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                              EMPLOYMENT AGREEMENT

     This  EMPLOYMENT  AGREEMENT  is made and entered  into as of the 9th day of
March,  2001 (the "Effective  Date"), by and between Cinergy and Lisa D. Gamblin
(the  "Executive").  The  capitalized  words  and  terms  used  throughout  this
Agreement are defined in Section 11.

                                    Recitals

     The Executive is qualified and available to assume  responsibility  for and
hold the position of Treasurer.  Cinergy desires to secure the employment of the
Executive in accordance with this Agreement.

     The  Executive  is willing to enter and continue to remain in the employ of
Cinergy, on the terms and conditions set forth in this Agreement.

                                    Agreement

     In consideration of the mutual premises, covenants and agreements set forth
below, the parties agree as follows:

1.   Employment and Term

          a.   Cinergy agrees to employ the Executive,  and the Executive agrees
               to enter and remain in the employ of Cinergy,  in accordance with
               the terms and  provisions of this  Agreement,  for the Employment
               Period  set forth in  Subsection  b. The  parties  agree that the
               Company will be responsible for carrying out all of the premises,
               covenants, and agreements of Cinergy set forth in this Agreement.

          b.   The  Employment  Period of this Agreement will commence as of the
               Effective  Date and continue  until  December 31, 2003;  provided
               that,  commencing  on December 31, 2001,  and on each  subsequent
               December 31, the  Employment  Period will be extended for one (1)
               additional year unless either party gives the other party written
               notice not to extend  this  Agreement  at least  ninety (90) days
               before the extension would otherwise become effective.

2.   Duties and Powers of Executive

          a.   Position.  The Executive will serve Cinergy as Treasurer,  and he
               will have such  responsibilities,  duties,  and  authority as are
               customary  for  someone  of that  position  and  such  additional
               duties,  consistent with his position,  as may be assigned to him
               from time to time  during the  Employment  Period by the Board of
               Directors,  the Chief Executive Officer,  or the senior executive
               officer  to whom he  directly  reports.  Executive  shall  devote
               substantially  all of  Executive's  business  time,  efforts  and
               attention to the  performance  of  Executive's  duties under this
               Agreement;  provided,  however,  that this requirement  shall not
               preclude  Executive  from  reasonable   participation  in  civic,
               charitable  or  professional  activities  or  the  management  of
               Executive's  passive  investments,  so long as such activities do
               not  materially  interfere  with the  performance  of Executive's
               duties under this Agreement.

          b.   Place  of   Performance.   In  connection  with  the  Executive's
               employment,  the  Executive  will be  based  at 221  East  Fourth
               Street, Cincinnati, OH 45202. Except for required business travel
               to an extent  substantially  consistent with the present business
               travel  obligations  of Cinergy  executives who have positions of
               authority comparable to that of the Executive, the Executive will
               not be required to relocate to a new principal  place of business
               that is more than  thirty  (30)  miles from  Cinergy's  principal
               executive offices.

3.   Compensation. The Executive will receive the following compensation for his
     services under this Agreement.

          a.   Salary. The Executive's  Annual Base Salary,  payable in pro-rata
               installments  not less  often than  semi-monthly,  will be at the
               annual   rate  of  not  less   than   $200,004.00   (subject   to
               across-the-board salary reductions described below). Any increase
               in the Annual  Base  Salary will not serve to limit or reduce any
               other obligation of Cinergy under this Agreement. The Annual Base
               Salary  will not be reduced  except for  across-the-board  salary
               reductions similarly affecting all Cinergy management  personnel.
               If  Annual  Base  Salary  is  increased  or  reduced  during  the
               Employment  Period,  then such adjusted salary will thereafter be
               the Annual Base Salary for all purposes under this Agreement.

          b.   Retirement,  Incentive, Welfare Benefit Plans and Other Benefits.
               During the Employment Period, the Executive will be eligible, and
               Cinergy will take all necessary  action 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 other  senior  executives  of
               Cinergy who are considered  Tier III executives for  compensation
               purposes,  except with respect to any plan,  practice,  policy or
               program to which the Executive has waived his rights in writing.

               Upon his  retirement on or after having  attained age fifty (50),
               the  Executive  will be eligible  for  comprehensive  medical and
               dental  benefits  which  are not  materially  different  from the
               benefits  provided  under  the  Retirees'  Medical  Plan  and the
               Retirees' Dental Plan. The Executive,  however,  will receive the
               maximum  level  of  subsidy  currently  applicable  to  similarly
               situated active Cinergy  employees that is provided by Cinergy to
               retirees,  as of  the  Effective  Date  of  this  Agreement,  for
               purposes of determining  the amount of monthly  premiums due from
               the Executive.

               The Executive will be a participant in the Annual Incentive Plan,
               and  the  Executive  will  be  paid  pursuant  to the  terms  and
               conditions of that plan an annual  benefit of up to fifty-two and
               one-half  percent (52.5%) of the  Executive's  Annual Base Salary
               (the  "Maximum  Annual  Bonus"),  with a target  of no less  than
               thirty percent (30%) of the  Executive's  Annual Base Salary (the
               "Target Annual Bonus").

               The Executive  will be a participant  in the Long-Term  Incentive
               Plan (the "LTIP"),  and the Executive's  annualized  target award
               opportunity  under  the  LTIP  will  be  equal  to no  less  than
               seventy-five percent (75%) of his Annual Base Salary (the "Target
               LTIP Bonus").

          c.   Fringe Benefits and  Perquisites.  During the Employment  Period,
               the Executive will be entitled to the following additional fringe
               benefits in accordance with the terms and conditions of Cinergy's
               policies for such fringe benefits:

               (i)  Cinergy  will  furnish  to  the   Executive  an   automobile
                    appropriate  for the Executive's  level of position,  or, at
                    Cinergy's discretion,  a cash allowance of equivalent value.
                    Cinergy  will  also  pay  all of the  related  expenses  for
                    gasoline,  insurance,  maintenance,  and repairs, or provide
                    for such expenses within the cash allowance.

               (ii) Cinergy  will pay the  initiation  fee and the annual  dues,
                    assessments,  and other membership  charges of the Executive
                    for membership in a country club selected by the Executive.

               (iii)Cinergy will  provide  paid  vacation for four (4) weeks per
                    year (or such longer period for which Executive is otherwise
                    eligible under Cinergy's policy).

               (iv) Cinergy  will  furnish  to the  Executive  annual  financial
                    planning and tax preparation services.

