**Exhibit 10(m)**

 

**DPL INC.**

 

**2006 EQUITY AND PERFORMANCE INCENTIVE PLAN**

**(As Amended and Restated Through December 31, 2007)**

 

# **ARTICLEI - PURPOSE**

# ** **

Thepurpose of the 2006 Equity and Performance Incentive Plan is to attract andretain directors, consultants, officers and other employees of DPL Inc. and itsSubsidiaries, to provide to such persons incentives and rewards for superiorperformance and to align their interests with those of shareholders.  This 2006 Equity and Performance IncentivePlan is intended to replace the Existing Plan (as defined below) and, ifadoption of this Plan is approved by the shareholders of the Company, no newawards will be granted under the Existing Plan, but shares relating to awardsthat are forfeited or terminated under the Existing Plan may be grantedhereunder pursuant to Section 3.1. Outstanding awards under the Existing Plan will not be affected byapproval of this Plan.

 

# **ARTICLEII - DEFINITIONS**

# ** **

## **Section 2.1.**  “Appreciation Right” means a rightgranted pursuant to Section 4.2 or Section 5.1 of this Plan, and willinclude both Tandem Appreciation Rights and Free-Standing Appreciation Rights.

##  

## **Section 2.2.**  “Awards” means Option Rights,Appreciation Rights, Restricted Stock, Restricted Stock Units, PerformanceShares, Performance Units and any other award granted pursuant to Section 6.1hereof.

##  

## **Section 2.3.**  “Base Price” means the price to beused as the basis for determining the Spread upon the exercise of aFree-Standing Appreciation Right and a Tandem Appreciation Right.

##  

## **Section 2.4.**  “Board” means the Board of Directorsof the Company and, to the extent of any delegation by the Board to a committee(or subcommittee thereof) pursuant to Section 8.1 of this Plan, suchcommittee (or subcommittee).

##  

## **Section 2.5.**  “Change of Control” has the meaningset forth in Section 10.1 hereof.

##  

## **Section 2.6.**  “Code” means the Internal Revenue Codeof 1986, as amended from time to time.

##  

## **Section 2.7.**  “Common Shares” means the shares ofcommon stock, par value $0.01 per share, of the Company or any security intowhich such Common Shares may be changed by reason of any transaction or eventof the type referred to in Section 7.2 of this Plan.

 

1

----

 

## **Section 2.8.**  “Company” means DPL Inc., an Ohio corporation.

##  

## **Section 2.9.**  “Covered Employee” means a Participantwho is, or is determined by the Board to be likely to become, a “coveredemployee” within the meaning of Section 162(m) of the Code (or anysuccessor provision).

##  

## **Section 2.10.**  “Date of Grant” means the datespecified by the Board on which a grant of Option Rights, Appreciation Rights,Performance Shares, Performance Units or other awards contemplated by Section 6.1of this Plan, or a grant or sale of Restricted Stock, Restricted Stock Units, orother awards contemplated by Section 6.1 of this Plan will becomeeffective (which date will not be earlier than the date on which the Boardtakes action with respect thereto).

##  

## **Section 2.11.**  “Detrimental Activity” means:

##  

### (a)           Engaging in any activity, as an employee, principal,agent, or consultant for another entity that competes with the Company in anyactual, researched, or prospective product, service, system, or businessactivity for which the Participant has had any direct responsibility during thelast two years of his or her employment with the Company or a Subsidiary, inany state where the Company or a Subsidiary owns or operates generation orelectric distribution assets.

###  

### (b)           Soliciting any employee of the Company or a Subsidiary toterminate his or her employment with the Company or a Subsidiary.

###  

### (c)           The disclosure to anyone outside the Company or aSubsidiary, or the use in other than the Company’s or a Subsidiary’s business,without prior written authorization from the Company, of any confidential,proprietary or trade secret information or material relating to the business ofthe Company and its Subsidiaries, acquired by the Participant during his or heremployment with the Company or its Subsidiaries or while acting as a consultantfor the Company or its Subsidiaries thereafter.

###  

### (d)           The failure or refusal to disclose promptly and to assignto the Company upon request all right, title and interest in any invention oridea, patentable or not, made or conceived by the Participant during employmentby the Company and any Subsidiary, relating in any manner to the actual oranticipated business, research or development work of the Company or anySubsidiary or the failure or refusal to do anything reasonably necessary toenable the Company or any Subsidiary to secure a patent where appropriate inthe United States and in other countries.

###  

### (e)           Activity that results in termination for Cause.  For the purposes of this Plan, “Cause” shallmean (i) any willful or negligent material violation of any applicablesecurities laws (including the Sarbanes-Oxley Act of 2002); (ii) any actof fraud, intentional misrepresentation, embezzlement, misappropriation orconversion of any asset or business opportunity of the Company; (iii) aconviction of, or entering into a plea of nolo contendere to, a felony; (iv) anintentional, repeated or continuing violation of any of the Company’s policiesor procedures that occurs or continues after the 

 

2

----

 

### Company has given notice to the Participantthat he or she has materially violated a Company policy or procedure; or (v) anybreach of a written covenant or agreement with the Company, including the termsof this Plan (other than a failure to perform Participant’s duties with theCompany resulting from the Participant’s incapacity due to physical or mentalillness or from the assignment to the Participant of duties that wouldconstitute Good Reason (as defined in the DPL Inc. Severance Pay and Change ofControl Plan), which is material and which is not cured within 30 days afterwritten notice thereof from the Company to the Participant.  Notwithstanding the foregoing, theParticipant shall not be deemed to have been terminated for Cause unless theParticipant receives a written notice of termination from the Company settingforth in reasonable detail the specific reason for the termination and thefacts and circumstances claimed to provide a basis for the termination ofemployment at least 15 calendar days prior to the specified date of terminationof employment.

###  

### (f)            Any other conduct or act determined to be injurious,detrimental or prejudicial to any significant interest of the Company or anySubsidiary unless the Participant acted in good faith and in a manner he or shereasonably believed to be in or not opposed to the best interests of theCompany.

###  

## **Section 2.12.**  “Director” means a member of the Boardof Directors of the Company.

##  

## **Section 2.13.**  “Evidence of Award” means anagreement, certificate, resolution or other type or form of writing or otherevidence approved by the Board that sets forth the terms and conditions of theawards granted.  An Evidence of Award maybe in an electronic medium, may be limited to notation on the books and recordsof the Company and, with the approval of the Board, need not be signed by arepresentative of the Company or a Participant.

##  

## **Section 2.14.**  “Exchange Act” means the SecuritiesExchange Act of 1934, as amended, and the rules and regulationsthereunder, as such law, rules and regulations may be amended from time totime.

##  

## **Section 2.15.**  “Existing Plan” means the DPL Inc.Stock Option Plan.

##  

## **Section 2.16.**  “Free-Standing Appreciation Right”means an Appreciation Right granted pursuant to Section 4.2 or Section 5.1of this Plan that is not granted in tandem with an Option Right.

