**Exhibit 10(pp)**

**SEPARATION AGREEMENT**

 

THIS SEPARATION AGREEMENT (this “Agreement”) is effective as of November 30,2008 (the “Termination Date”), by and between DPL Inc. and The DaytonPower and Light Company (collectively, the “Company”) and John J. Gillen (the “Executive”).

 

**WHEREAS**, prior to November 30,2008, the Executive was the Senior Vice President, Chief Financial Officer andTreasurer;

 

**WHEREAS**, theExecutive and the Company have jointly determined that, effective on theTermination Date, the Executive shall resign from his employment with theCompany;

 

**WHEREAS**, theExecutive resigns from any and all offices of the Company, and any otherposition, office or directorship of any other entity for which he was servingat the request of the Company as of November 30, 2008;

 

**WHEREAS**, the Companyaccepts the Executive’s resignations;

 

**WHEREAS**, the Companyand the Executive desire to set forth the payments that the Executive will beentitled to receive from the Company in connection with the cessation of hisemployment with the Company;

 

**WHEREAS**, the Companyand the Executive wish to resolve, settle and/or compromise certain matters,claims and issues between them, including, without limitation, the Executive’sresignation from the offices he held and from his employment with the Company;

 

**WHEREAS**, theExecutive is a participant in the DPL Inc. Severance Pay and Change ofControl Plan (the “DPL Severance Pay Plan”), and this Agreement is intended tofully satisfy any obligation the Company may have to the Executive under theDPL Severance Pay Plan; and

 

**NOW, THEREFORE**, inconsideration of the promises and agreements contained herein and other goodand valuable consideration, the sufficiency and receipt of which are herebyacknowledged, and intending to be legally bound, the Company and the Executivehereby agree as follows:

 

**1.****                                      Resignation. **The Executive hereby resigns effective onNovember 30, 2008 (the “Effective Date”), his position as Senior VicePresident, Chief Financial Officer and Treasurer.  The Executive further resigns, effective on November 30,2008:  (a) from all other offices orcommittees of the Company to which he has been elected by the Board ofDirectors of the Company (or to which he has otherwise been appointed), (b) fromall directorships or offices of any 

 

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entity that is a subsidiary of, or is otherwise related to oraffiliated with, the Company, (c) from all administrative, fiduciary orother positions he may hold with respect to arrangements or plans for, of orrelating to the Company, and (d) from any other directorship, office, orposition of any corporation, partnership, joint venture, trust or otherenterprise (each, an “Other Entity”) insofar as the Executive is serving in thedirectorship, office, or position of the Other Entity at the request of theCompany.  The Company hereby consents toand accepts said resignations.

 

**2.****                                      AdditionalCompensation and Benefits.**  Inconsideration of the promises made in this Agreement and subject to theconditions hereof, the Company and the Executive agree to the following:

 

**a)****                                      Payment**.  The Executive will be entitled to receive theamount of $194,175 (calculated as the prorated amount (11/12) of his targetbonus of $211,750 under the Executive Incentive Compensation Plan payablewithin thirty (30) days of the Effective Date.

 

**b)****                                      ExecutiveIncentive Compensation Plan and Long Term Incentive Plan**.  Except for the payment to be made underParagraph 2(a) of this Agreement, the Executive will not be entitled toreceive any incentive bonus payment thereunder for fiscal year 2008.  In addition, pursuant to the terms of theLong Term Incentive Plan — Performance Shares Agreement entered into betweenthe Company and the Executive on June 29, 2006, the Executive will not beeligible to receive payment of performance shares for the Regular PerformancePeriod, as that term is defined in such Performance Share Agreement.  Further, pursuant to the terms of the LongTerm Incentive Plan — Performance Shares Agreements entered into between theCompany and the Executive on March 6, 2007 and on February 21, 2008,the Executive will not be eligible to receive payment of performance sharesgranted in those Performance Share Agreements.

 

**c)****                                      Withholding**.  The Company will withhold such amounts fromthe payments described in this Paragraph 2 as are required by applicabletax or other law.