               (v)  Cinergy will provide  other  fringe  benefits in  accordance
                    with Cinergy  plans,  practices,  programs,  and policies in
                    effect from time to time, commensurate with his position and
                    at least  comparable to those received by other Cinergy Tier
                    III executives.

          d.   Expenses.  Cinergy  agrees to  reimburse  the  Executive  for all
               expenses, including those for travel and entertainment,  properly
               incurred  by him in the  performance  of his  duties  under  this
               Agreement in accordance with the policies  established  from time
               to time by the Board of Directors.

4.   Termination of Employment

          a.   Death.  The Executive's  employment will terminate  automatically
               upon the Executive's death during the Employment Period.

          b.   By Cinergy  for Cause.  Cinergy  may  terminate  the  Executive's
               employment  during the Employment  Period for Cause. For purposes
               of this Employment Agreement, "Cause" means the following:

               (i)  The  willful  and  continued  failure  by the  Executive  to
                    substantially  perform the  Executive's  duties with Cinergy
                    (other than any such failure  resulting from the Executive's
                    incapacity  due to  physical  or mental  illness)  that,  if
                    curable,  has not been cured  within 30 days after the Board
                    of Directors or the Chief Executive Officer has delivered to
                    the Executive a written demand for substantial  performance,
                    which demand specifically identifies the manner in which the
                    Executive has not substantially  performed his duties.  This
                    event will constitute  Cause even if the Executive  issues a
                    Notice of Termination for Good Reason pursuant to Subsection
                    4d after the Board of Directors or Chief  Executive  Officer
                    delivers a written demand for substantial performance.

               (ii) The  breach  by  the   Executive   of  the   confidentiality
                    provisions set forth in Section 9.

               (iii)The  conviction  of the  Executive  for the  commission of a
                    felony,  including the entry of a guilty or nolo  contendere
                    plea, or any willful or grossly negligent action or inaction
                    by the  Executive  that has a materially  adverse  effect on
                    Cinergy.  For purposes of this  definition of Cause, no act,
                    or failure to act,  on the  Executive's  part will be deemed
                    "willful"  unless it is done,  or omitted to be done, by the
                    Executive  in bad faith and without  reasonable  belief that
                    the  Executive's  act,  or failure  to act,  was in the best
                    interest of Cinergy.

          c.   By Cinergy  Without  Cause.  Cinergy  may,  upon at least 30 days
               advance   written   notice  to  the   Executive,   terminate  the
               Executive's  employment during the Employment Period for a reason
               other than Cause,  but the  obligations  placed  upon  Cinergy in
               Section 5 will apply.

          d.   By the Executive for Good Reason. The Executive may terminate his
               employment  during the  Employment  Period for Good  Reason.  For
               purposes of this Agreement, "Good Reason" means the following:

               (i)  A reduction in the  Executive's  Annual Base Salary,  except
                    for  across-the-board  salary reductions similarly affecting
                    all Cinergy  management  personnel,  or a  reduction  in any
                    other  benefit  or  payment  described  in Section 3 of this
                    Agreement,  except  for  changes  to the  employee  benefits
                    programs generally  affecting Cinergy management  personnel,
                    provided  that those  changes,  in the  aggregate,  will not
                    result in a  material  adverse  change  with  respect to the
                    benefits  to which  the  Executive  was  entitled  as of the
                    Effective Date.

               (ii) The   material   reduction   without   his  consent  of  the
                    Executive's title,  authority,  duties, or  responsibilities
                    from those in effect immediately prior to the reduction,  or
                    a  material  adverse  change  in the  Executive's  reporting
                    responsibilities.

               (iii)Any  breach by Cinergy of any other  material  provision  of
                    this  Agreement  (including  but not limited to the place of
                    performance as specified in Subsection 2b).

               (iv) The Executive's disability due to physical or mental illness
                    or injury that precludes the Executive  from  performing any
                    job for which he is qualified and able to perform based upon
                    his education, training or experience.

               (v)  A failure by the Company to require any successor  entity to
                    the  Company  specifically  to assume in writing  all of the
                    Company's obligations to the Executive under this Agreement.

     For purposes of  determining  whether Good Reason  exists with respect to a
Qualifying  Termination  occurring on or within 24 months  following a Change in
Control, any claim by the Executive that Good Reason exists shall be presumed to
be correct  unless the Company  establishes to the Board by clear and convincing
evidence that Good Reason does not exist.

          e.   By the Executive Without Good Reason. The Executive may terminate
               his  employment  without Good Reason upon prior written notice to
               the Company.

          f.   Notice  of  Termination.   Any  termination  of  the  Executive's
               employment by Cinergy or by the Executive  during the  Employment
               Period (other than a termination  due to the  Executive's  death)
               will be  communicated  by a written  Notice of Termination to the
               other party to this Agreement in accordance  with Subsection 12b.
               For purposes of this Agreement, a "Notice of Termination" means a
               written notice that  specifies the  particular  provision of this
               Agreement  relied upon and that sets forth in  reasonable  detail
               the  facts  and  circumstances  claimed  to  provide  a basis for
               terminating  the  Executive's   employment  under  the  specified
               provision.  The failure by the  Executive or Cinergy to set forth
               in the  Notice  of  Termination  any  fact or  circumstance  that
               contributes  to a showing of Good  Reason or Cause will not waive
               any right of the  Executive  or Cinergy  under this  Agreement or
               preclude the  Executive or Cinergy  from  asserting  that fact or
               circumstance in enforcing rights under this Agreement.

5.   Obligations of Cinergy Upon Termination.

          a.   Certain Terminations

               (i)  If a Qualifying  Termination  occurs  during the  Employment
                    Period, Cinergy will pay to the Executive a lump sum amount,
                    in  cash,  equal  to  the  sum  of  the  following   Accrued
                    Obligations:

                           (1)      the pro-rated portion of the Executive's
                                    Annual Base Salary payable through the Date
                                    of Termination, to the extent not previously
                                    paid.

                           (2)      any amount payable to the Executive under
                                    the Annual Incentive Plan in respect of the
                                    most recently completed fiscal year, to the
                                    extent not theretofore paid.

                           (3)      an amount equal to the AIP Benefit for the
                                    fiscal year that includes the Date of
                                    Termination multiplied by a fraction, the
                                    numerator of which is the number of days
                                    from the beginning of that fiscal year to
                                    and including the Date of Termination and
                                    the denominator of which is three hundred
                                    and sixty-five (365). The AIP Benefit
                                    component of the calculation will be equal
                                    to the annual bonus that would have been
                                    earned by the Executive pursuant to any
                                    annual bonus or incentive plan maintained by
                                    Cinergy in respect of the fiscal year in
                                    which occurs the date of determination,
                                    determined by projecting Cinergy's
                                    performance and other applicable goals and
                                    objectives for the entire fiscal year based
                                    on Cinergy's performance during the period
                                    of such fiscal year occurring prior to the
                                    Date of Termination, and based on such other
                                    assumptions and rates as Cinergy deems
                                    reasonable.

