**Exhibit 10(c)**

 

THE DAYTON POWER ANDLIGHT COMPANY

 

MANAGEMENT STOCKINCENTIVE PLAN

 

(AS AMENDED AND RESTATEDTHROUGH DECEMBER 31, 2007)

 

SECTION 1.  INTRODUCTION.

 

TheBoard of Directors of DPL Inc. (“DPL”) and the Board of Directors of The DaytonPower and Light Company (“DP&L”) adopted The Dayton Power and Light CompanyManagement Stock Incentive Plan (the “Plan”). This amended and restated versionof the Plan is effective December 31, 2007.

 

The purposes of the Planare (i) to attract and retain in the employment of the Company executivesof experience and ability by providing incentives to those who contribute tothe successful operation of the business and affairs of the Company, (ii) toincrease the identity of interests of such key employees with those of theCompany’s shareholders, (iii) to encourage achievement of the Company’slong term goals and objectives, and (iv) to prevent frustration of thegoals of this Plan in the event of a Change of Control.

 

SECTION 2.  DEFINITIONS.

 

Thefollowing terms as used herein shall have the following meanings:

 

(a)           “BOARD OF DIRECTORS” means the Boardof Directors of DPL Inc. in place from time to time prior to a Change ofControl.

 

(b)           “CHANGE OF CONTROL” means any changein control of DPL, or its principal subsidiary, DP&L, of a nature thatwould be required to be reported in response to Item 6(e) of Schedule 14Aof Regulation 14A promulgated under the Securities Exchange Act of 1934, asamended (the “Exchange Act”) as determined by the Board of Directors in its solediscretion; provided that, without limitation, such a Change of Control shallbe deemed to have occurred if (i) any “person” (as such term is defined inSections 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 indirectlycontrolling, controlled by or under common control with DPL or DP&L is onthe date hereof or becomes or commences a tender offer to become the beneficialowner, 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 DPLor DP&L if the acquisition of such beneficial

 

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ownership or such tender offer is not approvedby the Board of Directors prior to the acquisition or the commencement of suchtender offer or (B) 50% or more of such combined voting power in all othercases; (ii) DPL or DP&L enters into an agreement to merge orconsolidate itself, or an agreement to consummate a “combination” or “majorityshare acquisition” in which it is the “acquiring corporation” (as such termsare defined in Ohio Rev. Code Sections 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, combinationor majority share acquisition, securities of DPL or DP&L or any survivingor new corporation, as the case may be, having less than 50% of the “votingpower” of DPL or DP&L or any surviving or new corporation, as the case maybe, including “voting power” exercisable on a contingent or deferred basis aswell as immediately exercisable “voting power”, excluding any merger of DPLinto DP&L or of DP&L into DPL; (iii) DPL or DP&L enters intoan agreement to sell, lease, exchange or otherwise transfer or dispose of allor substantially all of its assets to any Person other than to a wholly ownedsubsidiary or, in the case of DP&L, to DPL or a wholly owned subsidiary(ies)of DPL; but not including (A) a mortgage or pledge of assets granted inconnection with a financing or (B) a spin-off or sale of assets if DPLcontinues in existence and its common shares are listed on a nationalsecurities exchange, quoted on the automated quotation system of a nationalsecurities association or traded in the over-the-counter market; (iv) anytransaction referred to in (ii) or (iii) above is consummated; or (v) thosepersons serving as directors of DPL or DP&L on February 1, 2000 (the “OriginalDirectors”) and/or their Successors do not constitute a majority of the wholeBoard 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 byshareholders has been approved by the vote of at least two-thirds of theOriginal Directors and previously qualified Successors serving as directors ofDPL or DP&L, as the case may be, at the time of such election or nominationfor election).

 

(c)           “CEO” means the Chief Executive Officerof DPL, duly installed, from time to time, prior to a Change of Control.However, “Committee” will be substituted for “CEO” in discussing the CEO’srights and benefits under the Plan.

 

(d)           “COMMITTEE” means the ManagementReview and Compensation Committee of the Board of Directors of DPL Inc. or suchother committee(s) as may be designated by the Board of Directors of DPLInc. from time to time to administer the Plan.

