EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT is made and entered into as of the 4th day of February, 2004 (the Effective Date), by and between Cinergy and James E. Rogers (the Executive).  This Agreement replaces and supersedes any and all prior employment agreements between Cinergy and the Executive.  The capitalized words and terms used throughout this Agreement are defined in Section 11.

Recitals

A.            The Executive is currently serving as Chairman of the Board, President and Chief Executive Officer of the Company, and Cinergy desires to secure the continued employment of the Executive in accordance with this Agreement.

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

C.            The parties intend that this Agreement will replace and supersede any and all prior employment agreements between Cinergy (or any component company or business unit of Cinergy) and the Executive.

Agreement

In consideration of the mutual promises, 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 remain in the employ of Cinergy, in accordance with the terms and provisions of this Agreement, for the Employment Period set forth in Section 1b.  The parties agree that the Company will be responsible for carrying out all of the promises, 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, 2006; provided that, commencing on December 31, 2004, 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 the Chairman of the Board, President and Chief Executive Officer of the Company 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 (excluding the Executive).  Executive shall devote substantially all of Executives business time, efforts and attention to the performance of Executives duties under this Agreement; provided, however, that this requirement shall not preclude Executive from reasonable participation in civic, charitable or professional activities, the management of Executives passive investments or service on the board of directors of one or more unrelated companies, so long as such activities do not materially interfere with the performance of Executives duties under this Agreement.

b.                                      Place of Performance.  In connection with the Executives employment, the Executive will be based at the principal executive offices of Cinergy, 221 East Fourth Street, Cincinnati, Ohio.  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 fifty (50) miles from such location.

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

a.                                       Salary.  The Executives Annual Base Salary, payable in pro rata installments not less often than semi-monthly, will be at the annual rate of not less than $1,250,004.  The Board of Directors may, from time to time, increase the Annual Base Salary as the Board of Directors deems to be necessary or desirable, including without limitation adjustments to reflect increases in the cost of living.  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 without the consent of the Executive, 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 (but only as permitted by the preceding sentence), 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.

(i)                                     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 short-term and long-term incentive, stock option, restricted stock, performance unit, savings, retirement and welfare plans, practices, policies and programs commensurate with his position and at least comparable to those applicable generally to senior executives of Cinergy who are considered Tier II executives for compensation purposes, except with respect to any plan, practice, policy or program to which the Executive has waived his rights in writing.

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In addition, Cinergy will assume and continue the Insurance Agreement and the Deferred Compensation Agreement.  Notwithstanding anything in this Agreement to the contrary, in the event that Cinergy or any successor fails to assume, breaches, or, at any time during their respective terms, terminates, modifies, amends, or in any way affects, to the Executives detriment and without his consent, the Insurance Agreement or the Deferred Compensation Agreement, then the Executive will be entitled to:  (i) in the case of the Deferred Compensation Agreement, those amounts that are described in Section 16 of the Deferred Compensation Agreement, and (ii) in the case of the Insurance Agreement, those amounts that are described in Section 12 of the Insurance Agreement.

(ii)                                  Supplemental Retirement Benefit.

(1)                                  Amount, Form, Timing and Method of Payment.  If the Executive retires from Cinergy, the Executive will be entitled and fully vested in a supplemental retirement benefit in an amount which, when expressed as an annual amount payable during the life of the Executive, shall equal the excess of (1) 60% of the Executives Highest Average Earnings over (2) his total aggregate annual benefit, payable in the form of a single life annuity to the Executive, under all Executive Retirement Plans.  Except as described below, the form (e.g., the 100% joint and survivor annuity form of benefit), timing, and method of payment of the supplemental retirement benefit payable under this Paragraph will be the same as those elected by the Executive under the Pension Plan, and the amount of such benefit shall be calculated after taking into account the actuarial factors contained in the Pension Plan, provided, however, that such benefit shall not be actuarially reduced for early commencement.  Notwithstanding the foregoing, if the Executive retires from Cinergy after attaining age 56 but prior to attaining age 57, then this Section shall be applied by substituting 61-2/3% for 60%.  If the Executive retires from Cinergy after attaining age 57 but prior to attaining age 58, then this Section shall be applied by substituting 63-1/3% for 60%.  If the Executive retires from Cinergy after attaining age 58, then this Section shall be applied by substituting 65% for 60%.