                           (4)      the Accrued Obligations described in this
                                    Paragraph 5a(i) will be paid within thirty
                                    (30) days after the Date of Termination.
                                    These Accrued Obligations are payable to the
                                    Executive regardless of whether a Change in
                                    Control has occurred.

               (ii) In the event of a Qualifying Termination either prior to the
                    occurrence of a Change in Control,  or more than twenty-four
                    (24) months following the occurrence of a Change in Control,
                    Cinergy will pay the Accrued  Obligations,  and Cinergy will
                    have the following additional obligations:

                    (1)  Cinergy will pay to the Executive a lump sum amount, in
                         cash,  equal to three (3)  times the sum of the  Annual
                         Base Salary and the Annual Bonus. For this purpose, the
                         Annual Base Salary will be at the rate in effect at the
                         time Notice of  Termination  is given  (without  giving
                         effect to any reduction in Annual Base Salary,  if any,
                         prior to the termination,  other than  across-the-board
                         reductions), and the Annual Bonus will be the higher of
                         (A) the annual bonus earned by the  Executive  pursuant
                         to any annual bonus or  incentive  plan  maintained  by
                         Cinergy in respect of the year ending immediately prior
                         to  the  fiscal  year  in  which  occurs  the  Date  of
                         Termination,  and (B) the annual  bonus that would have
                         been  earned by the  Executive  pursuant  to any annual
                         bonus  or  incentive  plan  maintained  by  Cinergy  in
                         respect of the fiscal year in which  occurs the Date of
                         Termination,   calculated   by   projecting   Cinergy's
                         performance and other  applicable  goals and objectives
                         for  the  entire   fiscal   year  based  on   Cinergy's
                         performance  during  the  period  of such  fiscal  year
                         occurring prior to the Date of  Termination,  and based
                         on such other  assumptions  and rates as Cinergy  deems
                         reasonable; provided, however that for purposes of this
                         Subsection 5a(ii)(1)(B),  the Annual Bonus shall not be
                         less than the Target Annual Bonus, nor greater than the
                         Maximum  Annual Bonus for the year in which the Date of
                         Termination  occurs.  This lump sum will be paid within
                         thirty (30) days of the Date of Termination.

                    (2)  Subject to Clauses (A), (B) and (C) below, Cinergy will
                         provide,  until  the  end  of  the  Employment  Period,
                         medical and dental benefits to the Executive and/or the
                         Executive's  dependents  at least  equal to those  that
                         would have been provided if the Executive's  employment
                         had not been  terminated  (excluding  benefits to which
                         the  Executive  has waived his rights in writing).  The
                         benefits described in the preceding sentence will be in
                         accordance  with the medical and welfare benefit plans,
                         practices,  programs,  or policies of Cinergy (the "M&W
                         Plans")  as then  currently  in effect  and  applicable
                         generally to other Cinergy senior  executives and their
                         families.

                    (A)  If,  as of the  Executive's  Date of  Termination,  the
                         Executive  meets  the  eligibility   requirements   for
                         Cinergy's  retiree  medical and welfare  benefit plans,
                         the  provision  of those  retiree  medical  and welfare
                         benefit plans to the Executive  will satisfy  Cinergy's
                         obligation under this Subparagraph 5a(ii)(2).

                    (B)  If,  as of the  Executive's  Date of  Termination,  the
                         provision  to the  Executive  of the M&W Plan  benefits
                         described in this  Subparagraph  5a(ii)(2) would either
                         (1)  violate the terms of the M&W Plans (or any related
                         insurance  policies)  or (2)  violate any of the Code's
                         nondiscrimination  requirements  applicable  to the M&W
                         Plans, then Cinergy, in its sole discretion,  may elect
                         to pay the Executive,  in lieu of the M&W Plan benefits
                         described under this Subparagraph 5a(ii)(2), a lump sum
                         cash payment equal to the total monthly premiums (or in
                         the  case of a self  funded  plan,  the  cost of  COBRA
                         continuation  coverage)  that  would  have been paid by
                         Cinergy for the Executive  under the M&W Plans from the
                         Date of  Termination  through the end of the Employment
                         Period, grossed up for the effect of federal, state and
                         local income taxes.  Nothing in this Clause will affect
                         the  Executive's  right  to  elect  COBRA  continuation
                         coverage under a M&W Plan in accordance with applicable
                         law,  and Cinergy  will make the payment  described  in
                         this Clause  whether or not the Executive  elects COBRA
                         continuation coverage, and whether or not the Executive
                         receives health coverage from another employer.

                    (C)  If the Executive  becomes  employed by another employer
                         and is  eligible  to receive  medical or other  welfare
                         benefits  under  another  employer-provided  plan,  any
                         benefits  provided to the Executive under the M&W Plans
                         will be  secondary  to those  provided  under the other
                         employer-provided    plan   during   the    Executive's
                         applicable period of eligibility.

                    (3)  Cinergy will provide tax counseling services through an
                         agency selected by the Executive, not to exceed fifteen
                         thousand dollars ($15,000.00) in cost.

               (iii)In  the  event  of  a  Qualifying   Termination  during  the
                    twenty-four  (24) month period beginning upon the occurrence
                    of a  Change  in  Control,  Cinergy  will  pay  the  Accrued
                    Obligations,  and  Cinergy  will  also  have  the  following
                    additional obligations:

                    (1)  Cinergy will pay to the  Executive a lump sum severance
                         payment,  in cash,  equal to three (3) times the higher
                         of (x) the sum of the  Executive's  current Annual Base
                         Salary and Target  Annual  Bonus and (y) the sum of the
                         Executive's  Annual Base  Salary in effect  immediately
                         prior  to the  Change  in  Control  and the  Change  in
                         Control  Bonus.  For  purposes of this  Agreement,  the
                         Change in  Control  Bonus  shall mean the higher of (A)
                         the annual  bonus earned by the  Executive  pursuant to
                         any  annual  bonus  or  incentive  plan  maintained  by
                         Cinergy in respect of the year ending immediately prior
                         to  the  fiscal  year  in  which  occurs  the  Date  of
                         Termination  or, if  higher,  immediately  prior to the
                         fiscal year in which occurs the Change in Control,  and
                         (B) the annual bonus that would have been earned by the
                         Executive  pursuant  to any annual  bonus or  incentive
                         plan  maintained  by  Cinergy in respect of the year in
                         which  occurs the Date of  Termination,  calculated  by
                         projecting  Cinergy's  performance and other applicable
                         goals and objective for the entire fiscal year based on
                         Cinergy's  performance during the period of such fiscal
                         year occurring  prior to the Date of  Termination,  and
                         based on such  other  assumptions  and rates as Cinergy
                         deems reasonable,  provided, however, that for purposes
                         of  this  Subsection  5a(iii)(1)(B),   such  Change  in
                         Control  Annual Bonus shall not be less than the Target
                         Annual  Bonus,  nor  greater  than the  Maximum  Annual
                         Bonus.  This lump sum will be paid  within  thirty (30)
                         days of the Date of Termination.

