Exhibit 10(f)

 

THE DAYTON POWER AND LIGHT COMPANY

 

SUPPLMENTAL EXECUTIVE RETIREMENT PLAN

 

(As Amended Through February 1, 2000)

 

Section 1.              Establishment of the Plan

 

1.1          Establishment of the Plan.  The Dayton Power and Light Company
established, effective as of January 1, 1977, a supplemental retirement plan for
Eligible Executives of the Company which plan shall be known as the Supplemental
Executive Retirement Plan (the “Plan”).

 

1.2          Description of the Plan.  This Plan has been established in order
to provide supplemental retirement benefits (and as such the Plan is exempt from
the participation, vesting, funding and fiduciary requirements of Title I of the
Employee Retirement Income Security Act of 1974, as amended), and to prevent
frustration of the purposes of the Plan in the event of a Change of Control as
defined herein.

 

1.3          Purpose of the Plan.  In addition to the description of the Plan as
set forth in subsection 1.2 above, the primary objectives of the Company in
establishing this Plan are as follows:

 

a)             To enhance the ability of the Company to recruit executives who
could not earn adequate benefits under the Qualified Plan because of short
service potential.

 

b)            To enhance the ability to retain and motivate Eligible Executives
in similar situations and eliminate individual deferred compensation
arrangements for the purpose of providing competitive retirement benefits.

 

c)             To permit earlier than normal retirement of Eligible Executives
when and if desirable. The provisions of this Plan are applicable to Eligible
Executives of the Company who retire or terminate employment on or after
January 1, 1977 and are approved by the Committee. Any person who retired from
or terminated employment with the Company prior to January 1, 1977 shall not be
eligible for any benefits under this Plan.

 

Section 2.              Definitions

 

2.1          Definition.  Whenever used in the Plan the following terms shall
have the respective meanings set forth below:

 

a)             “Board of Directors” means the Board of Directors of DPL Inc. in
place from time to time prior to a Change of Control.

 

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b)            “CEO” means the Chief Executive Officer of DPL, duly installed,
from time to time, prior to a Change of Control. However, “Committee” will be
substituted for “CEO” in discussing the CEO’s rights and benefits in the Plan.

 

c)             “Change of Control” means any change in control of DPL, or its
principal subsidiary, DP&L, of a nature that would be required to be reported in
response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”) as determined
by the Board of Directors in its sole discretion; provided that, without
limitation, such a Change of Control shall be deemed to have occurred if (i) any
“person” (as such term is defined in Sections 13(d) and 14(d)(2) of the Exchange
Act; hereafter, a “Person”) other than DPL or DP&L or an entity then directly or
indirectly controlling, controlled by or under common control with DPL or DP&L
is on the date hereof or becomes or commences a tender offer to become the
beneficial owner, directly or indirectly, of securities of DPL or DP&L
representing (A) 15% or more of the combined voting power of the then
outstanding securities of DPL or DP&L if the acquisition of such beneficial
ownership or such tender offer is not approved by the Board of Directors prior
to the acquisition or the commencement of such tender offer or (B) 50% or more
of such combined voting power in all other cases; (ii) DPL or DP&L enters into
an agreement to merge or consolidate itself, or an agreement to consummate a
“combination” or “majority share acquisition” in which it is the “acquiring
corporation” (as such terms are defined in Ohio Rev. Code 1701.01 as in effect
on December 31, 1990) and in which shareholders of DPL or DP&L, as the case may
be, immediately prior to entering into such agreement, will beneficially own
immediately after the effective time of the merger, consolidation, combination
or majority share acquisition, securities of DPL or DP&L or any surviving or new
corporation, as the case may be, having less than 50% of the “voting power” of
DPL or DP&L or any surviving or new corporation, as the case may be, including
“voting power” exercisable on a contingent or deferred basis as well as
immediately exercisable “voting power”, excluding any merger of DPL into DP&L or
of DP&L into DPL; (iii) DPL or DP&L enters into an agreement to sell, lease,
exchange or otherwise transfer or dispose of all or substantially all of its
assets to any Person other than to a wholly-owned subsidiary or, in the case of
DP&L, to DPL; but not including (A) a mortgage or pledge of assets granted in
connection with a financing or (B) a spin-off or sale of assets if DPL continues
in existence and its common shares are listed on a national securities exchange,
quoted on the automated quotation system of a national securities association or
traded in the over-the-counter market; (iv) any transaction referred to in
(ii) or (iii) above is consummated; or (v) those persons serving as directors of
DPL or DP&L on February 1, 2000 (the “Original Directors”) and/or their
Successors do not constitute a majority of the whole Board of Directors of DPL
or DP&L, as the case may be (the term “Successors” shall mean those directors
whose election or nomination for election by shareholders has been approved by
the vote of at least two-thirds of the Original Directors and previously
qualified Successors serving as directors of DPL or DP&L, as the case may be, at
the time of such election or nomination for election).

 

d)            “Committee” means the Compensation and Management Review Committee
of the Board of Directors of DPL Inc. or such other committee(s) as may be
designated by the Board of Directors of DPL Inc. from time to time to administer
the Plan.

 

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e)             “Company” means The Dayton Power and Light Company (“DP&L”), DPL
Inc. (also referred to as “DPL”), and any entity which, prior to a Change of
Control is controlling, controlled by or under common control with DP&L or DPL
Inc.

 

f)             “Effective Date” means January 1, 1977.