##  

## **Section 2.17.**  “Incentive Stock Options” means OptionRights that are intended to qualify as “incentive stock options” under Section 422of the Code or any successor provision.

##  

## **Section 2.18.**  “Management Objectives” means themeasurable performance objective or objectives established pursuant to thisPlan for Participants who have received grants of Performance Shares orPerformance Units or, when so determined by the Board, Option Rights,Appreciation Rights, Restricted Stock, Restricted Stock Units, dividend creditsand other awards pursuant to this Plan. Management Objectives 

 

3

----

 

## may be described in terms of Company-wideobjectives or objectives that are related to the performance of the individualParticipant or of the Subsidiary, division, department, region or functionwithin the Company or Subsidiary in which the Participant is employed.  The Management Objectives may be maderelative to the performance of other companies. The Management Objectives applicable to any award to a Covered Employeewill be based on specified levels of or growth in one or more of the followingcriteria:

##  

### (a)           Appreciation in value of shares;

###  

### (b)           Total shareholder return;

###  

### (c)           Earnings per share;

###  

### (d)           Operating income;

###  

### (e)           Net income;

###  

### (f)            Pretax earnings;

###  

### (g)           Earnings before interest, taxes, depreciation andamortization;

###  

### (h)           Pro forma net income;

###  

### (i)            Return on equity;

###  

### (j)            Return on designated assets;

###  

### (k)           Return on capital;

###  

### (l)            Economic value added;

###  

### (m)          Revenues;

###  

### (n)           Expenses;

###  

### (o)           Operating cash flow;

###  

### (p)           Free cash flow;

###  

### (q)           Cash flow return on investment;

###  

### (r)            Operating margin or net profit margin; or

###  

### (s)           Any of the above criteria as compared to the performanceof a published or a special index deemed applicable by the Board, including,but not limited to, the Standard & Poor’s Utility Index.

 

4

----

 

Ifthe Board determines that a change in the business, operations, corporate structureor capital structure of the Company, or the manner in which it conducts itsbusiness, or other events or circumstances render the Management Objectivesunsuitable, the Board may in its discretion modify such Management Objectivesor the related minimum acceptable level of achievement, in whole or in part, asthe Board deems appropriate and equitable, except in the case of a CoveredEmployee where such action would result in the loss of the otherwise availableexemption of the award under Section 162(m) of the Code.  In such case, the Board will not make anymodification of the Management Objectives or minimum acceptable level ofachievement with respect to such Covered Employee.

 

## **Section 2.19.**  “Market Value per Share” means, as ofany particular date, the closing sales price of the Common Shares as reportedon the New York Stock Exchange Composite Tape or, if not listed on suchexchange, on any other national securities exchange on which the Common Sharesare listed.  If there is no regulartrading market for such Common Shares, the Market Value per Share shall bedetermined by the Board.

##  

## **Section 2.20.**  “Non-Employee Director” means a personwho is a “non-employee director” of the Company within the meaning of Rule 16b-3of the Securities and Exchange Commission promulgated under the Exchange Act.

##  

## **Section 2.21.**  “Optionee” means the optionee named inan Evidence of Award evidencing an outstanding Option Right.

##  

## **Section 2.22.**  “Option Price” means the purchaseprice payable on exercise of an Option Right.

##  

## **Section 2.23.**  “Option Right” means the right topurchase Common Shares upon exercise of an option granted pursuant to Section 4.1or Section 5.1 of this Plan.

##  

## **Section 2.24.**  “Original Directors” has the meaningset forth in Section 10.1 hereof.

##  

## **Section 2.25.**  “Participant” means a person who (a) isselected by the Board to receive benefits under this Plan and who is at thetime a consultant or an officer, general management employee or other keyemployee of the Company or any one or more of its Subsidiaries, or who hasagreed to commence serving in any of such capacities within 90 days of the Dateof Grant, and will also include each Non-Employee Director who receives CommonShares or an award of Option Rights, Appreciation Rights, Restricted Stock, RestrictedStock Units or other awards under this Plan and (b) if requested to do soby the Company, has executed a Participation Agreement.

##  

## **Section 2.26.**  “Participation Agreement” means anagreement between the Company and each Employee that must be executed as acondition of the Participant’s eligibility for this Plan.

 

5

----

 

## **Section 2.27.**  “Performance Period” means, in respectof a Performance Share or Performance Unit, a period of time establishedpursuant to Section 4.5 of this Plan within which the ManagementObjectives relating to such Performance Share or Performance Unit are to beachieved.

##  

## **Section 2.28.**  “Performance Share” means abookkeeping entry that records the equivalent of one Common Share awardedpursuant to Section 4.5 of this Plan.

##  

## **Section 2.29.**  “Performance Unit” means a bookkeepingentry awarded pursuant to Section 4.5 of this Plan that records a unitequivalent to $1.00 or such other value as is determined by the Board.

##  

## **Section 2.30.**  “Person” has the meaning set forth in Section 10.1hereof.

##  

## **Section 2.31.**  “Plan” means this DPL Inc. 2006 Equityand Performance Incentive Plan, as may be amended from time to time.

##  

## **Section 2.32.**  “Restricted Stock” means Common Sharesgranted or sold pursuant to Section 4.3 or Section 5.1 of this Planas to which neither the substantial risk of forfeiture nor the prohibition ontransfers has expired.

##  

## **Section 2.33.**  “Restriction Period” means the periodof time during which Restricted Stock Units are subject to restrictions.

##  

## **Section 2.34.**  “Restricted Stock Unit” means an awardmade pursuant to Section 4.4 or Section 5.1 of this Plan of the rightto receive Common Shares or cash at the end of a specified period.

##  

## **Section 2.35.**  “Spread” means the excess of theMarket Value per Share on the date when an Appreciation Right is exercised overthe Option Price or Base Price provided for in the related Option Right orFree-Standing Appreciation Right, respectively.

##  

## **Section 2.36.**  “Subsidiary” means a corporation,company or other entity (i) more than 50 percent of whose outstandingshares or securities (representing the right to vote for the election ofdirectors or other managing authority) are, or (ii) which does not haveoutstanding shares or securities (as may be the case in a partnership, jointventure or unincorporated association), but more than 50 percent of whoseownership interest representing the right generally to make decisions for suchother entity is, now or hereafter, owned or controlled, directly or indirectly,by the Company except that for purposes of determining whether any person maybe a Participant for purposes of any grant of Incentive Stock Options, “Subsidiary”means any corporation in which at the time the Company owns or controls, directlyor indirectly, more than 50 percent of the total combined voting powerrepresented by all classes of stock issued by such corporation.

##  

## **Section 2.37.**  “Successors” has the meaning set forthin Section 10.1 hereof.

 

6

----

 

## **Section 2.38.**  “Tandem Appreciation Right” means anAppreciation Right granted pursuant to Section 4.2 or Section 5.1 ofthis Plan that is granted in tandem with an Option Right.