 

(e)           “COMPANY” means The Dayton Power andLight Company (“DP&L”), DPL Inc. (“DPL”) and any entity which, prior to aChange of Control, is controlling, controlled by or under common control withDP&L or DPL Inc.

 

(f)            “DEFERRED COMPENSATION PLAN” meansthe Company’s Key Employees Deferred Compensation Plan, as the same may beamended, modified or supplemented from time to time.

 

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(g)           “DIVIDEND EQUIVALENT” means theexpression on the Company’s books of a dividend with respect to a StockIncentive Unit; each Dividend Equivalent being equal to the cash dividends paidfrom time to time on one Share.

 

(h)           “EARNED STOCK INCENTIVE UNITS” meansStock Incentive Units which have been awarded and have been earned inaccordance with Section 6, together with all Dividend Equivalents withrespect to such Earned Stock Incentive Units in accordance with Section 6(including any Stock Incentive Units credited to the Participant’s account asthe result of the conversion of such Dividend Equivalents into Stock IncentiveUnits).

 

(i)            “FAIR MARKET VALUE” means theaverage of the closing sale price of a Share on the last trading day of each ofthe four calendar months preceding the date the value of a Share is to bedetermined, as reported on the New York Stock Exchange—Composite TransactionsTape.

 

(j)            “INCENTIVE PERIOD” means the periodestablished by the Committee with respect to each Stock Incentive Award, overwhich period the Stock Incentive Units included in such award are to be earnedas provided in Section 6(d) of the Plan. The Incentive Period shallbe specified by the Committee in and with respect to each Stock Incentive Awardmade. If the Incentive Period is not so specified then it shall be the calendarplan year to which the Stock Incentive Award relates.

 

(k)           “PLAN” means this Management StockIncentive Plan.

 

(l)            “SHARE” means a Common Share of DPL Inc.

 

(m)          “STOCK INCENTIVE AWARD” means an awardmade under the Plan with respect to a specified Incentive Period.

 

(n)           “STOCK INCENTIVE UNIT” means theexpression on the Company’s books of a unit which is equivalent to one Share.

 

(o)           “TERMINATION OF EMPLOYMENT” means,when used with respect to the payments to be made to a Participant pursuant to Section 8of the Plan, (i) the date such Participant’s employment with the Companyterminates, if such termination occurs on or after such Participant’s 55th birthdayor (ii) if such Participant’s employment with the Company terminates priorto such Participant’s 55th birthday, the date of such Participant’s 55thbirthday.

 

SECTION 3.  ADMINISTRATION.

 

(a)           COMMITTEE. The Plan shall beadministered by the Committee. No director shall serve as a voting member ofthe Committee if he is then, or was at any time within one year prior to hisappointment, eligible to participate in the Plan or eligible for selection as aperson to whom Shares may be allocated or to whom stock options may be grantedpursuant to any other plan of the Company or any of its affiliates, other thanthe DP&L Directors’ Deferred Stock Compensation Plan and the Directors’

 

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Deferred Compensation Plan, entitling theparticipants therein to acquire Shares, options or stock appreciation rights ofthe Company or any of its affiliates.

 

(b)           AUTHORITY AND DISCRETION. Prior to aChange of Control, the Committee shall have the power to interpret the Planand, subject to the provisions herein set forth, to prescribe, amend andrescind rules and regulations and make all other determinations necessaryor desirable for the administration of the Plan. The decision of the Committeeon any questions concerning or involved in the interpretation or administrationof the Plan shall be final and conclusive, and nothing in the Plan shall bedeemed to give any officer or employee, his legal representatives or assigns,any right to participate in the Plan except to such extent, if any, as theCommittee may have determined or approved pursuant to the provisions of thePlan.

 

SECTION 4.  ELIGIBILITY.

 

Employees eligible toparticipate in the Plan shall be those full-time salaried employees of theCompany or any entity comprising the Company who, in the opinion of the Committee,serve in key executive, administrative, professional or technical capacitieswith the Company or any entity comprising the Company and have made asignificant contribution to the successful operation of the Company or anyentity comprising the Company.

