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EXHIBIT 99.02

                           DESCRIPTION OF COMMON STOCK

The information under this caption is a succinct summary of certain provisions
and is subject to the detailed provisions of the Company's Restated Articles of
Incorporation, as amended, and of its By-Laws, which have been filed (or
incorporated by reference) as exhibits to the Company's Annual Report on Form
10-K for the year ended December 31, 1996, and which are incorporated herein by
this reference.

Authorized Stock

Under the Company's Articles of Incorporation, the Company is authorized to
issue 125,000,000 shares of Common Stock, without par value (the "Common
Stock"), of which approximately 66,377,022 shares were outstanding on February
28, 1997.

The Company is also authorized to issue 5,000,000 shares of preferred stock,
without par value (the "Preferred Stock"). As discussed below under the caption
"Rights to Purchase Series A Preferred Stock," the Company has created a series
of Preferred Stock designated as "Series A Preferred Stock," and the number of
shares constituting such series is 750,000. No shares of such Series A Preferred
Stock and no shares of any other Preferred Stock are currently outstanding.
Preferred Stock may be issued in the future in such series as may be designated
by the Company's Board of Directors. In creating any such series, the Company's
Board of Directors has the authority to fix the rights and preferences of each
series with respect to, among other things, the dividend rate, redemption
provisions, liquidation preferences, and sinking fund provisions.

Dividend Rights

Subject to the prior payment in full of all accrued and unpaid dividends on the
Series A Preferred Stock and possible prior rights of holders of other Preferred
Stock that may be issued in the future, holders of the Company's Common Stock
are entitled to receive such dividends as may be declared from time to time by
the Board of Directors of the Company out of funds legally available therefor.

The funds required by the Company to enable it to pay dividends on its Common
Stock are expected to be derived principally from dividends paid by Louisville
Gas and Electric Company, the Company's principal subsidiary ("LG&E"), on LG&E's
Common Stock. The Company's ability to receive dividends on LG&E's Common Stock
is subject to the prior rights of the holders of LG&E's preferred stock and the
covenants of debt instruments limiting the ability of LG&E to pay dividends.

The only existing covenant limiting LG&E's ability to pay dividends is in LG&E's
trust indenture, as supplemented, securing LG&E's first mortgage bonds. It
provides in substance that retained income of LG&E equal to the amount by which
the aggregate of (a) provisions for retirement and depreciation and (b)
expenditures for maintenance, for the period from January 1, 


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1978, to the end of the last preceding month for which a balance sheet of LG&E
is available, is less than 2.25% of depreciable property, including construction
work in progress, as of the end of that period, shall not be available for the
payment of cash dividends on the Common Stock of LG&E. No portion of retained
income of LG&E is presently restricted by this provision.

Voting Rights

Every holder of Common Stock and every holder of Series A Preferred Stock that
may be issued in the future is entitled to one vote per share for the election
of directors and upon all other matters on which such holder is entitled to
vote. At all elections of directors, any eligible shareholder may vote
cumulatively. The Board of Directors of the Company has the authority to fix
conversion and voting rights for any new series of Preferred Stock (including
the right to elect directors upon a failure to pay dividends), provided that no
share of Preferred Stock can have more than one vote per share.

Notwithstanding the foregoing, if any Series A Preferred Stock is issued in the
future and if and when dividends payable on such Series A Preferred Stock that
may be issued in the future shall be in default for six full quarterly dividends
and thereafter until all defaults shall have been paid, the holders of the
Series A Preferred Stock, voting separately as one class, to the exclusion of
the holders of Common Stock, will be entitled to elect two (2) directors of the
Company.

The Company's Articles of Incorporation contain "fair price" provisions, which
require that mergers and certain other business combinations or transactions
involving the Company and any substantial (10% or more) holder of the Company's
Voting Stock (as defined below) must be approved by the holders of at least 80%
of the voting power of the Company's outstanding Voting Stock and by the holders
of at least 66-2/3% of the voting power of the Company's Voting Stock not
beneficially owned by the 10% owner unless the transaction is either approved by
a majority of the members of the Board of Directors who are unaffiliated with
the substantial holder or certain minimum price and procedural requirements are
met. Any amendment to the foregoing provisions must be approved by the holders
of at least 80% of the voting power of the Company's outstanding Voting Stock
and by the holders of at least 66-2/3% of the voting power of the Company's
Voting Stock not beneficially owned by any 10% owner. The Company's Voting Stock
consists of all outstanding shares of the Company generally entitled to vote in
the election of directors and currently consists of the Company's Common Stock.