 

g)            “Eligible Executive” means each employee who is a participant in
“Retirement Income Plan Two of The Dayton Power and Light Company,” as in effect
from time to time, including any successor plan thereto (the “Qualified Plan”)
(i) who has been approved for participation in the Plan from time to time by the
CEO and the Committee or (ii) who participates in the Company’s Key Employees
Deferred Compensation Plan but who has been selected by the CEO or the Committee
to be only entitled to the benefit provided in Section 4.5 hereof. As
memorialized in separate letter agreements, the participation by certain
employees in the Plan was terminated effective as of January 1, 2000 and the
present value, as determined by the Committee, of each such employee’s accrued
benefits under the Plan was credited to the Standard Deferral Account of such
employee under the Company’s Key Employees Deferred Compensation Plan. These
employees are no longer “Eligible Participants.”

 

h)            “Final Average Compensation” means the monthly average of any
Eligible Executive’s total earnings paid for services performed for the Company,
without the restrictions or limitations imposed by Sections 415, 401(a)(17), or
any other provision of the Internal Revenue Code of 1986, as amended, including,
without limitation, any extraordinary forms of earnings such as bonuses,
deferred and incentive compensation in the year earned (provided, however, that
in the case of a multiple year incentive compensation program the earnings
attributable to the incentive period, once determined, shall be allocated
equally to each year in the incentive period) and employee deferrals under the
Company’s “Savings Plan” or contributions to the Company’s other benefit plans
in the year the deferral or contribution is made, as follows:

 

1)             For a normal retirement under subsection 4.1, for the three
calendar years, whether or not consecutive, out of the last ten completed
consecutive calendar years during which the Eligible Executive received
compensation (or fewer if the Eligible Executive has not completed ten calendar
years) prior to the year in which the first of the following occurs (i) his
Normal Retirement Date (under the Qualified Plan); or (ii) his cessation of
employment with the Company; or (iii) his 65th birthday; which yield the highest
average; or

 

2)             For an early retirement under subsection 4.2 hereof, for the
three calendar years, whether or not consecutive, out of the last ten
consecutive completed calendar years during which the Eligible Executive
received compensation (or fewer if the Eligible Executive has not completed ten
calendar years) prior to the year in which the first of the following occurs
(i) his Early Retirement Date (under the Qualified Plan) or (ii) his cessation
of employment with the Company; which yield the highest average.

 

i)              “Primary Social Security Benefit” means the monthly amount as
determined by the Committee (in consultation with an actuary selected by the
Committee) which an Eligible Executive would receive at the earliest possible
retirement age upon timely and proper

 

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application to the Social Security Administration and on the assumption that
such executive would not engage in disqualifying employment under the Federal
Social Security Act as in effect on the date of determination. Any
nonlegislative change in a method, factor or index (such as a Consumer Price
Index) used to compute Social Security benefits occurring during the year of
determination will not be taken into account. If a Participant’s Primary Social
Security Benefit must be estimated, it will be based on the assumptions that
(a) the Social Security Act will not be amended after the date of determination;
and (b) the Eligible Executive’s compensation is his Final Average Compensation.

 

j)              “Other Benefit” means, for each Eligible Executive, the
estimated monthly benefit that can be provided as a life annuity beginning at
the date his benefit payments under this Plan commence, based upon the amount of
monthly retirement benefits under the Qualified Plan, or under any other
qualified pension or retirement plan whether or not sponsored by the Company
(“Non-Company Plan”), and inclusive of the estimated monthly benefit that would
have been provided under any Non-Company Plan had the Eligible Executive not
received any prior lump sum payments from such plan, which is based on service
for which the Eligible Executive receives Service and Benefit Service credit
hereunder, but excluding any Non-Company Plan savings plan similar to the
Savings Plan, or the benefit from any Non-Company Plan to the extent
attributable to employee contributions. The Committee shall determine such Other
Benefit in consultation with an actuary selected by the Committee, using such
accepted actuarial tables and reasonable interest assumptions and actuarial
reduction factors, if appropriate, as the Committee shall determine. The
adjustment for Other Benefit as described in subsections 4.1(b)(2) and
4.3(b)(2) hereof, shall be made not only in the case of one actually receiving
an Other Benefit, but also in the case of one who would be entitled to receive
an Other Benefit but is not actually receiving it in that he does not make
application therefor.

 

k)             “Service” and “Benefit Service” means an Eligible Executive’s
period of service with the Company, as determined by the Committee, using the
rules set forth in the Qualified Plan as in effect when the Eligible Executive’s
service terminated, it is specifically intended under this Plan to include as
Service and Benefit Service any period of employment with the Company prior to
the Eligible Executive’s coverage under this Plan and also such period of
employment as an employee of the Company prior to becoming an Eligible
Executive. The Committee may, in its sole discretion, approve the inclusion as
Service and Benefit Service of any period of employment with another company
prior to an Eligible Executive’s period of employment by the Company, using the
same rules to credit such service as are used for the crediting of service for
employment with the Company.

 

Section 3.              Eligibility and Participation

 

3.1          Eligibility.  Any employee of the Company who is an Eligible
Executive (as defined herein) shall be eligible to participate in the Plan.

 

3.2          Participation.  An Eligible Executive who is eligible for this Plan
under subsection 3.1 above shall remain covered hereunder until the first to
occur of (a) or (b) below:

 

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a)             the date the Committee shall determine that his participation
shall cease, provided that such determination is made prior to the Eligible
Executive’s retirement or

 

b)            the later of (i) or (ii) below:

 

(i)            the date upon which his Service terminates for any reason.

 

(ii)           the date upon which he is no longer entitled to receive any
benefits hereunder.

 

Provided, however, that under (b) above if an Eligible Executive’s service
terminates on or after he becomes eligible to receive (then or thereafter) a
benefit under this Plan he shall be entitled to such benefit as provided herein,
and if an Eligible Executive’s Service terminates before he becomes eligible to
receive (then or thereafter) a benefit under this Plan, he thereupon shall cease
participation in the Plan unless and until he thereafter becomes eligible to
participate again in accordance with subsections 2.1(g) and 3.1 hereof.