##  

## **Section 2.39.**  “Voting Stock” means securitiesentitled to vote generally in the election of directors.

##  

# **ARTICLEIII - SHARES**

# ** **

## **Section 3.1.**  Shares Available Under the Plan.

##  

### (a)           Subject to adjustment as provided in Section 7.2 ofthis Plan, the number of Common Shares that may be issued or transferred (i) uponthe exercise of Option Rights or Appreciation Rights, (ii) as RestrictedStock and released from substantial risks of forfeiture thereof, (iii) asRestricted Stock Units, (iv) in payment of Performance Shares orPerformance Units that have been earned, (v) as awards to Non-EmployeeDirectors, (vi) as awards contemplated by Section 6.1 of this Plan,or (vii) in payment of dividend equivalents paid with respect to awardsmade under the Plan will not exceed in the aggregate 4,500,000 Common Shares,plus any shares relating to Awards that expire or are forfeited, terminated orcancelled.  In addition to the CommonShares authorized by the preceding sentence, to the extent any award under theExisting Plan otherwise terminates without the issuance of some or all of theCommon Shares underlying the award to a participant or if any option under theExisting Plan terminates without having been exercised in full, the CommonShares underlying such award, to the extent of any such forfeiture ortermination, shall be available for future grant under the Plan and creditedtoward the Plan limit.  Common Sharescovered by an award granted under the Plan shall not be counted as used unlessand until they are actually issued and delivered to a Participant.  Without limiting the generality of theforegoing, upon payment in cash of the benefit provided by any award grantedunder the Plan, any Common Shares that were covered by that award will beavailable for issue or transfer hereunder. Notwithstanding anything to the contrary contained herein: (A) sharestendered in payment of the Option Price of a Option Right shall not be added tothe aggregate plan limit described above; (B) shares withheld by theCompany to satisfy the tax withholding obligation shall not be added to theaggregate plan limit described above; (C) shares that are repurchased bythe Company with Option Right proceeds shall not be added to the aggregate planlimit described above; and (D) all shares covered by an AppreciationRight, to the extent that it is exercised and settled in Common Shares, andwhether or not shares are actually issued to the Participant upon exercise ofthe right, shall be considered issued or transferred pursuant to the Plan.  Such shares may be shares of originalissuance or treasury shares or a combination of the foregoing.

###  

### (b)           If, under this Plan, a Participant has elected to give upthe right to receive compensation in exchange for Common Shares based on fairmarket value, such Common Shares will not count against the number of sharesavailable in Section 3.1(a) above.

 

7

----

 

### (c)           Notwithstanding anything in this Section 3.1, orelsewhere in this Plan, to the contrary and subject to adjustment as providedin Section 7.2 of this Plan: (i) the aggregate number of CommonShares actually issued or transferred by the Company upon the exercise ofIncentive Stock Options will not exceed 500,000Common Shares; (ii) no Participant will be granted Option Rights orAppreciation Rights, in the aggregate, for more than 500,000 Common Shares during any calendar year; (iii) noParticipant will be granted Restricted Stock or Restricted Stock Units thatspecify Management Objectives, Performance Shares or other awards under Section 6.1of this Plan, in the aggregate, for more than 500,000 Common Shares during any calendar year; and (iv) awards will not be granted under Section 5.1or Section 6.1 of the Plan to the extent they would involve the issuanceof more than 1,000,000 shares in the aggregate.

###  

### (d)           Notwithstanding any other provision of this Plan to thecontrary, in no event will any Participant in any calendar year receive anaward of Performance Units having an aggregate maximum value as of theirrespective Dates of Grant in excess of $5.0 million.

###  

# **ARTICLEIV - AUTHORIZED AWARDS**

# ** **

## **Section 4.1.**  Option Rights.  The Board may, from time to time and uponsuch terms and conditions as it may determine, authorize the granting toParticipants of options to purchase Common Shares.  Each such grant may utilize any or all of theauthorizations, and will be subject to all of the requirements contained in thefollowing provisions:

##  

### (a)           Each grant will specify the number of Common Shares towhich it pertains subject to the limitations set forth in Section 3.1 ofthis Plan.

###  

### (b)           Each grant will specify an Option Price per share, whichmay not be less than the Market Value per Share on the day immediatelypreceding the Date of Grant.

###  

### (c)           Each grant will specify whether the Option Price will bepayable (i) in cash or by check acceptable to the Company or by wiretransfer of immediately available funds, (ii) by the actual orconstructive transfer to the Company of Common Shares owned by the Optionee forat least 6 months (or other consideration authorized pursuant to Section 4.1(d))having a value at the time of exercise equal to the total Option Price, (iii) bya combination of such methods of payment, or (iv) by such other methods asmay be approved by the Board.

###  

### (d)           To the extent permitted by law, any grant may provide fordeferred payment of the Option Price from the proceeds of sale through a bankor broker on a date satisfactory to the Company of some or all of the CommonShares to which such exercise relates.

###  

### (e)           Successive grants may be made to the same Participantwhether or not any Option Rights previously granted to such Participant remainunexercised.

 

8

----

 

### (f)            Each grant will specify the period or periods ofcontinuous service by the Optionee with the Company or any Subsidiary that isnecessary before the Option Rights or installments thereof will becomeexercisable; provided, however, that, subject to sub-section (g) below,Option Rights may not become exercisable by the passage of time sooner thanone-third per year over three years.  Agrant of Option Rights may provide for the earlier exercise of such OptionRights in the event of the retirement, death or disability of a Participant.

###  

### (g)           Any grant of Option Rights may specify ManagementObjectives that must be achieved as a condition to the exercise of such rights;provided, however, that, except in the case of the retirement,death or disability of a Participant, Option Rights that become exercisableupon the achievement of Management Objectives may not become exercisable soonerthan one year from the Date of Grant.

###  

### (h)           Option Rights granted under this Plan may be (i) options,including, without limitation, Incentive Stock Options, that are intended toqualify under particular provisions of the Code, (ii) options that are notintended so to qualify, or (iii) combinations of the foregoing.  Incentive Stock Options may only be grantedto Participants who meet the definition of “employees” under Section 3401(c) ofthe Code.

###  

### (i)            The Board may at the Date of Grant of any Option Rights(other than Incentive Stock Options), provide for the payment of dividendequivalents to the Optionee on either a current or deferred or contingentbasis, either in cash or in additional Common Shares.

###  

### (j)            The exercise of an Option Right will result in thecancellation on a share- for-share basis of any Tandem Appreciation Rightauthorized under Section 4.2 of this Plan.

###  

### (k)           No Option Right will be exercisable more than 10 yearsfrom the Date of Grant.

###  

### (l)            The Board reserves the discretion at or after the Date ofGrant to provide for (i) the payment of a cash bonus at the time ofexercise; (ii) the availability of a loan at exercise; and (iii) theright to tender in satisfaction of the Option Price nonforfeitable,unrestricted Common Shares, which are already owned by the Optionee and have avalue at the time of exercise that is equal to the Option Price.

