EMPLOYMENT AGREEMENT


EMPLOYMENT AGREEMENT made and entered into as of the 24th 
day of October, 1994, 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 Cheryl M. Foley (the 
"Executive").  Cinergy, Cinergy Services, CG&E, and PSI will 
sometimes be referred to in this Employment Agreement 
collectively as the "Corporation".

WHEREAS, the Corporation desires that the Executive become 
an employee in accordance with this Employment Agreement;

WHEREAS, the Executive is willing to commit herself to the 
employ of the Corporation and any successor thereto, on the terms 
and conditions set forth in this Employment Agreement and thus to 
forego opportunities elsewhere; and

WHEREAS, the parties desire to enter into this Employment 
Agreement as of the date first set forth above setting forth the 
terms and conditions for the employment relationship of the 
Executive;

NOW, THEREFORE, IN CONSIDERATION of the mutual premises, 
covenants and agreements set forth below, it is hereby agreed as 
follows:

1.Employment and Term.

a.The Corporation agrees to employ the Executive, and the 
Executive agrees to be employed, in accordance with the 
terms and provisions of this Employment Agreement for 
the period set forth below (the "Employment Period").

b.The Employment Period of the Executive as provided in 
Section 1(a) will commence on October 24, 1994 (the 
"Effective Date") and shall continue until December 31, 
1997; provided, however, commencing on January 1, 1996, 
and each January 1 thereafter (the "Renewal Date"), the 
Employment Period of this Employment Agreement may 
automatically be extended for one (1) additional year 
if the Corporation shall have given notice to the 
Executive of its intent to extend this Employment 
Agreement prior to such Renewal Date and the Executive 
shall not have objected to such extension in writing 
within ten (10) business days of receipt of such 
notice.

2.Duties and Powers of Executive.

a.Position.  The Executive shall serve the Corporation in 
such responsible executive capacity or capacities as 
the Board of Directors of Cinergy or Cinergy Services 
(the Board of Directors of Cinergy or Cinergy Services, 
as the case may be, may be referred to sometimes as the 
"Board") or the Chief Executive Officer of Cinergy or 
the Chief Operating Officer of Cinergy may from time to 
time determine and shall have such responsibilities, 
duties and authority as may be assigned to her from 
time to time during the Employment Period by the Board 
or the Chief Executive Officer of Cinergy or the Chief 
Operating Officer of Cinergy that are consistent with 
such responsibilities, duties and authority.  Upon the 
Effective Date of this Employment Agreement, the 
Executive shall initially serve as Vice President, 
General Counsel and Corporate Secretary for the 
Corporation, but consistent with the foregoing 
provisions of this Section 2(a), may be assigned to any 
other position or positions by either the Board or the 
Chief Executive Officer of Cinergy or the Chief 
Operating Officer of Cinergy during the Employment 
Period.



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

3.Compensation.  The Executive shall receive the following 
compensation for her services under this Employment 
Agreement.

a.Salary.  The Executive's annual base salary (the "Annual 
Base Salary"), payable not less often than semi-
monthly, shall be at the annual rate of not less than 
$230,000.00.  The Board may, from time to time, direct 
such upward adjustments in the Annual Base Salary as 
the Board deems to be necessary or desirable, including 
without limitation adjustments in order to reflect 
increases in the cost of living.  Any increase in the 
Annual Base Salary shall not serve to limit or reduce 
any other obligation of the Corporation under this 
Employment Agreement.  The Annual Base Salary shall not 
be reduced after any increase thereof except for 
across-the-board salary reductions similarly affecting 
all management personnel of Cinergy, Cinergy Services, 
PSI or CG&E.