 

Section 4.              Benefits

 

4.1          Normal Retirement Benefits

 

a)             Eligibility.  An Eligible Executive shall be eligible to receive
a normal retirement benefit under the Plan, in accordance with and subject to
the provisions of the Plan, upon termination of his Service which occurs on or
after his 62nd birthday.

 

b)            Amount.  A retired Eligible Executive who is eligible to receive a
normal retirement benefit pursuant to (a) above, shall be entitled to a monthly
normal retirement benefit equal to the amount determined in 1) below less the
amount determined in 2) and 3) below:

 

1)                      An amount equal to (i) multiplied by (ii) below:

 

(i)            The sum of (A) and (B) below minus the amount in (C) below:

 

A)                                  87% of his first $800 of Final Average
Compensation;

 

B)                                    57% of his Final Average Compensation in
excess of $800;

 

C)                                    the amount of his Primary Social Security
Benefit.

 

(ii)           a fraction, the numerator of which is his total months of Benefit
Service (not to exceed 240), and the denominator of which is 240.

 

2)                      His Other Benefit.

 

3)                      The value of any benefit previously received under this
Plan.

 

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c)             Commencement and Duration.  Except as provided in subsection 4.7,
monthly normal retirement benefit payments for an Eligible Executive covered by
subsection 4.1(a) above shall begin as of the first day of the calendar month
next following the date such Eligible Executive’s Service terminates, and shall
be paid as a single life annuity for the Eligible Executive.

 

4.2          Early Retirement Benefits.

 

a)             Eligibility.  An Eligible Executive shall be eligible to receive
an early retirement benefit under the Plan, in accordance with and subject to
the provisions of the Plan, upon termination of his Service prior to his
62nd birthday but after he has completed at least 10 years of Service.

 

b)            Amount.  A retired Eligible Executive who is eligible to receive
an early retirement pursuant to subsection 4.2(a) above shall be entitled to
receive a monthly early retirement benefit computed in the same manner as a
normal retirement benefit under subsection 4.1(b) hereof, based upon his Final
Average Compensation as determined under subsection 2.1(h)(2) hereof, and his
Benefit Service as of the date his Service terminates, reduced by 1/4 of 1% for
each calendar month by which his first benefit payment precedes the first of the
month next following his 62nd birthday; provided, however, that such reduction
shall in no event exceed twenty-one percent (21 %) in the aggregate.

 

c)             Commencement and Duration.  Except as provided in subsection 4.7,
monthly early retirement benefit payments for an Eligible Executive covered by
subsection 4.2(a) above shall begin as of the first day of the calendar month
next following the date such Eligible Executive’s Service terminates; provided
however, that payments shall not commence earlier than the calendar month
coincident with or next succeeding the Eligible Executive’s 55th birthday. By
election filed by the Eligible Executive prior to the time of his termination,
benefit payments hereunder may be delayed until the first of any calendar month
before the Eligible Executive’s 65th birthday. In all cases, payments hereunder
shall be paid as a single life annuity for the Eligible Executive.

 

4.3          [Intentionally left blank.]

 

4.4          Surviving Spouse/Estate Benefit

 

a)             Pre-Retirement Spousal Benefit.  If an Eligible Executive dies
before commencement of monthly retirement benefit payments under this Plan, and
leaves a surviving spouse (“Spouse”), then such Eligible Executive’s Spouse
shall be entitled to receive a monthly benefit under the Plan. The monthly
benefit shall commence on a date beginning within thirty (30) days after the
death of the Eligible Executive, and shall be equal to the monthly benefit
amount to which the Eligible Executive would have been entitled under subsection
4.1, 4.2 or 4.5 hereunder had he terminated employment on the date of his death
and began to collect payments immediately, with an appropriate discount to
present value in the event that the Eligible Executive had not yet reached his
55th birthday, which benefit shall continue for that number of months that is
equivalent to the Eligible Executive’s remaining actuarial life expectancy

 

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determined as of the date monthly benefits under the Plan began, as determined
by the Committee in consultation with an actuary selected by it.

 

b)            Post-Retirement Benefit.  If an Eligible Executive dies after the
commencement of monthly retirement benefit payments under this Plan, then such
Eligible Executive’s Spouse, or designated beneficiary if there is no such
Spouse, or estate if there is no designated beneficiary shall be entitled to
receive a monthly benefit under this Plan equal to the monthly benefit received
by the Eligible Executive, which benefit shall continue for that number of
months that is equivalent to the Eligible Executive’s remaining actuarial life
expectancy determined as of the date monthly benefits under the Plan began, as
determined by the Committee in consultation with an actuary selected by it.

 

4.5          Benefit for Persons Participating Only in The Dayton Power and
Light Company Key Employee Deferred Compensation Plan.  Notwithstanding any
other provision in this Plan to the contrary, an employee who participates in
The Dayton Power and Light Company Key Employee Deferred Compensation Plan and
who is not an Eligible Executive pursuant to Section 2.1(g)(i) hereof, will
receive a benefit under this Plan equal (and limited) to:

 

a)                                      The benefit he would have received under
the Qualified Plan if he had not deferred compensation under The Dayton Power
and Light Company Key Employee Deferred Compensation Plan; less

 

b)                                     The benefit actually paid under the
Qualified Plan; less

 

c)                                      The value of any benefit previously
received under this Plan.

 

The benefit under this section will be paid in the manner provided in
Section 4.1(c), 4.2(c), 4.4 or 4.6, as appropriate, depending on the
circumstances affecting the employee’s termination.