###  

### (m)          Each grant of Option Rights will be evidenced by anEvidence of Award.  Each Evidence ofAward shall be subject to the Plan and shall contain such terms and provisionsas the Board may approve.

###  

## **Section 4.2.**  Appreciation Rights.

##  

### (a)           The Board may authorize the granting (i) to anyOptionee, of Tandem Appreciation Rights in respect of Option Rights grantedhereunder, and (ii) to any Participant, of Free-Standing AppreciationRights.  A Tandem Appreciation Right willbe a right of the Optionee, exercisable by surrender of the related OptionRight, to 

 

9

----

 

### receive from the Company an amount determinedby the Board, which will be expressed as a percentage of the Spread (notexceeding 100 percent) at the time of exercise. Tandem Appreciation Rights may be granted at any time prior to theexercise or termination of the related Option Rights; provided, however,that a Tandem Appreciation Right awarded in relation to an Incentive StockOption must be granted concurrently with such Incentive Stock Option.  A Free-Standing Appreciation Right will be aright of the Participant to receive from the Company an amount determined bythe Board, which will be expressed as a percentage of the Spread (not exceeding100 percent) at the time of exercise.

###  

### (b)           Each grant of Appreciation Rights may utilize any or allof the authorizations, and will be subject to all of the requirements,contained in the following provisions:

###  

#### (i)                                     Any grant mayspecify that the amount payable on exercise of an Appreciation Right may bepaid by the Company in cash, in Common Shares or in any combination thereof andmay either grant to the Participant or retain in the Board the right to electamong those alternatives.

####  

#### (ii)                                  Any grant mayspecify that the amount payable on exercise of an Appreciation Right may notexceed a maximum specified by the Board at the Date of Grant.

####  

#### (iii)                               Any grant mayspecify waiting periods before exercise and permissible exercise dates orperiods; provided, however, that Appreciation Rights may notbecome exercisable by the passage of time sooner than one-third per year overthree years.

####  

#### (iv)                              Any grant mayprovide for the payment to the Participant of dividend equivalents thereon incash or Common Shares on a current, deferred or contingent basis.

####  

#### (v)                                 Any grant ofAppreciation Rights may specify Management Objectives that must be achieved asa condition of the exercise of such Appreciation Rights; provided, however,that Appreciation Rights that become exercisable upon the achievement ofManagement Objectives may not become exercisable sooner than one year from theDate of Grant.

####  

#### (vi)                              Any grant mayspecify that such Appreciation Right may be exercised in the event of, orearlier in the event of, the retirement, death or disability of a Participant.

####  

#### (vii)                           Each grant ofAppreciation Rights will be evidenced by an Evidence of Award, which Evidenceof Award will describe such Appreciation Rights, identify the related OptionRights (if applicable), and contain 

 

10

----

 

#### such other terms and provisions, consistent with this Plan, as theBoard may approve.

####  

### (c)           Any grant of Tandem Appreciation Rights will provide thatsuch Tandem Appreciation Rights may be exercised only at a time when therelated Option Right is also exercisable and at a time when the Spread ispositive, and by surrender of the related Option Right for cancellation.

###  

### (d)           Regarding Free-Standing Appreciation Rights only:

###  

#### (i)                                     Each grant willspecify in respect of each Free-Standing Appreciation Right a Base Price, whichwill be equal to or greater than the Market Value per Share on the dayimmediately preceding the Date of Grant;

####  

#### (ii)                                  Successivegrants may be made to the same Participant regardless of whether anyFree-Standing Appreciation Rights previously granted to the Participant remainunexercised; and

####  

#### (iii)                               NoFree-Standing Appreciation Right granted under this Plan may be exercised morethan 10 years from the Date of Grant.

####  

## **Section 4.3.**  Restricted Stock.  The Board may also authorize the grant orsale of Restricted Stock to Participants. Each such grant or sale may utilizeany or all of the authorizations, and will be subject to all of therequirements, contained in the following provisions:

##  

### (a)           Each such grant or sale will constitute an immediatetransfer of the ownership of Common Shares to the Participant in considerationof the performance of services, entitling such Participant to voting, dividendand other ownership rights, but subject to the substantial risk of forfeitureand restrictions on transfer hereinafter referred to.

###  

### (b)           Each such grant or sale may be made without additionalconsideration or in consideration of a payment by such Participant that is lessthan the Market Value per Share at the Date of Grant.

###  

### (c)           Each such grant or sale will provide that the RestrictedStock covered by such grant or sale that vests solely upon the passage of timewill be subject to a “substantial risk of forfeiture” within the meaning of Section 83of the Code for a period of not less than three years to be determined by theBoard at the Date of Grant and may provide for the earlier lapse of suchsubstantial risk of forfeiture as provided in Section 4.3(e) below orin the event of the retirement, death or disability of a Participant.

###  

### (d)           Each such grant or sale will provide that during theperiod for which such substantial risk of forfeiture is to continue, thetransferability of the Restricted Stock will be prohibited or restricted in themanner and to the extent prescribed by the Board at the Date of Grant (whichrestrictions may include, without limitation, rights of 

 

11

----

###  

### repurchase or first refusal in the Company orprovisions subjecting the Restricted Stock to a continuing substantial risk offorfeiture in the hands of any transferee).

###  

### (e)           Any grant of Restricted Stock may specify ManagementObjectives that, if achieved, will result in termination or early terminationof the restrictions applicable to such Restricted Stock; provided, however,that, except in the case of the retirement, death or disability of aParticipant, restrictions relating to Restricted Stock that vests upon theachievement of Management Objectives may not terminate sooner than one yearfrom the Date of Grant.  Each grant mayspecify in respect of such Management Objectives a minimum acceptable level ofachievement and may set forth a formula for determining the number of shares ofRestricted Stock on which restrictions will terminate if performance is at orabove the minimum level, but falls short of full achievement of the specifiedManagement Objectives.

###  

### (f)            Any such grant or sale of Restricted Stock may requirethat any or all dividends or other distributions paid thereon during the periodof such restrictions be automatically deferred and reinvested in additionalshares of Restricted Stock, which may be subject to the same restrictions asthe underlying award.

###  

### (g)           Each grant or sale of Restricted Stock will be evidencedby an Evidence of Award and will contain such terms and provisions, consistentwith this Plan, as the Board may approve. Unless otherwise directed by the Board, all certificates representingshares of Restricted Stock will be held in custody by the Company until allrestrictions thereon will have lapsed, together with a stock power or powersexecuted by the Participant in whose name such certificates are registered, endorsedin blank and covering such Shares.