                    (2)  Cinergy will pay to the  Executive the lump sum present
                         value of any benefits under the Executive  Supplemental
                         Life Program under the terms of the applicable  plan or
                         program as of the Date of Termination, calculated as if
                         the  Executive  was  fully  vested  as of the  Date  of
                         Termination.  The  lump  sum  present  value,  assuming
                         commencement  at  age  50 or  age  as of  the  Date  of
                         Termination  if  later,  will be  determined  using the
                         interest  rate  applicable  to lump sum payments in the
                         Cinergy Corp.  Non-Union Employees' Pension Plan or any
                         successor to that plan for the plan year that  includes
                         the Date of Termination. To the extent no such interest
                         rate is  provided  therein,  the annual  interest  rate
                         applicable under section  417(e)(3) of the Code, or any
                         successor  provision  thereto,   for  the  second  full
                         calendar month  preceding the first day of the calendar
                         year  that  includes  the Date of  Termination  will be
                         used.  This lump sum will be paid  within  thirty  (30)
                         days of the Date of Termination.

                    (3)  The  Executive  shall be fully  vested  in his  accrued
                         benefits  as of  the  Date  of  Termination  under  the
                         Executive  Retirement  Plans,  and his accrued benefits
                         thereunder  will be  calculated as if the Executive was
                         credited  with  three (3)  additional  years of age and
                         service as of the Date of Termination. However, Cinergy
                         will not commence  payment of such  benefits  until the
                         Executive   has   attained  age  50.  For  purposes  of
                         determining  benefits  under the  Executive  Retirement
                         Plans,  the  definition of earnings will be the same as
                         defined in such plans.

                    (4)  For a  thirty-six  (36) month  period after the Date of
                         Termination,  Cinergy  will  arrange  to provide to the
                         Executive  and/or  the  Executive's   dependents  life,
                         disability,  accident,  and health  insurance  benefits
                         substantially  similar  to  those  that  the  Executive
                         and/or  the   Executive's   dependents   are  receiving
                         immediately  prior to the  Notice of  Termination  at a
                         substantially  similar cost to the  Executive  (without
                         giving  effect  to  any  reduction  in  those  benefits
                         subsequent to a Change in Control that constitutes Good
                         Reason),  except for any  benefits  that were waived by
                         the  Executive  in  writing.  If  Cinergy  arranges  to
                         provide the Executive and/or the Executive's dependents
                         with life,  disability,  accident, and health insurance
                         benefits,  those benefits will be reduced to the extent
                         comparable  benefits are  actually  received by or made
                         available  to  the  Executive  and/or  the  Executive's
                         dependents  during the  thirty-six  (36)  month  period
                         following  the  Executive's  Date of  Termination.  The
                         Executive must report to Cinergy any such benefits that
                         he or his dependents actually receives.  In lieu of the
                         benefits described in the preceding sentences, Cinergy,
                         in  its  sole  discretion,  may  elect  to  pay  to the
                         Executive a lump sum cash payment  equal to  thirty-six
                         (36) times the  monthly  premiums  (or in the case of a
                         self  funded  plan,  the  cost  of  COBRA  continuation
                         coverage)  that  would  have  been paid by  Cinergy  to
                         provide  those  benefits  to the  Executive  and/or the
                         Executive's  dependents,  grossed  up for the effect of
                         federal,  state and local income taxes. Nothing in this
                         Subparagraph  5a(iii)(4)  will  affect the  Executive's
                         right  to  elect   COBRA   continuation   coverage   in
                         accordance  with  applicable law, and Cinergy will make
                         the payment described in this Clause whether or not the
                         Executive  elects  COBRA  continuation   coverage,  and
                         whether or not the Executive  receives  health coverage
                         from another employer.

                    (5)  Title and ownership of the  automobile  assigned to the
                         Executive  by  Cinergy  will  be   transferred  to  the
                         Executive  within  thirty  (30)  days  of the  Date  of
                         Termination.  To the extent there is imputed  income to
                         the Executive resulting from the transfer of title, the
                         Executive  will  receive  a cash  payment  equal to the
                         amount  of  federal,   state  and  local  income  taxes
                         resulting    from    this    transfer    as   soon   as
                         administratively   feasible   after  the   transfer  is
                         effective.  At Cinergy's discretion,  a cash payment of
                         an equivalent value of the automobile and corresponding
                         income taxes may be paid in lieu of the  assignment  of
                         the automobile.

                    (6)  Cinergy will provide tax counseling services through an
                         agency selected by the Executive, not to exceed fifteen
                         thousand dollars ($15,000.00) in cost.

                    (7)  Cinergy will provide annual dues and assessments of the
                         Executive for  membership in a country club selected by
                         the Executive until the end of the Employment Period.

                    (8)  Cinergy will provide outplacement  services suitable to
                         the   Executive's   position   until  the  end  of  the
                         Employment  Period  or,  if  earlier,  until  the first
                         acceptance by the Executive of an offer of  employment.
                         At  the  Executive's  discretion,  15% of  Annual  Base
                         Salary may be paid in lieu of outplacement services.

     For purposes of this  Paragraph  5a(iii),  the Executive  will be deemed to
have  incurred  a  Qualifying  Termination  upon  a  Change  in  Control  if the
Executive's employment is terminated prior to a Change in Control, without Cause
at the direction of a Person who has entered into an agreement with Cinergy, the
consummation of which will  constitute a Change in Control,  or if the Executive
terminates  his  employment  for Good Reason prior to a Change in Control if the
circumstances  or event that  constitutes Good Reason occurs at the direction of
such a Person.

          b.   Termination  by Cinergy for Cause or by the Executive  Other Than
               for Good  Reason.  Subject  to the  provisions  of Section 7, and
               notwithstanding  any other  provisions of this Agreement,  if the
               Executive's   employment  is  terminated  for  Cause  during  the
               Employment  Period,  or if the  Executive  terminates  employment
               during the  Employment  Period other than a termination  for Good
               Reason, Cinergy will have no further obligations to the Executive
               under  this  Agreement  other than the  obligation  to pay to the
               Executive  the  Accrued  Obligations,  plus any other  earned but
               unpaid  compensation,  in each case to the extent not  previously
               paid.

          c.   Certain Tax Consequences.

