**Exhibit10(f)**

 

**THE DAYTON POWER AND LIGHT COMPANY**

 

**SUPPLMENTAL EXECUTIVE RETIREMENT PLAN**

 

**(As Amended Through February 1, 2000)**

 

**Section 1****.****             ****Establishmentof the Plan**

 

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

 

**1.2****         ****Description of the Plan****.**  This Plan has been established in order to providesupplemental retirement benefits (and as such the Plan is exempt from theparticipation, vesting, funding and fiduciary requirements of Title I of theEmployee Retirement Income Security Act of 1974, as amended), and to preventfrustration of the purposes of the Plan in the event of a Change of Control asdefined herein.

 

**1.3****         ****Purpose of the Plan****.**  In addition to thedescription of the Plan as set forth in subsection 1.2 above, the primaryobjectives of the Company in establishing this Plan are as follows:

 

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

 

b)            To enhance the ability toretain and motivate Eligible Executives in similar situations and eliminateindividual deferred compensation arrangements for the purpose of providingcompetitive retirement benefits.

 

c)             To permit earlier thannormal retirement of Eligible Executives when and if desirable. The provisionsof this Plan are applicable to Eligible Executives of the Company who retire orterminate employment on or after January 1, 1977 and are approved by theCommittee. Any person who retired from or terminated employment with theCompany prior to January 1, 1977 shall not be eligible for any benefitsunder this Plan.

 

**Section 2****.****             ****Definitions**

 

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

 

a)             **“Board of Directors”** means theBoard of Directors of DPL Inc. in place from time to time prior to a Change ofControl.

 

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

 

c)             **“Changeof Control”** means any change in control of DPL, or itsprincipal subsidiary, DP&L, of a nature that would be required to bereported in response to Item 6(e) of Schedule 14A of Regulation 14Apromulgated under the Securities Exchange Act of 1934, as amended (the“Exchange Act”) as determined by the Board of Directors in its sole discretion;provided that, without limitation, such a Change of Control shall be deemed tohave occurred if (i) any “person” (as such term is defined in Sections 13(d) and14(d)(2) of the Exchange Act; hereafter, a “Person”) other than DPL orDP&L or an entity then directly or indirectly controlling, controlled by orunder common control with DPL or DP&L is on the date hereof or becomes orcommences a tender offer to become the beneficial owner, directly orindirectly, of securities of DPL or DP&L representing (A) 15% or moreof the combined voting power of the then outstanding securities of DPL orDP&L if the acquisition of such beneficial ownership or such tender offeris not approved by the Board of Directors prior to the acquisition or thecommencement of such tender offer or (B) 50% or more of such combinedvoting power in all other cases; (ii) DPL or DP&L enters into anagreement to merge or consolidate itself, or an agreement to consummate a“combination” or “majority share acquisition” in which it is the “acquiringcorporation” (as such terms are defined in Ohio Rev. Code 1701.01 as in effecton December 31, 1990) and in which shareholders of DPL or DP&L, as thecase may be, immediately prior to entering into such agreement, willbeneficially own immediately after the effective time of the merger,consolidation, combination or majority share acquisition, securities of DPL orDP&L or any surviving or new corporation, as the case may be, having lessthan 50% of the “voting power” of DPL or DP&L or any surviving or newcorporation, as the case may be, including “voting power” exercisable on acontingent or deferred basis as well as immediately exercisable “voting power”,excluding any merger of DPL into DP&L or of DP&L into DPL; (iii) DPLor DP&L enters into an agreement to sell, lease, exchange or otherwisetransfer or dispose of all or substantially all of its assets to any Personother than to a wholly-owned subsidiary or, in the case of DP&L, to DPL;but not including (A) a mortgage or pledge of assets granted in connectionwith a financing or (B) a spin-off or sale of assets if DPL continues inexistence and its common shares are listed on a national securities exchange,quoted on the automated quotation system of a national securities associationor traded in the over-the-counter market; (iv) any transaction referred toin (ii) or (iii) above is consummated; or (v) those personsserving 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 forelection by shareholders has been approved by the vote of at least two-thirdsof the Original Directors and previously qualified Successors serving asdirectors of DPL or DP&L, as the case may be, at the time of such electionor nomination for election).