###  

## **Section 4.4.**  Restricted Stock Units.  The Board may also authorize the granting orsale of Restricted Stock Units to Participants. Each such grant or sale may utilize any or all of the authorizations,and will be subject to all of the requirements contained in the followingprovisions:

##  

### (a)           Each such grant or sale will constitute the agreement bythe Company to deliver Common Shares or cash to the Participant in the futurein consideration of the performance of services, but subject to the fulfillmentof such conditions (which may include the achievement of Management Objectives)during the Restriction Period as the Board may specify.  If a grant of Restricted Stock Units specifiesthat the Restriction Period will terminate only upon the achievement ofManagement Objectives, such Restriction Period may not terminate sooner thanone year from the Date of Grant, except in the case of the retirement, death ordisability of a Participant.  Each grantmay specify in respect of such Management Objectives a minimum acceptable levelof achievement and may set forth a formula for determining the number of sharesof Restricted Stock Units on which restrictions will terminate if performanceis at or above the minimum level, but falls short of full achievement of thespecified Management Objectives.

 

12

----

 

### (b)           Each such grant or sale may be made without additionalconsideration or in consideration of a payment by such Participant that is lessthan the Market Value per Share at the Date of Grant.

###  

### (c)           If the Restriction Period lapses solely by the passage oftime, each such grant or sale will be subject to a Restriction Period of notless than three years, as determined by the Board at the Date of Grant, and mayprovide for the earlier lapse or other modification of such Restriction Periodin the event of the retirement, death or disability of a Participant.

###  

### (d)           During the Restriction Period, the Participant will haveno right to transfer any rights under his or her award and will have no rightsof ownership in the Restricted Stock Units and will have no right to vote them,but the Board may at the Date of Grant, authorize the payment of dividendequivalents on such Restricted Stock Units on either a current or deferred orcontingent basis, either in cash or in additional Common Shares.

###  

### (e)           Each grant or sale of Restricted Stock Units will beevidenced by an Evidence of Award and will contain such terms and provisions,consistent with this Plan, as the Board may approve.

###  

## **Section 4.5.**  Performance Shares and Performance Units.  The Board may also authorize the granting ofPerformance Shares and Performance Units that will become payable to aParticipant upon achievement of specified Management Objectives during thePerformance Period.  Each such grant mayutilize any or all of the authorizations, and will be subject to all of therequirements, contained in the following provisions:

##  

### (a)           Each grant will specify the number of Performance Sharesor Performance Units to which it pertains, which number may be subject toadjustment to reflect changes in compensation or other factors; provided,however, that no such adjustment will be made in the case of a CoveredEmployee where such action would result in the loss of the otherwise availableexemption of the award under Section 162(m) of the Code.

###  

### (b)           The Performance Period with respect to each PerformanceShare or Performance Unit will be such period of time (not less than threeyears) as will be determined by the Board at the time of grant, which may besubject to earlier lapse or other modification in the event of the retirement,death or disability of a Participant.

###  

### (c)           Any grant of Performance Shares or Performance Units willspecify Management Objectives which, if achieved, will result in payment orearly payment of the award, and each grant may specify in respect of suchspecified Management Objectives a minimum acceptable level of achievement andwill set forth a formula for determining the number of Performance Shares orPerformance Units that will be earned if performance is at or above the minimumlevel, but falls short of full achievement of the specified ManagementObjectives.  The grant of PerformanceShares or Performance Units will specify that, before the Performance Shares or

 

13

----

 

### Performance Units will be earned and paid,the Board must certify that the Management Objectives have been satisfied.

###  

### (d)           Each grant will specify the time and manner of payment ofPerformance Shares or Performance Units that have been earned.  Any grant may specify that the amount payablewith respect thereto may be paid by the Company in cash, in Common Shares or inany combination thereof and may either grant to the Participant or retain inthe Board the right to elect among those alternatives.

###  

### (e)           Any grant of Performance Shares may specify that theamount payable with respect thereto may not exceed a maximum specified by theBoard at the Date of Grant.  Any grant ofPerformance Units may specify that the amount payable or the number of CommonShares issued with respect thereto may not exceed maximums specified by theBoard at the Date of Grant.

###  

### (f)            The Board may at the Date of Grant of Performance Shares,provide for the payment of dividend equivalents to the holder thereof on eithera current or deferred or contingent basis, either in cash or in additionalCommon Shares.

###  

### (g)           Each grant of Performance Shares or Performance Units willbe evidenced by an Evidence of Award and will contain such other terms andprovisions, consistent with this Plan, as the Board may approve.

###  

# **ARTICLEV - AWARDS TO NON-EMPLOYEE DIRECTORS**

# ** **

## **Section 5.1.**  Awards to Non-Employee Directors.  The Board may, from time to time and uponsuch terms and conditions as it may determine, authorize the granting toNon-Employee Directors Option Rights, Appreciation Rights or other awardscontemplated by Section 6.1 of this Plan and may also authorize the grantor sale of Common Shares, Restricted Stock or Restricted Stock Units toNon-Employee Directors.  Each grant of anAward to a Non-Employee Director will be upon such terms and conditions asapproved by the Board and will be evidenced by an Evidence of Award in suchform as will be approved by the Board. Each grant will specify in the case of an Option Right an Option Priceper share, and in the case of a Free-Standing Appreciation Right, a Base Priceper share, which will not be less than the Market Value per Share on the dayimmediately preceding the Date of Grant. Each Option Right and Free-Standing Appreciation Right granted under thePlan to a Non-Employee Director will expire not more than 10 years from theDate of Grant and will be subject to earlier termination as hereinafter provided.  If a Non-Employee Director subsequentlybecomes an employee of the Company or a Subsidiary while remaining a member ofthe Board, any Award held under the Plan by such individual at the time of suchcommencement of employment will not be affected thereby.  Non-Employee Directors, pursuant to this Section 5.1,may be awarded, or may be permitted to elect to receive, pursuant to proceduresestablished by the Board, all or any portion of their annual retainer, meetingfees or other fees in Common Shares in lieu of cash.

 

14

----

 

# **ARTICLEVI - OTHER AWARDS**

 

## **Section 6.1.**  Other Awards.

##  

### (a)           The Board may, subject to limitations under applicablelaw, grant to any Participant such other awards that may be denominated orpayable in, valued in whole or in part by reference to, or otherwise based on,or related to, Common Shares or factors that may influence the value of suchshares, including, without limitation, convertible or exchangeable debtsecurities, other rights convertible or exchangeable into Common Shares,purchase rights for Common Shares, awards with value and payment contingentupon performance of the Company or specified Subsidiaries, affiliates or otherbusiness units thereof or any other factors designated by the Board, and awardsvalued by reference to the book value of Common Shares or the value ofsecurities of, or the performance of specified Subsidiaries or affiliates orother business units of the Company.  TheBoard may consider recommendations from the Chief Executive Officer or theChairman of the Board relating to such awards and shall determine the terms andconditions of such awards.  Common Sharesdelivered pursuant to an award in the nature of a purchase right granted underthis Section 6.1 shall be purchased for such consideration, paid for atsuch time, by such methods, and in such forms, including, without limitation,cash, Common Shares, other awards, notes or other property, as the Board shalldetermine.