               (i)  In the event that any Severance  Benefits paid or payable to
                    the  Executive  or for his benefit  pursuant to the terms of
                    this  Agreement or otherwise in connection  with, or arising
                    out of, his employment with Cinergy or a change in ownership
                    or effective control of Cinergy or of a substantial  portion
                    of its assets (a "Payment" or  "Payments")  would be subject
                    to any Excise Tax,  then the  Executive  will be entitled to
                    receive an additional  payment (a "Gross-Up  Payment") in an
                    amount such that after payment by the Executive of all taxes
                    (including  any  interest,  penalties,  additional  tax,  or
                    similar  items  imposed with respect  thereto and the Excise
                    Tax),  including  any Excise Tax imposed  upon the  Gross-Up
                    Payment,  the  Executive  retains an amount of the  Gross-Up
                    Payment  equal to the Excise Tax imposed upon or  assessable
                    against the Executive due to the Payments.

               (ii) Subject   to  the   provisions   of  Section   5(iii),   all
                    determinations  required  to be made under this  Section 5c,
                    including  whether  and when a Gross-Up  Payment is required
                    and the amount of such Gross-Up  Payment and the assumptions
                    to be utilized in arriving at such  determination,  shall be
                    made by the Accounting  Firm,  which shall provide  detailed
                    supporting   calculations   both  to  the  Company  and  the
                    Executive  within  fifteen (15) business days of the receipt
                    of notice from the Executive  that there has been a Payment,
                    or such earlier  time as is  requested  by the Company.  All
                    fees and  expenses  of the  Accounting  Firm  shall be borne
                    solely by the Company.  Any Gross-Up Payment,  as determined
                    pursuant to this Section 5c, shall be paid by Cinergy to the
                    Executive  within  five  (5)  days  of  the  receipt  of the
                    Accounting  Firm's  determination.  Any determination by the
                    Accounting  Firm  shall  be  binding  upon  Cinergy  and the
                    Executive.  However,  as a result of the  uncertainty in the
                    application  of Section  4999 of the Code at the time of the
                    initial  determination by the Accounting Firm hereunder,  it
                    is possible that Gross-Up  Payments which will not have been
                    made by  Cinergy  should  have been  made  ("Underpayment"),
                    consistent  with  the  calculations   required  to  be  made
                    hereunder.  In the event that Cinergy  exhausts its remedies
                    pursuant to Section 5c(iii) and the Executive  thereafter is
                    required to make a payment of any Excise Tax, the Accounting
                    Firm shall determine the amount of the Underpayment that has
                    occurred and any such Underpayment shall be promptly paid by
                    Cinergy to or for the benefit of the Executive. In the event
                    that the Excise Tax is  subsequently  determined  to be less
                    than the amount taken into account  hereunder at the time of
                    termination  of the  Executive's  employment,  the Executive
                    shall repay to the  Company,  at the time that the amount of
                    such  reduction  in Excise  Tax is finally  determined,  the
                    portion  of  the  Gross-Up  Payment   attributable  to  such
                    reduction  (plus  that  portion  of  the  Gross-Up   Payment
                    attributable to the Excise Tax and federal,  state and local
                    income and  employment  tax imposed on the Gross-Up  Payment
                    being  repaid  by the  Executive  to the  extent  that  such
                    repayment  results  in a  reduction  in Excise  Tax and/or a
                    federal,  state or local income or employment tax deduction)
                    plus  interest on the amount of such  repayment  at the rate
                    provided in Code section 1274(b)(2)(B).

               (iii)The value of any non-cash  benefits or any deferred  payment
                    or  benefit  paid  or  payable  to  the  Executive  will  be
                    determined  in  accordance   with  the  principles  of  Code
                    sections 280G(d)(3) and (4). For purposes of determining the
                    amount of the Gross-Up Payment, the Executive will be deemed
                    to pay federal income taxes at the highest  marginal rate of
                    federal  income  taxation in the calendar  year in which the
                    Gross-Up  Payment  is to be made and  applicable  state  and
                    local income taxes at the highest  marginal rate of taxation
                    in the state and  locality of the  Executive's  residence on
                    the Date of  Termination,  net of the maximum  reduction  in
                    federal  income taxes that would be obtained from  deduction
                    of those state and local taxes.

               (iv) Notwithstanding  anything contained in this Agreement to the
                    contrary,  in the event that,  according  to the  Accounting
                    Firm's  determination,  an Excise Tax will be imposed on any
                    Payment  or  Payments,  Cinergy  will pay to the  applicable
                    government taxing authorities as Excise Tax withholding, the
                    amount of the Excise Tax that Cinergy has actually  withheld
                    from the Payment or Payments in accordance with law.

          d.   Value  Creation  Plan and  Stock  Options.  Upon the  Executive's
               termination  of  employment  for  any  reason,   the  Executive's
               entitlement to restricted shares and performance shares under the
               Value Creation Plan and any stock options granted under the Stock
               Option Plan or the LTIP will be determined under the terms of the
               appropriate plan and any applicable administrative guidelines and
               written agreements.

          e.   Deferred  Compensation  Plan and  401(k)  Excess  Plan.  Upon the
               Executive's   termination  of  employment  for  any  reason,  the
               Executive's   entitlements,   if  any,  under  the  Non-Qualified
               Deferred  Compensation  Plan  and  401(k)  Excess  Plan  shall be
               distributed  under  the terms of such  plans  and any  applicable
               administrative guidelines and written agreements.

          f.   Other  Fees  and  Expenses.   Cinergy  will  also  reimburse  the
               Executive for all reasonable legal fees and expenses  incurred by
               the Executive in successfully  disputing a Qualifying Termination
               that entitles the Executive to Severance  Benefits.  Payment will
               be made  within  five (5)  business  days after  delivery  of the
               Executive's  written  request  for  payment  accompanied  by such
               evidence of fees and expenses incurred as Cinergy  reasonably may
               require.