 

SECTION 5.  PARTICIPANTS.

 

Fromthe employees eligible to participate in the Plan, the Committee may annuallychoose those who shall actually participate for that year in the Plan (the “Participants”),and shall determine the number of Stock Incentive Units to comprise eachParticipant’s Stock Incentive Award. In choosing the Participants and indetermining the number of Stock Incentive Units comprising a Stock IncentiveAward, the Committee shall consider, after consulting with the CEO concerninghis recommendations on these matters, the positions and responsibilities of theeligible employees, their accomplishments during recent periods, the corporateand individual objectives jointly established with the CEO, the value of suchaccomplishments to the Company, and such other factors as the Committee deemspertinent. The Company may determine in any year during the term of the Plannot to make any Stock Incentive Awards with respect to such year.

 

SECTION 6.  OPERATIONOF THE PLAN.

 

(a)           STOCK INCENTIVE AWARDS. StockIncentive Awards shall be made by the Committee at such time or times as it maydetermine; however, Stock Incentive Awards shall generally be made in the yearpreceding commencement of the next plan year. At the time the Committee makes aStock Incentive Award, it shall determine the aggregate number of StockIncentive Units which may be earned by each Participant over the IncentivePeriod. Except as expressly provided in a Stock Incentive Award, the terms andconditions of the Plan shall be deemed to be incorporated in and shall controlall Stock Incentive Awards. However, to the extent inconsistent with anyprovision

 

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of this Plan (including, without limitation, Section 10),the terms of a Stock Incentive Award (other than a Stock Incentive Awardapplicable to Previously Earned Units) shall control this Plan.

 

(b)           PREVIOUSLY AWARDED STOCK INCENTIVEUNITS. Previously awarded Stock Incentive Units shall be deemed to have beenearned or, in the future, will be earned to the extent to which they would havebeen earned if Section 6(d) had been in effect at the time theypreviously were awarded and based on the Incentive Period applicable to therelated Stock Incentive Award previously awarded.

 

(c)           CREDITING OF STOCK INCENTIVE UNITSAND DIVIDEND EQUIVALENTS. Earned Stock Incentive Units for each year followingthe effective date of the Plan accrue and shall be credited to a Participant’sseparate account under the Plan on the first day of the month following thedate on which they are earned. On each dividend payment date a DividendEquivalent shall be credited to such account for each Earned Stock IncentiveUnit (or, if and to the extent that the related Stock Incentive Award otherwiseprovides, for Stock Incentive Units awarded, whether or not such units areEarned Stock Incentive Units) credited to the Participant’s account. On anydividend payment date when the value of accumulated Dividend Equivalents onStock Incentive Units as provided above in a Participant’s account equals theFair Market Value of a full Share on such date, such Dividend Equivalentsshall, subject to the terms of the Stock Incentive Award, the terms of whichshall control this Plan to the extent inconsistent herewith, be credited to theParticipant’s account as an Earned Stock Incentive Unit. Such separate accountsare established only as a mechanism for measuring the potential number ofShares which may be distributed under the Plan. The Company shall retainbeneficial ownership of all Stock Incentive Units and Dividend Equivalentscredited to the accounts and such Stock Incentive Units and DividendEquivalents will be subject to the claims of DP&L’s creditors. NoParticipant or beneficiary has or will have any property interest in any StockIncentive Units or Dividend Equivalents credited to such Participant’s accountor in any specific assets of the Company.