###  

### (b)           Cash awards, as an element of or supplement to any otheraward granted under this Plan, may also be granted pursuant to this Section 6.1of this Plan.

###  

### (c)           The Board may grant Common Shares as a bonus, or may grantother awards in lieu of obligations of the Company or a Subsidiary to pay cashor deliver other property under this Plan or under other plans or compensatoryarrangements, subject to such terms as shall be determined by the Board.

###  

# **ARTICLEVII - GENERAL PROVISIONS**

# ** **

## **Section 7.1.**  Transferability.

##  

### (a)           Except as otherwise determined by the Board, no OptionRight, Appreciation Right or other derivative security granted under the Planshall be transferable by the Participant except by will or the laws of descentand distribution or, except with respect to an Incentive Stock Option, pursuantto a domestic relations order (within the meaning of Rule 16a-12promulgated under the Exchange Act). Except as otherwise determined by the Board, Option Rights andAppreciation Rights will be exercisable during the Participant’s lifetime onlyby him or her or, in the event of the Participant’s legal incapacity to do so,by his or her guardian or legal representative acting on behalf of theParticipant in a fiduciary capacity under state law and**/or**court supervision.

###  

### (b)           The Board may specify at the Date of Grant that part orall of the Common Shares that are (i) to be issued or transferred by theCompany upon the exercise of Option Rights or Appreciation Rights, upon thetermination of the Restriction 

 

15

----

 

### Period applicable to Restricted Stock Unitsor upon payment under any grant of Performance Shares or Performance Units or (ii) nolonger subject to the substantial risk of forfeiture and restrictions ontransfer referred to in Section 6.1 of this Plan, will be subject tofurther restrictions on transfer.

###  

## **Section 7.2.**  Adjustments.  The Board may make or provide for suchadjustments in the numbers of Common Shares covered by outstanding OptionRights, Appreciation Rights, Restricted Stock Units, Performance Shares andPerformance Units granted hereunder and, if applicable, in the number of CommonShares covered by other awards granted pursuant to Section 6.1 hereof, inthe Option Price and Base Price provided in outstanding Appreciation Rights, andin the kind of shares covered thereby, as the Board, in its sole discretion,exercised in good faith, may determine is equitably required to preventdilution or enlargement of the rights of Participants or Optionees thatotherwise would result from (a) any stock dividend, stock split,combination of shares, recapitalization or other change in the capitalstructure of the Company, or (b) any merger, consolidation, spin-off,split- off, spin-out, split-up, reorganization, partial or complete liquidationor other distribution of assets, issuance of rights or warrants to purchasesecurities, or (c) any other corporate transaction or event having aneffect similar to any of the foregoing. Moreover, in the event of any such transaction or event or in the eventof a Change of Control, the Board, in its discretion, may provide insubstitution for any or all outstanding awards under this Plan such alternativeconsideration (including cash), if any, as it, in good faith, may determine tobe equitable in the circumstances and may require in connection therewith thesurrender of all awards so replaced.  TheBoard may also make or provide for such adjustments in the numbers of sharesspecified in Section 3.1 of this Plan as the Board in its sole discretion,exercised in good faith, may determine is appropriate to reflect anytransaction or event described in this Section 7.2; provided, however,that any such adjustment to the number specified in Section 3.1(c)(i) willbe made only if and to the extent that such adjustment would not cause anyoption intended to qualify as an Incentive Stock Option to fail so to qualify.

##  

## **Section 7.3.**  Fractional Shares.  The Company will not be required to issue anyfractional Common Shares pursuant to this Plan. The Board may provide for the elimination of fractions or for thesettlement of fractions in cash.

##  

## **Section 7.4.**  Withholding Taxes.  To the extent that the Company is required towithhold federal, state, local or foreign taxes in connection with any paymentmade or benefit realized by a Participant or other person under this Plan, andthe amounts available to the Company for such withholding are insufficient, itwill be a condition to the receipt of such payment or the realization of suchbenefit that the Participant or such other person make arrangementssatisfactory to the Company for payment of the balance of such taxes requiredto be withheld, which arrangements (in the discretion of the Board) may includerelinquishment of a portion of such benefit.

 

16

----

 

# **ARTICLEVIII - ADMINISTRATION**

 

## **Section 8.1.**  Administration of the Plan.

##  

### (a)           This Plan will be administered by the Board, which mayfrom time to time delegate all or any part of its authority under this Plan tothe Compensation Committee of the Board or any other committee of the Board (ora subcommittee thereof), as constituted from time to time.  To the extent of any such delegation,references in this Plan to the Board will be deemed to be references to suchcommittee or subcommittee.  A majority ofthe committee (or subcommittee) will constitute a quorum, and the action of themembers of the committee (or subcommittee) present at any meeting at which aquorum is present, or acts unanimously approved in writing, will be the acts ofthe committee (or subcommittee).

###  

### (b)           The interpretation and construction by the Board of anyprovision of this Plan or of any agreement, notification or document evidencingthe grant of Option Rights, Appreciation Rights, Restricted Stock, RestrictedStock Units, Performance Shares, Performance Units or other awards pursuant to Section 6.1of this Plan and any determination by the Board pursuant to any provision ofthis Plan or of any such agreement, notification or document will be final andconclusive.  No member of the Board willbe liable for any such action or determination made in good faith.

###  

### (c)           The Board or, to the extent of any delegation as providedin Section 8.1(a), the committee, may delegate to one or more of itsmembers or to one or more officers of the Company, or to one or more agents oradvisors, such administrative duties or powers as it may deem advisable, andthe Board, the committee, or any person to whom duties or powers have beendelegated as aforesaid, may employ one or more persons to render advice withrespect to any responsibility the Board, the committee or such person may haveunder the Plan.  The Board or thecommittee may, by resolution, authorize one or more officers of the Company todo one or both of the following on the same basis as the Board or thecommittee: (i) designate employees to be recipients of awards under thisPlan; (ii) determine the size of any such awards; provided, however,that (A) the Board or the Committee shall not delegate suchresponsibilities to any such officer for awards granted to an employee who isan officer, Director, or more than 10% beneficial owner of any class of theCompany’s equity securities that is registered pursuant to Section 12 ofthe Exchange Act, as determined by the Board in accordance with Section 16of the Exchange Act; (B) the resolution providing for such authorizationsets forth the total number of Common Shares such officer(s) may grant;and (iii) the officer(s) shall report periodically to the Board orthe committee, as the case may be, regarding the nature and scope of the awardsgranted pursuant to the authority delegated.

 

17

----

 

# **ARTICLEIX - AMENDMENTS AND TERMINATION**

 

## **Section 9.1.**  Amendments, Etc.

##  

### (a)           The Board may at any time and from time to time amend thePlan in whole or in part; provided, however, that if an amendmentto the Plan (i) would materially increase the benefits accruing toparticipants under the Plan, (ii) would materially increase the number ofsecurities which may be issued under the Plan, (iii) would materiallymodify the requirements for participation in the Plan or (iv) mustotherwise be approved by the shareholders of the Company in order to complywith applicable law or the rules of the New York Stock Exchange or, if theCommon Shares are not traded on the New York Stock Exchange, the principalnational securities exchange upon which the Common Shares are traded or quoted,then, such amendment will be subject to shareholder approval and will not be effectiveunless and until such approval has been obtained.