(2)                                  Death Benefit.  If the Executive dies prior to his retirement from Cinergy, and if his Spouse, on the date of his death, is living on the date the first installment of the supplemental retirement benefit would be payable under this Paragraph, the Spouse will be entitled to receive the supplemental retirement benefit as a Spouses benefit.  The form, timing, and method of payment of any Spouses benefit under this Paragraph will be the same as those applicable to the Spouse under the Pension Plan, and the amount of such benefit shall be calculated after taking into account the actuarial factors

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contained in the Pension Plan, provided, however, that such benefit shall not be actuarially reduced for early commencement.

(3)                                  Special Payment Election Effective Upon a Change in Control.  Notwithstanding the foregoing, the Executive may make a special payment election with respect to his supplemental retirement benefit (if any) in accordance with the following provisions:

(A)                              The Executive may elect, on a form provided by Cinergy, to receive a single lump sum cash payment in an amount equal to the Actuarial Equivalent (as defined below) of his supplemental retirement benefit (or the Actuarial Equivalent of the remaining payments to be made in connection with his supplemental retirement benefit in the event that payment of his supplemental retirement benefit has already commenced) payable no later than 30 days after the later of the occurrence of a Change in Control or the date of his termination of employment.

(B)                                Such special payment election shall become operative only upon the occurrence of a Change in Control and only if the Executives termination of employment occurs either (1) prior to the occurrence of a Change in Control or (2) during the 24-month period commencing upon the occurrence of a Change in Control.  Once operative, such special payment election shall override any other payment election made by the Executive with respect to his supplemental retirement benefit.

(C)                                In order to be effective, a special payment election (or withdrawal of that election) must be made either prior to the occurrence of a Potential Change in Control or, with the consent of Cinergy, during the 30-day period commencing upon the occurrence of a Potential Change in Control.  In the event that a Potential Change in Control occurs and subsequently ceases to exist, other than as a result of a Change in Control, such Potential Change in Control shall be disregarded for purposes of this Section.

(D)                               In the event that the Executive makes a special payment election and pursuant to that election he becomes entitled to receive a single lump sum cash payment pursuant to this Section payable prior to the commencement of his supplemental retirement benefit in another form of payment, the Actuarial Equivalent of his supplemental retirement benefit shall be calculated based on the following assumptions:

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(I)                                    The form of payment for each of the Executives retirement benefits under the Executive Retirement Plans and the Executives supplemental retirement benefit shall be a single life annuity;

(II)                                The commencement date for each of the Executives retirement benefits under the Executive Retirement Plans and the Executives supplemental retirement benefit shall be the first day of the calendar month coincident with or next following his termination of employment;

(III)                            The term Actuarial Equivalent has the meaning given to that term in the Pension Plan with respect to lump sum payments; and

(IV)                            The amount of the Executives supplemental retirement benefit shall not be actuarially reduced for early commencement.

(E)                                 In the event that the Executive makes a special payment election and pursuant to that election he is entitled to receive a single lump sum cash payment payable after the commencement of his supplemental retirement benefit in another form of payment, his lump sum cash payment shall be equal to the Actuarial Equivalent (as that term is used in the Pension Plan with respect to lump sum payments) of the remaining payments to be made in connection with his supplemental retirement benefit.

(4)                              Special One-Time Payment Election Without a Change in Control.  Notwithstanding the foregoing, the Executive may make an election, on a form provided by Cinergy, to receive a single lump sum cash payment in an amount equal to one-half of the Actuarial Equivalent (as defined above in Section 3b(ii)(3)(D)) of his supplemental retirement benefit payable no later than 30 days after the date of his termination of employment.  In order to be effective, the special payment election under this Section 3b(ii)(4) must be made at least one year prior to the termination of Executives employment with Cinergy.  The lump sum amount payable pursuant to this Section 3b(ii)(4) shall be calculated in accordance with the provisions of Section 3b(ii)(3)(D).  In the event an amount is paid to or on behalf of the Executive pursuant to this Section 3b(ii)(4), such payment shall discharge any liability under this Agreement to or on behalf of the Executive with respect to one-half of the Actuarial Equivalent (as defined above in Section 3b(ii)(3)(D)) of his supplemental retirement benefit.