 

(d)           EARNING OF STOCK INCENTIVE UNITS. AwardedStock Incentive Units shall be earned as specified in the related StockIncentive Award or as otherwise determined by the Committee. Subject to suchStock Incentive Award and any determinations by the Committee, the terms ofwhich shall control this Plan to the extent inconsistent herewith, the maximumnumber of Stock Incentive Units which may be earned in any one year shall be equalto the product obtained by multiplying the total number of Stock IncentiveUnits included in a Stock Incentive Award by a fraction, the numerator of whichis one and the denominator of which is the number of calendar years in theIncentive Period. For example, in the case of a Stock Incentive Award for whicha one-year Incentive Period applies, all of the Stock Incentive Units may beearned in the calendar year to which the Stock Incentive Award relates, and inthe case of a Stock Incentive Award for which a three year Incentive Period hasbeen fixed by the Committee, up to one-third of the Stock Incentive Unitsincluded in the Stock Incentive Award may be earned each year. Unless therelated Stock Incentive Award otherwise provides, by its terms or by implication,prior to or as soon as practicable after the end

 

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of each calendar year the Committee will reviewwith each Participant his or her achievement of the related performance goalsand will specify the number of Stock Incentive Units which have been earned forthat year by the Participant.

 

SECTION 7.  PAYMENTSUNDER THE PLAN.

 

(a)           RIGHT TO PAYMENT OF EARNED STOCKINCENTIVE UNITS. A Participant shall be entitled to receive payment for anawarded Stock Incentive Unit in a given year of the Incentive Period only ifsuch Stock Incentive Unit shall have been earned under the provisions of Section 6(d) and,except as provided under Section 10 and Section 7(d) hereof, orin the Stock Incentive Award, a Stock Incentive Unit, though earned, onlybecomes vested (and, thus, ultimately payable in accordance with Section 8)if the Participant is employed by the Company on the last day of the year ofthe Incentive Period in which the Participant could earn a portion of theparticular Stock Incentive Units awarded. All Stock Incentive Units which donot become so vested shall be forfeited. The CEO or the Committee may, however,accelerate the earning and vesting of any Stock Incentive Units awarded whetheror not earned or vested, if he or it determines in his or its sole opinion thatsuch action is warranted; provided, however, no such acceleration of thevesting of any Stock Incentive Units shall cause such Stock Incentive Units tobe paid other than when they would have been paid absent such acceleration of vesting.

 

Notwithstanding anyprovision of the Plan to the contrary, in the event of the death of aParticipant, all of such Participant’s awarded Stock Incentive Units shallimmediately become fully vested and shall be paid in cash as soon aspracticable after the Participant’s death.

 

(b)           TIME OF PAYMENT OF EARNED STOCKINCENTIVE UNITS. Except as provided in Section 8, Earned Stock IncentiveUnits shall vest on July 1st of the year in which they are scheduled tovest and shall be paid in cash no later than July 31st of such year ofvesting.

 

(c)           WITHHOLDINGS. There shall be deductedfrom all payments any taxes required by an Federal, state, or local governmentto be withheld and paid over to the government for the account of theParticipant.

 

(d)           SPECIAL PROVISION FOR VESTING OFCERTAIN EARNED STOCK INCENTIVE UNITS. All Earned Stock Incentive Unitscomprising the 1997 award (which covers the period 1998-2000) and the 1998award (which covers the period 1999-2001) (“Previously Earned Units”) will vestin three equal annual installments commencing on December 31, 2000 and December 31of each year thereafter. The Participant must be employed by the Company on thedate of an installment in order to become vested in and be entitled to paymentwith respect to the Previously Earned Units vesting on that date. Notwithstandingthe above sentence, in the event a

 

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Participant is entitled to benefits pursuant toparagraph 3 (or successor provision) of the Participant’s severance letteragreement with the Company (or, if the Participant is not then a party to aseverance letter agreement, pursuant to paragraph 3 (or successor provision) ofthe most restrictive severance letter agreement between the Company and anyemployee [in terms of triggering the Company’s obligation to pay benefits tothe employee]), then all Previously Earned Units which have not yet vestedshall immediately become fully vested and shall be paid in accordance with theprovisions of Section 10 of the Plan.

 

SECTION 8.  DEFERRALPROVISIONS.

 

(a)           FILING OF ELECTION FORM. Under thePlan, a Participant must elect to defer payment of any amounts payable underthe Plan by providing the Company with a written Election Form, in the formattached hereto as Exhibit A or such other form as the Committee maydesignate from time to time (the “Deferral Election Form”), prior to thecommencement of the Incentive Period which the Committee uses as a basis fordetermining what portion of the particular annual installment of his StockIncentive Award may be earned. For example, if a Participant were to elect todefer payment of Stock Incentive Units which would be deemed to be earned on December 31,2000, the Election Form must be received by the Company prior to January 1,2000.

