its sole discretion, cause any funds held by any
       Insurance Company, or any Trust Fund held by any Trustee, for the purpose
       of providing benefits under the Plan, to be transferred to any other
       Insurance Company, or qualified Trustee, to be held for the same purpose.


15.2   IRREVOCABILITY


       The Employers will have no right, title, or interest in the Pension Fund
       or to the contributions made under the Plan, and no part of the Pension
       Fund will revert to the Employers, except that upon termination of the
       Plan and after satisfaction or provision for the satisfaction of all
       fixed and contingent liabilities or obligations to persons entitled to
       benefits upon the termination, any balance remaining in the Pension Fund
       will be distributed to the Employers.  However, nothing in this
       Section will prohibit the return, in accordance with the provisions of
       ERISA subsection 403(c), to the Employers of a

                                      85

<PAGE>

       contribution (or a portion of a contribution) by the Employers to the
       Pension Fund if the contribution is (a) made by reason of mistake of
       fact, (b) conditioned on the initial qualification of the Plan under Code
       subsection 401(a), or (c) conditioned upon its deductibility under Code
       section 404 and the deduction is not fully allowed.


15.3   SUFFICIENCY OF PENSION FUND


       The Employer intends the Plan to be a permanent, as distinguished from a
       temporary, program.  Except as otherwise provided by the Code or ERISA,
       however, the Employer will not be under any liability to make
       contributions to the Pension Fund.  Benefits under the Plan are to be
       paid only from the Pension Fund and only to the extent that the Pension
       Fund is sufficient for that purpose.  Neither Cinergy, nor any of the
       officers, employees, members of the Board of Directors, the Committee, or
       representatives of Cinergy guarantees in any manner nor, unless otherwise
       required by law, will be liable for the payment of benefits under the
       Plan.  Except as otherwise provided by ERISA, any person having any claim
       under, or in connection with, the Plan must look solely to the Pension
       Fund for satisfaction.

                                     ARTICLE 16

                                   CONTRIBUTIONS


No contributions to the Plan by Participants will be required or permitted under
the Plan.


During the continuance of the Plan and for the purpose of providing the benefits
contemplated under the Plan, the Employer intends to deposit, from time to time,
with the Trustee or with the Insurance Company, sums of money, to be held in the
Pension Fund, which, together with the earnings of the Pension Fund, will be
deemed sufficient to provide the benefits of the Plan and to satisfy the minimum
funding standards set forth in ERISA.  All contributions by the Employer to the
Pension Fund are expressly conditioned upon deductibility under Code
section 404.


                                     ARTICLE 17

                        APPROVAL UNDER INTERNAL REVENUE CODE

                                      86

<PAGE>

The Plan as set forth in this document is intended to comply with the
requirements of Code subsection 401(a), so that the income of the Pension
Fund may be exempt from federal income taxes and so that contributions of the
Employers under the Plan may be deductible for federal income tax purposes
under Code section 404.  Any modification or amendment of the Plan may be
made, retroactive or otherwise, as necessary or appropriate to establish and
maintain its qualified status under the Code, or to otherwise comply with
ERISA.

                                     ARTICLE 18
                             AMENDMENT AND TERMINATION

18.1   RIGHT TO AMEND OR TERMINATE

       Cinergy reserves the right to modify, alter, amend, revoke or terminate
       the Plan and/or any Trust Fund or group annuity contract that may be
       established or entered into to effectuate and implement the Plan at any
       time.  The Board of Directors will generally have the authority to adopt
       amendments; however, the Committee or the compensation committee of the
       Board of Directors may adopt any amendment to ensure the continued
       qualification of the Plan and Pension Fund under Code subsections 401(a)
       and 501(a), to comply with the provisions of any federal statute or
       regulation impacting pension plans, to enhance the delivery of benefits
       to Participants and Beneficiaries, to ease Plan administration, or to
       respond to the withdrawal of any Employer from the Plan.  Notwithstanding
       the preceding sentence, no amendment by the Committee or the compensation
       committee of the Board of Directors will substantially increase the cost
       of the Plan without the Board of Directors' consent.