b.Retirement, Incentive, Welfare Benefit Plans and Other 
Benefits.  During the Employment Period and so long as 
the Executive is employed by the Corporation, the 
Executive shall be eligible, and the Corporation shall 
take such actions as may be necessary or required to 
cause the Executive to become eligible, to participate 
in all short-term and long-term incentive, stock 
option, restricted stock, performance unit, savings, 
retirement and welfare plans, practices, policies and 
programs applicable generally to employees and/or other 
senior executives of the Corporation, including but not 
limited to Cinergy's Annual Incentive Plan, Cinergy's 
Performance Shares Plan, Cinergy's Executive 
Supplemental Life Insurance Program, Cinergy's Stock 
Option Plan, PSI's Pension Plan, PSI's Supplemental 
Retirement Plan and PSI's Excess Benefit Plan, or any 
successors thereto, except with respect to any plan, 
practice, policy or program to which the Executive has 
waived her rights in writing.

c.Fringe Benefits and Perquisites.  During the Employment 
Period and so long as the Executive is employed by the 
Corporation, the Executive shall be entitled to the 
following additional fringe benefits:

(i)The Corporation shall furnish to the Executive an 
automobile and shall pay all of the related 
expenses for gasoline, insurance, maintenance and 
repairs, 

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

(iii)The Corporation shall provide paid vacation for 
four (4) weeks per year (or longer if permitted by 
the Corporation's policy), and

(iv)The Corporation shall furnish to the Executive 
annual financial planning and tax preparation 
services.  In addition, the Executive shall be 
entitled to receive such other fringe benefits in 
accordance with the plans, practices, programs and 
policies of the Corporation from time to time in 
effect, commensurate with her position and at 
least comparable to those received by other senior 
executives of the Corporation.

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

e.Relocation Benefits.  The Executive shall be entitled to 
reimbursement from the Corporation pursuant to the 
terms of the Corporation Relocation Program in effect 
as of the day and year first written above, as well as 
all actual expenses for temporary housing until such 
time as she has moved into a new primary residence in 
the general area of the Corporation's principal 
corporate office located in Cincinnati, Ohio.  The 
expenses described in this Section shall be "grossed 
up" to provide for adverse tax consequences to the 
Executive.

4.Termination of Employment.

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

b.By the Corporation for Cause.  The Corporation may 
terminate the Executive's employment during the 
Employment Period for Cause.  For purposes of this 
Employment Agreement, "Cause" shall mean:

(i)The willful and continued failure by the Executive 
to substantially perform the Executive's duties 
with the Corporation (other than any such failure 
resulting from Executive's incapacity due to 
physical or mental illness or any such actual or 
anticipated failure after the issuance of a Notice 
of Termination for Good Reason by the Executive 
pursuant to Section 4(c) after a written demand 
for substantial performance is delivered to the 
Executive by the Board, which demand specifically 
identifies the manner in which the Board believes 
that the Executive has not substantially performed 
the Executive's duties, or

(ii)The breach by the Executive of the confidentiality 
provisions set forth in Section 8 of this 
Employment Agreement, or

(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 the 
Corporation.  For purposes of this definition of 
"Cause", no act, or failure to act, on the 
Executive's part shall be deemed "willful" unless 
done, or omitted to be done, by the Executive not 
in good faith and without reasonable belief that 
the Executive's act, or failure to act, was in the 
best interest of the Corporation.  Notwithstanding 
the above definition of "Cause", the Corporation 
may terminate the Executive's employment during 
the Employment Period for a reason other than 
Cause, but the obligations placed upon the 
Corporation in Section 5 shall apply.

c.By the Executive for Good Reason.  The Executive may 
terminate her employment during the Employment Period 
for Good Reason.  For purposes of this Employment 
Agreement, "Good Reason" shall mean:

(i)The reduction in the Executive's Annual Base Salary 
as specified in Section 3(a) of this Employment 
Agreement, or any other benefit or payment 
described in Section 3 of this Employment 
Agreement, except for across-the-board salary 
reductions similarly affecting all management 
personnel of Cinergy, Cinergy Services, CG&E, and 
PSI, and changes to the employee benefits programs 
affecting all management personnel of those 
Corporations, provided that such changes (either 
individually or in the aggregate) will not result 
in a material adverse change with respect to the 
benefits which the Executive was entitled to 
receive as of the Effective Date;