 

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

 

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

 

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

 

g)            **“Eligible Executive”** means eachemployee who is a participant in “Retirement Income Plan Two of The DaytonPower and Light Company,” as in effect from time to time, including anysuccessor plan thereto (the “Qualified Plan”) (i) who has been approvedfor participation in the Plan from time to time by the CEO and the Committee or(ii) who participates in the Company’s Key Employees Deferred CompensationPlan but who has been selected by the CEO or the Committee to be only entitledto the benefit provided in Section 4.5 hereof. As memorialized in separateletter agreements, the participation by certain employees in the Plan wasterminated effective as of January 1, 2000 and the present value, asdetermined by the Committee, of each such employee’s accrued benefits under thePlan was credited to the Standard Deferral Account of such employee under theCompany’s Key Employees Deferred Compensation Plan. These employees are nolonger “Eligible Participants.”

 

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

 

1)             For a normal retirementunder subsection 4.1, for the three calendar years, whether or not consecutive,out of the last ten completed consecutive calendar years during which theEligible Executive received compensation (or fewer if the Eligible Executivehas not completed ten calendar years) prior to the year in which the first ofthe following occurs (i) his Normal Retirement Date (under the QualifiedPlan); or (ii) his cessation of employment with the Company; or (iii) his65th birthday; which yield the highest average; or

 

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

 

i)              **“Primary Social SecurityBenefit”** means the monthly amount as determined by theCommittee (in consultation with an actuary selected by the Committee) which anEligible Executive would receive at the earliest possible retirement age upontimely and proper 

 

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

 

j)              **“Other Benefit”** means, foreach Eligible Executive, the estimated monthly benefit that can be provided asa life annuity beginning at the date his benefit payments under this Plancommence, based upon the amount of monthly retirement benefits under theQualified Plan, or under any other qualified pension or retirement plan whetheror not sponsored by the Company (“Non-Company Plan”), and inclusive of theestimated monthly benefit that would have been provided under any Non-CompanyPlan had the Eligible Executive not received any prior lump sum payments fromsuch plan, which is based on service for which the Eligible Executive receivesService and Benefit Service credit hereunder, but excluding any Non-CompanyPlan savings plan similar to the Savings Plan, or the benefit from anyNon-Company Plan to the extent attributable to employee contributions. TheCommittee shall determine such Other Benefit in consultation with an actuaryselected by the Committee, using such accepted actuarial tables and reasonableinterest assumptions and actuarial reduction factors, if appropriate, as theCommittee shall determine. The adjustment for Other Benefit as described insubsections 4.1(b)(2) and 4.3(b)(2) hereof, shall be made not only inthe case of one actually receiving an Other Benefit, but also in the case ofone who would be entitled to receive an Other Benefit but is not actuallyreceiving it in that he does not make application therefor.

 

k)             **“Service” and “Benefit Service”** means anEligible Executive’s period of service with the Company, as determined by theCommittee, using the rules set forth in the Qualified Plan as in effectwhen the Eligible Executive’s service terminated, it is specifically intendedunder this Plan to include as Service and Benefit Service any period ofemployment with the Company prior to the Eligible Executive’s coverage underthis Plan and also such period of employment as an employee of the Companyprior to becoming an Eligible Executive. The Committee may, in its solediscretion, approve the inclusion as Service and Benefit Service of any periodof employment with another company prior to an Eligible Executive’s period ofemployment by the Company, using the same rules to credit such service asare used for the crediting of service for employment with the Company.

 

**Section 3****.****             ****Eligibilityand Participation**

 

**3.1****         ****Eligibility****. **Any employee of the Companywho is an Eligible Executive (as defined herein) shall be eligible toparticipate in the Plan.

 

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

 

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

 

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

 

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

 

(ii)           the date upon which he is nolonger entitled to receive any benefits hereunder.