       The Board of Directors, or any person or persons duly authorized by the
       Board of Directors, will also have the right, authority, and power to
       terminate the Plan and to discontinue or suspend the payment of
       contributions to provide benefits under the Plan (except for the
       provision of any agreement which has been entered into between an
       Employer and a labor union representing Eligible Employees).  However, no
       action taken


                                       87
<PAGE>


       pursuant to this Section will operate to enlarge the right of Cinergy
       under Section 15.2 (Irrevocability).

18.2   EFFECT OF TERMINATION

       If a partial or complete termination of the Plan occurs, all Participants
       with respect to whom the Plan is being so terminated will have a
       Nonforfeitable right to their benefits accrued under the Plan up to the
       date of termination of the Plan to the extent then funded.

       Except as otherwise required by ERISA section 4044, Cinergy will direct
       the Trustee and/or Insurance Company to segregate the Pension Fund, as
       determined by Cinergy to be attributable to the group that is terminating
       its participation in the Plan, and to make separate allocations of the
       segregated assets among the respective persons having interests in them.
       The separate allocations will be made as follows:

       (a)    First, either:

              (1)    in the case of the pension of a Retired Participant, a
                     Terminated Vested Participant, a Spouse, or a Contingent
                     Annuitant that began at least three years prior to the
                     termination date of the Plan, that portion of the pension
                     that is based on the provisions of the Plan as in effect at
                     any time during the five-year period ending on the
                     termination date, which would result in the least amount,
                     or

              (2)    in the case of the pension of an Active Participant, a
                     Participant who has incurred a Severance from Service, or
                     either a Retired Participant or a Terminated Vested
                     Participant not included in Paragraph (1) of this
                     Subsection (a) that three years prior to the termination
                     date of the Plan would have begun had the Participant then
                     become a Retired Participant, a Terminated Vested
                     Participant, or the Participant's Spouse or Contingent
                     Annuitant, that portion of the pension that is based on the
                     provisions of the


                                       88
<PAGE>


                     Plan that were in effect at any time during the five-year
                     period ending on the termination date, which would result
                     in the least amount;

       (b)    Second, all other pensions under the Plan that are guaranteed by
              the Pension Benefit Guaranty Corporation;

       (c)    Third, all other pensions with respect to both (1) Retired
              Participants, Terminated Vested Participants, Spouses, and
              Contingent Annuitants and (2) Active Participants and Participants
              who have incurred a Severance from Service who, as of the date of
              termination of the Plan, have completed the Vesting Requirement of
              the Plan; and

       (d)    All other pensions under the Plan.

              If the balance of the Pension Fund allocable to the terminating
              group that is remaining after allocations have been made with
              respect to all pensions in a preceding class or group is
              insufficient to allocate the full Actuarial Equivalent of pensions
              to all persons in the class or group for which it is then being
              applied, the balance will be allocated to each person in the class
              or group in the proportion to which the Actuarial Equivalent of
              the pension allocable to him pursuant to the class or group bears
              to the total Actuarial Equivalent of the pensions so allocable to
              all persons in the class or group.  However, if the balance is
              sufficient to allocate a portion only of the full Actuarial
              Equivalent of the pensions set forth in Subsection (c), then the
              amounts of pension otherwise provided will be redetermined based
              on the provisions of the Plan as in effect five years prior to the
              termination date, or, if applicable, as of the later date as will
              provide for the allocation of the full Actuarial Equivalent
              thereof.

              The amounts so allocated will, subject to the rights of the
              Insurance Company under the Group Annuity Contract governing
              allocations of small annuities, be purchased under the Group
              Annuity Contract or other group annuity contract.


                                       89
<PAGE>


              Any balance remaining in the Pension Fund that is allocable to the
              terminating group, and after all allocations have been made
              pursuant to the foregoing provisions of this Subsection, will be
              allocated to the Employers.