(ii)The material reduction without her consent of the 
Executive's title, authority, duties or 
responsibilities from those in effect immediately 
prior to the reduction;

(iii)Any breach by the Corporation of any other 
material provision (including but not limited to 
the place of performance as specified in Section 
2(b);

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

(v)Any event which constitutes a "Change in Control" as 
defined in Section 4(f) of this Employment 
Agreement.

d.Notice of Termination.  Any termination by the Corporation 
for cause, or by the Executive for Good Reason, shall 
be communicated by Notice of Termination to the other 
party to this Employment Agreement given in accordance 
with Section 10(b) of this Employment Agreement.  For 
purposes of this Employment Agreement, a "Notice of 
Termination" means a written notice which:

(i)Indicates the specific termination provision in this 
Employment Agreement relied upon,

(ii)To the extent applicable, sets forth in reasonable 
detail the facts and circumstances claimed to 
provide a basis for termination of the Executive's 
employment under the provision so indicated, and

(iii)If the Date of Termination (as defined in Section 
4(e)) is other than the date of receipt of such 
notice, specifies the termination date (which date 
shall be not more than thirty (30) days after the 
giving of such notice).  The failure by the 
Executive or the Corporation to set forth in the 
Notice of Termination any fact or circumstances 
which contributes to a showing of Good Reason or 
Cause shall not waive any right of the Executive 
or the Corporation under this Employment Agreement 
or preclude the Executive or the Corporation from 
asserting such fact or circumstances in enforcing 
the Executive's or the Corporation's rights under 
this Employment Agreement.

e.Date of Termination.  "Date of Termination" means:

(i)If the Executive's employment is terminated by the 
Corporation for Cause, or by the Executive for 
Good Reason, the date of receipt of the Notice of 
Termination or any later date specified therein, 
as the case may be,

(ii)If the Executive's employment is terminated by the 
Corporation other than for Cause, the date on 
which the Corporation notifies the Executive of 
such termination, and

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

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 corporation, person, other entity or group 
becomes the "beneficial owner" (as defined in Rule 
13d-3 under the Securities Exchange Act of 1934) 
of more than fifty percent (50%) of the then 
outstanding voting stock of Cinergy otherwise than 
through a transaction arranged by, or consummated 
with, the prior approval of the Board;

(ii)The shareholders of Cinergy approve a definite 
agreement to merge or consolidate with or into 
another corporation in a transaction in which 
neither Cinergy nor any of its subsidiaries or 
affiliates will be the surviving corporation, or 
to sell or otherwise dispose of all or 
substantially all of Cinergy's assets to any 
person or group other than Cinergy or any of its 
subsidiaries or affiliates, other than a merge or 
a sale which will result in the voting securities 
of Cinergy outstanding prior to the merger or sale 
continuing to represent at least fifty percent 
(50%) of the combined voting power of the voting 
securities of the corporation surviving the merger 
or purchasing the assets; or

(iii)During any period of two (2) consecutive years, 
individuals who at the beginning of such period 
constitute the Board of Directors of Cinergy (and 
any new director whose election by the Board of 
Directors of Cinergy or whose nomination for 
election by Cinergy's stockholders was approved 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 such period or whose 
election or nomination for election was previously 
so approved) cease for any reason to constitute a 
majority of Cinergy's Board of Directors.

g.Person.  "Person" shall have the meaning given in Section 
3(a)(9) of the Securities Exchange Act of 1934, 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.

5.Obligations of the Corporation Upon Termination.

a.Certain Terminations.  During the Employment Period, if 
the Corporation shall terminate the Executive's 
employment (other than in the case of a termination for 
Cause), the Executive shall terminate her employment 
for Good Reason or the Executive's employment shall 
terminate by reason of death (termination in any such 
case referred to as "Termination"):

(i)The Corporation shall pay to the Executive a lump 
sum amount, in case, equal to the sum of:

(1)the Executive's Annual Base Salary through the 
Date of Termination to the extent not 
previously paid, 

(2)an amount equal to the Cinergy Annual Incentive 
Plan target percentage benefit for the fiscal 
year that includes the Date of Termination 
multiplied by a fraction the numerator of 
which shall be the number of days from the 
beginning of such fiscal year to and 
including the Date of Termination and the 
denominator of which shall be three hundred 
and sixty-five (365),

(3)an amount equal to her vested accrued benefit 
under the Cinergy Performance Shares Plan, 
and

(4)any compensation previously deferred by the 
Executive (together with any accrued interest 
or earnings thereon) and any accrued vacation 
pay, in each case to the extent not 
previously paid.  
 
