SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 1-11377
CINERGY CORP. DIRECTORS' DEFERRED COMPENSATION PLAN
(Full title of the plan)
CINERGY CORP.
(Name of issuer of the securities held pursuant to the plan)
139 East Fourth Street
Cincinnati, Ohio 45202
(Address of principal executive offices)
TABLE OF CONTENTS
Page No.
Financial Statements
Report of Independent Public Accountants
Statements of Financial Condition as of
December 31, 1996 and 1995
Statements of Income and Other Changes in Plan Equity
for the Years Ended December 31, 1996, 1995, and 1994
Notes to Financial Statements
Financial Statement Schedules:
Schedules I, II, and III are not applicable
Signatures
Exhibits
1) Consent of Independent Public Accountants
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Plan Administrator of
the Cinergy Corp. Directors'
Deferred Compensation Plan:
We have audited the accompanying statements of financial
condition of the CINERGY CORP. DIRECTORS' DEFERRED COMPENSATION
PLAN as of December 31, 1996 and 1995, and the statements of
income and other changes in plan equity for each of the three
years in the period ended December 31, 1996. These financial
statements are the responsibility of the Plan Administrator. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by the Plan Administrator, as well as
evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of the Plan as of December 31, 1996 and 1995, and the results of
its operations and changes in plan equity for each of the three
years in the period ended December 31, 1996, in conformity with
generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Cincinnati, Ohio,
March 25, 1997.
<PAGE>
<TABLE>
<CAPTION>
CINERGY CORP. DIRECTORS' DEFERRED COMPENSATION PLAN
STATEMENTS OF FINANCIAL CONDITION
Stock
Accounts Total
AS OF DECEMBER 31, 1996
<S> <C> <C>
ASSETS
Amounts due from participating
employers (Note A) $739 676 $739 676
PLAN EQUITY $739 676 $739 676
AS OF DECEMBER 31, 1995
ASSETS
Amounts due from participating
employers (Note A) $489 414 $489 414
PLAN EQUITY $489 414 $489 414
<FN>
The accompanying notes are an integral part of these financial statements.
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
CINERGY CORP. DIRECTORS' DEFERRED COMPENSATION PLAN
STATEMENTS OF INCOME AND OTHER CHANGES IN PLAN EQUITY
Stock Cash
Accounts Accounts Total
<S> <C> <C> <C>
PLAN EQUITY AT DECEMBER 31, 1993 $ 14 250 $ 1 750 $ 16 000
Investment income (Note C)
Dividends earned 3 476 - 3 476
Interest earned - 534 534
Net investment income 3 476 534 4 010
Unrealized appreciation (Note G) 7 578 - 7 578
Contributions from participants (Note C) 161 878 26 000 187 878
Participant withdrawals (Note E) (2 000) - (2 000)
PLAN EQUITY AT DECEMBER 31, 1994 185 182 28 284 213 466
Investment income (Note C)
Dividends earned 19 285 - 19 285
Interest earned - 810 810
Net investment income 19 285 810 20 095
Unrealized appreciation (Note G) 85 065 - 85 065
Contributions from participants (Note C) 199 882 6 548 206 430
Participant withdrawals (Note E) - (35 642) (35 642)
PLAN EQUITY AT DECEMBER 31, 1995 489 414 - 489 414
Investment income (Note C)
Dividends earned 31 615 - 31 615
Unrealized appreciation (Note G) 47 816 - 47 816
Contributions from participants (Note C) 191 500 - 191 500
Participant withdrawals (Note E) (20 669) - (20 669)
PLAN EQUITY AT DECEMBER 31, 1996 $ 739 676 $ - $ 739 676
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
CINERGY CORP. DIRECTORS' DEFERRED COMPENSATION PLAN
NOTES TO FINANCIAL STATEMENTS
Note A - Plan Description
The Cinergy Corp. Directors' Deferred Compensation Plan (the
Plan) was established to enable non-employee directors of Cinergy
Corp. (Cinergy or Company) and its subsidiaries to defer the
receipt of all or a portion of the compensation payable for
services performed as a member of the board of directors of
Cinergy or any of its subsidiaries. The Plan is not a funded
plan; thereby, Cinergy and its subsidiaries have not segregated
any assets to pay the contractual obligations to participants
under the Plan. The administrative expenses of the Plan are paid
by the Company. Further details of the Plan are provided in the
Plan prospectus which has been distributed to all eligible Plan
participants.
In conjunction with the merger of PSI Resources, Inc. (PSI) with
and into the Company on October 24, 1994, the PSI Resources, Inc.
Directors' Deferred Compensation Plan (the PSI Plan) was merged
into the Plan. The PSI Plan contained provisions substantially
similar to the Plan.
Note B - Accounting Principles
The accounts of the Plan are maintained on an accrual basis.
Activity and balances related to the PSI Plan are reflected in
the financial statements as though the PSI Plan has always been
part of the Plan.
Note C - Investment Program
Under the Plan, eligible participants may elect to defer all or
any portion of the compensation payable for services performed as
a member of the board of directors of Cinergy or its
subsidiaries. Each participant elects to have amounts deferred
credited among two different accounts - a "Stock Account" and a
"Cash Account" - as follows:
Stock Account -
A participant may elect to have any portion of
deferred amounts treated as if invested in a number of
shares of Cinergy Corp. Common Stock, $.01 par value
(Common Stock). When a participant elects to have
amounts treated as if invested in Common Stock, the
deferred amounts are deemed to be invested in a number
of theoretical shares of Common Stock determined using
the market price per share existing on the date each
amount would otherwise have been payable to the
participant. Dividends on the theoretical shares are
assumed to be reinvested into additional theoretical
shares determined using the existing market price per
share as and when dividends on Common Stock are paid.