18.3   MERGER AND CONSOLIDATION OF PLAN

       In the case of any merger or consolidation with, or transfer of assets
       and liabilities to, any other plan, provisions will be made so that each
       Participant in the Plan on the date thereof (if the Plan had then
       terminated) would receive a benefit immediately after the merger,
       consolidation or transfer that is equal to, or greater than, the benefit
       he would have been entitled to receive immediately prior to the merger,
       consolidation, or transfer if the Plan had then terminated.

18.4   POST-CHANGE IN CONTROL MERGER, CONSOLIDATION, OR TRANSFER OF PENSION PLAN
       ASSETS OR LIABILITIES

       Notwithstanding the preceding provisions of this Article or any other
       provision of this Plan, in the event of any merger or consolidation of
       this Plan with another employee benefit plan or any transfer of assets or
       liabilities of this Plan to another plan that is effected within three
       years following a Change in Control, (a) the accrued benefit of each
       Participant who is actively employed by an Employer as of the effective
       date of the merger, consolidation, or transfer of assets or liabilities
       and with respect to whom liability for the payment of benefits under the
       Plan is being merged or consolidated with or transferred to another plan
       will become fully vested; (b) the vested accrued benefit of each
       Participant, former Participant, and Beneficiary with respect to whom any
       liability for the payment of benefits under the Plan is being merged or
       consolidated with or transferred to another plan will be increased in
       accordance with Section 18.6 (Post-Change in Control Surplus Reversion)
       as if the Plan had terminated immediately prior to any merger,
       consolidation, or transfer (and for purposes of calculating the
       increase, the accrued benefits of all other Participants, former
       Participants and their Beneficiaries will be deemed to have increased in
       accordance with Section 18.6 (Post-Change in Control


                                       90
<PAGE>


       Surplus Reversion)); and (c) prior to consummation of any merger,
       consolidation, or transfer, the accrued benefit (as increased, if
       applicable) of each Participant, former Participant, and Beneficiary
       with respect to whom liability for the payment of benefits under the
       Plan is being merged or consolidated with or transferred to another plan
       will be satisfied by the purchase of a guaranteed annuity contract from
       a financially sound insurance company that represents an irrevocable
       commitment to satisfy the accrued benefit (as increased, if applicable)
       of the person. Notwithstanding the provisions of Section 18.1 (Right to
       Amend or Terminate), the provisions of this Section may not be amended
       by an amendment to the Plan effective within three years following a
       Change in Control.

18.5   GENERAL PROTECTION OF BENEFITS IN THE EVENT OF A CHANGE IN CONTROL

       Notwithstanding any other provisions of this Plan, for a period of three
       years following a Change in Control, the provisions of this Plan may not
       be amended in any manner that would adversely affect in any way the
       computation or amount of or the entitlement to retirement benefits under
       the Plan, including, but not limited to, any adverse change in or to
       (a) the rate at which benefits accrue or vest, (b) the compensation
       recognized under the Plan, or (c) the optional forms of payment available
       to a Participant or Beneficiary under the Plan, including the time of
       commencement of benefits and any actuarial factors utilized.
       Notwithstanding the provisions of Section 18.1 (Right to Amend or
       Terminate), the provisions of this Section may not be amended by an
       amendment effective within three years following a Change in Control.

18.6   POST-CHANGE IN CONTROL SURPLUS REVERSION

       Notwithstanding the preceding provisions of this Article or any other
       provision of the Plan, in the event this Plan is terminated within three
       years following a Change in Control, the assets of the Plan will be
       applied in accordance with the preceding provisions of this Article to
       satisfy all liabilities to Participants, former Participants, and their


                                       91
<PAGE>


       Beneficiaries.  If, after satisfaction of the liabilities, there are
       assets remaining in the Plan, the balance will be applied on a pro rata
       basis based upon final vested benefit to increase the benefits of the
       Participants, former Participants, and their Beneficiaries, subject
       however, to the applicable legal limitations on benefits payable from tax
       qualified plans.  Notwithstanding the provisions of Section 18.1 (Right
       to Amend or Terminate), the provisions of this Section may not be amended
       by an amendment to the Plan effected within three years following a
       Change in Control.


