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 Larry E. Thomas
(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  since October
5, 1967;

         WHEREAS, the Executive has been employed by the Corporation pursuant to
an Employment  Agreement dated effective as of October 24, 1994 (the "Employment
Agreement"),  as amended by a First  Amendment  to  Employment  Agreement  dated
effective as of October 24, 1994 (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 Sections 4 (f) and (g) 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.

g. 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."

2.   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



-----------------------------
       Larry E. Thomas