Exhibit 10(w)

 

DPL INC.

PARTICIPATION AGREEMENT AND WAIVER

 

This PARTICIPATION AGREEMENT AND WAIVER (“Agreement”) is entered into this
6th day of March 2006 (the “Effective Date”) among DPL Inc., an Ohio corporation
(“DPL”), The Dayton Power and Light Company, an Ohio corporation (“DP&L”), and
Arthur G. Meyer (“Executive”).

 

WHEREAS, DPL has implemented a new executive compensation program (the
“Program”), generally effective as of January 1, 2006;

 

WHEREAS, the Program provides benefits pursuant to the following plans that have
been approved by the Compensation Committee of the Board of Directors of DPL
(the “Committee”) and adopted by the Board of Directors of DPL (the “Board”):
the DPL Inc. Severance Pay and Change of Control Plan, the DPL Inc. Supplemental
Executive Defined Contribution Retirement Plan, (“EPIP”), the DPL Inc. 2006
Equity and Performance Incentive Plan, and the DPL Inc. Executive Incentive
Compensation Plan (collectively, the “Plans”);

 

WHEREAS, Executive’s participation in the Plans requires execution of this
Agreement in order to be eligible to receive benefits under such Program; and

 

WHEREAS, Executive has entered into Letter Agreements with DPL and DP&L
(collectively, the “Company”), dated November 26, 1997 and December 15, 2000,
respectively (the “Prior Agreements”);

 

NOW THEREFORE, in consideration of the promises and agreements contained herein
and other good and valuable consideration, the sufficiency and receipt of which
are hereby acknowledged, and intending to be legally bound, Executive agrees as
follows:

 

1.             Effective Date.  This Agreement is effective on the date hereof
and will continue in effect as provided herein.

 

2.             Participation in the Plans.  DPL confirms that Executive (a) has
been designated by the Committee and the Board to participate in each of the
Plans pursuant to the terms thereof, contingent on his execution of this
Agreement and, with respect to the EPIP, its approval by the shareholders of the
Company at their annual meeting on April 26, 2006, and (b) is eligible to
receive additional benefits as such are provided to other similarly situated
employees of the Company from time to time.

 

1

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3.             Termination of Prior Agreements.  Executive, for himself and his
dependents, successors, assigns, heirs, executors and administrators (and his
and their legal representatives of every kind), and the Company hereby agree
that, upon execution of this Agreement, the Prior Agreements shall terminate and
have no further force and effect.

 

4.             Remaining Rights.  Notwithstanding the terms of Section 3 of this
Agreement, Executive and the Company hereby agree that nothing in this Agreement
negates or diminishes Executive’s rights under any agreement other than the
Prior Agreements, including the rights (a) to receive medical benefits as
described in the letter dated October 28, 1998 from Allen M. Hill to Executive,
a copy of which is attached hereto as Exhibit A; (b) to receive supplemental
executive retirement benefits as described in a letter dated April 20, 1999, a
copy of which is attached hereto as Exhibit B, under the DP&L Supplemental
Executive Retirement Plan, as amended on December 7, 2004; (c) with respect to
any stock incentive units granted under DP&L’s Management Stock Incentive Plan,
as described in and subject to the terms and conditions contained in the Letter
Agreement between the Company and Executive, dated October 3, 1996, to which
Executive agreed and accepted October 14, 1996, a copy of which is attached
hereto as Exhibit C, and as further described in the Letter Agreement between
the Company and Executive, dated April 27, 2001, a copy of which is attached
hereto as Exhibit D; and (d) to purchase from the Company, to the extent not yet
purchased, up to a total of 50,000 Common Shares of the Company at an exercise
price of $29 5/8 per share pursuant to the terms of Executive’s Management Stock
Option Agreement, dated January 1, 2001, a copy of which is attached hereto as
Exhibit E.