 

Provided,however, that under (b) above if an Eligible Executive’s serviceterminates on or after he becomes eligible to receive (then or thereafter) abenefit under this Plan he shall be entitled to such benefit as providedherein, and if an Eligible Executive’s Service terminates before he becomeseligible to receive (then or thereafter) a benefit under this Plan, he thereuponshall cease participation in the Plan unless and until he thereafter becomeseligible to participate again in accordance with subsections 2.1(g) and3.1 hereof.

 

**Section 4****.****             ****Benefits**

 

**4.1****         ****NormalRetirement Benefits**

 

a)             **Eligibility****.**  An Eligible Executive shall be eligible toreceive a normal retirement benefit under the Plan, in accordance with andsubject to the provisions of the Plan, upon termination of his Service whichoccurs on or after his 62nd birthday.

 

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

 

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

 

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

 

A)                                  87% of hisfirst $800 of Final Average Compensation;

 

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

 

C)                                    the amount ofhis Primary Social Security Benefit.

 

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

 

2)                      His Other Benefit.

 

3)                      The value of any benefit previously received underthis Plan.

 

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c)             **Commencement and Duration****.**  Except as provided in subsection 4.7, monthlynormal retirement benefit payments for an Eligible Executive covered bysubsection 4.1(a) above shall begin as of the first day of the calendar monthnext following the date such Eligible Executive’s Service terminates, and shallbe paid as a single life annuity for the Eligible Executive.

 

**4.2****         ****Early Retirement Benefits****.**

 

a)             **Eligibility****. **An Eligible Executive shallbe eligible to receive an early retirement benefit under the Plan, inaccordance with and subject to the provisions of the Plan, upon termination ofhis Service prior to his 62nd birthday but after he hascompleted at least 10 years of Service.

 

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

 

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

 

**4.3****         ****[Intentionallyleft blank.]**

 

**4.4****         ****SurvivingSpouse/Estate Benefit**

 

a)             **Pre-Retirement Spousal Benefit****.**  If an Eligible Executive dies beforecommencement of monthly retirement benefit payments under this Plan, and leavesa surviving spouse (“Spouse”), then such Eligible Executive’s Spouse shall beentitled to receive a monthly benefit under the Plan. The monthly benefit shallcommence on a date beginning within thirty (30) days after the death of theEligible Executive, and shall be equal to the monthly benefit amount to whichthe Eligible Executive would have been entitled under subsection 4.1, 4.2 or4.5 hereunder had he terminated employment on the date of his death and beganto collect payments immediately, with an appropriate discount to present valuein the event that the Eligible Executive had not yet reached his 55th birthday, which benefit shall continue forthat number of months that is equivalent to the Eligible Executive’s remainingactuarial life expectancy 

 

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

 

b)            **Post-Retirement Benefit****.**  If an Eligible Executive dies after thecommencement of monthly retirement benefit payments under this Plan, then suchEligible Executive’s Spouse, or designated beneficiary if there is no suchSpouse, or estate if there is no designated beneficiary shall be entitled toreceive a monthly benefit under this Plan equal to the monthly benefit receivedby the Eligible Executive, which benefit shall continue for that number ofmonths that is equivalent to the Eligible Executive’s remaining actuarial lifeexpectancy determined as of the date monthly benefits under the Plan began, asdetermined by the Committee in consultation with an actuary selected by it.

 

**4.5****         ****Benefitfor Persons Participating Only in The Dayton Power and Light Company KeyEmployee Deferred Compensation Plan****.**  Notwithstanding any other provision in thisPlan to the contrary, an employee who participates in The Dayton Power andLight Company Key Employee Deferred Compensation Plan and who is not anEligible Executive pursuant to Section 2.1(g)(i) hereof, will receivea benefit under this Plan equal (and limited) to:

 

a)                                      The benefit hewould have received under the Qualified Plan if he had not deferredcompensation under The Dayton Power and Light Company Key Employee DeferredCompensation Plan; less

 

b)                                     The benefitactually paid under the Qualified Plan; less

 

c)                                      The value ofany benefit previously received under this Plan.