(The amounts specified in clauses (1), (2), 
(3) and (4) shall be referred to in this 
Employment Agreement as the "Accrued 
Obligations".)  The amounts specified in this 
Section 5(a)(i) shall be paid within thirty 
(30) days after the Date of Termination.  The 
Accrued Obligations described in this Section 
are payable to the Executive regardless of 
whether a Change in Control has occurred.

(ii)Prior to the occurrence of a Change in Control, and 
in the event of Termination other than by reason 
of the Executive's death, then:

(1)the Corporation shall pay to the Executive a 
lump sum amount, in cash, equal to the 
present value discounted using an interest 
rate equal to the prime rate promulgated by 
CitiBank, N.A. and in effect as of the Date 
of Termination (the "Prime Rate") of the 
Annual Base Salary, and the Cinergy Annual 
Incentive Plan target percentage payable 
through the end of the Employment Period, 
each at the rate, and using the same goals 
and factors, in effect at the time Notice of 
Termination is given, and paid within thirty 
(30) days of the Date of Termination;

(2)the Corporation shall pay to the Executive the 
present value (discounted at the Prime Rate) 
of all amounts to which the Executive would 
have been entitled had she remained in 
employment with the Corporation until the end 
of the Employment Period, each, where 
applicable, at the rate of the Annual Base 
Salary, and using the same goals and factors, 
in effect at the time Notice of Termination 
is given, under the Cinergy Performance 
Shares Plan and the Cinergy Executive 
Supplemental Life Insurance Program minus the 
present value (discounted at the Prime Rate) 
of the benefits to which she is actually 
entitled under the above mentioned plans and 
programs;

(3)the Corporation shall pay the value of all 
deferred compensation amounts and all 
executive life insurance benefits whether or 
not then vested or payable; and

(4)the Corporation shall continue, until the end 
of the Employment Period, medical and welfare 
benefits to the Executive and/or the 
Executive's family at least equal to those 
which would have been provided if the 
Executive's employment had not been 
terminated (excluding benefits to which the 
Executive has waived her rights in writing), 
such benefits to be in accordance with the 
most favorable medical and welfare benefit 
plans, practices, programs or policies (the 
"M&W Plans") of the Corporation as in effect 
and applicable generally to other senior 
executives of the Corporation and their 
families during the ninety (90) day period 
immediately preceding the Date of 
Termination; provided, however, that if the 
Executive becomes employed with another 
employer and is eligible to receive medical 
or other welfare benefits under another 
employer-provided plan, the benefits under 
the M&W Plans shall be secondary to those 
provided under such other plan during such 
applicable period of eligibility.

(iii)From and after the occurrence of a Change in 
Control and in the event of Termination other than 
by reason of the Executive's death, then in lieu 
of any further salary payments to the Executive 
for periods subsequent to the Date of Termination 
and in lieu of any other benefits payable pursuant 
to Section 5(a)(ii) of this Employment Agreement:

(1)The Corporation shall pay to the Executive a 
lump sum severance payment, in cash, equal to 
the greater of:

(A)the present value of all amounts and 
benefits that would have been due under 
Sections 5(a)(ii) of this Employment 
Agreement, excluding Section 
5(a)(ii)(4), and

(B)three (3) times the sum of (x) the higher 
of the Executive's Annual Base Salary in 
effect immediately prior to the 
occurrence of the event or circumstance 
upon which the Notice of Termination is 
based or in effect immediately prior to 
the Change in Control, and (y) the 
higher of the amount paid to the 
Executive pursuant to all incentive 
compensation or bonus plans or programs 
maintained by the Corporation, in the 
year preceding that in which the Date of 
Termination occurs or in the year 
preceding that in which the Change in 
Control occurs; and