Subject to the rights of the Series A Preferred Stock (if any are issued) to
elect directors under certain circumstances described above and any voting
rights of the holders of the Company's Preferred Stock that may be issued in the
future, the Company's Articles and By-Laws contain provisions stating that: (a)
the Board of Directors shall be divided into three classes, as nearly equal in
number as possible, each of which, after an interim arrangement, will serve for
three years, with one class being elected each year, (b) directors may be
removed only with the approval of the holders of at least 80% of the voting
power of the shares of the Company generally entitled to vote, except that so
long as cumulative voting applies no director may be removed if the votes cast
against removal would be sufficient to elect the director if cumulatively voted
at an election of the class of directors of which such director is a part, (c)
any vacancy on the Board of Directors shall be filled by the remaining directors
then in office, though less than a 


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quorum, (d) advance notice of introduction by shareholders of business at annual
shareholders' meetings and of shareholder nominations for the election of
directors shall be given and that certain information be provided with respect
to such matters, (e) shareholder action may be taken only by unanimous written
consent or at an annual meeting of shareholders or a special meeting of
shareholders called by the President, the Board of Directors or, to the extent
required by Kentucky law, shareholders, and (f) the foregoing provisions may be
amended only by the approval of the holders of at least 80% of the voting power
of the shares of the Company generally entitled to vote. These provisions along
with the "fair price" provisions and cumulative voting provisions discussed
above and the Rights described below, may deter attempts to change control of
the Company (by proxy contest, tender offer or otherwise) and will make more
difficult a change in control of the Company that is opposed by the Company's
Board of Directors.

Liquidation Rights

Subject to the prior rights of the holders of the Series A Preferred Stock that
may be issued in the future and the possible prior rights of holders of other
Preferred Stock that may be issued in the future, in the event of liquidation,
dissolution or winding up of the Company, whether voluntary or involuntary, the
holders of the Common Stock are entitled to the remaining assets.

Other Provisions

No holder of Common Stock or any future holder of Preferred Stock has the
preemptive right to subscribe for and purchase any part of any new or additional
issue of stock or securities convertible into stock. The Common Stock is not
subject to redemption and does not have any conversion or sinking fund
provisions. The issued and outstanding shares of Common Stock are fully paid and
nonassessable shares of Common Stock of the Company.

Under the Company's Articles of Incorporation, the Board of Directors may issue
additional shares of authorized but unissued Common Stock for such consideration
as it may from time to time determine.

Rights to Purchase Series A Preferred Stock

On December 5, 1990, the Board of Directors of the Company: (i) declared a
dividend distribution of one Preferred Stock purchase right (a "Right" or
"Rights") for each outstanding share of Common Stock to shareholders of record
on December 19, 1990, and issuable as of such Record Date and (ii) further
authorized the issuance of one Right with respect to each share of Common Stock
of the Company that becomes outstanding after such Record Date and before the
Distribution Date (as defined below).

The Company declared a three-for-two split of the Common Stock to shareholders
of record on April 30, 1992. As a result of the stock split and in accordance
with the terms of the Rights, the number of Rights associated with a share of
Common Stock was reduced, effective May 15, 1992, from one Right per share to
two-thirds of a Right per share. The Company declared a two-for-one split of the
Common Stock to shareholders of record on April 1, 1996. As a result of the


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two-for-one split and in accordance with the terms of the Rights, the number of
Rights associated with a share of Common Stock was reduced from two-thirds of a
Right per share to one-third of a Right per share, effective April 15, 1996.

On June 7, 1995, the Board of Directors approved the First Amendment to Rights
Agreement, whereby the definition of "Acquiring Person" (see below) was modified
to provide that an "Acquiring Person" shall be any person who has acquired, or
obtained the rights to acquire, beneficial ownership of 15% or more of the
outstanding Common Stock of the Company. The previous ownership threshold was
20%.

Each whole Right entitles the holder of record to purchase from the Company one
one-hundredth of a share of Series A Preferred Stock, without par value, of the
Company ("Series A Preferred Stock") at a price of $110 per one one-hundredth of
a share (the "Purchase Price"). The description and terms of the Rights are set
forth in the Rights Agreement, as amended (the "Rights Agreement").

Initially the Rights will not be exercisable, certificates will not be sent to
shareholders and the rights will automatically trade with the Common Stock.