 

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

 

**4.6****         ****LumpSum Amount****.**

 

a)             **Request For Conversion of Benefitto Lump Sum Amount****.**  An Eligible Executive may submit a writtenrequest to the Committee within sixty (60) days prior to or after terminationof Service requesting that all of the Eligible Executive’s benefits payablepursuant to Section 4.1, 4.2, or 4.5 of the Plan be converted into a LumpSum Amount (as defined in subsection 4 and that such Lump Sum Amount be paideither in a single lump sum payment or in annual installments over a period ofup to 20 years, together with earnings on the unpaid balance determined inaccordance with this subsection 4.6(a). The lump sum payment, or the firstinstallment payment, as the case may be, shall, if approved as provided insubsection 4.6(b), be made, unless otherwise determined by the Committee in itsdiscretion, on or prior to the January 31 immediately after approval ofthe request (but, subject to subsections 4.6(e) and 4.7, no earlier thanage 55), with subsequent annual installments, if payments are to be made inannual installments, to be paid on or prior to each January 31 thereafteruntil the “Unpaid Amount” has been paid in full.

 

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Ifan Eligible Executive’s benefits under the Plan have been converted into a LumpSum Amount in accordance with this Section 4.6 and such Eligible Executive(an “Electing Executive”) has requested that such Lump Sum Amount be paid inannual installments, then, for purposes of measuring the amounts which may bedistributed under the Plan, the “Unpaid Amount” of such Electing Executiveshall be deemed invested in such “Eligible Investment Options” as such ElectingExecutive may designate from time to time as provided herein. For purposes ofthe Plan, the term “Unpaid Amount” means, at any time with respect to anyElecting Executive, such Electing Executive’s Lump Sum Amount (together withany dividends, interest, distributions or other amounts credited theretopursuant to this subsection 4.6(a)) less the aggregate amount of allinstallment payments theretofore made to such Electing Executive and the term“Eligible Investment Options” means those securities, mutual funds or otherinvestment vehicles set forth on Schedule I hereto, as such Schedule I may bemodified from time to time by the Committee upon at least 30 days’ prior noticeto the Electing Executives.

 

EachElecting Executive shall have the option, ,by delivering to the Secretary ofCompany a completed Investment Option Election Form in the form attachedhereto as Exhibit D (or such other form as the Committee may designatefrom time to time) on or prior to each such date as the Committee may specifyfrom time to time for such purpose or, in the case of the first election, on orprior to the conversion of such Electing Executive’s benefits under the Planinto a Lump Sum Amount (each of the foregoing dates, an “Election Date”), todesignate or change, in a percentage equal to at least 10%, the portions of hisUnpaid Amount which shall be deemed invested in each Eligible Investment Optionas of each Election Date. Any such designation by an Electing Executive shallremain in effect until changed in accordance with the preceding sentence. Anyincrease in the percentage of an Electing Executive’s Unpaid Amount deemedinvested in an Eligible Investment Option effected on any Election Date shallbe deemed to be a purchase of such Eligible Investment Option and any decreasein the percentage of an Electing Executive’s Unpaid Amount deemed invested inan Eligible Investment Option effected on any Election Date shall be deemed tobe a sale of such Eligible Investment Option, and any such purchase or sale shallbe deemed to have occurred as of the last business day immediately prior tosuch Election Date at the closing price of such Eligible Investment Option onsuch date. In the absence of any such designation by an Electing Executive withrespect to all or any portion of his Unpaid Amount, such Unpaid Amount (or suchportion) shall be credited with interest on the first day of each month in anamount equal to one-twelfth of the simple average yield of the annualized AAutility bond averages as published monthly in Moody’s Bond Survey for thepreceding quarter. All dividends, interest, distributions and other amountspaid or distributed from time to time with respect to any Eligible InvestmentOption in which all or any portion of an Electing Executive’s Unpaid Amount isdeemed invested shall be credited to such Electing Executive’s Unpaid Amountand shall be deemed reinvested in such Eligible Investment Option.

 

TheCompany shall not be required to purchase, hold or dispose of any EligibleInvestment Options designated by Electing Executives. To the extent that theCompany does, in its discretion, purchase or hold any of the EligibleInvestment Options designated by Electing Executives, the same shall remain thesole property of the Company, subject to the claims of its general creditors,and no Electing Executive shall have a property interest therein or claimthereto.