(2)For a thirty-six (36) month period after the 
Date of Termination, the Corporation shall 
arrange to provide the Executive with life, 
disability, accident and health insurance 
benefits substantially similar to those which 
the Executive is receiving immediately prior 
to the Notice of Termination (without giving 
effect to any reduction in such benefits 
subsequent to a Change in Control which 
reduction constitutes Good Reason), except 
for any benefits that were waived by the 
Executive in writing.  Benefits otherwise 
receivable by the Executive pursuant to this 
Section 5(a)(iii)(2) shall be reduced to the 
extent comparable benefits are actually 
received by or made available to the 
Executive without cost during the thirty-six 
(36) month period following the Executive's 
termination of employment (and any such 
benefits actually received by the Executive 
shall be reported to the Corporation by the 
Executive).

The Executive's employment shall be deemed to 
have been terminated following a Change in 
Control of Cinergy without Cause or by the 
Executive for Good Reason if, in addition to 
all other applicable Terminations, 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 or any of its 
subsidiaries or affiliates, the consummation 
of which will constitute a Change in Control 
or if the Executive terminates her employment 
for Good Reason prior to a Change in Control 
if the circumstances or event which 
constitutes Good Reason occurs at the 
direction of such Person.

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

c.Retirement Benefits on Termination.  In addition to 
retirement benefits under PSI's Pension Plan, PSI's 
Supplemental Retirement Plan, and PSI's Excess Benefit 
Plan, or any successor thereto, the Executive shall be 
eligible to participate in any supplemental executive 
retirement plan (commonly referred to as a "SERP") 
sponsored by the Corporation.

d.Survival of Section 5(c).  The provisions of Section 5(c) 
shall survive the expiration or termination of this 
Employment Agreement for any reason.

e.Certain Tax Consequences.  In the event that the Executive 
becomes entitled to the payments and benefits described 
in this Section 5 (the "Severance Benefits"), if any of 
the Severance Benefits will be subject to any excise 
tax (the "Excise Tax") imposed under Section 4999 of 
the Internal Revenue Code of 1986, as amended (the 
"Code"), the Corporation shall pay to the Executive an 
additional amount (the "Gross-Up Payment") such that 
the net amount retained by the Executive, after 
deduction of an Excise Tax on the Severance Benefits 
and any federal, state and local income and employment 
tax and Excise Tax upon the payment provided for by 
this Section 5, shall be equal to the Severance 
Benefits.  For purposes of determining whether any of 
the Severance Benefits will be subject to the Excise 
Tax and the amount of such Excise Tax, 

(i) any other payments or benefits received or to be 
received by the Executive in connection with a 
Change in Control or the Executive's termination 
of employment (whether pursuant to the terms of 
this Employment Agreement or any other plan, 
arrangement or agreement with the Corporation, any 
Person whose actions result in a Change in Control 
or any Person affiliated with the Corporation or 
such Person) shall be treated as "parachute 
payments" within the meaning of Section 280G(b)(2) 
of the Code, and all "excess parachute payments" 
within the meaning of Section 280G(b)(1) of the 
Code shall be treated as subject to the Excise 
Tax, unless in the opinion of tax counsel selected 
by the Corporation's independent auditors and 
reasonably acceptable to the Executive such other 
payments or benefits (in whole or in part) do not 
constitute parachute payments, including by reason 
of Section 280G(b)(4)(A) of the Code, or such 
excess parachute payments (in whole or in part) 
represent reasonable compensation for services 
actually rendered, within the meaning of Section 
280G(b)(4)(B) of the Code, in excess of the Base 
Amount as defined in Section 280G(b)(3) of the 
Code allocable to such reasonable compensation, or 
are otherwise not subject to the Excise Tax,

(ii)the amount of the Severance Benefits that shall be 
treated as subject to the Excise Tax shall be 
equal to the lesser of