The Rights will be evidenced by the Common Stock certificates until the close of
business on the earlier to occur of the tenth day following (i) a public
announcement (or, if earlier, the date a majority of the Board of Directors of
the Company becomes aware) that a person or group of affiliated or associated
persons has become an "Acquiring Person", which is defined as a person who has
acquired, or obtained the right to acquire, beneficial ownership of 15% or more
of the outstanding Common Stock of the Company (the "Stock Acquisition Date"),
or (ii) the commencement of, or public announcement of an intention to commence,
a tender or exchange offer the consummation of which would result in the
ownership of 15% or more of the outstanding Common Stock (the earlier of the
dates in clause (i) or (ii) being called the "Distribution Date").
Notwithstanding the foregoing, if the Board of Directors of the Company
determines in good faith that a person who would otherwise be an "Acquiring
Person," has become such inadvertently and without any intention of changing or
influencing control of the Company, and such person, as promptly as practicable
after being advised of such determination, divests himself or itself of
beneficial ownership of a sufficient number of shares of Common Stock so that
such person would no longer be an "Acquiring Person," then such person shall not
be deemed to be an "Acquiring Person" for any purposes of the Rights Agreement.
Until the Distribution Date, (i) the Rights will be evidenced by the Common
Stock certificates and will be transferred with and only with such Common Stock
certificates, (ii) new Common Stock certificates will contain a notation
incorporating the Rights Agreement by reference and (iii) the surrender for
transfer of any certificates for Common Stock outstanding will also constitute
the transfer of the Rights associated with the Common Stock represented by such
certificate.

As soon as practicable following the Distribution Date, separate certificates
evidencing the Rights ("Right Certificates") will be mailed to holders of record
of the Company's Common Stock as of the close of business on the Distribution
Date, and such separate certificates alone will evidence the rights from and
after the Distribution Date.


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Each of the following persons (an "Exempt Person") will not be deemed to be an
Acquiring Person, even if they have acquired, or obtained the right to acquire,
beneficial ownership of 15% or more of the outstanding Common Stock of the
Company: (i) the Company, any subsidiary of the Company, any employee benefit
plan or employee stock plan of the Company or of any subsidiary of the Company;
and (ii) any person who becomes an Acquiring Person solely by virtue of a
reduction in the number of outstanding shares of Common Stock, unless and until
such person shall become the beneficial owner of, or make a tender offer for,
any additional shares of Common Stock.

The Rights are not exercisable until the Distribution Date. The Rights will
expire at the close of business on December 19, 2000, unless earlier redeemed or
exchanged by the Company as described below.

The Purchase Price payable, and the number of shares of Series A Preferred Stock
or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the event of
a stock dividend on, or a subdivision, combination or reclassification of, the
Series A Preferred Stock, (ii) upon the grant to holders of the Series A
Preferred Stock of certain rights or warrants to subscribe for Series A
Preferred Stock or convertible securities at less than the current market price
of the Series A Preferred Stock or (iii) upon the distribution to holders of the
Series A Preferred Stock of evidences of indebtedness or assets (excluding
dividends payable in Series A Preferred Stock) or of subscription rights or
warrants (other than those referred to above). The number of Rights associated
with a share of the Company's Common Stock is subject to adjustment from time to
time in the event of a stock dividend on, or a subdivision or combination of,
the Common Stock.

In the event any Person (other than an Exempt Person) becomes the beneficial
owner of 15% or more of the then outstanding shares of Common Stock (except
pursuant to an offer for all outstanding shares of Common Stock that the
independent directors determine to be fair to and otherwise in the best interest
of the Company and its shareholders) or any Exempt Person who is the beneficial
owner of 15% or more of the outstanding Common Stock fails to continue to
qualify as an Exempt Person, then each holder of record of a whole Right, other
than the Acquiring Person, will thereafter have the right to receive, upon
payment of the Purchase Price, Common Stock (or, in certain circumstances, cash,
property or other securities of the Company) having a market value at the time
of the transaction equal to twice the Purchase Price. However, Rights are not
exercisable following such event until such time as the Rights are no longer
redeemable by the Company as set forth below. Any Rights that are or were at any
time, on or after the Distribution Date, beneficially owned by an Acquiring
Person shall become null and void.

For example, at an exercise price of $110 per Right, each whole Right not owned
by an Acquiring Person (or by certain related parties) following an event set
forth in the preceding paragraph would entitle its holder to purchase $220 worth
of Common Stock (or other consideration, as noted above) for $110. Assuming that
the Common Stock had a per share value of $22 at such time, the holder of each
valid Right would be entitled to purchase 10 shares of Common Stock for $110.


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After the Rights have become exercisable, if the Company is acquired in a merger
or other business combination (in which any shares of the Company's Common Stock
are changed into or exchanged for other securities or assets) or more than 50%
of the assets or earning power of the Company and its subsidiaries (taken as a
whole) are sold or transferred in one or a series of related transactions, the
Rights Agreement provides that proper provision shall be made so that each
holder of record of a whole Right will have the right to receive, upon payment
of the Purchase Price, that number of shares of common stock of the acquiring
company having a market value at the time of such transaction equal to two times
the Purchase Price.

After any such event, to the extent that insufficient shares of Common Stock are
available for the exercise in full of the Rights, holders of Rights will receive
upon exercise shares of Common Stock to the extent available and then other
securities of the Company, including units of shares of Series A Preferred Stock
with rights substantially comparable to those of the Common Stock, property, or
cash, in proportions determined by the Company, so that the aggregate value
received is equal to twice the Purchase Price. The Company, however, shall not
be required to issue any cash, property or debt securities upon exercise of the
Rights to the extent their aggregate value would exceed the amount of cash the
Company would otherwise be entitled to receive upon exercise in full of the then
exercisable Rights.