###  

### (b)           The Board will not, without the further approval of theshareholders of the Company, authorize the amendment of any outstanding OptionRight to reduce the Option Price. Furthermore, no Option Right will be cancelled and replaced with awardshaving a lower Option Price without further approval of the shareholders of theCompany.  This Section 9.1(b) isintended to prohibit the repricing of “underwater” Option Rights and will notbe construed to prohibit the adjustments provided for in Section 7.2 ofthis Plan.

###  

### (c)           The Board may condition the grant of any award orcombination of awards authorized under this Plan on the surrender or deferralby the Participant of his or her right to receive a cash bonus or othercompensation otherwise payable by the Company or a Subsidiary to theParticipant.

###  

### (d)           If permitted by Section 409A of the Code, in case oftermination of employment by reason of death, disability or normal or earlyretirement, or in the case of unforeseeable emergency or other specialcircumstances, of a Participant who holds an Option Right or Appreciation Rightnot immediately exercisable in full, or any shares of Restricted Stock as towhich the substantial risk of forfeiture or the prohibition or restriction ontransfer has not lapsed, or any Restricted Stock Units as to which theRestriction Period has not been completed, or any Performance Shares orPerformance Units which have not been fully earned, or any other awards madepursuant to Section 6.1 subject to any vesting schedule or transferrestriction, or who holds Common Shares subject to any transfer restrictionimposed pursuant to Section 7.1(b) of this Plan, the Board may, inits sole discretion, accelerate the time at which such Option Right,Appreciation Right or other award may be exercised or the time at which suchsubstantial risk of forfeiture or prohibition or restriction on transfer willlapse or the time when such Restriction Period will end or the time at whichsuch Performance Shares or Performance Units will be deemed to have been fullyearned or the time when such transfer restriction will terminate or may waiveany other limitation or requirement under any such award.

 

18

----

 

### (e)           This Plan will not confer upon any Participant any rightwith respect to continuance of employment or other service with the Company orany Subsidiary, nor will it interfere in any way with any right the Company orany Subsidiary would otherwise have to terminate such Participant’s employmentor other service at any time.

###  

### (f)            To the extent that any provision of this Plan wouldprevent any Option Right that was intended to qualify as an Incentive StockOption from qualifying as such, that provision will be null and void withrespect to such Option Right.  Suchprovision, however, will remain in effect for other Option Rights and therewill be no further effect on any provision of this Plan.

###  

### (g)           The Board may amend the terms of any award theretofore grantedunder this Plan prospectively or retroactively, but subject to Section 7.2above, no such amendment shall impair the rights of any Participant without hisor her consent.  The Board may, in itsdiscretion, terminate this Plan at any time. Termination of this Plan will not affect the rights of Participants ortheir successors under any awards outstanding hereunder and not exercised infull on the date of termination.

###  

# **ARTICLEX - CHANGE OF CONTROL**

# ** **

## **Section 10.1.**  Change of Control.  For purposes of this Plan, except as may beotherwise prescribed by the Board in an Evidence of Award made under this Plan,a “Change of Control” means the consummation of any Change of Control of theCompany, or its principal subsidiary, DP&L (“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 in its solediscretion; provided that, without limitation, such a Change of Control shallbe deemed to have occurred if:

##  

### (a)           any “Person” (as such term is defined in Sections 13(d) or 14(d)(2) ofthe Exchange Act; hereafter, a “Person”) is on the date hereof or becomes thebeneficial owner, directly or indirectly, of securities of the Company orDP&L representing (i) 25% or more of the combined voting power of thethen outstanding Voting Stock of the Company or DP&L if the acquisition ofsuch beneficial ownership is not approved by the Board prior to the acquisitionor (ii) 50% or more of such combined voting power in all other cases; provided,however, that:

###  

#### (i)                                     for purposes ofthis Section 10.1(a), the following acquisitions shall not constitute aChange of Control: (A) any acquisition of Voting Stock of the Company orDP&L directly from the Company or DP&L that is approved by a majorityof the Original Directors or their Successors (as defined below), (B) anyacquisition of Voting Stock of the Company or DP&L by the Company or anySubsidiary, and (C) any acquisition of Voting Stock of the Company orDP&L by the trustee or other fiduciary holding securities under anyemployee benefit plan (or related trust) sponsored or maintained by the Companyor any Subsidiary;

 

19

----

 

#### (ii)                                  if any Personis or becomes the beneficial owner of 25% or more of the combined voting powerof the then-outstanding Voting Stock of the Company or DP&L as a result ofa transaction described in clause (A) of Section 10.1(a)(i) aboveand such Person thereafter becomes the beneficial owner of any additionalshares of Voting Stock of the Company or DP&L representing 1% or more ofthe then-outstanding Voting Stock of the Company or DP&L, other than in anacquisition directly from the Company or DP&L that is approved by amajority of the Original Directors or their Successors or other than as aresult of a stock dividend, stock split or similar transaction effected by theCompany or DP&L in which all holders of Voting Stock of the Company orDP&L are treated equally, such subsequent acquisition shall be treated as aChange in Control;

####  

#### (iii)                               a Change inControl will not be deemed to have occurred if a Person is or becomes thebeneficial owner of 25% or more of the Voting Stock of the Company or DP&Las a result of a reduction in the number of shares of Voting Stock of theCompany or DP&L outstanding pursuant to a transaction or series oftransactions that is approved by a majority of the Original Directors or theirSuccessors unless and until such Person thereafter becomes the beneficial ownerof any additional shares of Voting Stock of the Company or DP&Lrepresenting 1% or more of the then-outstanding Voting Stock of the Company orDP&L, other than as a result of a stock dividend, stock split or similartransaction effected by the Company or DP&L in which all holders of VotingStock are treated equally; and

####  

#### (iv)                              if at least amajority of the Original Directors or their Successors determine in good faiththat a Person has acquired beneficial ownership of 25% or more of the VotingStock of the Company or DP&L inadvertently, and such Person divests aspromptly as practicable but no later than the date, if any, set by the OriginalDirectors or their Successors a sufficient number of shares so that such Personbeneficially owns less than 25% of the Voting Stock of the Company or DP&L,then no Change of Control shall have occurred as a result of such Person’sacquisition; or

####  

### (b)           the Company or DP&L consummates a merger orconsolidation, or consummates a “combination” or “majority share acquisition”in which it is the “acquiring corporation” (as such terms are defined in OhioRev. Code § 1701.01 as in effect on the Effective Date) and in whichshareholders of the Company or DP&L, as the case may be, immediately priorto entering into such agreement, will beneficially own, immediately after theeffective time of the merger, consolidation, combination or majority shareacquisition, securities of the Company or DP&L or any surviving or newcorporation, as the case may be, having less than 50% of the “voting power” ofthe Company or DP&L or any surviving or new corporation, as the case maybe, including “voting power” 