 

**d)****                                      OtherRights and Obligations**.

 

**i)****                                       **Nothingin this Agreement will affect the vested rights that the Executive may have,based on termination of the Executive’s employment as of the Termination Date,pursuant to any agreement, policy, plan, program or arrangement of the Companyproviding for payment of accrued vacation pay or retirement benefits under TheDayton Power and Light Company Retirement Income Plan, The Dayton Power andLight Company Employee Savings Plan, the DPL Inc. Employee Stock OwnershipPlan, and the DPL Inc. Supplemental Executive Defined Contribution Plan(collectively, the “Retirement Plans”) or deferred compensation under TheDayton Power and Light Company 

 

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Key Employee Deferred Compensation Plan and the DPL Inc. 2006Deferred Compensation Plan for Executives, which rights will be governed by theterms thereof, as such agreements, policies, plans, programs or arrangementsmay be modified from time to time consistent with the terms of such agreements,policies, plans, programs or arrangements.

 

**ii)****                                   **Exceptas specifically set forth in this Agreement, no other compensation or benefitsare due the Executive under this Agreement, the DPL Severance Pay Plan, or anyother agreement, policy or program of the Company.  The Executive agrees that the compensationand benefits due him under this Agreement are intended to and do fully satisfy anyobligation of the Company to the Executive under the DPL Severance Pay Plan.

 

**iii)****                               **Inconnection with his termination of employment, the Executive will follow theCompany’s standard procedures relating to departing employees, including,without limitation, returning (and providing confirmation that he has soreturned) all Company-owned property, documents and materials (includingcopies, reproduction, summaries and/or analyses), and all other materials thatcontain, reflect, summarize, describe, analyze, refer to, or relate to anyitems of Confidential Information (as defined below).

 

**3.****                                      Releaseby the Executive**.

 

**a)****                                     **TheExecutive for himself and his dependents, successors, assigns, heirs, executorsand administrators (and his and their legal representatives of every kind),hereby releases, dismisses, and forever discharges the Company from any and allarbitrations, claims (including claims for attorneys’ fees), demands, damages,suits, proceedings, actions and/or causes of action of any kind and everydescription, whether known or unknown, which the Executive now has or may havehad for, upon, or by reason of any cause whatsoever (except that this releaseshall not apply to the obligations of the Company arising under thisAgreement), against the Company (“Claims”), including but not limited to:

 

**i)****                                       **anyand all Claims, directly or indirectly, arising out of or relating to:  (a) the Executive’s employment with theCompany; and (b) the Executive’s resignation as Senior Vice President,Chief Financial Officer and Treasurer;

 

**ii)****                                   **anyand all Claims of discrimination, including but not limited to claims ofdiscrimination on the basis of sex, race, age, national origin, marital status,religion or disability, including, specifically, but without limiting thegenerality of the foregoing, any claims under the Age Discrimination inEmployment Act, as amended (the “ADEA”), Title VII of the Civil Rights Act of1964, as amended, the Americans with Disabilities Act of 1990, the Family andMedical Leave Act of 1993 and Ohio Revised Code Chapter 4112;

 

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**iii)****                               **anyand all Claims of wrongful or unjust discharge or breach of any contract orpromise, express or implied; and

 

**iv)****                                  **anyand all Claims under or relating to any and all employee compensation, employeebenefit, employee severance or employee incentive bonus plans and arrangements;provided that he shall remain entitled to the amounts and benefits specified inParagraph 2 above.

 

**b)****                                     **TheExecutive’s release excludes claims that cannot be waived by law, including theright to file a charge with the Equal Employment Opportunity Commission;provided, however, that the Executive specifically waives and releases theright to any monetary recovery or other relief from such a filing.

 

**c)****                                     **TheExecutive understands and acknowledges that the Company does not admit anyviolation of law, liability or invasion of any of his rights and that any suchviolation, liability or invasion is expressly denied.  The consideration provided under thisAgreement is made for the purpose of settling and extinguishing all Claims andrights (and every other similar or dissimilar matter) that the Executive everhad or now may have or ever will have against the Company to the extentprovided in this Paragraph 3.  TheExecutive further agrees and acknowledges that no representations, promises orinducements have been made by the Company other than as appear in thisAgreement.