 

5.             Perquisite Allowance.  By executing this Agreement, Executive
shall be entitled to receive a perquisite allowance in the amount of $20,000 per
year (the “Perquisite Allowance”), for each year that (a) Executive remains
designated by the Committee as eligible to receive the Perquisite Allowance and
(b) DPL continues to make the Perquisite Allowance available to executive-level
employees of the Company.  Executive has been designated by the Committee as
eligible to receive the Perquisite Allowance for 2006.  The Perquisite Allowance
for 2006 shall be paid as soon as practicable after the Effective Date.  The
Perquisite Allowance for years after 2006 shall be paid to Executive as soon as
practicable after the Committee designates Executive as eligible to receive the
Perquisite Allowance for that year.  The Perquisite Allowance will not be deemed
“compensation,” as that term is defined under any of the Plans, nor under any
other plan, practice, program or policy of the Company or any of its affiliates,
as in effect from time to time.

 

6.             Non-Solicitation.  As a condition to his eligibility to
participate in the Program, Executive hereby agrees that during his employment
and for a period of two years following his termination of employment with the
Company, Executive will not (a) solicit for employment with himself or any firm
or entity with which he is associated, any employee of DPL, its subsidiaries or
affiliates, or otherwise disrupt, impair, damage or

 

2

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interfere with DPL’s, its subsidiaries’ or affiliates’ relationships with their
employees or (b) solicit for Executive’s own behalf or on behalf of any other
person(s), any retail customer of DPL, its subsidiaries or affiliates, that has
purchased products or services from the DPL, its subsidiaries or affiliates, at
any time (i) with respect to solicitation during employment, during the
Executive’s employment or (ii) with respect to solicitation after termination of
employment, in the twelve months preceding the date on which Executive’s
employment with DPL, its subsidiaries or affiliates is terminated or that DPL,
its subsidiaries or affiliates are actively soliciting or have known plans to
solicit, for the purpose of marketing or distributing any product, pricing or
service competitive with any product, pricing or service then offered by DPL,
its subsidiaries or affiliates or which DPL, its subsidiaries or affiliates have
known plans to offer.

 

7.             No Inducement.  Executive agrees and acknowledges that no
representations, promises or inducements have been made by the Company to induce
Executive to enter into this Agreement other than as set forth herein.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first written above.

 

 

DPL INC.

 

 

 

 

 

By:

/s/ James V. Mahoney

 

 

Name: James V. Mahoney

 

 

Title: President and CEO

 

 

 

 

 

 

 

THE DAYTON POWER AND LIGHT

 

COMPANY

 

 

 

 

 

 

 

By:

/s/ James V. Mahoney

 

 

Name: James V. Mahoney

 

 

Title: President and CEO

 

 

 

 

 

 

 

/s/ Arthur G. Meyer

 

Arthur G. Meyer

 

3

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Exhibit A

 

Meyer Medical Benefits

 

4

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Exhibit B

 

Meyer SERP Letter Agreement

 

5

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Exhibit C

 

Meyer SIU Letter Agreement, dated October 3, 1996

 

6

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Exhibit D

 

Meyer SIU Letter Agreement, dated April 27, 2001

 

7

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Exhibit E

 

Meyer Management Stock Option Agreement

 

8

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October 28, 1998

 

Mr. Arthur G. Meyer

MacGregor Park

 

Dear Art,

 

It is my pleasure to tell you that effective January 1, 1999, you are included
in DPL’s executive health care plan.  As well as providing current full medical
benefits, this program also ensures that you will have complete medical benefits
during your lifetime.

 

The enclosed packet provides all the necessary information.  If you have any
questions, please call Jeanne Holihan.

 

I appreciate your continued contributions to our Company.

 

Best regards,

 

 

Allen M. Hill

President and

Chief Executive Officer

 

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[g357601ki05i001.jpg]

 

WorMug For You Today And Tomorrow

 

Allen M. Hill

 

President and

Chief Executive Officer

(937)259-7205

April 20, 1999

 

Art Meyer

MacGregor Park

 

Dear Art:

 

It gives me great pleasure to let you know that effective today, you will be
part of the Company’s Supplemental Executive Retirement Program (SERP). Your
benefit will include all years of service with the Company.

 

As you know, the SERP program includes all forms of compensation, SIU’s, base
pay and incentive pay. Steve Koziar will be sending you a copy of the plan and
any needed signature documents.

 

Again, congratulations. We look forward to your successes.

 

 

Sincerely,

 

[g357601ki05i002.jpg]

 

 

cc: Steve Koziar

 

confidential

The Dayton Power and Light Company · P.O. Box 8815, Dayton, Ohio 45401

Feb10. 2006 10:02 EST

 

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[g357601ki07i001.jpg]

 

STZPHEN F. KOZ1AR, JR.