No fractional shares of Series A Preferred Stock or Common Stock will be
required to be issued upon exercise of the Rights and, in lieu thereof, a
payment in cash may be made to the holder of such Rights equal to the same
fraction of the current market value of a share of Series A Preferred Stock or,
if applicable, Common Stock.

At any time until ten days after the Stock Acquisition Date (subject to
extension by the Board of Directors), the Company may redeem the Rights in
whole, but not in part, at a price of $0.01 per Right (subject to certain
anti-dilution adjustments) (the "Redemption Price"). After such redemption
period, the Company's right of redemption may be reinstated, under certain
circumstances, if an Acquiring Person reduces his beneficial ownership of Common
Stock to below 10% and there is no other Acquiring Person. Immediately upon the
action of the Board of Directors of the Company authorizing redemption of the
Rights, the right to exercise the rights will terminate, and the only right of
the holders of Rights will be to receive the Redemption Price without any
interest thereon.

The Board of Directors may, at its option, at any time after any Person becomes
an Acquiring Person, exchange all or part of the outstanding Rights (other than
Rights held by the Acquiring Person and certain related parties) for shares of
Common Stock at an exchange ratio of three (3) shares of Common Stock per Right
(subject to certain anti-dilution adjustments). However, the Board may not
effect such an exchange at any time any Person or group owns 50% or more of the
shares of Common Stock then outstanding. Immediately after the Board orders such
an exchange, the right to exercise the Rights shall terminate and the holders of
Rights shall thereafter only be entitled to receive shares of Common Stock at
the applicable exchange ratio.

The Board of Directors of the Company may amend the Rights Agreement. After the
Distribution Date, however, the provisions of the Rights Agreement may be
amended by the Board only to cure any ambiguity, to make changes which do not
adversely affect the interests of holders of 


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Rights (excluding the interests of any Acquiring Person or an affiliate or
associate of an Acquiring Person), or to shorten or lengthen any time period
under the Rights Agreement; provided, however, that no amendment to adjust the
time period governing redemption shall be made at such time as the Rights are
not redeemable. In addition, no supplement or amendment may be made which
changes the Redemption Price, the final expiration date, the Purchase Price or
the number one one-hundredths of a share of Series A Preferred Stock for which a
Right is exercisable, unless at the time of such supplement or amendment there
has been no occurrence of a Stock Acquisition Date and such supplement or
amendment does not adversely affect the interests of the holders of Rights
(other than an Acquiring Person or an associate or affiliate of an Acquiring
Person).

Until a Right is exercised, the holder, as such, will have no rights as a
shareholder of the Company, including, without limitation, the right to vote or
to receive dividends.

The issuance of the Rights is not taxable to the Company or to shareholders
under presently existing federal income tax law, and will not change the way in
which shareholders can presently trade the Company's shares of Common Stock. If
the Rights should become exercisable, shareholders, depending on then existing
circumstances, may recognize taxable income.

The Rights may have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by the Board of Directors and, accordingly, will make more
difficult a change of control that is opposed by the Company's Board of
Directors. However, the Rights should not interfere with a proposed change of
control (including a merger or other business combination) approved by a
majority of the Board of Directors since the Rights may be redeemed by the
Company at the Redemption Price at any time until ten days after the Stock
Acquisition Date (subject to extension by the Board of Directors). Thus, the
Rights are intended to encourage persons who may seek to acquire control of the
Company to initiate such an acquisition through negotiations with the Board of
Directors. Nevertheless, the Rights also may discourage a third party from
making a partial tender offer or otherwise attempting to obtain a substantial
equity position in, or seeking to obtain control of, the Company. To the extent
any potential acquirors are deterred by the Rights, the Rights may have the
effect of preserving incumbent management in office.

A copy of the Rights Agreement has been filed with the Securities and Exchange
Commission as an Exhibit to the Company's Registration Statement on Form S-8,
Registration No. 33-38557. A copy of the First Amendment to Rights Agreement has
been filed with the SEC as an Exhibit to the Company's Registration Statement on
Form 8-A/A, Registration No. 1-10568, filed on June 20, 1995. This summary
description of the Rights does not purport to be complete and is qualified in
its entirety by reference to the Rights Agreement, which is incorporated in this
summary description herein by reference.

Miscellaneous

The Company's outstanding Common Stock is listed on the New York and Chicago
Stock Exchanges.


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Transfer Agents and Registrar

The Transfer Agents for the Common Stock are the Company and Norwest Bank
Minnesota, N.A., Minneapolis, Minnesota. Registrar for the Common Stock is PNC
Bank, Kentucky, Inc., Louisville, Kentucky.


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