 

4.6          Lump Sum Amount.

 

a)             Request For Conversion of Benefit to Lump Sum Amount.  An
Eligible Executive may submit a written request to the Committee within sixty
(60) days prior to or after termination of Service requesting that all of the
Eligible Executive’s benefits payable pursuant to Section 4.1, 4.2, or 4.5 of
the Plan be converted into a Lump Sum Amount (as defined in subsection 4 and
that such Lump Sum Amount be paid either in a single lump sum payment or in
annual installments over a period of up to 20 years, together with earnings on
the unpaid balance determined in accordance with this subsection 4.6(a). The
lump sum payment, or the first installment payment, as the case may be, shall,
if approved as provided in subsection 4.6(b), be made, unless otherwise
determined by the Committee in its discretion, on or prior to the January 31
immediately after approval of the request (but, subject to subsections
4.6(e) and 4.7, no earlier than age 55), with subsequent annual installments, if
payments are to be made in annual installments, to be paid on or prior to each
January 31 thereafter until the “Unpaid Amount” has been paid in full.

 

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If an Eligible Executive’s benefits under the Plan have been converted into a
Lump Sum Amount in accordance with this Section 4.6 and such Eligible Executive
(an “Electing Executive”) has requested that such Lump Sum Amount be paid in
annual installments, then, for purposes of measuring the amounts which may be
distributed under the Plan, the “Unpaid Amount” of such Electing Executive shall
be deemed invested in such “Eligible Investment Options” as such Electing
Executive may designate from time to time as provided herein. For purposes of
the Plan, the term “Unpaid Amount” means, at any time with respect to any
Electing Executive, such Electing Executive’s Lump Sum Amount (together with any
dividends, interest, distributions or other amounts credited thereto pursuant to
this subsection 4.6(a)) less the aggregate amount of all installment payments
theretofore made to such Electing Executive and the term “Eligible Investment
Options” means those securities, mutual funds or other investment vehicles set
forth on Schedule I hereto, as such Schedule I may be modified from time to time
by the Committee upon at least 30 days’ prior notice to the Electing Executives.

 

Each Electing Executive shall have the option, ,by delivering to the Secretary
of Company a completed Investment Option Election Form in the form attached
hereto as Exhibit D (or such other form as the Committee may designate from time
to time) on or prior to each such date as the Committee may specify from time to
time for such purpose or, in the case of the first election, on or prior to the
conversion of such Electing Executive’s benefits under the Plan into a Lump Sum
Amount (each of the foregoing dates, an “Election Date”), to designate or
change, in a percentage equal to at least 10%, the portions of his Unpaid Amount
which shall be deemed invested in each Eligible Investment Option as of each
Election Date. Any such designation by an Electing Executive shall remain in
effect until changed in accordance with the preceding sentence. Any increase in
the percentage of an Electing Executive’s Unpaid Amount deemed invested in an
Eligible Investment Option effected on any Election Date shall be deemed to be a
purchase of such Eligible Investment Option and any decrease in the percentage
of an Electing Executive’s Unpaid Amount deemed invested in an Eligible
Investment Option effected on any Election Date shall be deemed to be a sale of
such Eligible Investment Option, and any such purchase or sale shall be deemed
to have occurred as of the last business day immediately prior to such Election
Date at the closing price of such Eligible Investment Option on such date. In
the absence of any such designation by an Electing Executive with respect to all
or any portion of his Unpaid Amount, such Unpaid Amount (or such portion) shall
be credited with interest on the first day of each month in an amount equal to
one-twelfth of the simple average yield of the annualized AA utility bond
averages as published monthly in Moody’s Bond Survey for the preceding quarter.
All dividends, interest, distributions and other amounts paid or distributed
from time to time with respect to any Eligible Investment Option in which all or
any portion of an Electing Executive’s Unpaid Amount is deemed invested shall be
credited to such Electing Executive’s Unpaid Amount and shall be deemed
reinvested in such Eligible Investment Option.

 

The Company shall not be required to purchase, hold or dispose of any Eligible
Investment Options designated by Electing Executives. To the extent that the
Company does, in its discretion, purchase or hold any of the Eligible Investment
Options designated by Electing Executives, the same shall remain the sole
property of the Company, subject to the claims of its general creditors, and no
Electing Executive shall have a property interest therein or claim thereto.

 

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For purposes of any distribution with respect to an Electing Executive’s Unpaid
Amount pursuant to this subsection 4.6(a), the amount of such Electing
Executive’s Unpaid Amount on any date shall be equal to the value (determined on
the basis of the closing prices on the last business day immediately preceding
such date) of all Eligible Investment Options in which such Electing Executive’s
Unpaid Amount is deemed to be invested on such date and, in the case of a
partial distribution of such Electing Executive’s Unpaid Amount, the amount of
such distribution shall proportionately reduce the amount which is deemed
invested in each Eligible Investment Option.

 

b)            Conditions to Conversion of Benefit to Lump Sum Amount.  The
Committee, in its sole discretion, may approve or deny an Eligible Executive’s
request made pursuant to subsection 4.6(a) for conversion of the Eligible
Executive’s benefit into a Lump Sum Amount, and payment thereof as a lump sum,
or as a series of installment payments based thereon, as described in subsection
4.6(a). In addition, the Committee shall, subject to subsections 4.6(d), (e) and
(f) hereof in all cases in which a lump sum payment or a series of installment
payments based thereon is approved, require that the Eligible Executive enter
into a noncompetition agreement with the Company in substantially the form
attached hereto as Exhibit A, with the Committee to determine, in its sole
discretion, the geographic location of such non-competition agreement. The term
of the non-competition agreement shall be for such period from the date of
termination as the Committee may, in its sole discretion, determine, if the Lump
Sum Amount is paid as a lump sum payment, or for a period equivalent to the
period over which installment payments are made if the Lump Sum Amount is paid
in installment payments.