 

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Forpurposes of any distribution with respect to an Electing Executive’s UnpaidAmount pursuant to this subsection 4.6(a), the amount of such ElectingExecutive’s Unpaid Amount on any date shall be equal to the value (determinedon the basis of the closing prices on the last business day immediatelypreceding such date) of all Eligible Investment Options in which such ElectingExecutive’s Unpaid Amount is deemed to be invested on such date and, in thecase of a partial distribution of such Electing Executive’s Unpaid Amount, theamount of such distribution shall proportionately reduce the amount which isdeemed invested in each Eligible Investment Option.

 

b)            **Conditions to Conversion ofBenefit to Lump Sum Amount****.**  The Committee, in its sole discretion, mayapprove or deny an Eligible Executive’s request made pursuant to subsection 4.6(a) forconversion of the Eligible Executive’s benefit into a Lump Sum Amount, andpayment thereof as a lump sum, or as a series of installment payments basedthereon, as described in subsection 4.6(a). In addition, the Committee shall,subject to subsections 4.6(d), (e) and (f) hereof in all cases inwhich a lump sum payment or a series of installment payments based thereon isapproved, require that the Eligible Executive enter into a noncompetitionagreement with the Company in substantially the form attached hereto as Exhibit A,with the Committee to determine, in its sole discretion, the geographiclocation of such non-competition agreement. The term of the non-competitionagreement shall be for such period from the date of termination as theCommittee may, in its sole discretion, determine, if the Lump Sum Amount ispaid as a lump sum payment, or for a period equivalent to the period over whichinstallment payments are made if the Lump Sum Amount is paid in installmentpayments.

 

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

 

d)            **Death ofExecutive****.**  Notwithstandingsubsection 4.6(b), if an Eligible Executive dies after requesting a lump sumpayment or series of fixed installment payments but prior to receiving approvalof such payment from the Committee, the lump sum payment or installmentpayments may be approved notwithstanding the absence of a noncompetitionagreement and determined under subsection 4.6(c) based upon facts existingon the date the request was made. If such approval is obtained, or if anEligible Executive who is receiving the Lump Sum Amount in installment paymentsdies prior to receipt of all installments then all future payments hereundershall be paid to the beneficiary or beneficiaries designated by the EligibleExecutive, or to the estate of the Eligible Executive on failure to sodesignate a beneficiary.

 

e)             **Change ofControl****.**  Notwithstanding anyprovision of this Plan (including subsection 4.6(b)), an Eligible Employeeshall be entitled to a lump sum payment (the “Lump Sum Payment”), ontermination of his/her employment with the Company under circumstances in whichpayments under paragraph 5.A. [or successor provision] of the EligibleExecutive severance letter agreement with the Company would become due andpayable to the Eligible

 

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Executive (or, if the Eligible Executive is not then a partyto a severance letter agreement, under circumstances in which payments underparagraph 5.A. [or successor provision] of the most restrictive severanceletter agreement between the Company and any employee [in terms of triggeringthe Company’s obligation to pay benefits to the employee] would become due andpayable to the Eligible Executive if he were a party thereto). The Lump SumPayment shall equal the lump sum payment computed in accordance with subsection4.6(c) hereof. The Lump Sum Payment shall be paid immediately upontermination.

 

Notwithstanding any other provision of the Plan, aftera Change of Control, any portion of a distribution to be made to an ElectingExecutive with respect to the Unpaid amount of such Electing Executive may, atthe request of such Electing Executive at least 30 days prior to the scheduleddate of such distribution, be made, by the Trustees of the Master Trust(s) pursuantto which benefits under the Plan are being funded, in the sole and absolutediscretion of such Trustees, in the form of any Eligible Investment Optionsactually held by such Master Trust(s) for purposes of funding suchdistribution to such Electing Executive under the Plan. For purposes of makingany such distribution, any Eligible Investment Option so distributed shall bevalued at its closing price on the last business day immediately preceding thedate of such distribution and such distribution shall be net of any applicablefederal, state or local withholding taxes unless the Electing Executive makes acash payment, concurrently with such distribution, to the Master Trust(s) makingsuch distribution for the purpose of paying such withholding taxes. Nothingcontained in this paragraph shall require the Company (or any of the MasterTrusts) to purchase, hold or dispose of any Eligible Investment Optionsdesignated by Electing Executives. To the extent that any Master Trust holds anyEligible Investment Options, the same shall remain the sole property of theCompany, subject to the claims of its general creditors, and no ElectingExecutive shall have any property interest therein or claim thereto.