 

Notwithstanding the foregoing, because no further Incentive Periodshave commenced or will commence on or after January 1, 2005, no furtherelections to defer payment of any amounts payable under the Plan have been orwill be made for Incentive Periods commencing on or after that date.

 

(b)           PAYMENT OF AMOUNTS DEFERRED UNDER THEPLAN. Payment of a Participant’s deferred Stock Incentive Units which becomeearned and vested shall be made in the form of Shares in a lump sum or inannual installments over a period of up to twenty years, as the Participant mayelect in his Deferral Election Form, and shall be made, or commence, unlessotherwise determined by the Committee in its discretion, on or prior to the January 31immediately following the date specified by the Participant in his DeferralElection Form, provided such date is after his termination of employment, andwith subsequent annual installments, if payments are to be made in annualinstallments, to be paid on or prior to each January 31 thereafter. Allpayments under the Plan with respect to earned and vested Stock Incentive Unitsshall be in the form of Shares and a Participant shall be entitled to receiveone Share for each earned and vested Stock Incentive Unit credited to hisaccount (with a cash payment being made for any fractional shares). Aftertermination of a Participant’s employment, such Participant’s account shallcontinue to be credited with Dividend Equivalents as provided in Section 6(c) withrespect to any unpaid earned and vested Stock Incentive Units.

 

Notwithstandingany other provision of the Plan (other than Sections 8(d) and 10(b)) orany election made by a Participant under the Plan or in any Deferral ElectionForm, no Participant who has been granted stock options under the DPL Inc.Stock Option Plan (the “Stock Option Plan”) shall be entitled to receive anypayment under the

 

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Planprior to January 1, 2005 with respect to that number of earned and vestedStock Incentive Units which is equal to 1/3 of the aggregate number of stockoptions which have been granted to such Participant under the Stock OptionPlan. Notwithstanding the foregoing, any Participant may receive payment of hisearned and vested Stock Incentive Units in accordance with Sections 8(d) and10(b).

 

(c)           EARNED STOCK INCENTIVE UNITS CREDITEDAS CASH. Prior to December 31, 1999, certain Participants (the “ElectingParticipants”) elected to convert a portion of their Earned Stock IncentiveUnits to cash. The amount each Electing Participant so elected to convert tocash was credited to the Standard Deferral Account of such Electing Participantunder the Deferred Compensation Plan. Since February 2, 1999, no furtherconversion of any Earned Stock Incentive Units into cash has been permittedunder the Plan and payment of the Earned Stock Incentive Units previouslyconverted into cash shall be in accordance with the Deferred Compensation Plan.

 

(d)           LACK OF STOCK EXCHANGE LISTING. Inthe event that the Shares cease to be listed on the New York Stock Exchange,then there shall be established for such Participant an account (the “CashAccount”) to which shall be credited a cash amount equal to the ConversionPrice multiplied by the number of Earned Stock Incentive Units credited to hisor her account. “Conversion Price” means: (i) the Fair Market Value of aShare determined as of the date that the Shares cease to be listed on the NewYork Stock Exchange or (ii) if the Shares cease to be so listed as aresult of a Change of Control, the greatest of (x) the amount determinedin accordance with the foregoing clause (i), (y) the closing sales priceof a Share on the New York Stock Exchange — Composite Transaction Tape on thedate the Shares cease to be so listed, or (z) the closing sales price of aShare on the New York Stock Exchange — Composite Transaction Tape on the dateon which the Change of Control occurs. Each Participant’s Cash Account shall beadministered and subject to the same deemed investment rules as if it werean “Account” under Section 3.3 of the DPL Inc. 2006 Deferred CompensationPlan for Executives. Each Participant shall vest in his or her Cash Account assuch Participant would have vested in the Stock Incentive Units that wereconverted into the Cash Account. Each Participant’s Cash Account shall be paidto the Participant in cash when the Stock Incentive Units that were convertedinto the Cash Account would have been paid under Section 7(b).