 

c)             Computation of Lump Sum Amount.  The conversion of the Eligible
Executive’s benefit into a Lump Sum Amount as described in Section 4.6(a) or in
Section 4.8 shall be equal to the present value of the amount of monthly benefit
the Eligible Executive would be entitled to receive under Sections 4.1, 4.2, or
4.5, as the case may be, determined as of the date of distribution, converted
into a lump sum (such lump sum is referred to herein as the “Lump Sum Amount”).
The Committee shall determine such conversion using the interest and mortality
assumptions contained in Exhibit B hereto.

 

d)            Death of Executive.  Notwithstanding subsection 4.6(b), if an
Eligible Executive dies after requesting a lump sum payment or series of fixed
installment payments but prior to receiving approval of such payment from the
Committee, the lump sum payment or installment payments may be approved
notwithstanding the absence of a noncompetition agreement and determined under
subsection 4.6(c) based upon facts existing on the date the request was made. If
such approval is obtained, or if an Eligible Executive who is receiving the Lump
Sum Amount in installment payments dies prior to receipt of all installments
then all future payments hereunder shall be paid to the beneficiary or
beneficiaries designated by the Eligible Executive, or to the estate of the
Eligible Executive on failure to so designate a beneficiary.

 

e)             Change of Control.  Notwithstanding any provision of this Plan
(including subsection 4.6(b)), an Eligible Employee shall be entitled to a lump
sum payment (the “Lump Sum Payment”), on termination of his/her employment with
the Company under circumstances in which payments under paragraph 5.A. [or
successor provision] of the Eligible Executive severance letter agreement with
the Company would become due and payable to the Eligible

 

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Executive (or, if the Eligible Executive is not then a party to a severance
letter agreement, under circumstances in which payments under paragraph 5.A. [or
successor provision] of the most restrictive severance letter agreement between
the Company and any employee [in terms of triggering the Company’s obligation to
pay benefits to the employee] would become due and payable to the Eligible
Executive if he were a party thereto). The Lump Sum Payment shall equal the lump
sum payment computed in accordance with subsection 4.6(c) hereof. The Lump Sum
Payment shall be paid immediately upon termination.

 

Notwithstanding any other provision of the Plan, after a Change of Control, any
portion of a distribution to be made to an Electing Executive with respect to
the Unpaid amount of such Electing Executive may, at the request of such
Electing Executive at least 30 days prior to the scheduled date of such
distribution, be made, by the Trustees of the Master Trust(s) pursuant to which
benefits under the Plan are being funded, in the sole and absolute discretion of
such Trustees, in the form of any Eligible Investment Options actually held by
such Master Trust(s) for purposes of funding such distribution to such Electing
Executive under the Plan. For purposes of making any such distribution, any
Eligible Investment Option so distributed shall be valued at its closing price
on the last business day immediately preceding the date of such distribution and
such distribution shall be net of any applicable federal, state or local
withholding taxes unless the Electing Executive makes a cash payment,
concurrently with such distribution, to the Master Trust(s) making such
distribution for the purpose of paying such withholding taxes. Nothing contained
in this paragraph shall require the Company (or any of the Master Trusts) to
purchase, hold or dispose of any Eligible Investment Options designated by
Electing Executives. To the extent that any Master Trust holds any Eligible
Investment Options, the same shall remain the sole property of the Company,
subject to the claims of its general creditors, and no Electing Executive shall
have any property interest therein or claim thereto.

 

(f)            Surviving Spouse Lump Sum Benefit.  If an Eligible Executive dies
under circumstances in which subsection 4.4(a) hereof would apply, then the
Spouse may submit a written request to the Committee within one hundred twenty
(120) days after the Eligible Executive’s date of death requesting that the
benefits payable pursuant to Section 4.4 be paid in a single lump sum, computed
in accordance with the principles of subsection 4.6(c), to be made as soon as
reasonably possible after approval of the request. Such request may be approved
by the Committee, in its sole discretion, notwithstanding the absence of a
non-competition agreement.

 

(g)           Estate Lump Sum Benefit.  If an Eligible Executive dies under
circumstances in which subsection 4.4(a) would apply but for the fact that such
Eligible Executive does not have a surviving Spouse, then the Eligible
Executive’s designated beneficiary shall be entitled to an immediate lump-sum
payment equal to the amount which would have been received under subsection
4.6(f) had the Eligible Executive had a surviving Spouse who had requested and
been awarded the single lump-sum provided therein. If an Eligible Executive has
not designated a beneficiary, or if the designated beneficiary does not survive
the Eligible Executive, then such lump-sum amount will be paid to the Eligible
Executive’s estate.

 

4.7          Early Distribution.   Notwithstanding any other provision of the
Plan to the contrary, the Committee may, upon receiving a written request from
the Eligible Executive and determining that a distribution is in the best
interest of the Company and the Eligible Executive

 

10

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taking into account the financial condition of each, distribute an annuity
purchased pursuant to the Plan or make a lump sum distribution, crediting such
distribution to the Eligible Executive’s account.

 

4.8          Certain Lump Sum Distributions.  Notwithstanding any other
provision of the Plan, in the event that the Company is entitled to make a lump
sum distribution to an Eligible Executive pursuant to Section 4.H. of the
Company’s Key Employees Deferred Compensation Plan of the amounts then credited
to such Eligible Executive’s Standard Deferral Account under such plan (a
“Section 4.H. Distribution”), then, whether or not the Company makes such
Section 4.H. Distribution, the Company may, at its option, (i) convert the
benefits payable to such Eligible Executive pursuant to Section 4.1, 4.2 or 4.5
of the Plan into a Lump Sum Amount in accordance with Section 4.6(c) and
distribute such Lump Sum Amount to such Eligible Executive in a single lump sum
payment or (ii) if such Eligible Executive’s benefits under Section 4.1, 4.2 or
4.5 of the Plan have been converted into a Lump Sum Amount in accordance with
Section 4.6(a) prior thereto and such Lump Sum Amount is being paid in
installments in accordance with Section 4.6(a), distribute to such Eligible
Executive in a single lump sum payment the entire Unpaid Amount of such Eligible
Executive.