 

(f)            **SurvivingSpouse Lump Sum Benefit****.**  If an EligibleExecutive dies under circumstances in which subsection 4.4(a) hereof wouldapply, then the Spouse may submit a written request to the Committee within onehundred twenty (120) days after the Eligible Executive’s date of deathrequesting that the benefits payable pursuant to Section 4.4 be paid in asingle lump sum, computed in accordance with the principles of subsection4.6(c), to be made as soon as reasonably possible after approval of therequest. Such request may be approved by the Committee, in its sole discretion,notwithstanding the absence of a non-competition agreement.

 

(g)           **EstateLump Sum Benefit****.**  If an EligibleExecutive dies under circumstances in which subsection 4.4(a) would applybut for the fact that such Eligible Executive does not have a surviving Spouse,then the Eligible Executive’s designated beneficiary shall be entitled to animmediate lump-sum payment equal to the amount which would have been receivedunder subsection 4.6(f) had the Eligible Executive had a surviving Spousewho had requested and been awarded the single lump-sum provided therein. If anEligible Executive has not designated a beneficiary, or if the designatedbeneficiary does not survive the Eligible Executive, then such lump-sum amountwill be paid to the Eligible Executive’s estate.

 

**4.7****         ****Early Distribution****.**   Notwithstanding any other provision of thePlan to the contrary, the Committee may, upon receiving a written request fromthe Eligible Executive and determining that a distribution is in the bestinterest of the Company and the Eligible Executive

 

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

 

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

 

**Section 5****.****             ****Administration**

 

**5.1****         ****Administration****.**  The Company shall be responsible for thegeneral administration of the Plan and the carrying out of the provisionsthereof, and shall have all, rights and powers required in connectiontherewith, including the right to establish rules for the administrationof the Plan and the methods to be used to calculate benefits under this Plan.

 

**Section 6****.****             ****Financing**

 

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

 

**Section 7****.****             ****Master Trusts**

 

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

 

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

 

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

 

**Section 8****.****             ****Change of Control****.**  In the event of any Change of Control, asdefined herein:

 

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

 

b)            (Intentionallyleft blank.)

 

c)             Upona Change of Control, the Company shall immediately transfer to one or more ofthe Master Trusts an aggregate amount of cash which, when combined with theother assets of the Master Trusts contributed or accruing thereto under or byreason of Section 7 hereof, is equal to the value of benefits accrued byEligible Employees under the Plan through the date of Change of Control, andincluding cash sufficient to make the lump sum payments described in Section 4.6(e) hereofas if termination of employment occurred on the date of such Change of Control.

 

**Section 9****.****             ****General Provisions**

 

**9.1****         ****Non-assignability****.**  Neither a Participant, nor his beneficiary,nor any other individual shall have an right by way of anticipation orotherwise to alienate, sell, transfer, assign, pledge, charge or otherwisedispose of any benefits which may become payable under this Plan, prior to thetime 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.

 

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

 

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

 

Inthe event a guardian or conservator or statutory committee of the estate of anyperson receiving or claiming benefits under the Plan shall be appointed by acourt of competent jurisdiction, payment shall be made to such guardian or conservatoror statutory committee provided that proper proof of appointment is furnishedin a form and manner suitable to the Committee. Any payment made under theprovisions of this subsection 9.2 shall be a complete discharge of liabilitytherefor under the Plan.

 

**9.3****         ****EmploymentRights****. **Theestablishment of the Plan shall not be construed as conferring any legal rightsupon any Eligible Executive or any person for a continuation  of employment, nor shall it interfere withthe rights of the Company to discharge any person and/or to treat him in thesame manner as a person not covered by this Plan and without regard to theeffect which such treatment might have upon him as a person covered by thisPlan.

