SECOND AMENDMENT TO EMPLOYMENT AGREEMENT

     This Second  Amendment to  Employment  Agreement  (the "Second  Amendment")
dated  effective  January 29, 1997,  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 Second Amendment collectively as the "Corporation".

     WHEREAS,  the Executive has been employed by the Corporation 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");

     WHEREAS,  on January 27, 1997, the Board of Directors of Cinergy  adopted a
resolution  that directed the  Corporation to amend all  outstanding  employment
agreements,  including  the  Executive's  Employment  Agreement,  to delete  the
existing  definition  of  "change  in  control"  of  Cinergy  as  found in those
agreements and substitute therefor the same definition of "change in control" of
Cinergy as adopted that date for inclusion in various  compensation  and benefit
plans of the Corporation;

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

1.   The  substantive  provisions of Section 4 (f) are deleted in their entirety
     and replaced with the following:

     "f.  Change in  Control.  A  'Change  in  Control'  shall 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  Securities  Exchange Act of 1934
               (the '1934 Act') is or becomes the  beneficial  owner (as defined
               in Rule 13d-3  under the 1934 Act),  directly or  indirectly,  of
               securities   of  Cinergy  (not   including   in  the   securities
               beneficially  owned  by  such  Person  any  securities   acquired
               directly  from  Cinergy  or its  affiliates)  representing  fifty
               percent  (50%) or more of the combined  voting power of Cinergy'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 Cinergy or any
               direct  or  indirect   subsidiary   of  Cinergy  with  any  other
               corporation  , other  than (1) a merger  or  consolidation  which
               would  result in the voting  securities  of  Cinergy  outstanding
               immediately  prior to such merger or consolidation  continuing to
               represent (either by remaining  outstanding or by being converted
               into  voting  securities  of the  surviving  entity or any parent
               thereof)  at least fifty  percent  (50%) of the  combined  voting
               power of the  securities of Cinergy or such  surviving  entity or
               any  parent  thereof  outstanding   immediately  such  merger  or
               consolidation,  or (2) a  merger  or  consolidation  effected  to
               implement a recapitalization of Cinergy (or similar  transaction)
               in which no person is or becomes the beneficial  owner,  directly
               or  indirectly,  of securities  of Cinergy (not  including in the
               securities  beneficially  owned  by such  person  any  securities
               acquired  directly from Cinergy or its  affiliates  other than in
               connection with the acquisition by Cinergy or its affiliates of a
               business)  representing  twenty-five percent (25%) or more of the
               combined voting power of Cinergy's then  outstanding  securities;
               or

          (iii)During any period of two  consecutive  years,  individuals who at
               the  beginning  of that  period  constitute  Cinergy's  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
               Cinergy) whose appointment or election by Cinergy'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
               Cinergy's Board of Directors; or

          (iv) The   shareholders   of  Cinergy   approve  a  plan  of  complete
               liquidation  or dissolution of Cinergy or there is consummated an
               agreement  for  the  sale or  disposition  by  Cinergy  of all or
               substantially  all of  Cinergy's  assets,  other  than a sale  or
               disposition by Cinergy of all or  substantially  all of Cinergy'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 Cinergy in substantially  the same proportions as
               their ownership of Cinergy immediately prior to such sale."

2.   A new Section 4 (h) is added to the Agreement as follows:

     "h.  Person.  'Person'  shall have the meaning given in Section  3(a)(9) of
          the 1934  Act,  as  modified  and used in  Sections  13(d)  and  14(d)
          thereof; however, a Person shall not include: 

          (i)  The Corporation or any of its subsidiaries;

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

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

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

3.   All other provisions of the Employment Agreement and First Amendment remain
     unchanged by this Second Amendment.

     IN WITNESS  WHEREOF,  the  Executive and the  Corporation  have caused this
Second 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