Group Vice President

(513) 259.7214

 

October 3, 1996

 

Mr. Arthur Meyer

3325 Ridgeway Rd.

Dayton, OH 45429

 

Dear Art:

 

In this time of increasing change in the utility industry, we expect to continue
to train, educate and develop you as a valued and key employee so that we can
remain at the forefront of our competition. Your continued efforts on our behalf
are very important to us. On behalf of DPL Inc. and its affiliates (the
“Companies”), I would like to confirm our mutual understandings relating to your
employment.

 

As a key employee, you are eligible to be considered to receive Stock Incentive
Units under DPL’s Management Stock Incentive Plan. Among other objectives, these
awards are intended to give you a long term incentive to remain with and work
for DPL’s benefit. In turn, we would like for you to give us assurance that you
will not act contrary to DPL’s interests in the future. Accordingly, in
consideration of your participation in the Plan, we would like you to agree to
the following:

 

·        During the term of your employment with the Companies and, if you
voluntarily terminate your employment or if your employment is terminated “for
cause,” for a period of two years after such termination, you will not, without
our prior written consent, engage, participate or be interested, directly or
indirectly, in any business: (i) which is engaged in Ohio, Indiana, Kentucky,
Michigan and/or Pennsylvania in providing (as a public utility or otherwise) gas
and/or electric power or services on a retail and/or wholesale basis or in
providing energy marketing, aggregation and/or procurement services or (ii)
which is engaged in any other business being conducted or proposed to be
conducted by any of the Companies. The term “for cause” means the termination of
your employment as a result of fraud, theft, dishonesty, deliberate misconduct
or breach of duty, gross neglect of the duties reasonably assigned to you, the
commission of a felony, your breach of this agreement or unsatisfactory
performance of your duties because of alcoholism, intoxication or substance
abuse.

 

DPL Inc. · P.O.8815 · Dayton, Ohio 45401

 

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·        At all times, you (i) will keep all confidential, nonpublic and/or
proprietary information (including, for example, trade secrets, financial
information, customer information and business and strategic plans) of the
Companies (regardless of when you became aware of such information) in strict
confidence and (ii) will not, directly or indirectly, use or disclose to any
person in any manner any of such information, except to the extent directly
related to and required by your performance of the duties assigned to you by the
Companies. You will take all appropriate steps to safeguard such information and
to protect it against unauthorized disclosure, misuse, loss or theft. Upon
termination of your employment, you will promptly return to the Companies,
without retaining any copies, all written or computer readable material
containing any of such information, as well as all other property and records of
the Companies, in your possession or control.

 

·        If you breach either of the above, all unvested Stock Incentive Units
awarded to you under the MSIP will be immediately forfeited.

 

You acknowledge that this agreement is not intended, and should not be
construed, to grant you any right to continued employment or to interfere in any
manner with either your right or the right of the Companies to terminate your
employment at any time, with or without cause.

 

If you agree with the above, I would appreciate if you would sign the enclosed
copy of this letter and return the same to us.

 

 

 

Very truly yours,

 

 

 

 

 

DPL Inc.

 

 

 

 

 

 

 

 

By:

/s/ Stephen F. Koziar, Jr.

 

 

 

Stephen F. Koziar, Jr.

 

 

 

Group Vice President

 

 

 

ACCEPTED AND AGREED:

 

 

 

 

 

[ILLEGIBLE]

 

 

Oct 14, 1996

 

 

Date

 

 

 

 

 

 

 

 

Enclosure

 

 

 

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[g357601ki09i001.jpg]

 

Allen M. Hill

 

President and

Chief Executive Officer

(937) 259-7205

 

April 27, 2001

 

Arthur G. Meyer

DPL Inc.

 

Dear Art:

 

Congratulations! The Management SIU program which you participated in ended
December 31, 2000. Your total awards, with accrued dividends, is 27,676 SIU’s.

 

In accordance with the program, SIU’s which have vested will be paid, in cash,
in the year in which they vest. Payments will occur on July 15 of each payout
year and will be based on the average of the last closing price of the previous
three months. Attached is your vesting schedule indicating the timing and
amounts of your vested SIU’s.