 

Section 5.              Administration

 

5.1          Administration.  The Company shall be responsible for the general
administration of the Plan and the carrying out of the provisions thereof, and
shall have all, rights and powers required in connection therewith, including
the right to establish rules for the administration of the Plan and the methods
to be used to calculate benefits under this Plan.

 

Section 6.              Financing

 

6.1          Financing of Benefits.  No Eligible Executive shall be required to
make any contribution under the Plan. Benefits shall be payable when due, by the
Company, from the general assets of the Company.

 

Section 7.              Master Trusts

 

7.1          Participation Accounts.  The Company has established, and may in
the future establish, one or more trusts (each such trust, as it may be amended
from time to time, is referred to herein as a “Master Trust”) for the purpose,
among others, of securing the performance by the Company of its obligation to
Eligible Executives to make the distributions under the Plan and has funded one
or more of the Master Trusts in an aggregate amount of cash as the Company has
determined to be equal to the value of benefits accrued under the Plan, and the
Master Trust(s) to which such cash has been transferred may purchase annuities
for the Eligible Executives’ accounts equal in value to the benefits accrued
under the Plan. Pursuant to one or more of the Master Trusts, each Eligible
Executive has been assigned a separate account as a mechanism for measuring the
potential benefits which may be distributed in the future. Subsequent transfers
of cash which the Company is required to make to the Master Trusts pursuant to
Section 7.2 or 8(c) hereof or otherwise shall be allocated among the Master
Trusts as the Committee may determine from time to time.

 

11

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7.2          Successive Transfers.  Within one hundred twenty (120) days after
the end of each calendar year, the Company shall transfer an aggregate amount of
cash as the Committee shall determine to be equal to the value of benefits
accrued by Eligible Executives under the Plan through such calendar year.

 

7.3          Title to Funds.  DP&L shall retain beneficial ownership of all cash
or shares transferred to the Master Trusts and such cash or shares will be
subject to the claims of DP&L’s creditors. No Eligible Executive or beneficiary
has or will have any property interest in the cash or shares held in the Master
Trusts or any other specific asset of the Company.

 

Section 8.              Change of Control.  In the event of any Change of
Control, as defined herein:

 

a)             Any and all authority and discretion which is exercisable by the
Committee, or the CEO, as heretofore or hereafter described in the Plan, shall
automatically be transferred to the Trustees of each Master Trust to the extent
that benefits under the Plan are being funded under such Master Trust.

 

b)            (Intentionally left blank.)

 

c)             Upon a Change of Control, the Company shall immediately transfer
to one or more of the Master Trusts an aggregate amount of cash which, when
combined with the other assets of the Master Trusts contributed or accruing
thereto under or by reason of Section 7 hereof, is equal to the value of
benefits accrued by Eligible Employees under the Plan through the date of Change
of Control, and including cash sufficient to make the lump sum payments
described in Section 4.6(e) hereof as if termination of employment occurred on
the date of such Change of Control.

 

Section 9.              General Provisions

 

9.1          Non-assignability.  Neither a Participant, nor his beneficiary, nor
any other individual shall have an right by way of anticipation or otherwise to
alienate, sell, transfer, assign, pledge, charge or otherwise dispose of any
benefits which may become payable under this Plan, prior to the time that
payment of any such benefit is made, and any attempted anticipation, alienation,
sale, transfer, assignment, pledge, charge, or other disposition shall be null
and void. Furthermore, none of the benefits payable under this Plan shall be
subject to the claim or legal process of the creditors of any Participant or of
the beneficiary, spouse or former spouse of any Participant or of any other
person or entity.

 

9.2          Incompetency.  Every person receiving or claiming benefits under
the Plan shall be conclusively presumed to be mentally competent and of age
until the Committee receives written notice, in a form and manner acceptable to
it, that such person is incompetent or a minor, and that a guardian,
conservator, statutory committee under the laws of the State of Ohio, or other
person generally vested with the care of his estate has been appointed. In the
event that the Committee finds that any person to whom a benefit is payable
under the Plan is unable to properly care for his affairs, or is a minor, then
any payment due (unless a prior claim therefor shall have been made by a duly
appointed legal representative) may be paid to the spouse, a

 

12

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child, a parent, or brother or sister, or to any person deemed by the Committee
to have incurred expenses for such person otherwise entitled to payment.

 

In the event a guardian or conservator or statutory committee of the estate of
any person receiving or claiming benefits under the Plan shall be appointed by a
court of competent jurisdiction, payment shall be made to such guardian or
conservator or statutory committee provided that proper proof of appointment is
furnished in a form and manner suitable to the Committee. Any payment made under
the provisions of this subsection 9.2 shall be a complete discharge of liability
therefor under the Plan.

 

9.3          Employment Rights.  The establishment of the Plan shall not be
construed as conferring any legal rights upon any Eligible Executive or any
person for a continuation  of employment, nor shall it interfere with the rights
of the Company to discharge any person and/or to treat him in the same manner as
a person not covered by this Plan and without regard to the effect which such
treatment might have upon him as a person covered by this Plan.