 

20

----

 

### exercisable on a contingent or deferred basisas well as immediately exercisable “voting power”, excluding any merger ofDP&L into the Company or of the Company into DP&L; or

###  

### (c)           the Company or DP&L consummates a sale, lease,exchange or other transfer or disposition of all or substantially all of itsassets to any Person other than to a wholly owned subsidiary or, in the case ofDP&L, to the Company or a wholly owned subsidiary(ies) of the Company; butnot including (i) a mortgage or pledge of assets granted in connectionwith a financing or (ii) a spin-off or sale of assets if the Companycontinues 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; or

###  

### (d)           those persons serving as directors of the Company orDP&L on the Effective Date (the “Original Directors”) and/or theirSuccessors do not constitute a majority of the whole Board of Directors of theCompany or DP&L, as the case may be (the term “Successors” shall mean thosedirectors whose election or nomination for election by shareholders has beenapproved by the vote of at least two-thirds of the Original Directors andpreviously qualified Successors serving as directors of the Company orDP&L, as the case may be, at the time of such election or nomination forelection); or

###  

### (e)           approval by the shareholders of the Company or DP&L ofa complete liquidation or dissolution of the Company or DP&L, as the casemay be.

###  

## **Section 10.2.**  Acceleration.  Notwithstanding anything to the contrarycontained in this Plan and except and unless the Board determines otherwise atthe time of grant of an Award under the Plan (and as set forth in theapplicable Evidence of Award), upon the occurrence of a Change of Control: (a) anyAwards that are outstanding as of the date of such Change of Control that aresubject to vesting requirements and that are not then vested, shall becomefully vested; (b) all then-outstanding Option Rights and AppreciationRights shall be fully vested and immediately exercisable, provided that in noevent shall any Option Right or Appreciation Right be exercisable beyond itsoriginal expiration date; and (c) all restrictions and other conditionsprescribed by the Board, if any, with respect to grants of Restricted Stock,Restricted Stock Units, Performance Shares, Performance Units, and other awardsgranted pursuant to Section 6.1 hereof, shall automatically lapse, expireand terminate and all such awards shall be deemed to be fully earned.

##  

## **Section 10.3.**  Section 409A.  To the extent an Award shall be deemed to bevested or restrictions lapse, expire or terminate upon the occurrence of aChange of Control pursuant to Section 10.2 and such Change of Control doesnot constitute a “change in the ownership or effective control” or a “change inthe ownership of a substantial portion of the assets” of the Company within themeaning of Section 409A(a)(2)(A)(v) of the Code, then notwithstandingthat the award shall be deemed to be vested or restrictions lapse, expire orterminate upon the occurrence of the Change of Control or any other provisionof this Plan, payment will be made, to the extent 

 

21

----

 

## necessary to comply with the provisions of Section 409Aof the Code, to the Participant on the earliest of (i) the Participant’s “separationfrom service” with the Company (determined in accordance with Section 409Aof the Code); provided, however, that if the Participant is a “specifiedemployee” (within the meaning of Section 409A of the Code), the paymentdate shall be the date that is six months after the date of the Participant’sseparation from service with the Company, (ii) the date payment otherwise would have been made in the absenceof Section 10.2**(provided suchdate is a permissible distribution date under Section 409A of the Code),or (iii) the Participant’s death.

##  

# **ARTICLEXI - MISCELLANEOUS**

# ** **

## **Section 11.1.**  Detrimental Activity.  Any Evidence of Award may provide that if aParticipant, either during employment by the Company or a Subsidiary or withina specified period after termination of such employment, shall engage in anyDetrimental Activity, and the Board shall so find, forthwith upon notice ofsuch finding, the Participant shall:

##  

### (a)           Forfeit any Award granted under the Plan then held by theParticipant;

###  

### (b)           Return to the Company, in exchange for payment by theCompany of any amount actually paid therefor by the Participant, all CommonShares that the Participant has not disposed of that were offered pursuant tothis Plan within a specified period prior to the date of the commencement ofsuch Detrimental Activity, and

###  

### (c)           With respect to any Common Shares so acquired that theParticipant has disposed of, pay to the Company in cash the difference between:

###  

#### (i)                                     Any amountactually paid therefor by the Participant pursuant to this Plan, and

####  

#### (ii)                                  The MarketValue per Share of the Common Shares on the date of such acquisition.

####  

Tothe extent that such amounts are not paid to the Company, the Company may setoff the amounts so payable to it against any amounts that may be owing fromtime to time by the Company or a Subsidiary to the Participant, whether aswages, deferred compensation or vacation pay or in the form of any otherbenefit or for any other reason.

 

## **Section 11.2.**  Compliance with Section 409A of theCode.  To the extent applicable, itis intended that this Plan and any grants made hereunder comply with theprovisions of Section 409A of the Code. The Plan and any grants made hereunder shall be administered in a mannerconsistent with this intent.  Anyreference in this Plan to Section 409A of the Code will also include anyregulations, or any other formal guidance, promulgated with respect to such Section bythe U.S. Department of the Treasury or the Internal Revenue Service.

 

22

----

 

## **Section 11.3.**  Governing Law.  The Plan and all grants and awards andactions taken thereunder shall be governed by and construed in accordance withthe internal substantive laws of the State of Ohio.

##  

## **Section 11.4.**  Termination.  No grant will be made under this Plan morethan 10 years after the date on which this Plan is first approved by theshareholders of the Company, but all grants made on or prior to such date willcontinue in effect thereafter subject to the terms thereof and of this Plan.

##  

## **Section 11.5.**  General Provisions.

##  

### (a)           No award under this Plan may be exercised by the holderthereof if such exercise, and the receipt of cash or stock thereunder, wouldbe, in the opinion of counsel selected by the Board, contrary to law or theregulations of any duly constituted authority having jurisdiction over thisPlan.

###  

### (b)           Absence on leave approved by a duly constituted officer ofthe Company or any of its Subsidiaries shall not be considered interruption ortermination of service of any employee for any purposes of this Plan or awardsgranted hereunder, except that no awards may be granted to an employee while heor she is absent on leave.

###  

### (c)           No Participant shall have any rights as a stockholder withrespect to any shares subject to awards granted to him or her under this Planprior to the date as of which he or she is actually recorded as the holder ofsuch shares upon the stock records of the Company.

###  

### (d)           If any provision of the Plan is or becomes invalid,illegal or unenforceable in any jurisdiction, or would disqualify the Plan orany award under any law deemed applicable by the Board, such provision shall beconstrued or deemed amended or limited in scope to conform to applicable lawsor, in the discretion of the Board, it shall be stricken and the remainder ofthe Plan shall remain in full force and effect.

 

23

----