 

SECTION 9.  MASTERTRUSTS.

 

(a)           PARTICIPANT’S ACCOUNT. The Companyhas established, and may in the future establish, one or more trusts (each suchtrust, as it may be amended from time to time, is referred to herein as a “MasterTrust”) for the purpose, among others, of securing the performance by theCompany of its obligations to Participants under the Plan and has funded one ormore of the Master Trusts in an aggregate amount of Shares and/or cash as theCompany has determined to be equal to the value of all Earned Stock IncentiveUnits and other currently vested or earned benefits of the Participants underthe Plan. Pursuant to one or more of the Master Trusts, each Participant hasbeen assigned a separate account as a mechanism for measuring the potentialbenefits which may be distributed in the future. Subsequent transfers of

 

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Shares and/or cash which the Company is requiredto make to the Master Trusts pursuant to Section 9(b) or 10(d) hereofor otherwise shall be allocated among the Master Trusts as the Committee maydetermine from time to time.

 

(b)           SUCCESSIVE TRANSFERS. On or beforethe twentieth day following the end of each successive calendar quarter, theCompany shall transfer to one or more of the Master Trusts an aggregate amountof Shares and/or cash as it shall determine to be equal to the value ofbenefits of Participants under the Plan which benefits have vested or have beenearned (i.e., all Earned Stock Incentive Units) during such calendar quarter;provided, however, no amount shall be so transferred to a Master Trust if,pursuant to Section 409A(b)(3)(A) of the Internal Revenue Code (the “Code”),such amount would, for purposes of Section 83 of the Code, be treated asproperty transferred in connection with the performance of services.

 

(c)           TITLE TO FUNDS. DP&L shall retainbeneficial ownership of all assets transferred to the Master Trusts and suchassets will be subject to the claims of DP&L’s creditors. No Participant orbeneficiary has or will have any property interest in the assets held in theMaster Trusts or in any other specific asset of the Company.

 

SECTION 10.  CHANGEOF CONTROL.

 

(a)           AUTOMATIC TRANSFER OF AUTHORITY. Inthe event of a Change of Control, any and all authority and discretion which isexercisable by the Committee, or the CEO, as heretofore or hereafter describedin the Plan, shall automatically be transferred to the Trustees of each MasterTrust to the extent that benefits under the Plan are being funded under suchMaster Trust.

 

(b)           ACCELERATION UPON CHANGE OF CONTROL. Inthe event any Participant who is a party to a Severance Contract (as defined inthe Master Trust or as otherwise determined by the Committee) is entitled tobenefits pursuant to paragraph 3 (or successor provision) of such SeveranceContract, any and all of his awarded Stock Incentive Units (other than to theextent related to a completed Incentive Period for which the determination ofthe number of Earned Stock Incentive Units has already been made; and not toexceed the number of Stock Incentive Units comprising the target award underthe applicable Stock Incentive Award regardless of the potential to earn morethan such target award if and as provided in such Stock Incentive Award) shallbe deemed to be Earned Stock Incentive Units which are vested and,notwithstanding the second paragraph of Section 8(b) hereof, all suchEarned Stock Incentive Units (including, without limitation, Previously EarnedUnits), shall be payable to such Participant as the Participant has elected onhis Deferral Election Form. For purposes of any payment to a Participantpursuant to the foregoing sentence, all Earned Stock Incentive Units shall bevalued as at the date of termination of employment at an amount equal to thegreater of (i) an amount based on the higher of the closing sales price onthe New York Stock Exchange—Composite Transaction Tape on the date oftermination or the date on which a Change of Control occurs, whichever isgreater, of Common Shares of DPL Inc. or (ii) the Conversion Price (asdetermined in accordance with Section 8(e)). If such Earned StockIncentive Units are not payable in a lump sum

 

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upon termination of employment in accordancewith the Participant’s Deferral Election Form, the value of such Earned StockIncentive Units shall be immediately credited to the Standard Deferral Accountof such Participant under the Deferred Compensation Plan (or if the Participantdoes not have such an account, the Company shall establish such an account forhim or her), and thereafter payment of the amount so credited shall be inaccordance with the Deferred Compensation Plan.