 

9.4          Notices.  Any notice required or permitted to be given hereunder to
an Eligible Executive or spouse will be properly given or delivered or mailed,
postage prepaid, to the Eligible Executive or beneficiary at the last post
office address as shown on the Company’s records. Any notice, election or any
request required or permitted hereunder, which is to be mailed to or requested
from the Secretary or the CEO of the Company, shall be delivered or mailed,
postage prepaid, as follows:

 

 

(i)            Prior to a Change of Control; to the

 

Secretary of DP&L at:

MacGregor Park

Woodman Drive

Dayton, Ohio 45432

Attention: Corporate Secretary

 

(ii)           After a Change of Control; to the Trustees of each Master Trust
pursuant to which benefits under the Plan are being funded, at the notice
address specified by such Trustees in the applicable trust agreement.

 

The parties may from time to time change their addresses for receipt of notices
by giving notice of such change to the other parties, but no such change shall
be deemed to be effective until notice thereof is actually received by the party
to whom it is directed.

 

9.5          Waiver of Notice.  Any notice required hereunder may be waived by
the person entitled thereto.

 

9.6          Action by Company.  Any action required or permitted to be taken
hereunder by the Company or its Board of Directors shall be taken by the Board
of Directors, or by any person or persons or committee authorized by the Board
of Directors.

 

13

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9.7          Notice of Address.  Any payment to an Eligible Executive, or in
case of his death to his beneficiary, at the last known post office address of
the distributee on file with the Company, shall constitute a complete
acquittance and discharge to the Company and Director or officer with respect
thereto unless the Company shall have received prior written notice of any
change in the condition or status of the distributee.  Neither the Company nor
any Director or officer shall have the duty or obligation to search for or
ascertain the whereabouts of any Eligible Executive or his spouse.

 

9.8          Records.  The records of the Company with respect to the Plan shall
be conclusive on all Eligible Executives, all beneficiaries, and all other
persons whomsoever.

 

9.9          Forfeiture of Benefits.  Notwithstanding the provisions of
Section 4, if he Company determines that an Eligible Executive, while in the
employ of the Company or while receiving (or eligible to receive) payment under
the Plan, has

 

a)             committed a felony,

 

b)            taken part in a fraud, or

 

c)             been terminated for cause,

 

the Eligible Executive, as of the date of such determination shall forfeit, at
the election of the Company and action of the Committee, all entitlement to
payments under this Plan. This subsection 9.9 shall apply, however, for a period
of three years following each Change of Control by substituting for b) and c)
above the following

 

b)            embezzled, or

 

c)             illegally used drugs

 

as the circumstance under which an Eligible Executive’s benefits under the Plan
may be forfeited.

 

9.10        No Individual Liability.  It is declared to be the express purpose
and intention of the Plan that no liability whatever shall attach to or be
incurred by the shareholders, officers, or Directors of the Company, or any
representatives appointed hereunder by the Company, under or by reason of any of
the terms or conditions of the Plan.

 

9.11        Illegality of Particular Provision.  If any particular provision of
this Plan shall be found to be illegal or unenforceable, such provision shall
not affect the other provisions thereof, but the Plan shall be construed in all
respects as if such invalid provision were omitted.

 

9.12        Gender and Number.  Except when indicated by the context, any
masculine terminology used herein shall also include the feminine, and the use
of any term herein in the singular may also include the plural.

 

14

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Section 10.            Interpretation and Amendment.  The Plan will be
administered by the Committee. The decision of the Committee with respect to the
administration of the Plan will be final and binding. The Committee reserves the
right prior to a Change of Control, to amend, modify or terminate the Plan;
provided, however that (i) no amendment, modification or termination of the Plan
shall adversely affect any right or benefit earned or accrued under the Plan by
any Eligible Executive prior to any such amendment, modification or termination
without the prior written consent of such Eligible Executive and (ii) following
a Change of Control the Committee’s discretion under this Section 10 will be
exercised as provided in Section 8(a) hereof; provided further that the Trustees
shall have no authority to terminate the Plan.

 

Section 11.            Applicable Laws.  The Plan shall be governed by and
construed according to the laws of the State of Ohio.

 

15

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EXHIBIT A

 

AGREEMENT NOT TO COMPETE

 

THIS AGREEMENT is made                                         , 2000 between
THE DAYTON POWER AND LIGHT COMPANY, an Ohio corporation (the “Company”) and
                                         (the “Executive”), under the following
circumstances:

 

A.            The Executive has been employed by the Company for a period of
approximately            years. During the course of his employment, the
Executive has held a number of executive positions within the Company, including
his present position as                                         , and has had
access to highly sensitive confidential information relating to the Company and
its business.

 

B.            The Executive is retiring from the Company’s employ effective the
date hereof.

 

C.            The Executive is a participant in the Company’s Supplemental
Executive Retirement Plan (the “Plan”).

 

D.            Pursuant to Section 4.6 of the Plan, the Executive has requested
that his benefits under the Plan [be paid in a lump-sum] or [be converted into a
“Lump Sum Amount” and be paid in annual installments over a period of           
years], rather than as a monthly annuity as otherwise provided in the Plan.

 

E.             Such payment of benefits under the Plan is conditioned, among
other things, upon the execution and delivery of this Agreement by the
Executive.

 

NOW, THEREFORE, for and in consideration of good and valuable consideration, the
receipt and adequacy of which consideration are hereby acknowledged, the parties
intending to be legally bound hereby agree as follows:

 

Section 1.              Covenant Not to Compete.  During the term of this
Agreement, the Executive shall not, without the prior written consent of the
Company, either for his own account or on behalf of any corporation, person,
firm, partnership, association or other entity (whether as an agent, employee,
officer, director, shareholder, investor, owner, consultant, joint venturer,
partner, trustee or in any other capacity) engage or participate in, directly or
indirectly, in any business or enterprise: (i) which is engaged in providing gas
and/or electric services on a retail and/or wholesale basis in the States of
                               or (ii) which is engaged in any other business
being conducted or proposed to be conducted by the Company and/or its parent,
DPL Inc. (and/or any of the subsidiaries or affiliates of the Company or DPL
Inc.) as of the date hereof; provided, however, that nothing contained in this
Section 1 shall prevent the Executive from purchasing and holding for investment
less than 5% of the shares of any corporation the shares of which are regularly
traded either on a national securities exchange or in the over-the-counter
market.