                                     ARTICLE 19
                               AUTHORIZED TRANSACTION

Cinergy will have the right, authority, and power to transfer some or all of the
assets of the Plan, including contributions and earnings, to a pooled investment
fund of an insurance company qualified to do business in one or more states of
the United States, even though that insurance company might otherwise be a
"party in interest," as that term is defined in ERISA; provided, the insurance
company receives not more than reasonable compensation with respect to the
transaction.


                                     ARTICLE 20
                          PARTICIPATION BY OTHER EMPLOYERS

20.1   ADOPTION OF PLAN

       With Cinergy's consent, any Affiliate may become a participating Employer
       under the Plan by (a) taking appropriate action to adopt the Plan,
       (b) filing with Cinergy a duly certified copy of the Plan as adopted by
       the Affiliate, (c) becoming a party to the trust agreement establishing
       the Trust Fund, and (d) executing and delivering documents and


                                       92
<PAGE>


       taking any other action as may be necessary or desirable to put the Plan
       into effect with respect to it.


20.2   WITHDRAWAL FROM PARTICIPATION

       Any Employer may, with Cinergy's consent, withdraw from participation in
       the Plan at any time by filing with Cinergy a duly certified copy of a
       resolution of its board of directors to that effect and giving notice of
       its intended withdrawal to Cinergy, the Trustee, and Insurance Company
       prior to the effective date of withdrawal.  If an Employer withdraws from
       the Plan, Cinergy will determine the portion of the Pension Fund held by
       the Trustee or Insurance Company that is applicable to the Participants
       and former Participants of the withdrawing Employer and direct the
       Trustee and Insurance Company to segregate its portion in a separate
       trust.  The separate trust will be held and administered as a part of the
       separate plan of the withdrawn Employer.  The portion of the Pension Fund
       applicable to the Participants and former Participants of a particular
       Employer will be the sum of:

       (a)    the total amount of the accrued benefits applicable to the
              Participants and former Participants of the withdrawing Employer,
              and

       (b)    an amount that bears the same ratio to the excess, if any, of:

              (1)    the total of the Pension Fund over

              (2)    the total amount of the accrued benefits applicable to the
                     Participants and former Participants of the withdrawing
                     Employer bears to the total amount of the accrued benefits
                     applicable to all Participants and former Participants.

       Notwithstanding the preceding sentence, if the total amount of the
       present value of the accrued benefits applicable to the Participants and
       former Participants of the withdrawing


                                       93
<PAGE>


       Employer (when combined with the value of any other assets segregated
       during that Plan Year) is less than three percent of the total of the
       Pension Fund as of at least one day in the Plan Year during which the
       withdrawal occurs, the portion of the Pension Fund applicable to the
       Participants and former Participants of the withdrawing Employer will be
       equal to the present value of those Participants' accrued benefits.

20.3   CINERGY AS AGENT FOR EMPLOYERS

       Each Affiliate that becomes a participating Employer pursuant to 20.1
       (Adoption of Plan) or Article 22 (Continuance by a Successor) by so doing
       will be deemed to have appointed Cinergy its agent to exercise on its
       behalf all of the powers and authorities conferred upon Cinergy by the
       terms of the Plan, including, but not limited to the power to amend and
       terminate the Plan.  Cinergy's authority to act as agent will continue
       unless and until the portion of the Pension Fund held for the benefit of
       Employees of the particular Employer and their Beneficiaries is set aside
       in a separate trust as provided in Section 20.2 (Withdrawal from
       Participation).  Each Employer will, from time to time, upon Cinergy's
       request, furnish to Cinergy any data and information as Cinergy requires
       in the performance of its duties.