 

**d)****                                     **TheExecutive further understands and acknowledges that:

 

**i)****                                       **therelease provided for in this Paragraph 3, including claims under the ADEAto and including the date of this Agreement, is in exchange for the additionalconsideration provided for in this Agreement, to which consideration he was notheretofore entitled;

 

**ii)****                                   **hehas been advised by the Company to consult with legal counsel prior toexecuting this Agreement and the release provided for in this Paragraph 3,has had an opportunity to consult with and to be advised by legal counsel ofhis choice, fully understands the terms of this Agreement, and enters into thisAgreement freely, voluntarily and intending to be bound;

 

**iii)****                               **hehas been given a period of twenty-one (21) days to review and consider theterms of this Agreement, and the release contained herein, prior to itsexecution and that he may use as much of the twenty-one (21) day period as hedesires; and he may, within seven (7) days after execution, revoke thisAgreement.  Revocation shall be made bydelivering a notice of revocation to the Senior Vice President, Human Resourcesand Administration of the Company no later than the close of business on theseventh (7th) day afterthe Executive executes this Agreement. If the Executive exercises his right to revoke this Agreement, all ofthe terms and conditions of the Agreement shall be of no force and effect andthe Company shall have no obligation to satisfy the 

 

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terms or make any payment to the Executive as set forth inParagraph 2 of this Agreement.

 

**e)****                                     **TheExecutive and the Company acknowledge that his resignation is by mutualagreement between the Company and the Executive, and that the Executive waivesand releases any claim that he has or may have to reemployment by the Company.

 

**f)****                                       **Forpurposes of the above provisions of this Paragraph 3, the “Company” shallinclude its predecessors, subsidiaries, divisions, related or affiliatedcompanies, officers, directors, stockholders, members, employees, heirs,successors, assigns, representatives, agents and counsel.

 

**4.****                                      ConfidentialInformation**.  The Executive acknowledgesand agrees that as an employee of the Company, he may have created or hadaccess to information, trade secrets, substances and inventions includingconfidential information relating to the business or interests of persons withwhom the Company or its affiliated companies may have commercial, technical, orscientific relations (“Information”) that is valuable to the Company or itsaffiliated companies and may lose its value if disclosed to third parties.  The Executive therefore agrees to treat allsuch Information as confidential and belonging to the Company and to take allactions reasonably requested to confirm such ownership.  The Executive will not, without the priorwritten consent of the Company, disclose or use the Information.  This non-disclosure obligation shall continueuntil such Information becomes public knowledge through no fault of theExecutive.  The Executive agrees topromptly inform the Company of any request, order, or legal process requestingor requiring the Executive to disclose Information.  The Executive will cooperate with legalefforts by the Company to prevent or limit disclosure of Information.

 

**5.****                                      Breach**.

 

**a)****                                     **Ifthe Company determines in good faith that the Executive has breached any of theprovisions of this Agreement, then the Company may, upon providing ten calendardays’ advance written notice to the Executive (during which time he has anopportunity to respond in writing to the Company), terminate all remainingpayments and benefits described in this Agreement, and in addition, the Companyshall be entitled to obtain reimbursement from the Executive of all paymentsand benefits already provided pursuant to Paragraph 2 of this Agreement,plus any expenses and damages incurred as a result of the breach (including,without limitation, reasonable attorneys’ fees), with the remainder of thisAgreement, and all promises and covenants herein, remaining in full force andeffect.

 

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**i)****                                       **TheCompany will not terminate pursuant to Paragraph 5(a) any benefits inwhich the Executive had vested as of the Termination Date under the RetirementPlans.  The Executive’s COBRA rights, ifany, will not be reduced by any action taken by the Company underParagraph 5(a).

 

**ii)****                                   **TheExecutive may challenge any Company action under Paragraph 5(a).

 

**6.****                                      Successorsand Binding Agreement**.

 

**a)****                                     **ThisAgreement shall be binding upon and inure to the benefit of the Company and anysuccessor of or to the Company, including, without limitation, any persons acquiring,directly or indirectly, all or substantially all of the business and/or assetsof the Company whether by purchase, merger, consolidation, reorganization, orotherwise (and such successor shall thereafter be deemed included in thedefinition of “the Company” for purposes of this Agreement), but shall nototherwise be assignable or delegable by the Company.

 

**b)****                                     **ThisAgreement shall inure to the benefit of and be enforceable by the Executive’spersonal or legal representatives, executors, administrator, successors, heirs,distributees, and/or legatees.

 

**c)****                                     **ThisAgreement is personal in nature and none of the parties hereto shall, withoutthe consent of the other parties, assign, transfer or delegate this Agreementor any rights or obligations hereunder except as expressly provided inSubparagraphs (a) and (b) of this Paragraph 6.