 

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

 

 

(i)            Prior to a Change ofControl; to the

 

Secretaryof DP&L at:

MacGregorPark

WoodmanDrive

Dayton,Ohio 45432

Attention:Corporate Secretary

 

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

 

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

 

**9.5****         ****Waiverof Notice****.**  Any notice required hereunder may be waivedby the person entitled thereto.

 

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

 

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**9.7****         ****Noticeof Address****.**  Any payment to an Eligible Executive, or incase of his death to his beneficiary, at the last known post office address ofthe distributee on file with the Company, shall constitute a completeacquittance and discharge to the Company and Director or officer with respectthereto unless the Company shall have received prior written notice of anychange in the condition or status of the distributee.  Neither the Company nor any Director orofficer shall have the duty or obligation to search for or ascertain thewhereabouts of any Eligible Executive or his spouse.

 

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

 

**9.9****         ****Forfeitureof Benefits****. **Notwithstandingthe provisions of Section 4, if he Company determines that an EligibleExecutive, while in the employ of the Company or while receiving (or eligibleto receive) payment under the Plan, has

 

a)             committed afelony,

 

b)            taken part in afraud, or

 

c)             been terminatedfor cause,

 

theEligible Executive, as of the date of such determination shall forfeit, at theelection of the Company and action of the Committee, all entitlement topayments under this Plan. This subsection 9.9 shall apply, however, for aperiod of three years following each Change of Control by substituting for b)and c) above the following

 

b)            embezzled, or

 

c)             illegally used drugs

 

asthe circumstance under which an Eligible Executive’s benefits under the Planmay be forfeited.

 

**9.10****       ****No Individual Liability****.**  It is declared to be the express purpose andintention of the Plan that no liability whatever shall attach to or be incurredby the shareholders, officers, or Directors of the Company, or anyrepresentatives appointed hereunder by the Company, under or by reason of anyof the terms or conditions of the Plan.

 

**9.11****       ****Illegality of ParticularProvision****.**  If any particular provision of this Planshall be found to be illegal or unenforceable, such provision shall not affectthe other provisions thereof, but the Plan shall be construed in all respectsas if such invalid provision were omitted.

 

**9.12****       ****Genderand Number****.**  Except when indicated by the context, anymasculine terminology used herein shall also include the feminine, and the useof any term herein in the singular may also include the plural.

 

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**Section 10****.****           ****Interpretationand Amendment****.**  The Plan will be administered by theCommittee. The decision of the Committee with respect to the administration ofthe Plan will be final and binding. The Committee reserves the right prior to aChange of Control, to amend, modify or terminate the Plan; provided, howeverthat (i) no amendment, modification or termination of the Plan shalladversely affect any right or benefit earned or accrued under the Plan by anyEligible Executive prior to any such amendment, modification or terminationwithout the prior written consent of such Eligible Executive and (ii) followinga Change of Control the Committee’s discretion under this Section 10 willbe exercised as provided in Section 8(a) hereof; provided furtherthat the Trustees shall have no authority to terminate the Plan.

 

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

 

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**EXHIBIT A**

 

**AGREEMENT NOT TOCOMPETE**

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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**Section 3****.****             ****Remedies****. **The Executive acknowledges that any violation of Section 1of this Agreement may cause irreparable harm to the Company and that damagesalone are not an adequate remedy. The Executive therefore agrees that theCompany shall be entitled to an injunction by any court of competentjurisdiction enjoining, prohibiting and restraining the Executive from thecontinuance of any such violation, in addition to any monetary damages whichmight occur by reason of any such violation. The remedies provided in thisAgreement are cumulative and shall not exclude any other remedies to which anyparty hereto may be entitled under this Agreement or applicable law and theexercise of a remedy shall not be deemed an election excluding any otherremedy.