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(iii)                               Upon his retirement, the Executive will be eligible for comprehensive medical and dental benefits which are not materially different from the benefits provided to retirees under the Cinergy Corp. Welfare Benefits Program or any similar program or successor to that program.  For purposes of determining the amount of the monthly premiums due from the Executive, the Executive will receive from Cinergy the maximum subsidy available as of the date of his retirement to an active Cinergy employee with the same medical benefits classification/eligibility as the Executives medical benefits classification/eligibility on the date of his retirement.

(iv)                              The Executive will be a participant in the Annual Incentive Plan and will be paid pursuant to the terms and conditions of that plan, subject to the following: (1) The maximum annual bonus shall be not less than one hundred thirty percent (130%) of the Executives Annual Base Salary (the Maximum Annual Bonus); and (2) The target annual bonus shall be not less than seventy five percent (75%) of the Executives Annual Base Salary (the Target Annual Bonus).

(v)                                 The Executive will be a participant in the Long-Term Incentive Plan (the LTIP), and the Executives annualized target award opportunity under the LTIP will be equal to no less than one hundred sixty percent (160%) 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 Cinergys policies and practices for such fringe benefits:

(i)                                     Cinergy will furnish to the Executive an automobile appropriate for the Executives level of position, or, at Cinergys 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 up to two (2) country clubs and one (1) luncheon club of the Executives choice that are used for business purposes.

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

(iv)                              Cinergy will furnish to the Executive annual financial planning and tax preparation services, provided, however, that the cost to Cinergy of such services shall not exceed $15,000 during any thirty-six (36) consecutive month period.

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(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 applicable generally to senior executives of Cinergy who are considered Tier I or Tier II executives for compensation purposes.

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.

e.                                       Relocation Benefits.  Following termination of the Executives employment for any reason (other than death), the Executive will be entitled to reimbursement from Cinergy for the reasonable costs of relocating from the Cincinnati, Ohio, area to a new primary residence within the continental United States in a manner that is consistent with the terms of the Relocation Program.  Notwithstanding the foregoing, if the Executive becomes employed by another employer and is eligible to receive relocation benefits under another employer-provided plan, any benefits provided to the Executive under this Section 3e will be secondary to those provided under the other employer-provided relocation plan.  The Executive must report to Cinergy any such relocation benefits that he actually receives under another employer-provided plan.

f.                                         Stock Options and Stock Appreciation Rights.  Notwithstanding Section 5d, upon the occurrence of a Change in Control, any stock options or stock appreciation rights then held by the Executive pursuant to the LTIP or Cinergy Corp. Stock Option Plan shall, to the extent not otherwise provided in the applicable Stock Related Documents, become immediately exercisable.  If the Executive terminates employment for any reason during the twenty-four (24) month period commencing upon the occurrence of a Change in Control, notwithstanding Section 5d, any stock options or stock appreciation rights then held by the Executive pursuant to the LTIP or Cinergy Corp. Stock Option Plan shall, to the extent not otherwise provided in the applicable Stock Related Documents, remain exercisable in accordance with their terms but in no event for a period less than the lesser of (i) three months following such termination of employment or (ii) the remaining term of such stock option or stock appreciation right (which remaining term shall be determined without regard to such termination of employment).

g.                                      Performance Award.  The Executive is hereby granted a contingent right (the Performance Award) to have a Nonelective Employer Contribution credited to his account under the 401(k) Excess Plan in an amount equal to the Fair Market Value as of the vesting date of 129,049 shares of Common Stock (the Shares) (which is the number of shares obtained by dividing $5 million by the Fair Market Value of a share of Common Stock as of January 1, 2004), subject to the following terms and conditions:

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