(1)the total amount of the Severance Benefits, or

(2)the amount of excess parachute payments within 
the meaning of Section 280G(b)(1) of the Code 
(after applying clause (i), above), and

(iii)the value of any non-cash benefits or any deferred 
payment or benefit shall be determined by the 
Corporation's independent auditors in accordance 
with the principles of Section 280G(d)(3) and (4) 
of the Code.  For purposes of determining the 
amount of the Gross-Up Payment, the Executive 
shall 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 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 which would be obtained 
from deduction of such state and local taxes.  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 Corporation, 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 
Section 1274(b)(2)(B) of the Code.  In the event 
that the Excise Tax is determined to exceed the 
amount taken into account hereunder at the time of 
the termination of the Executive's employment 
(including by reason of any payment the existence 
or amount of which cannot be determined at the 
time of the Gross-Up Payment), the Corporation 
shall make an additional Gross-Up Payment in 
respect of such excess (plus any interest, 
penalties or additions payable by the Executive 
with respect to such excess) at the time that the 
amount of such excess is finally determined.  The 
Executive and the Corporation shall each 
reasonably cooperate with the other in connection 
with any administrative or judicial proceedings 
concerning the existence or amount of liability 
for Excise Tax with respect to the Severance 
Benefits.

f.Other Fees and Expenses.  The Corporation also shall pay 
to the Executive all legal fees and expenses incurred 
by the Executive as a result of a termination which 
entitles the Executive to the Severance Benefits 
(including all such fees and expenses, if any, incurred 
in disputing any such termination or in seeking in good 
faith to obtain or enforce any benefit or right 
provided by this Employment Agreement).  Such payments 
shall be made within five (5) business days after 
delivery of the Executive's written requests for 
payment accompanied with such evidence of fees and 
expenses incurred as the Corporation reasonably may 
require.

6.Non-exclusivity of Rights.  Nothing in this Employment 
Agreement shall prevent or limit the Executive's continuing 
or future participation in any benefit, plan, program, 
policy or practice provided by the Corporation and for which 
the Executive may qualify (except with respect to any 
benefit to which the Executive has waived her rights in 
writing), nor shall anything herein limit or otherwise 
affect such rights as the Executive may have under any other 
contract or agreement entered into after the date hereof 
with the Corporation.  Amounts which are vested benefits or 
which 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 date hereof 
with, the Corporation at or subsequent to the Date of 
Termination, shall be payable in accordance with such 
benefit, plan, program, policy or practice, or contract or 
agreement, except as explicitly modified by this Employment 
Agreement.

7.Full Settlement:  Mitigation.  Except as provided in Sections 
5(a)(ii)(4) and 5(a)(iii)(2) of this Employment Agreement, 
the Corporation's obligation to make the payments provided 
for in this Employment Agreement and otherwise to perform 
its obligations under this Employment Agreement shall not be 
affected by any set-off, counterclaim, recoupment, defense 
or other claim, right or action which the Corporation may 
have against the Executive or others.  In no event shall 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 Employment Agreement and 
such amounts shall not be reduced whether or not the 
Executive obtains other employment.  If the Executive 
finally prevails with respect to any dispute between the 
Corporation, the Executive or others as to the 
interpretation, terms, validity or enforceability of 
(including any dispute about the amount of any payment 
pursuant to) this Employment Agreement, the Corporation 
agrees to pay all legal fees and expenses which the 
Executive may reasonably incur as a result of any such 
dispute.