 

**Section 4****.****             ****Enforceability****.**  If, for any reason, any provision containedin this Agreement should be held invalid in part by a court of competentjurisdiction, then it is the intent of each of the parties hereto that the balanceof this Agreement be enforced to the fullest extent permitted by applicablelaw. It is the intent of each of the parties that the covenant not to competecontained in Section 1 of this Agreement be enforced to the fullest extentpermitted by applicable law. Accordingly, in the event that a court ofcompetent jurisdiction determines that the scope of the covenant is too broadto be enforced as written, it is the intent of each of the parties that thecourt should reform the covenant to such narrower scope as it determinesenforceable and this Agreement shall be deemed amended to the extent requiredto render it valid and enforceable and that such amendment shall apply onlywith respect to the operation of this Agreement in the jurisdiction of thecourt which has made such adjudication.

 

**Section 5****.****             ****Non-waiver**.  The failure of any party to requireperformance of any of the provisions of this Agreement shall not be deemed awaiver of any such provision and the obligations of the parties hereunder shallremain in full force and effect.

 

**Section 6****.****             ****Assignment and Benefit****.**  This Agreement shall be binding upon, shallbe assignable by and shall inure to the benefit of the Company and itssuccessors and assigns. This Agreement is personal to the Executive and may notbe assigned by him.

 

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

 

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

 

**Section 9****.****             ****Headings****.**  The headings in this Agreement are forconvenience of reference only and shall not limit or otherwise affect themeaning of this Agreement.

 

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**Section 10****.****           ****G****overning Law****. **This Agreement shall begoverned by, and construed and enforced in accordance with, the laws of theState of Ohio.

 

INWITNESS WHEREOF, the parties have executed this Agreement on or as of the datefirst written above.

 
|   | THE  DAYTON POWER AND LIGHT COMPANY |
|--------|-------------------------------------|
|   |                                |
|   | By                                  |   |
|   |                                |   |
|   | Title                               |   |

 

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**EXHIBIT B**

 

Theformula used in computing the lump sum provided for in Section 4.6 shalluse the following interest rate and mortality assumptions.

 

A.            Interest Rate

 

Theaverage of the monthly Pension Benefit Guaranty Corporation (“PBGC”) interestrate for immediate annuities, as currently published in Appendix B to part 2619of the PBGC Regulations (the “PBGC Rate”) for the year end periods 1995 and1996 was used for the initial period ending December 31, 1998. Thatinitial interest rate was set at 4.6% (see the calculation attached). Theinterest rate was reset for the period January 1, 1999 through December 31,2000 at 4.35% based upon the average PBGC Rate for the year end periods 1997and 1998. The interest rate will be reestablished for future two year periodsprovided, however, that the rate shall not be adjusted by more than 25 basispoints from the prior two year period and provided further that if the ratecomputed herein for future periods becomes plus or minus 200 basis points fromthe initial rate, then the Committee shall reevaluate said rate based uponcurrent conditions and fairness to participants.

 

B.            Mortality

 

The1983 Individual Annuity Mortality Table shall be used in the computation of thelump sum provided for in Section 4.6.

 

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**PBGC IMMEDIATE INTEREST RATES**

**YEAR END**

 
| ** ** | ** ** | **2 YEAR  AVERAGE** | ** ** |
|------------|------------|---------------------|------------|
| 1995       |       | 4.50                | %          |
| 1996       |       | 4.75                | %          |
| TOTAL      |       | 9.25                | %          |
| AVERAGE    |       | 4.63                | %          |

 

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**EXHIBIT C**

 

**THE DAYTON POWER AND LIGHT COMPANY**

 

**SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN**

 

**BENEFICIARY DESIGNATION**

 

Allpayments required to be made under the Plan to my designated beneficiary in theevent of my death shall be made to the following person:

 

Nameof designated beneficiary:

 

Addressof designated beneficiary:

 

 

 

 

Ifthe above-designated beneficiary does not survive me, the payments will be madeto the following successor beneficiary (or to my estate on failure to designateotherwise):

 

Nameof designated beneficiary:

 

Addressof designated beneficiary:

 

 

 

 
|   |                    |
|--------|-------------------------|
|   |                    |
|   | Signature  of Executive |
|   |                    |
|   |                    |
|   |                    |
|   | Date                    |

 

ThisBeneficiary Designation Form was received by the Secretary of the Companyon                                        .

 

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

 

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