 

(c)           FUNDING OF MASTER TRUSTS. Upon aChange of Control, the Company shall immediately transfer to one or more of theMaster Trusts an aggregate amount of Shares and/or cash which, when combinedwith the other assets of the Master Trusts contributed or accruing theretounder or by reason of Section 9 hereof, is equal to the value of benefitsof Participants under the Plan (i.e., the value of all Earned Stock IncentiveUnits) accrued through the date of occurrence of the Change of Control event,determined after application of Section 10(b); provided, however, noamount shall be so transferred to a Master Trust if, pursuant to Section 409A(b)(3)(A) ofthe Code, such amount would, for purposes of Section 83 of the Code, betreated as property transferred in connection with the performance of services.

 

SECTION 11.  NOTICES.

 

Any notice, election orany request required or permitted hereunder, which is to be mailed or requestedfrom the Secretary or the CEO of the Company, shall be delivered or mailed,postage prepaid, as follows:

 

(a)                                Prior to aChange of Control, to the Corporate Secretary of the Company at:

 

TheDayton Power and Light CompanyMacGregor Park1065 Woodman DriveDayton, Ohio 45432Attention: Corporate Secretary

 

(b)          After a Change of Control, to theTrustees of each Master Trust pursuant to which benefits under the Plan arebeing funded, at the notice address specified by such Trustees in theapplicable trust agreement.

 

The Company orTrustees may from time to time change their addresses for receipt of notices bygiving notice of such change to the Participants, but no such change shall bedeemed to be effective until notice thereof is actually received by theParticipant to whom it is directed.

 

SECTION 12.  CONDITIONS UPONAWARDS AND PAYMENTS.

 

No provision of the Planor any Stock Incentive Award shall be binding upon the Company or enforceableagainst the Company to the extent that it would cause the Company not to complywith all relevant provisions of state and federal law.

 

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SECTION 13.  NO RIGHT TOEMPLOYMENT.

 

Nothing in the Planshall confer upon any Participant or other eligible employee the right tocontinue in the employment of the Company or affect any right the Company mayhave to terminate the employment of any Participant or other eligible employee.

 

SECTION 14.  NO RIGHTS ASSHAREHOLDERS.

 

No Participant whoreceives a Stock Incentive Award under the Plan shall have any rights as ashareholder of the Company as a result thereof unless and until Shares areissued to such Participant in accordance with the Plan.

 

SECTION 15.  NON-UNIFORM DETERMINATIONS.

 

The Committee’s determinationunder the Plan (including, without limitation, its selection of Participants toreceive Stock Incentive Awards, the length of Incentive Periods, and the amountof timing of awards) need not be uniform, and may be made by it selectivelyamong persons who receive, or are eligible to receive Stock Incentive Awardsunder the Plan, whether or not such persons are similarly situated.

 

SECTION 16.  NON-TRANSFERABILITY.

 

Neither a Participant,nor his beneficiary, nor any other individual shall have any right by way ofanticipation or otherwise to alienate, sell, transfer, assign, pledge, chargeor 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 dispositionshall be null and void. Furthermore, none of the benefits payable under thisPlan shall be subject to the claim or legal process of the creditors of anyParticipant or of the beneficiary, spouse or former spouse of any Participantor of any other person or entity.

 

SECTION 17.  ADJUSTMENTS UPONCHANGES IN CAPITALIZATION.

 

In the event of a sharedividend, a stock split, recapitalization, merger, consolidation, reorganization,split-up, combination or exchange of shares, spin-off, extraordinary dividendin property or in kind, or other similar corporate changes (each of theforegoing, an “Extraordinary Transaction”) the number and/or kind of StockIncentive Units allocated to a Participant’s account shall be appropriatelyadjusted by the Committee (whose determination in each case shall beconclusive) as the Committee may determine to be necessary to ensure equitabletreatment to each Participant as a result of the consummation of anyExtraordinary Transaction.