6.   Non-Exclusivity of Rights.  Nothing in this Agreement will prevent or limit
     the Executive's  continuing or future  participation in any benefit,  plan,
     program,  policy,  or  practice  provided  by  Cinergy  and for  which  the
     Executive  may  qualify,  except  with  respect to any benefit to which the
     Executive has waived his rights in writing or any plan, program, policy, or
     practice that  expressly  excludes the  Executive  from  participation.  In
     addition,  nothing in this  Agreement  will limit or  otherwise  affect the
     rights the  Executive may have under any other  contract or agreement  with
     Cinergy  entered  into after the  Effective  Date.  Amounts that are vested
     benefits or that the  Executive is otherwise  entitled to receive under any
     benefit,  plan,  program,  policy,  or  practice  of,  or any  contract  or
     agreement  entered  into  after  the  Effective  Date with  Cinergy,  at or
     subsequent to the Date of  Termination,  will be payable in accordance with
     that  benefit,  plan,  program,  policy or  practice,  or that  contract or
     agreement, except as explicitly modified by this Agreement.

7.   Full  Settlement:  Mitigation.  Cinergy's  obligation  to make the payments
     provided for in this  Agreement  and  otherwise to perform its  obligations
     under this  Agreement  will not be affected by any  set-off,  counterclaim,
     recoupment, defense, or other claim, right, or action that Cinergy may have
     against  the  Executive  or  others.  In no  event  will the  Executive  be
     obligated  to seek  other  employment  or take any  other  action by way of
     mitigation  of the  amounts  (including  amounts  for  damages  for breach)
     payable to the Executive under any of the provisions of this Agreement and,
     except as provided in Subparagraphs 5a(ii)(2) and 5a(iii)(4), those amounts
     will not be reduced simply because the Executive  obtains other employment.
     If the Executive  finally  prevails on the substantial  claims brought with
     respect  to  any  dispute  between  Cinergy  and  the  Executive  as to the
     interpretation,  terms,  validity,  or  enforceability  of  (including  any
     dispute  about  the  amount of any  payment  pursuant  to) this  Agreement,
     Cinergy  agrees to pay all  reasonable  legal  fees and  expenses  that the
     Executive may reasonably incur as a result of that dispute.

8.   Arbitration.  The parties  agree that any dispute,  claim,  or  controversy
     based on common law,  equity,  or any  federal,  state,  or local  statute,
     ordinance,  or regulation (other than workers' compensation claims) arising
     out of or relating  in any way to the  Executive's  employment,  the terms,
     benefits, and conditions of employment, or concerning this Agreement or its
     termination and any resulting termination of employment,  including whether
     such a  dispute  is  arbitrable,  shall be  settled  by  arbitration.  This
     agreement  to  arbitrate  includes but is not limited to all claims for any
     form of illegal discrimination,  improper or unfair treatment or dismissal,
     and all  tort  claims.  The  Executive  will  still  have a right to file a
     discrimination  charge  with a  federal  or  state  agency,  but the  final
     resolution  of any  discrimination  claim will be submitted to  arbitration
     instead of a court or jury. The  arbitration  proceeding  will be conducted
     under the employment dispute  resolution  arbitration rules of the American
     Arbitration  Association  in  effect at the time a demand  for  arbitration
     under the  rules is made.  The  decision  of the  arbitrator(s),  including
     determination  of the amount of any damages  suffered,  will be  exclusive,
     final, and binding on all parties, their heirs, executors,  administrators,
     successors  and  assigns.  Each  party  will bear its own  expenses  in the
     arbitration for  arbitrators'  fees and attorneys' fees, for its witnesses,
     and for other expenses of presenting  its case.  Other  arbitration  costs,
     including administrative fees and fees for records or transcripts,  will be
     borne equally by the parties.  Notwithstanding  anything in this Section to
     the  contrary,  if the  Executive  prevails  with  respect  to any  dispute
     submitted to arbitration under this Section,  Cinergy will reimburse or pay
     all legal fees and expenses that the Executive  may  reasonably  incur as a
     result of the dispute as required by Section 7.

9.   Confidential  Information.  The Executive will hold in a fiduciary capacity
     for the  benefit of Cinergy,  as well as all of  Cinergy's  successors  and
     assigns, all secret, confidential information,  knowledge, or data relating
     to Cinergy,  and its  affiliated  businesses,  that the  Executive  obtains
     during the  Executive's  employment  by  Cinergy  or any of its  affiliated
     companies,  and that has not been or subsequently  becomes public knowledge
     (other than by acts by the Executive or representatives of the Executive in
     violation of this Agreement).  During the Employment Period and thereafter,
     the Executive will not,  without  Cinergy's prior written consent or as may
     otherwise by required by law or legal  process,  communicate or divulge any
     such information, knowledge, or data to anyone other than Cinergy and those
     designated  by it. The  Executive  understands  that during the  Employment
     Period, Cinergy may be required from time to time to make public disclosure
     of the terms or existence of the  Executive's  employment  relationship  to
     comply with various laws and legal  requirements.  In addition to all other
     remedies available to Cinergy in law and equity,  this Agreement is subject
     to  termination  by  Cinergy  for Cause  under  Section 4b in the event the
     Executive violates any provision of this Section.

10.  Successors.

          a.   This  Agreement  is  personal  to  the  Executive  and,   without
               Cinergy's  prior  written  consent,  cannot  be  assigned  by the
               Executive other than Executive's  designation of a beneficiary of
               any amounts payable  hereunder after the Executive's  death. This
               Agreement  will inure to the benefit of and be enforceable by the
               Executive's legal representatives.

          b.   This  Agreement  will inure to the benefit of and be binding upon
               Cinergy and its successors and assigns.

          c.   Cinergy will require any successor  (whether  direct or indirect,
               by  purchase,  merger,  consolidation  or  otherwise)  to  all or
               substantially  all of the  business  and/or  assets of Cinergy to
               assume  expressly and agree to perform this Agreement in the same
               manner and to the same extent that  Cinergy  would be required to
               perform it if no succession had taken place. Cinergy's failure to
               obtain such an assumption  and  agreement  prior to the effective
               date of a succession  will be a breach of this Agreement and will
               entitle the  Executive to  compensation  from Cinergy in the same
               amount  and  on  the  same  terms  as if the  Executive  were  to
               terminate  his  employment  for  Good  Reason  upon a  Change  in
               Control, except that, for purposes of implementing the foregoing,
               the date on which any such succession  becomes  effective will be
               deemed the Date of Termination.