 

Section 2.              Term.  The term of this Agreement shall be for
           years commencing on the date hereof.

 

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Section 3.              Remedies.  The Executive acknowledges that any violation
of Section 1 of this Agreement may cause irreparable harm to the Company and
that damages alone are not an adequate remedy. The Executive therefore agrees
that the Company shall be entitled to an injunction by any court of competent
jurisdiction enjoining, prohibiting and restraining the Executive from the
continuance of any such violation, in addition to any monetary damages which
might occur by reason of any such violation. The remedies provided in this
Agreement are cumulative and shall not exclude any other remedies to which any
party hereto may be entitled under this Agreement or applicable law and the
exercise of a remedy shall not be deemed an election excluding any other remedy.

 

Section 4.              Enforceability.  If, for any reason, any provision
contained in this Agreement should be held invalid in part by a court of
competent jurisdiction, then it is the intent of each of the parties hereto that
the balance of this Agreement be enforced to the fullest extent permitted by
applicable law. It is the intent of each of the parties that the covenant not to
compete contained in Section 1 of this Agreement be enforced to the fullest
extent permitted by applicable law. Accordingly, in the event that a court of
competent jurisdiction determines that the scope of the covenant is too broad to
be enforced as written, it is the intent of each of the parties that the court
should reform the covenant to such narrower scope as it determines enforceable
and this Agreement shall be deemed amended to the extent required to render it
valid and enforceable and that such amendment shall apply only with respect to
the operation of this Agreement in the jurisdiction of the court which has made
such adjudication.

 

Section 5.              Non-waiver.  The failure of any party to require
performance of any of the provisions of this Agreement shall not be deemed a
waiver of any such provision and the obligations of the parties hereunder shall
remain in full force and effect.

 

Section 6.              Assignment and Benefit.  This Agreement shall be binding
upon, shall be assignable by and shall inure to the benefit of the Company and
its successors and assigns. This Agreement is personal to the Executive and may
not be assigned by him.

 

Section 7.              Attorneys’ Fees.  In the event of any litigation
concerning any controversy, claim or dispute between the parties arising out of
or relating to this Agreement or any breach hereof, or the interpretation
hereof, the prevailing party shall be entitled to recover from the losing party
reasonable expenses, attorneys’ fees and costs incurred therein. The “prevailing
party” means the party determined by the court to have most nearly prevailed,
even if such party did not prevail in all matters, and not necessarily the party
in whose favor a judgment is rendered. Further, in the event of any default by a
party under this Agreement, such defaulting party shall pay all expenses,
attorneys’ fees and costs incurred by the other party in connection with such
default, whether or not any litigation is commenced.

 

Section 8.              Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original and all of which
shall constitute one and the same instrument, but only one of which need be
produced.

 

Section 9.              Headings.  The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning of this Agreement.

 

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Section 10.            Governing Law.  This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Ohio.

 

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

 

 

THE DAYTON POWER AND LIGHT COMPANY

 

 

 

By

 

 

 

 

 

Title

 

 

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EXHIBIT B

 

The formula used in computing the lump sum provided for in Section 4.6 shall use
the following interest rate and mortality assumptions.

 

A.            Interest Rate

 

The average of the monthly Pension Benefit Guaranty Corporation (“PBGC”)
interest rate for immediate annuities, as currently published in Appendix B to
part 2619 of the PBGC Regulations (the “PBGC Rate”) for the year end periods
1995 and 1996 was used for the initial period ending December 31, 1998. That
initial interest rate was set at 4.6% (see the calculation attached). The
interest rate was reset for the period January 1, 1999 through December 31, 2000
at 4.35% based upon the average PBGC Rate for the year end periods 1997 and
1998. The interest rate will be reestablished for future two year periods
provided, however, that the rate shall not be adjusted by more than 25 basis
points from the prior two year period and provided further that if the rate
computed herein for future periods becomes plus or minus 200 basis points from
the initial rate, then the Committee shall reevaluate said rate based upon
current conditions and fairness to participants.

 

B.            Mortality

 

The 1983 Individual Annuity Mortality Table shall be used in the computation of
the lump sum provided for in Section 4.6.

 

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PBGC IMMEDIATE INTEREST RATES

YEAR END

 

 

 

2 YEAR
AVERAGE

 

1995

 

4.50

%

1996

 

4.75

%

TOTAL

 

9.25

%

AVERAGE

 

4.63

%

 

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EXHIBIT C

 

THE DAYTON POWER AND LIGHT COMPANY

 

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

 

BENEFICIARY DESIGNATION

 

All payments required to be made under the Plan to my designated beneficiary in
the event of my death shall be made to the following person:

 

Name of designated beneficiary:

 

Address of designated beneficiary:

 

 

 

 

If the above-designated beneficiary does not survive me, the payments will be
made to the following successor beneficiary (or to my estate on failure to
designate otherwise):

 

Name of designated beneficiary:

 

Address of designated beneficiary:

 

 

 

 

 

 

 

 

 

Signature of Executive

 

 

 

 

 

 

 

Date

 

This Beneficiary Designation Form was received by the Secretary of the Company
on                                         .

 

 

 

 

 

 

 

Secretary

 

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