FOURTH AMENDMENT TO EMPLOYMENT AGREEMENT

         This Fourth Amendment to Employment  Agreement (the "Fourth Amendment")
entered  into as of the 31st day of  December,  1998,  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 John
M.  Mutz  (the  "Executive").  Cinergy,  Cinergy  Services,  CG&E,  and PSI will
sometimes be referred to in this Fourth Amendment collectively as the "Company".

         WHEREAS,  the Executive has been employed by the Company pursuant to an
Employment  Agreement  dated  effective  as of October 4, 1993 (the  "Employment
Agreement"),  as amended by an  Agreement  dated  August  30,  1996 (the  "First
Amendment"),  by a Second  Amendment to Employment  Agreement  dated January 29,
1997 (the "Second Amendment"), and by an Agreement dated September 24, 1998 (the
"Third Amendment");

         WHEREAS,  the  parties  desire  to  extend  the term of the  Employment
Agreement that currently  terminates December 31, 1998, for an additional period
of time upon certain terms and conditions;

         NOW,  THEREFORE,  the  parties  have  agreed to enter into this  Fourth
Amendment  which amends the  Employment  Agreement,  as previously  amended,  as
follows:

     1. The parties  agree that  Section  1(b) of the  Employment  Agreement  is
hereby  amended  to  reflect  that the term of the  Employment  Agreement  shall
continue until May 31, 1999.

     2. The parties  agree that Section  2(a) of the  Employment  Agreement,  as
previously  amended by the First  Amendment,  is hereby  amended to reflect that
during the remaining term of the Employment  Agreement the Executive  shall hold
the titles of Vice President of Cinergy and President of PSI.

     3. The parties  agree that  Section  2(b) of the  Employment  Agreement  is
hereby  amended to reflect  that during the Term the  Executive  shall serve and
continue to serve, if and when elected and reelected, as a member of PSI's Board
of Directors.

     4. The parties  agree that  Section  3(d) of the  Employment  Agreement  is
hereby amended to reflect that, in addition to the other  benefits  provided for
therein,  effective January 1, 1999, the Executive shall become a participant in
the  Company's  new  Supplemental  Executive  Retirement  Plan (SERP).  Upon his
retirement  from the Company's  employ on June 1, 1999,  the Executive  shall be
credited with a pay replacement  percentage under the SERP of 60%. Moreover,  as
to the Executive  (i) the benefits  payable under the SERP will be fully vested,
and (ii) the amount of benefits payable to the Executive under the SERP shall be
reduced by fifty  percent  (50%) of the amount of his  "Reduced  Primary  Social
Security Benefit" as defined in Cinergy's Non-Union Employees' Pension Plan, but
will not be reduced by the amount of benefits  payable to the Executive from any
retirement plan of any of the Executive's employers previous to the Company. The
parties further agree that the Executive shall be entitled to the greater of the
retirement  benefit  calculated  under the SERP  (using the 60% pay  replacement
assumption) and the retirement benefit provided under the Company's Supplemental
Retirement Plan as set forth in the Employment Agreement, assuming in both cases
that he  continues  as an  employee  under those  plans  through  May 31,  1999.
Attached hereto as Exhibit A is a calculation of the estimated  benefits payable
to the Executive under the  Supplemental  Retirement Plan and the SERP as of May
31, 1999.


                                                 

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     5. The parties further agree that Section 3(f) of the Employment  Agreement
is hereby  amended to reflect  that  effective  May 31,  1999,  ownership of the
automobile furnished to the Executive by the Company shall be transferred to the
Executive  and the Company  shall pay to the  Executive  any federal,  state and
local income taxes owed by him as a result of such transfer.

     6. The parties acknowledge that upon Executive's  termination of employment
on May 31, 1999, he will be entitled to the following benefits:

          (a) all  benefits  payable  to him under  the  terms of the  Company's
     Non-Union Employees' Pension Plan and its Non-Union Employees' 401(k) Plan;

          (b) the right to exercise the options for the  Company's  common stock
     that have been granted to him on or before May 31, 1999 (all of which shall
     be 100% vested upon his  termination of  employment),  until the respective
     expiration dates of those options;

          (c) the payment as soon as  practicable  after January 1, 2000, but no
     later than April 1, 2000,  of any Earned Target Grant Shares and any Earned
     Performance  Shares  under the  1997-1999  performance  cycle of  Cinergy's
     Long-Term Incentive Compensation Program;

          (d) the  payment  of  benefits  to  which  he is  entitled  under  the
     Company's Executive Supplemental Life Insurance Program;

          (e) the continuation of his health insurance  benefits pursuant to the
     terms of the Company's  health insurance plan as it is in effect on May 31,
     1999; and

          (f) the  payment  in March  2000 of any  prorata  award  earned by the
     Executive under Cinergy's Annual Incentive Plan for 1999.


                                               

<PAGE>


     7. The parties agree to discuss the establishment of a consulting  services
arrangement  between the Executive and the Company to become  effective  June 1,
1999,  which  agreement will be on such terms and conditions as mutually  agreed
upon by the  parties.  The parties  agree to use their best  efforts to finalize
such an  agreement  prior to March 31,  1999.  In the event that no agreement is
reached  for the  establishment  of a  consulting  services  agreement,  (1) the
Company shall continue to provide to the Executive secretarial support like that
he is currently  receiving under the Employment  Agreement  through December 31,
1999, and (2) Executive  shall be nominated and elected to serve on the Board of
Directors of PSI as Vice Chairman from June 1, 1999 until December 31, 1999.

     8. All other  provisions  of the  Employment  Agreement,  First  Amendment,
Second Amendment, and Third Amendment remain unchanged by this Fourth Amendment.

         IN WITNESS  WHEREOF,  the  Executive  and the Company  have caused this
Fourth Amendment to 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:  _________________________
       James E. Rogers
       Vice Chairman and
       Chief Executive Officer

         EXECUTIVE


-----------------------------
         John M. Mutz