11.  Definitions.   As  used  in  this  Agreement,  the  following  terms,  when
     capitalized, will have the following meanings:

          a.   Accounting Firm.  "Accounting  Firm" means Cinergy's  independent
               auditors.

          b.   Accrued  Obligations.  "Accrued  Obligations"  means the  accrued
               obligations described in Paragraph 5a(i).

          c.   Agreement.  "Agreement"  means this Employment  Agreement between
               Cinergy and the Executive.

          d.   AIP  Benefit.  "AIP  Benefit"  means the  Annual  Incentive  Plan
               benefit described in Subsection 5a(i).

          e.   Annual Base Salary.  "Annual  Base Salary"  means the annual base
               salary payable to the Executive pursuant to Subsection 3a.

          f.   Annual  Bonus.  "Annual  Bonus"  has the  meaning  set  forth  in
               Subsection 5a(ii)(1).

          g.   Annual Incentive Plan.  "Annual Incentive Plan" means the Cinergy
               Corp.  Annual  Incentive Plan or any similar plan or successor to
               the Annual Incentive Plan.

          h.   Board of  Directors.  "Board  of  Directors"  means  the board of
               directors of the Company.

          i.   COBRA.    "COBRA"   means   the   Consolidated   Omnibus   Budget
               Reconciliation Act of 1985, as amended.

          j.   Cause. "Cause" has the meaning set forth in Subsection 4b.

          k.   Change in Control.  "A Change in Control"  will be deemed to have
               occurred  if  any  of  the  following  events  occur,  after  the
               Effective Date:

               (i)  Any  "person" or "group"  (within the meaning of  subsection
                    13(d) and paragraph  14(d)(2) of the 1934 Act) is or becomes
                    the  beneficial  owner (as  defined in Rule l3d-3  under the
                    1934 Act),  directly or  indirectly,  of  securities  of the
                    Company (not including in the securities  beneficially owned
                    by such a Person any securities  acquired  directly from the
                    Company or its  affiliates)  representing  more than  twenty
                    percent (20%) of the combined  voting power of the Company's
                    then  outstanding  securities,   excluding  any  person  who
                    becomes  such  a  beneficial  owner  in  connection  with  a
                    transaction described in Clause (1) of Paragraph (ii) below;
                    or

               (ii) There  is  consummated  a  merger  or  consolidation  of the
                    Company or any direct or indirect  subsidiary of the Company
                    with any  other  corporation,  other  than  (1) a merger  or
                    consolidation  that would result in the voting securities of
                    the Company outstanding  immediately prior to that merger or
                    consolidation  continuing to represent  (either by remaining
                    outstanding or by being converted into voting  securities of
                    the  surviving  entity or its parent) at least sixty percent
                    (60%) of the combined  voting power of the securities of the
                    Company or the  surviving  entity or its parent  outstanding
                    immediately  after  the  merger or  consolidation,  or (2) a
                    merger   or   consolidation    effected   to   implement   a
                    recapitalization of the Company (or similar  transaction) in
                    which no person is or becomes the beneficial owner, directly
                    or  indirectly,  of securities of the Company (not including
                    in the  securities  beneficially  owned by such a Person any
                    securities   acquired  directly  from  the  Company  or  its
                    affiliates  other than in connection with the acquisition by
                    the Company or its  affiliates  of a business)  representing
                    twenty percent (20%) or more of the combined voting power of
                    the Company's then outstanding securities; or

               (iii)During any period of two (2) 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 contest, including but not limited to
                    a  consent   solicitation,   relating  to  the  election  of
                    directors of the Company)  whose  appointment or election by
                    the Company'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

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

          l.   Change in  Control  Bonus.  "Change  in  Control  Bonus"  has the
               meaning set forth in Subsection 5a(iii)(1).

          m.   Chief  Executive  Officer.  "Chief  Executive  Officer" means the
               chief executive officer of the Company.

          n.   Cinergy.  "Cinergy" means the Company,  its subsidiaries,  and/or
               its affiliates, and any successors to the foregoing.

          o.   Code. "Code" means the Internal Revenue Code of 1986, as amended,
               and interpretive rules and regulations.

          p.   Company. "Company" means Cinergy Corp.

          q.   Date of Termination. "Date of Termination" means:

               (i)  if the  Executive's  employment is terminated by the Company
                    for Cause, or by the Executive with Good Reason, the date of
                    receipt  of the  Notice of  Termination  or any  later  date
                    specified in the notice, as the case may be;

               (ii) if the Executive's employment is terminated by the Executive
                    without  Good  Reason,  thirty  (30) days  after the date on
                    which the Executive notifies the Company of the termination;

               (iii)if the  Executive's  employment is terminated by the Company
                    other  than for  Cause,  thirty  (30) days after the date on
                    which the Company notifies the Executive of the termination;
                    and

               (iv) if the  Executive's  employment  is  terminated by reason of
                    death, the date of death.

          r.   Deferred  Compensation Plan.  "Deferred  Compensation Plan" means
               the Cinergy Corp.  Non-Qualified  Deferred Incentive Compensation
               Plan or any similar plan or successor to that plan..

          s.   Effective Date. "Effective Date" means March 9, 2001.

          t.   Employment Period.  "Employment Period" has the meaning set forth
               in Subsection 1b.

          u.   Excise  Tax.  "Excise  Tax" means any excise tax  imposed by Code
               section 4999, together with any interest,  penalties,  additional
               tax or similar  items that are  incurred  by the  Executive  with
               respect to the excise tax imposed by Code section 4999.

          v.   Executive. "Executive" means Lisa D. Gamblin.

          w.   Executive  Retirement Plans.  "Executive  Retirement Plans" means
               the Cinergy Corp.  Non-Union Employees' Pension Plan, the Cinergy
               Corp.  Supplemental  Executive  Retirement  Plan and the  Cinergy
               Corp.  Excess  Pension Plan or any similar plans or successors to
               those plans.

          x.   Executive Supplemental Life Program. "Executive Supplemental Life
               Program"  means the Cinergy  Corp.  Executive  Supplemental  Life
               Insurance  Program or any  similar  program or  successor  to the
               Executive Supplemental Life Program.

          y.   401(k) Excess Plan.  "401(k) Excess Plan" means the Cinergy Corp.
               401(k)  Excess  Plan,  or any similar  plan or  successor to that
               plan.

          z.   Good  Reason.   "Good  Reason"  has  the  meaning  set  forth  in
               Subsection 4d.

          aa.  Gross-Up Payment. "Gross-Up Payment" has the meaning set forth in
               Subsection 5c.