A total of 22,162.575 theoretical shares at a market
value of $33.375 per share and 15,980.855 theoretical
shares at a market value of $30.625 per share were
allocated to participants' Stock Accounts at December
31, 1996 and 1995, respectively.
Cash Account -
A participant may elect to have any portion of
deferred amounts treated as if invested in an interest-
bearing account. When a participant elects to have
amounts treated as if invested in an interest-bearing
account, the deferred amounts are deemed to be invested
in a theoretical account on the date each amount would
otherwise have been payable to the participant.
Interest is accrued on and credited to the theoretical
account at a rate that is equivalent to the interest
rate for a one year certificate of deposit of $100,000
as quoted in The Wall Street Journal. The rate of
interest is adjusted and compounded quarterly.
Upon six-month prior notice, a participant may change the amount
of compensation to be deferred and the allocation of amounts
among the two accounts. However, any change in allocation among
the two accounts will only apply to future deferred amounts and
not to existing account balances.
At December 31, 1996, 1995, and 1994, there were five, five, and
four active participants with Stock Accounts, respectively.
There were no active participants with a Cash Account at December
31, 1996 or December 31, 1995, and one active participant with a
Cash Account at December 31, 1994.
Note D - Income Tax Status
The Plan is not regarded as an "employee benefit plan" under
Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended (ERISA), and, therefore, is not subject to
ERISA. The Plan also is not a qualified plan under Section
401(a) of the Internal Revenue Code of 1986, as amended. The
Plan is subject to Federal income taxes; however, the unfunded
nature of the Plan precludes the occurrence of a taxable event
arising from the Plan's operation.
Amounts deferred, along with any dividends and interest accrued
thereon, are not considered taxable income to a participant until
distributed (see Note E). Amounts distributed from the Plan are
considered compensation taxable as ordinary income in the year
distributed, in an amount equal to the total of all cash and the
existing fair market value of all shares of Common Stock
distributed.
Subsequent dispositions of shares of Common Stock received from
the Plan may result in capital gains (losses) equal to the amount
realized over (under) the tax basis in the shares. The tax basis
is generally considered to be the amount of ordinary income
recognized in conjunction with the distribution from the Plan of
the shares of Common Stock. To qualify as a long-term capital
gain, the shares must be held at least one year after
distribution from the Plan.
Note E - Participant Withdrawals
At the participant's election, amounts deferred under the Plan,
together with earnings thereon, will be distributed either in a
single lump sum payment or in equal annual installments of two to
10 years. At the participant's election, the single lump sum
payment or the first installment payment will be payable on the
first business day of the calendar year immediately following the
year in which the participant either (a) ceases to be a director,
or (b) attains that age specified by Paragraph 203(f)(3) of the
Social Security Act or its equivalent then in effect. Any
additional installment(s) will be payable on the first business
day of each succeeding year.
All payments to be made under the Plan from a participant's Stock
Account are to be made in the form of new issue shares of Common
Stock or shares of Common Stock purchased on the open market, as
determined by the Company, and cash in lieu of any fractional
shares. All payments to be made under the Plan from a
participant's Cash Account are to be paid in cash.
In the event of the death of a participant, all amounts due the
participant are to be distributed within 90 days of the
participant's death to the designated beneficiary or to the
decedent's estate in accordance with the preceding paragraph.
Note F - Change in Control, Amendment, Termination, and
Forfeiture
In the event of a "change in control" of Cinergy, as defined in
the Plan as amended, the Compensation Committee of Cinergy's
Board of Directors, in its sole discretion, may elect to
accelerate the distribution of all compensation deferred under
the Plan. Previously, in the event of a "change in control" of
Cinergy, all compensation deferred under the Plan was immediately
payable. In accordance with the foregoing provision, all amounts
accumulated under the PSI Plan were disbursed to participants in
December 1993 as a result of the approval of the Cinergy merger
by PSI's shareholders. Such approval constituted a "change in
control".
Cinergy, at any time by action of its board of directors, may
alter, amend, modify, revoke, or terminate the Plan, or suspend
payment of benefits under the Plan, except with respect to
provisions relating to a "change in control" for a three-year
period following such "change in control".
Any amounts remaining in a participant's Stock Account or Cash
Account will be forfeited if the participant becomes affiliated
with any utility or other company in Indiana, Ohio, or Kentucky
that competes with Cinergy or its subsidiaries. Amounts will
also be forfeited if a participant refuses a reasonable request
to become a consultant after retiring as a member of the
Company's or its subsidiaries' board(s) of directors.
Note G - Unrealized Appreciation of Stock Accounts
The unrealized appreciation of assets included in the Plan equity
of the Stock Accounts is as follows:
BALANCE AS OF DECEMBER 31, 1993 $ -
Change for 1994 7 578
BALANCE AS OF DECEMBER 31, 1994 7 578
Change for 1995 85 065
BALANCE AS OF DECEMBER 31, 1995 92 643
Change for 1996 47 816
BALANCE AS OF DECEMBER 31, 1996 $140 459
<PAGE>
SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities
Exchange Act of 1934, the Plan Committee has duly caused this
annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
CINERGY CORP. DIRECTORS' DEFERRED COMPENSATION PLAN
(The Plan)
Date: March 25, 1997
________Van P. Smith_________
(Chairman, Compensation
Committee)
<PAGE>
Exhibit 1
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to
the incorporation of our report included in this Form 11-K into
Cinergy Corp.'s previously filed Registration Statement File No.
33-56089.
ARTHUR ANDERSEN LLP
Cincinnati, Ohio,
March 25, 1997.
