Exhibit 10.2

 

DPL INC.

STOCK OPTION PLAN

 

Management Stock Option Agreement

 

This Agreement is made as of August 31, 2005 (the “Grant Date”), by and between
DPL Inc., an Ohio corporation (the “Company”) and Robert D. Biggs (the
“Participant”).

 

WHEREAS, the Committee, pursuant to the Company’s Stock Option Plan (the
“Plan”), has made an award to the Participant and authorized and directed the
execution and delivery of this Agreement;

 

NOW, THEREFORE, in consideration of the foregoing, the mutual promises
hereinafter set forth, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Company and the
Participant hereby agree as follows:

 

1.                                       Award.  The Participant is hereby
granted a stock option (an “Option”) to purchase from the Company up to a total
of 350,000 Common Shares of the Company at the Fair Market Value, as defined in
the Plan, on the Grant Date, or $26.82 per share (the “Exercise Price”).  The
term of such Option shall be three years, commencing on the Grant Date and
ending on the third anniversary thereof (the “Term”).  This Option is not
intended to qualify as an incentive stock option under Code Section 422.

 

2.                                       Vesting and Exercise.  The Option may
be exercised only in accordance with the Plan, as supplemented by this
Agreement, and not otherwise.

 

a.                                       Vesting.  During its Term and prior to
its earlier termination in accordance with Section 3 of this Agreement, and
subject to Section 4 of this Agreement, the Option shall vest in its entirety on
June 30, 2006 if the Participant remains in the continuous employment of the
Company through such date.

 

b.                                      Exercise.  100% of the Option shall
become exercisable on June 30, 2006 if the participant remains in the continuous
employment of the Company through such date.  The Option may be exercised for
less than the full number of Shares for which the Option is then exercisable. 
To the extent then exercisable, the Option may be exercised by the Participant
by giving written notice of exercise to the Company in such form as may be
provided by the Committee, specifying the number of Shares with respect to which
the Option is to be exercised and such other information as the Committee may
require.  Such exercise shall be effective upon receipt by the Company of such
written notice together with the required payment of the Exercise Price and any
applicable withholding taxes. 

 

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c.                                       Payment of Exercise Price.  Payment of
the Exercise Price may be made by cash, check (subject to collection) or,
provided that the Shares have been owned by the Participant for at least six
months prior to such payment, by the delivery (or attestation of ownership) of
Shares having a Fair Market Value equal to the aggregate Exercise Price and any
applicable withholding taxes.  Alternatively, the Participant may make such
payment by authorizing the simultaneous sale of Shares (or a sufficient portion
thereof) acquired upon exercise through a brokerage or similar arrangement
approved in advance by the Committee.  Subject to the foregoing and except as
otherwise provided by the Committee before the Option is exercised, the Company
will deliver to the Participant, within a reasonable period of time thereafter,
a certificate or certificates representing the Shares so acquired, registered in
the name of the Participant or in accordance with other delivery instructions
provided by the Participant and acceptable to the Committee.

 

3.                                            Termination.  Except as otherwise
provided in this Section 3, the Option shall terminate upon the expiration of
its Term.  In no event may the Option be exercised beyond its Term.

 

4.                                       Vesting.  Notwithstanding the
provisions of Sections 2(a) and 2(b) hereof, the Option shall become fully
vested and exercisable as provided in the Amended and Restated Employment
Agreement between the Company and the Participant dated August 31, 2005 (the
“Employment Agreement”).  If there is any inconsistency between (a) this
Agreement or the Management Stock Option Agreement by and between the Company
and the Participant dated October 5, 2004 and (b) the Employment Agreement, then
the terms of the Employment Agreement shall govern.

 

5.                                       Withholding.  The Company shall
withhold all applicable taxes required by law from all amounts paid in respect
of the Option.  A Participant may satisfy the withholding obligation (i) by
paying the amount of any such taxes in cash or check (subject to collection),
(ii) by the delivery (or attestation of ownership) of Shares or (iii) with the
approval of the Committee, by having Shares deducted from the payment. 
Alternatively, the Participant may satisfy such obligation by authorizing the
simultaneous sale of Shares (or a sufficient portion thereof) acquired upon
exercise through a brokerage or similar arrangement approved in advance by the
Committee.  The amount of the withholding and, if applicable, the number of
Shares to be delivered or deducted, as the case may be, shall be determined by
the Committee as of when the withholding is required to be made, provided that
the number of Shares so delivered or withheld shall not exceed the minimum
required amount of such withholding.