 

**d)****                                     **ThisAgreement is intended to be for the exclusive benefit of the parties hereto,and except as provided in Subparagraphs (a) and (b) of thisParagraph 6, no third party shall have any rights hereunder.

 

**7.****                                      Statementsto Third Parties**.  Because thepurpose of this Agreement is to settle amicably any and all potential disputesor claims among the parties, the Executive shall not, directly or indirectly,make or cause to be made any statements to any third parties criticizing ordisparaging the Company or comment on its character or businessreputation.  The Executive further herebyagrees not: (a) to comment to others concerning the status, plans orprospects of the business of the Company, or (b) to engage in any act oromission that would be detrimental, financially or otherwise, to the Company,or that would subject the Company to public disrespect, scandal, orridicule.  For purposes of this Paragraph 7,the “Company” shall mean DPL Inc. and its directors, officers,predecessors, parents, subsidiaries, divisions, and related or affiliatedcompanies.  The Company agrees that itsdirectors and executive officers shall not, directly or indirectly, make orcause to be made any statements to any third parties criticizing or disparagingthe Executive or comment negatively on his character or businessreputation.  The foregoing undertakingsshall not 

 

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apply to any statements or opinions that are made under oath in anyinvestigation, civil or administrative proceeding or arbitration in which theindividual has been compelled to testify by subpoena or other judicial processor which are privileged communications.

 

**8.****                                      Notices. **For all purposes of this Agreement, allcommunications provided for herein shall be in writing and shall be deemed tohave been duly given when delivered, addressed to the Company (to the attentionof the Senior Vice President, Human Resources and Administration) at itsprincipal executive offices and to the Executive at his principal residentialaddress on file with the Company, or to such other address as any party mayhave furnished to the other in writing and in accordance herewith.  Notices of change of address shall beeffective only upon receipt.

 

**9.****                                      Miscellaneous.**  No provision of this Agreement may bemodified, waived or discharged unless such modification, waiver or discharge isagreed to in writing signed by the Executive and the Company.  No waiver by either party hereto at any timeof any breach by the other party hereto or compliance with any condition orprovision of this Agreement to be performed by such other party shall be deemeda waiver of similar or dissimilar provisions or conditions at the same or atany prior or subsequent time.  Noagreements or representations, oral or otherwise, expressed or implied withrespect to the subject matter hereof have been made by any of the parties thatare not set forth expressly in this Agreement and every one of them (if, infact, there have been any) is hereby terminated without liability or any otherlegal effect whatsoever.

 

**10.****                               EntireAgreement.**  This Agreement shallconstitute the entire agreement among the parties hereto with respect to thesubject matter hereof and, except to the extent otherwise provided herein,shall supersede all prior verbal or written agreements, covenants,communications, understandings, commitments, representations or warranties,whether oral or written, by any party hereto or any of its representativespertaining to such subject matter.

 

**11.****                               GoverningLaw.** Any dispute, controversy,or claim of whatever nature arising out of or relating to this Agreement orbreach thereof shall be governed by and under the laws of the State of Ohio.

 

**12.****                               Validity.**  The invalidity or unenforceability of anyprovision of this Agreement shall not affect the validity or enforceability ofany other provision of this Agreement, which shall nevertheless remain in fullforce and effect.

 

**13.****                               Counterparts.**  This Agreement may be executed in one or morecounterparts, each of which shall be deemed to be an original, but all of whichtogether shall constitute one and the same Agreement.

 

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**14.****                               Captionsand Paragraph Headings.**  Captionsand paragraph headings used herein are for convenience and are not part of thisAgreement and shall not be used in construing it.

 

**15.****                               FurtherAssurances.**  Each party heretoshall execute such additional documents, and do such additional things, as mayreasonably be requested by the other party to effectuate the purposes andprovisions of this Agreement.

 

**IN WITNESS WHEREOF**, the parties have executedand delivered this Separation Agreement on November       ,2008, effective as of the date first set forth above.

 
|   | **DPL INC.**                           |
|--------|----------------------------------------|
|   |                                   |
|   | By                                     |   |
|   |                                   |
|   |                                   |
|   | **THE DAYTON POWER AND LIGHT COMPANY** |
|   |                                   |
|   | By                                     |   |
|   |                                   |
|   |                                   |
|   | John J. Gillen                         |

 

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