 

SECTION 18.  INTERPRETATION ANDAMENDMENT.

 

This Plan will beadministered by the Committee. The decision of the Committee with respect tothe administration or interpretation of the Plan will be final and binding.

 

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The Committee reserves the right, prior to aChange in Control, to amend, modify or terminate the Plan; provided, howeverthat (i) no amendment, modification or termination of the Plan shallaffect an election to defer payments already in effect for the current calendaryear or any preceding calendar year or shall otherwise adversely affect anyright or benefit earned or accrued under the Plan by any Participant prior toany such amendment, modification or termination without the prior writtenconsent of such Participant, and (ii) following a Change of Control theCommittee’s discretion will be exercised as provided in Section 10(a) hereof;provided further that the Trustees shall have no authority to terminate thePlan.

 

SECTION 19.  GENDER AND NUMBER.

 

Except when indicated bythe context, any masculine terminology used herein shall also include thefeminine, and the use of any term herein in the singular may also include theplural.

 

SECTION 20.  CHOICE OF LAW.

 

This Plan shall beconstrued, rendered and governed by the laws of the State of Ohio.

 

SECTION 21.  SECTION 409A.

 

It is intended that the Plan comply with theprovisions of Section 409A of the Code so as to prevent the inclusion ingross income of any amounts earned hereunder in a taxable year that is prior tothe taxable year or years in which such amounts would otherwise actually bedistributed or made available to the Participants. It is intended that the Planshall be administered in a manner that will comply with Section 409A ofthe Code, including any proposed, temporary or final regulations or any otherguidance issued by the Secretary of the Treasury and the Internal RevenueService with respect thereto.

 

It is intended that no action be taken with respect tothe Plan that would violate any provision of Section 409A of the Code. TheCompensation Committee is authorized to adopt rules or regulations deemednecessary or appropriate in connection therewith to anticipate and/or complywith the requirements thereof (including any transition rules thereunder).

 

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EXHIBIT A

 

THE DAYTON POWER ANDLIGHT COMPANY

 

MANAGEMENT STOCKINCENTIVE PLAN

 

DEFERRAL ELECTION FORM

 

INSTRUCTIONS:

 

This Election Form relatesto Stock Incentive Units deferred pursuant to the Management Stock IncentivePlan (the “Plan”). Under the Plan, deferred Stock Incentive Units are creditedto a Participant’s Account in a Master Trust or Trusts created by DP&L.

 

PAYMENTS. Paymentsshall be made from the Plan in the form of DPL Inc. common shares aftertermination of employment (check one):

 

a.          in a lump sum payment;

 

b.          annually over a period of up to twenty years. (Specify number of years ______.)

 

Suchpayment(s) shall be made or commence by no later than the January 31immediately following:                            (specify date).

 

  Upon my death(check one):

 

____ payments tomy beneficiary shall continue or commence in the same         method to be paid to meas elected above.

 

____ payments are to be made to my beneficiary in alump sum.

 

DESIGNATION OF BENEFICIARY

 

In the event of mydeath all payments required to be made under the Plan shall be made to thefollowing person:

 
| Name of designated beneficiary:    |   |   |
|------------------------------------|--------|--------|
|                               |   |   |
| Address of designated beneficiary: |   |   |

 

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|   |   |   |
|--------|--------|--------|
|   |   |   |
|   |   |   |
|   |   |   |

 

If theabove-designated beneficiary does not survive me, payments will be made to thefollowing successor beneficiary (or to my estate on failure to designateotherwise):

 
| Name of designated beneficiary:    |      |   |
|------------------------------------|-----------|--------|
|                               |      |   |
|                               |      |   |
| Address of designated beneficiary: |      |   |
|                               |      |   |
|                               |      |   |
|                               |      |   |
|                               |      |   |
|                               |      |   |
|                               |      |   |
|                               | Signature |   |
|                               |      |   |
|                               | Date      |   |

 

This Election Form was received by the Secretaryof the Company on

 
|   | Secretary |   |
|--------|-----------|--------|

 

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