<PAGE>


                      FIRST AMENDMENT TO FIRST AMENDED AND
                          RESTATED EMPLOYMENT AGREEMENT

     This First Amendment to First Amended and Restated Employment Agreement
(the "First Amendment") dated effective September 1, 1999, is by and among
Cinergy Corp., a Delaware corporation ("Cinergy"), Cinergy Services, Inc., a
Delaware corporation ("Cinergy Services"), The Cincinnati Gas & Electric
Company, an Ohio corporation ("CG&E"), PSI Energy, Inc., an Indiana
corporation ("PSI"), and Larry E. Thomas (the "Executive"). Cinergy, Cinergy
Services, CG&E, and PSI will sometimes be referred to in this First Amendment
collectively as the "Company".

     WHEREAS, the Executive has been employed by the Company pursuant to the
terms of the First Amended and Restated Employment Agreement dated effective
as of March 1, 1999 (the "Employment Agreement");


                                    Page 1
<PAGE>

     WHEREAS, the parties desire to amend the retirement provisions of the
First Amended and Restated Employment Agreement;

     NOW, THEREFORE, the parties have agreed to enter into this First
Amendment which amends the First Amended and Restated Employment Agreement,
as follows:

1.   The substantive provisions of Section 3 (b) are deleted in their entirety
     and replaced with the following:

          "b. RETIREMENT, INCENTIVE, WELFARE BENEFIT PLANS AND OTHER
          BENEFITS. During the Employment Period and so long as the Executive
          is employed by the Company, the Executive shall be eligible, and
          the Company shall take such actions as may be necessary or required
          to cause the Executive to become eligible, to participate in all
          short-term and long-term incentive, stock option, restricted stock,
          performance unit, savings, retirement and welfare plans, practices,
           policies and programs applicable  generally to employees and/or
          other senior executives of the Company who are considered Tier II
          executives for compensation purposes, including, but not limited to
          Cinergy's Annual Incentive Plan, Cinergy's 1996 Long-Term Incentive
          Compensation Plan, Cinergy's Executive Supplemental Life Insurance
          Program, Cinergy's Stock Option Plan,  Cinergy's  Nonqualified
          Deferred  Incentive Compensation Plan, Cinergy's Excess 401(k)
          Plan, Cinergy's Non-Union Employees' 401(k) Plan, Cinergy's
          Non-Union Employees' Pension Plan, Cinergy's Supplemental Executive
          Retirement Plan (the Senior Executive Supplement), and Cinergy's
          Excess Pension Plan, or any successors thereto, except with respect
          to any plan, practice, policy


                                    Page 2
<PAGE>

          or program to which the Executive has waived his rights in writing.

          With regard to the Executive's retirement benefits, the Executive
          shall be entitled to a 'Contractual Retirement Supplement' (paid from
          the Corporation's general assets) which extends to the Executive upon
          retirement on or after age fifty-five (55) a non-qualified benefit
          that, when added to the Executive's benefit under Cinergy's Non-Union
          Employees' Pension Plan and Cinergy's Excess Pension Plan, or any
          successors thereto, will provide total retirement income equivalent to
          a full career employee with equal annual earnings. For purposes of the
          preceding sentence, a 'full career employee'shall mean an employee
          with thirty-five (35) full years of 'participation' under Cinergy's
          Supplemental Executive Retirement Plan.

          If the Executive retires on or after having attained age fifty-five
          (55), the Executive shall be entitled to receive from the Company
          total annual retirement income for his lifetime equal to the greater
          of (i) sixty percent (60%) of the Executive's 'Highest Average
          Earnings' (as such term is defined in Cinergy's Supplemental Executive
          Retirement Plan) or (ii) sixty percent (60%) of the Executive's
          'Earnings' (as such term is defined in the Supplemental Executive
          Retirement Plan) for the final twelve (12) calendar months immediately
          prior to the Executive's effective date of retirement. Thus, in
          addition to the Executive's retirement benefits under Cinergy's
          Pension Plan, its Supplemental Executive Retirement Plan, and its
          Excess Pension Plan, or any successors thereto, the Executive


                                    Page 3
<PAGE>

          shall receive an annual amount known as the 'Supplemental Executive
          Retirement Benefit' (a non-qualified benefit paid from the Company's
          general assets) that is equal to the difference between the greater of
          (i) sixty percent (60%) of the Executive's 'Highest Average Earnings'
          (as such term is defined in Cinergy's Supplemental Executive
          Retirement Plan) or (ii) sixty percent (60%) of the Executive's
          'Earnings' (as such term is defined in Cinergy's Supplemental
          Executive Retirement Plan) for the final twelve (12) calendar months
          immediately prior to the Executive's effective date of retirement, and
          the sum of the amounts payable to the Executive under Cinergy's
          Pension Plan, its Supplemental Executive Retirement Plan, and its
          Excess Pension Plan, or any successors thereto.

          Upon his retirement on or after having attained age fifty (50), the
          Executive shall be eligible for comprehensive medical and dental
          insurance pursuant to the terms of Cinergy's Retirees' Medical Plan
          and its Retirees' Dental Plan, or any successors thereto. However, the
          Executive shall receive the full subsidy provided by the Company to
          retirees for purposes of determining the amount of monthly premiums
          due from the Executive.

          Notwithstanding anything in this Agreement to the contrary, in the
          event that the Executive's employment is terminated following a Change
          in Control, the Executive shall immediately be credited with and
          vested in thirty-five (35) full years of 'Participation' (as that term
          is defined in Cinergy's Supplemental Executive Retirement


                                    Page 4
<PAGE>

          Plan), and the word 'fifty (50)' shall be substituted for the word
          'fifty-five (55)' in the first sentences of the second and third
          paragraphs of this Section 3(b).

          The Executive shall be a participant in Cinergy's Annual Incentive
          Plan. The Executive shall be paid by the Company an annual benefit of
          up to sixty percent (60%) of the Executive's Annual Base Salary, which
          benefit shall be determined and paid pursuant to the terms of
          Cinergy's Annual Incentive Plan.

          The Executive shall be a participant in Cinergy's Long-Term Incentive
          Plan (the 'LTIP') implemented under Cinergy's 1996 Long-Term Incentive
          Compensation Plan. The LTIP consists of two (2) parts: the Value
          Creation Plan involving shares of restricted common stock of Cinergy
          and options to purchase shares of common stock of Cinergy. The
          Executive's annualized target award opportunity under the LTIP shall
          be equal to no less seventy percent (70%) of his Annual Base Salary."

2.   All other provisions of the First Amended and Restated Employment
     Agreement, remain unchanged by this First Amendment.

     IN WITNESS WHEREOF, the Executive and the Corporation have caused this
First Amendment to First Amended and Restated Employment Agreement to be
executed effective as of the day and year first above written.

CINERGY CORP., CINERGY SERVICES, INC.,
THE CINCINNATI GAS & ELECTRIC COMPANY,
and PSI ENERGY, INC.


  By:         /s/ James E. Rogers


                                    Page 5
<PAGE>

            --------------------------
                James E. Rogers
               Vice Chairman and
            Chief Executive Officer




                    EXECUTIVE
               /s/ Larry E. Thomas
            --------------------------
                 Larry E. Thomas

DOC#48907


                                  Page 6