          bb.  Long-Term Incentive Plan or LTIP.  "Long-Term  Incentive Plan" or
               "LTIP" means the long-term  incentive plan implemented  under the
               Cinergy Corp. 1996 Long-Term  Incentive  Compensation Plan or any
               successor to that plan.

          cc.  M&W Plans.  "M&W Plans" has the meaning set forth in Subparagraph
               5a(ii)(3).

          dd.  Maximum Annual Bonus.  "Maximum Annual Bonus" has the meaning set
               forth in Subsection 3b.

          ee.  Notice of Termination.  "Notice of  Termination"  has the meaning
               set forth in Subsection 4f.

          ff.  Payment or Payments.  "Payment" or "Payments" has the meaning set
               forth in Subsection 5c.

          gg.  Person.  "Person" has the meaning set forth in paragraph  3(a)(9)
               of the 1934 Act, as modified  and used in  subsections  13(d) and
               14(d) of the 1934 Act;  however,  a Person  will not  include the
               following:

               (i)  Cinergy or any of its subsidiaries;

               (ii) A trustee or other  fiduciary  holding  securities  under an
                    employee benefit plan of Cinergy or its subsidiaries;

               (iii)An underwriter  temporarily  holding securities  pursuant to
                    an offering of those securities; or

               (iv) A  corporation  owned,   directly  or  indirectly,   by  the
                    stockholders  of  the  Company  in  substantially  the  same
                    proportions as their ownership of stock of the Company.

          hh.  Qualifying  Termination.  "Qualifying  Termination" means (i) the
               termination  by the Company of the  Executive's  employment  with
               Cinergy  other  than  a   termination   for  Cause  or  (ii)  the
               termination by the Executive of the  Executive's  employment with
               Cinergy for Good Reason.

          ii.  Relocation Program.  "Relocation Program" means the Cinergy Corp.
               Relocation  Program,  or any similar program or successor to that
               program, as in effect on the date of the Executive's  termination
               of employment.

          jj.  Retirees' Dental Plan.  "Retirees' Dental Plan" means the Cinergy
               Corp.   Retirees'  Dental  program  or  any  similar  program  or
               successor to that program.

          kk.  Retirees'  Medical  Plan.  "Retirees'  Medical  Plan"  means  the
               Cinergy Corp. Retirees' Medical program or any similar program or
               successor to that program.

          ll.  Severance Benefits.  "Severance  Benefits" means the payments and
               benefits payable to the Executive pursuant to Section 5.

          mm.  Stock Related  Documents.  "Stock  Related  Documents"  means the
               LTIP, the Cinergy Corp. Stock Option Plan, and the Value Creation
               Plan and any  applicable  administrative  guidelines  and written
               agreements relating to those plans.

          nn.  Target  Annual Bonus.  "Target  Annual Bonus" has the meaning set
               forth in Subsection 3b.

          oo.  Target LTIP Bonus.  "Target LTIP Bonus" has the meaning set forth
               in Subsection 3b.

          pp.  Value  Creation  Plan.  "Value  Creation  Plan"  means  the Value
               Creation Plan or any similar plan, or successor plan of the LTIP.

12.  Miscellaneous.

          a.   This  Agreement  will be governed by and  construed in accordance
               with  the  laws  of the  State  of  Ohio,  without  reference  to
               principles  of conflict of laws.  The captions of this  Agreement
               are not part of its  provisions and will have no force or effect.
               This Agreement may not be amended,  modified,  repealed,  waived,
               extended,  or discharged except by an agreement in writing signed
               by  the  party  against  whom   enforcement   of  the  amendment,
               modification,  repeal, waiver, extension, or discharge is sought.
               Only the  Chief  Executive  Officer  or his  designee  will  have
               authority on behalf of Cinergy to agree to amend, modify, repeal,
               waive, extend, or discharge any provision of this Agreement.

          b.   All notices and other communications under this Agreement will be
               in writing and will be given by hand  delivery to the other party
               or  by  Federal   Express  or  other   comparable   national   or
               international overnight delivery service, addressed as follows:

                  If to the Executive:
                  -------------------

                  Lisa D. Gamblin
                  11692 Grandstone Lane
                  Cincinnati, OH 45249

                  If to Cinergy:
                  -------------

                  Cinergy Corp.
                  221 East Fourth Street
                  Cincinnati, Ohio  45201-0960
                  Attn: Chief Executive Officer

                  or to such other address as either party has furnished to the
                  other in writing in accordance with this Agreement. All
                  notices and communications will be effective when actually
                  received by the addressee.

          c.   The  invalidity  or  unenforceability  of any  provision  of this
               Agreement will not affect the validity or  enforceability  of any
               other provision of this Agreement.

          d.   Cinergy  may  withhold  from  any  amounts   payable  under  this
               Agreement such federal,  state, or local taxes as are required to
               be withheld pursuant to any applicable law or regulation.

          e.   The  Executive's  or  Cinergy's  failure  to insist  upon  strict
               compliance with any provision of this Agreement or the failure to
               assert any right the  Executive  or  Cinergy  may have under this
               Agreement,   including  without   limitation  the  right  of  the
               Executive to  terminate  employment  for Good Reason  pursuant to
               Subsection   4d  or  the  right  of  Cinergy  to  terminate   the
               Executive's  employment for Cause pursuant to Subsection 4b, will
               not be deemed to be a waiver  of that  provision  or right or any
               other provision or right of this Agreement.

          f.   References  in  this  Agreement  to  the  masculine  include  the
               feminine unless the context clearly indicates otherwise.

          g.   This  instrument  contains the entire  agreement of the Executive
               and Cinergy with respect to the subject matter of this Agreement;
               and  subject  to  any  agreements   evidencing  stock  option  or
               restricted  stock grants described in Subsection 3b and the Stock
               Related Documents, all promises, representations, understandings,
               arrangements, and prior agreements are merged into this Agreement
               and accordingly superseded.

          h.   This  Agreement  may be executed in  counterparts,  each of which
               will be deemed to be an original but all of which  together  will
               constitute one and the same instrument.

          i.   Cinergy and the Executive agree that Cinergy Services,  Inc. will
               be  authorized  to act for  Cinergy  with  respect to all aspects
               pertaining  to the  administration  and  interpretation  of  this
               Agreement.

     IN  WITNESS  WHEREOF,  the  Executive  and the  Company  have  caused  this
Agreement to be executed as of the Effective Date.

                                                   CINERGY SERVICES, INC.

                                                    By: ------------------------
                                                        James E. Rogers
                                                        Chairman and
                                                        Chief Executive Officer

                                                     EXECUTIVE

                                                     ---------------------------
```