 

All program requirements and criteria, including your continuance as an
employee, remain effective.

 

Again, congratulations!

 

 

Sincerely,

 

[g357601ki09i002.jpg]

 

DPL Inc. · P.O. Box 8815 · Dayton, Ohio 45401

 

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THE DAYTON POWER & LIGHT COMPANY
Management SIU Program
Vesting Schedule

 

Meyer, Arthur G.

 

Award

 

Vested Awards

 

 

 

Year

 

SIU

 

2001

 

2002

 

2003

 

2004

 

2005

 

2006

 

2007

 

2008

 

2009

 

2010

 

Total

 

1995

 

2,135

 

426

 

426

 

426

 

426

 

431

 

 

 

 

 

 

 

 

 

 

 

2,135

 

1996

 

2,400

 

 

 

480

 

480

 

480

 

480

 

480

 

 

 

 

 

 

 

 

 

2,400

 

1997

 

5,250

 

 

 

 

 

1,050

 

1,050

 

1,050

 

1,050

 

1,050

 

 

 

 

 

 

 

5,250

 

1998

 

5,000

 

 

 

 

 

 

 

1,000

 

1,000

 

1,000

 

1,000

 

1,000

 

 

 

 

 

5,000

 

1999

 

5,000

 

 

 

 

 

 

 

 

 

1,000

 

1,000

 

1,000

 

1,000

 

1,000

 

 

 

5,000

 

2000

 

5,250

 

 

 

 

 

 

 

 

 

 

 

1,050

 

1,050

 

1,050

 

1,050

 

1,050

 

5,250

 

Dividends

 

2,641

 

45

 

96

 

207

 

312

 

418

 

484

 

432

 

321

 

216

 

110

 

2,641

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

27,675

 

471

 

1,002

 

2,163

 

3,268

 

4,379

 

5,064

 

4,532

 

3,371

 

2,266

 

1,160

 

27,676

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

13,934.00

 

$

26,363.00

 

$

33,260.00

 

$

64,401.00

 

$

114,133.00

 

$

0.00

 

$

0.00

 

$

0.00

 

$

0.00

 

$

0.00

 

$

252,091.00

 

 

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DPL INC.

STOCK OPTION PLAN

 

Management Stock Option Agreement

 

This Agreement is made as of January 1, 2001 (the “Grant Date”), by and between
DPL Inc., an Ohio corporation (the “Company”) and Arthur Meyer (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 50,000 Common Shares of the Company at $29 5/8 per share (the “Exercise
Price”).  The term of such Option shall be ten years, commencing on the Grant
Date (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 accordance with
the following schedule:

 

Cumulative Percent

 

 

of Option

 

Vested as of December 31

20

%

2001

40

%

2002

60

%

2003

80

%

2004

100

%

2005

 

b.                                     Exercise. The vested portion of the
Option shall become exercisable on January 1, 2006. 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,

 

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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.

 

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.

 

a.                                      If the Participant’s employment or other
service terminates for Cause, the Option, whether or not vested, shall be
forfeited.

 

b.                                     If the Participant’s employment or other
service terminates for any reason other than for Cause, the Participant shall be
entitled to the then vested portion of the Option and the unvested portion shall
be forfeited.

 

c.                                      In no event may the Option be exercised
beyond its Term.

 

4.                                      Change of Control. Notwithstanding the
provisions of Sections 2(a) and 2(b) hereof, in the event of a Change of
Control, the Option shall immediately vest and become exercisable in its
entirety, provided that the Participant’s employment or other service has not
terminated prior to the date of such Change of Control.

 

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

 

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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 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.

 

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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, together
with the Plan, sets 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.

 

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.                                      “Cause” means (i) the commission of a
felony, (ii) embezzlement, (iii) the illegal use of drugs or (iv) if no Change
of Control has occurred other than the entering into of an agreement referred to
in items (ii) or (iii) of the definition of Change of Control, the failure by
the Participant to substantially perform his duties with the Company or any
Subsidiary (other than any such failure resulting from his Disability) as
determined by the Committee.

 

b.                                     “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 any gender herein
shall be deemed to include the other gender and the use of the singular herein
shall be deemed to include the plural and vice versa, wherever appropriate.

 

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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:

 

 

 

President & CEO

 

 

 

 

 

Arthur Meyer

 

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