                                     ARTICLE 21
                             CONTINUANCE BY A SUCCESSOR

If Cinergy or any other Employer is reorganized by way of merger, consolidation,
transfer of assets, or otherwise, so that a corporation, partnership, or person
other than an Employer succeeds to all or substantially all of the Employer's
business, the successor may be substituted for the Employer under the Plan by
adopting the Plan and becoming a party to the trust agreement.  Contributions by
the Employer will be automatically suspended from the effective date of any
reorganization until the date upon which the substitution of the successor
corporation for the Employer under the Plan becomes effective.  If, within
90 days following the effective date of any reorganization, the successor does
not elect to become a party to the Plan, or if the Employer adopts a plan of
complete liquidation other than in connection with a reorganization,


                                       94
<PAGE>


the Plan will be automatically terminated with respect to employees of the
Employer as of the close of business on the 90th day following the effective
date of reorganization or as of the close of business on the date of adoption of
a plan of complete liquidation, as the case may be, and Cinergy will direct the
Trustee to distribute the portion of the Trust Fund applicable to that Employer
in the manner provided in Section 20.2 (Withdrawal from Participation).


       Cinergy Corp. has caused this document to be executed by its duly
authorized officers, effective January 1, 1998.




                                       By:    _______________________________
                                              Madeleine W. Ludlow
                                              Vice President and Chief
                                              Financial Officer

                                       Dated: _______________________________
APPROVED:

_______________________________
Jerome A. Vennemann
Acting General Counsel
and Assistant Corporate Secretary


Dated: _________________________


                                       95
<PAGE>


                                   ADDENDUM A

      LEVEL INCOME OPTION -- FACTORS USING UP84 MORTALITY AND 7.5% INTEREST

<TABLE>
<CAPTION>
   Age       0/12      1/12      2/12      3/12       4/12      5/12      6/12      7/12      8/12      9/12     10/12      11/12
   ---       ----      ----      ----      ----       ----      ----      ----      ----      ----      ----     -----      -----
   <S>     <C>       <C>       <C>       <C>        <C>       <C>       <C>       <C>       <C>       <C>       <C>        <C>
    50     0.30410   0.30651   0.30892   0.31133    0.31374   0.31615   0.31856   0.32097   0.32338   0.32579   0.32820    0.33061
    51     0.33302   0.33570   0.33837   0.34105    0.34373   0.34641   0.34908   0.35176   0.35444   0.35712   0.35979    0.36247
    52     0.36515   0.36813   0.37111   0.37408    0.37706   0.38004   0.38302   0.38600   0.38898   0.39195   0.39493    0.39791
    53     0.40089   0.40421   0.40753   0.41085    0.41417   0.41749   0.42080   0.42412   0.42744   0.43076   0.43408    0.43740
    54     0.44072   0.44443   0.44814   0.45185    0.45556   0.45927   0.46297   0.46668   0.47039   0.47410   0.47781    0.48152
    55     0.48523   0.48938   0.49353   0.49768    0.50184   0.50599   0.51014   0.51429   0.51844   0.52259   0.52675    0.53090
    56     0.53505   0.53971   0.54437   0.54903    0.55369   0.55835   0.56301   0.56767   0.57233   0.57699   0.58165    0.58631
    57     0.59097   0.59621   0.60146   0.60670    0.61194   0.61719   0.62243   0.62767   0.63292   0.63816   0.64340    0.64865
    58     0.65389   0.65980   0.66572   0.67163    0.67755   0.68346   0.68938   0.69529   0.70121   0.70712   0.71304    0.71895
    59     0.72487   0.73156   0.73825   0.74494    0.75164   0.75833   0.76502   0.77171   0.77840   0.78509   0.79179    0.79848
    60     0.80517   0.81276   0.82035   0.82795    0.83554   0.84313   0.85072   0.85832   0.86591   0.87350   0.88109    0.88869
    61     0.89628   0.90492   0.91357   0.92221    0.93085   0.93950   0.94814   0.95678   0.96543   0.97407   0.98271    0.99136
    62     1.00000
</TABLE>