8.Confidential Information.   The Executive shall hold in a 
fiduciary capacity for the benefit of Cinergy, all of its 
subsidiary companies and affiliates, as well as all 
successors and assigns thereof (the "Cinergy Companies"), 
all secret, confidential information, knowledge or data 
relating to the Cinergy Companies, and their respective 
businesses, that shall have been obtained by the Executive 
during the Executive's employment by the Corporation and 
that shall not have been or now or subsequently have become 
public knowledge (other than by acts by the Executive or 
representatives of the Executive in violation of this 
Employment Agreement).  During the Employment Period and 
thereafter, the Executive shall not, without the prior 
written consent of the Corporation or as may otherwise by 
required by law or legal process, communicate or divulge any 
such information, knowledge or data to anyone other than the 
Corporation and those designated by it.  The Executive 
understands that during the Employment Period, the Cinergy 
Companies may be required from time to time to make public 
disclosure of the terms or existence of the Executive's 
employment relationship in order to comply with various laws 
and legal requirements.  In addition to all other remedies 
available to the Corporation in law and equity, this 
Employment Agreement is subject to termination by the 
Corporation for Cause under Section 4(b) in the event the 
Executive violates any provision of this Section 8.

9.Successors.

a.This Employment Agreement is personal to the Executive 
and, without the prior written consent of the 
Corporation, shall not be assignable by the Executive 
otherwise than by will or the laws of descent and 
distribution.  This Employment Agreement shall insure 
to the benefits of and be enforceable by the 
Executive's legal representatives.

b.This Employment Agreement shall inure to the benefit of 
and be binding upon the Corporation, and its successors 
and assigns.

c.The Corporation shall 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 the Corporation to assume 
expressly and agree to perform this Employment 
Agreement in the same manner and to the same extent 
that the Corporation would be required to perform it if 
no such succession had taken place.

10.Miscellaneous.

a.This Employment Agreement shall 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 Employment Agreement are 
not part of the provisions hereof and shall have no 
force or effect.  This Employment 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 such amendment, 
modification, repeal, waiver, extension or discharge is 
sought.  No person, other than pursuant to a resolution 
of the Board or a committee thereof, shall have 
authority on behalf of the Corporation to agree to 
amend, modify, repeal, waive, extend or discharge any 
provision of this Employment Agreement or anything in 
reference thereto.

b.All notices and other communications hereunder shall be in 
writing and shall be given by hand delivery to the 
other party or by registered or certified mail, return 
receipt requested, postage prepaid, addressed as 
follows:


If to the Executive:
Cheryl M. Foley
Cinergy Corp.
221 East Fourth Street
P. O. Box 960
Cincinnati, Ohio 45201-0960

If to the Corporation:
Cinergy Corp.
221 East Fourth Street
P. O. Box 960
Cincinnati, Ohio 45201-0960
Attn:  Chief Executive Officer

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

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

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

e.The Executive's or the Corporation's failure to insist 
upon strict compliance with any provision of this 
Employment Agreement or the failure to assert any right 
the Executive or the Corporation may have under this 
Employment Agreement, including without limitation the 
right of the Executive to terminate employment for Good 
Reason pursuant to Section 4(c) of this Employment 
Agreement, or the right of the Corporation to terminate 
the Executive's employment for Cause pursuant to 
Section 4(b) of this Employment Agreement, shall not be 
deemed to be a waiver of such provision or right or any 
other provision or right of this Employment Agreement.

f.This instrument contains the entire agreement of the 
Executive and the Corporation with respect to the 
subject matter hereof; and all promises, 
representations, understandings, arrangements and prior 
agreements are merged into this Employment Agreement 
and accordingly superseded.

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

h.The Corporation and the Executive agree that Cinergy shall 
be authorized to act for the Corporation with respect 
to all aspects pertaining to the administration and 
interpretation of this Employment Agreement.

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


CINERGY CORP.



By:               Jackson H. Randolph
                   (Jackson H. Randolph)
        Chairman and Chief Executive Officer




CINERGY SERVICES, INC.



By:                Jackson H. Randolph
                    (Jackson H. Randolph)
        Chairman and Chief Executive Officer


THE CINCINNATI GAS & ELECTRIC COMPANY



By:                Jackson H. Randolph
                    (Jackson H. Randolph)
        Chairman and Chief Executive Officer



PSI ENERGY, INC.



By:                Jackson H. Randolph
                    (Jackson H. Randolph)
        Chairman and Chief Executive Officer



EXECUTIVE



                        Cheryl M. Foley
                       (Cheryl M. Foley)