 

6.                                       Non-Assignability.  Except as otherwise
provided in this Section, the Option is not assignable or transferable other
than by will or by the laws of descent and distribution and, during the
Participant’s life, may be exercised only by the Participant.  The Participant,
with the approval of the Committee, which approval

 

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may be withheld in its sole discretion, may transfer the Option for no
consideration to or for the benefit of any member or members of the
Participant’s Immediate Family (including, without limitation, to a trust for
the benefit of any member or members of the Participant’s Immediate Family or to
a partnership or limited liability company for one or more members of the
Participant’s Immediate Family) subject to such limits as the Committee may
establish, and the transferee shall remain subject to all the terms and
conditions applicable to the Option prior to such transfer.  The foregoing right
to transfer the Option shall apply to the right to consent to amendments to this
Agreement and, in the discretion of the Committee, shall also apply to the right
to transfer ancillary rights associated with the Option.

 

7.                                       Rights as a Shareholder.  A Participant
shall have no rights as a shareholder with respect to any Shares subject to this
award until the date the Participant becomes the holder of record of the Shares.

 

8.                                       No Right to Continued Service.  Nothing
herein shall obligate the Company or any Subsidiary to continue the
Participant’s employment or other service for any particular period or on any
particular basis of compensation.

 

9.                                       Burden and Benefit.  The terms and
provisions of this Agreement shall be binding upon, and shall inure to the
benefit of, the Participant and his or her executors or administrators, heirs,
and personal and legal representatives.

 

10.                                 Execution.  This Option is not enforceable
until this Agreement has been signed by the Participant and the Company.  By
executing this Agreement, the Participant shall be deemed to have accepted and
consented to any action taken or to be taken under the Plan by the Committee,
the Board of Directors or their delegates.

 

11.                                 Governing Law.  This Agreement shall be
construed and enforced in accordance with the laws of the State of Ohio, without
regard to the conflict of laws principles thereof.

 

12.                                 Modifications.  Except for alterations and
amendments permitted under the Plan without the consent of the Participant, no
change or modification of this Agreement shall be valid unless it is in writing
and signed by the parties hereto.

 

13.                                 Entire Agreement.  This Agreement and the
Employment Agreement, together with the Plan, set forth all of the promises,
agreements, conditions, understandings, warranties and representations between
the parties hereto with respect to the Option, and there are no promises,
agreements, conditions, understandings, warranties or representations, oral or
written, express or implied, between them with respect to the Option other than
as set forth herein or therein.  The terms and conditions of the Plan, a copy of
which has been furnished to the Participant, are incorporated by reference
herein, and to the extent that any conflict may exist between any term or
provision of this Agreement and any term or provision of the Plan, the term or
provision of the Plan shall control.

 

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Notwithstanding the foregoing, Section 4 of this Agreement shall govern any
conflict related to vesting.

 

14.                                 Additional Definitions.  Any capitalized
term to the extent not defined below or elsewhere in this Agreement shall have
the same meaning as set forth in the Plan.

 

a.                                       “Immediate Family” means the
Participant’s spouse, parents, parents-in-law, children, stepchildren, adoptive
relationships, sisters, brothers and grandchildren (and, for this purpose, shall
also include the Participant).

 

15.                                 Construction.  The use of the singular
herein shall be deemed to include the plural and vice versa, wherever
appropriate.

 

16.                                 Notices.  Any and all notices required
herein shall be addressed: (i) if to the Company, to the principal executive
offices of the Company; and (ii) if to the Participant, to his or her address as
reflected in the records of the Company.

 

17.                                 Invalid or Unenforceable Provisions.  The
invalidity or unenforceability of any particular provision of this Agreement
shall not affect the other provisions hereof, and this Agreement shall be
construed in all respects as if the invalid or unenforceable provisions were
omitted.

 

IN WITNESS WHEREOF, the Company and the Participant have executed this Agreement
as of the date first above written.

 

 

 

DPL INC.

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

James V. Mahoney

 

 

Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

 

Robert D. Biggs

 

 

Participant

 

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