**Exhibit 10(o)**

 

**DPL INC.**

**SEVERANCE PAY ANDCHANGE OF CONTROL PLAN**

**(AS AMENDED ANDRESTATED THROUGH DECEMBER 31, 2007)**

** **

# **ARTICLEI  - INTRODUCTION**

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The Board of Directors of DPL Inc. (“DPL”)and the Board of Directors of The Dayton Power and Light Company (“DP&L”)(collectively, the “Company”) adopted the DPL Inc. Severance Pay and Change ofControl Plan (the “Plan”), effective as of the Effective Date.  This amended and restated version of the Planis effective December 31, 2007.

 

The Plan is designed to (a) provideseverance protection to certain Employees of the Company who are expected tomake substantial contributions to the success of the Company and therebyprovide for stability and continuity of operations and (b) enable certainEmployees to make career decisions without regard to the time pressure andfinancial uncertainty which may result from a proposed or threatened Change ofControl (as defined herein) transaction, encourage such Employees to remainemployees of the Company and its Subsidiaries notwithstanding the outcome ofany such proposed transaction, and to assure fair treatment of such Employeesin the event of a Change of Control of the Company.

 

# **ARTICLEII  - ESTABLISHMENT OF THE PLAN**

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## **Section 2.1.          **Applicabilityof Plan.  The benefits provided bythis Plan shall be available to all Employees who, at or after the EffectiveDate, meet the eligibility requirements of Article IV hereof.

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## **Section 2.2.          **ContractualRight to Benefits.  Subject to theprovisions of Article IX hereof, this Plan establishes and vests in eachParticipant a contractual right to the benefits to which he or she is entitledhereunder, enforceable by the Participant against the Company on the terms andsubject to the conditions hereof.

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# **ARTICLEIII  - DEFINITIONS AND CONSTRUCTION**

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## **Section 3.1.          **“Affiliate”means, with respect to any person, any entity, directly or indirectly,controlled by, controlling or under common control with such person.

 

## **Section 3.2.          **“AnnualIncentive Plan” means the EICP or the DPL Inc. Management Incentive Plan,as applicable to the Participant on his Termination Date.

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## **Section 3.3.          **“BasePay” of a Participant means the Participant’s annual base salary rate as ineffect on the Termination Date from the Participant’s Employer; *provided, however*, that any reductions in Base Pay followingthe date of a Change of Control will not be taken into account when determiningBase Pay hereunder; and

 

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## *further**provided,* any reduction in Base Pay thatoccurs prior to a Change of Control but which the Participant reasonablydemonstrates (i) was at the request of a third party who effectuates aChange of Control or (ii) otherwise occurred in connection with or inanticipation of a Change of Control which has been threatened or proposed andwhich actually occurs, shall not be taken into account when determining BasePay hereunder, it being agreed that any such reduction taken followingshareholder approval of a transaction which if consummated would constitute aChange of Control, shall be deemed to be in anticipation of a Change of Controlprovided such transaction is actually consummated.

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## **Section 3.4.          **“Board”means the Board of Directors of DPL Inc.

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## **Section 3.5.          **“Cause”means:

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### (a)           any willful or negligent material violation of anyapplicable securities laws (including the Sarbanes-Oxley Act of 2002);

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### (b)           any act of fraud, intentional misrepresentation,embezzlement, misappropriation or conversion of any asset or businessopportunity of the Company;

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### (c)           a conviction of, or entering into a plea of nolocontendere to, a felony;

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### (d)           an intentional, repeated or continuing violation of any ofthe Company’s policies or procedures that occurs or continues after the Companyhas given notice to the Participant that he or she has materially violated aCompany policy or procedure; or

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### (e)           any breach of a written covenant or agreement with theCompany, including the terms of this Plan (other than a failure to performParticipant’s duties with the Company resulting from the Participant’sincapacity due to physical or mental illness or from the assignment to theParticipant of duties that would constitute Good Reason), which is material andwhich is not cured within 30 days after written notice thereof from the Companyto the Participant

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For purposes of this Plan, theParticipant shall not be deemed to have been terminated for Cause under clauses(a), (b), (c), (d) or (e) hereunder unless the Participant receives aNotice of Termination setting forth the grounds for the termination at least 15calendar days prior to the specified Termination Date.

 

## **Section 3.6.          **“Changeof Control” means the consummation of any Change of 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 “ExchangeAct”), as determined by the Board of Directors of DPL in its sole discretion;provided that, without limitation, such a Change of Control shall be deemed tohave occurred if:

 

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### (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 DPL or DP&Lrepresenting (i) 25% or more of the combined voting power of the thenoutstanding Voting Stock of DPL or DP&L if the acquisition of suchbeneficial ownership is not approved by the Board of Directors of DPL prior tothe acquisition or (ii) 50% or more of such combined voting power in allother cases; provided, however, that:

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#### (i)            for purposes of this Section 3.6(a), the followingacquisitions shall not constitute a Change of Control: (A) any acquisitionof Voting Stock of DPL or DP&L directly from DPL or DP&L that isapproved by a majority of those persons serving as directors of the Company orDP&L on the date of this Plan (the “Original Directors”) or theirSuccessors (as defined below), (B) any acquisition of Voting Stock of DPLor DP&L by DPL or any Subsidiary, and (C) any acquisition of VotingStock of DPL or DP&L by the trustee or other fiduciary holding securitiesunder any employee benefit plan (or related trust) sponsored or maintained byDPL or any Subsidiary (the term “Successors” shall mean those directors whoseelection or nomination for election by shareholders has been approved by thevote of at least two-thirds of the Original Directors and previously qualifiedSuccessors serving as directors of DPL or DP&L, as the case may be, at thetime of such election or nomination for election);

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#### (ii)           if any Person is or becomes the beneficial owner of 25% ormore of the combined voting power of the then-outstanding Voting Stock of DPLor DP&L as a result of a transaction described in clause (A) of Section 3.6(a)(i) aboveand such Person thereafter becomes the beneficial owner of any additionalshares of Voting Stock of DPL or DP&L representing 1% or more of thethen-outstanding Voting Stock of DPL or DP&L, other than in an acquisitiondirectly from DPL or DP&L that is approved by a majority of the OriginalDirectors or their Successors or other than as a result of a stock dividend,stock split or similar transaction effected by DPL or DP&L in which allholders of Voting Stock of DPL or DP&L are treated equally, such subsequentacquisition shall be treated as a Change in Control;

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#### (iii)          a Change in Control will not be deemed to have occurred ifa Person is or becomes the beneficial owner of 25% or more of the Voting Stockof DPL or DP&L as a result of a reduction in the number of shares of VotingStock of DPL 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 DPL or DP&L representing 1% ormore of the then-outstanding Voting Stock of DPL or DP&L, other than as aresult of a stock dividend, stock split or similar transaction effected by DPLor DP&L in which all holders of Voting Stock are treated equally; and

 

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#### (iv)          if at least a majority of the Original Directors or theirSuccessors determine in good faith that a Person has acquired beneficialownership of 25% or more of the Voting Stock of DPL or DP&L inadvertently,and such Person divests as promptly as practicable but no later than the date,if any, set by the Original Directors or their Successors a sufficient numberof shares so that such Person beneficially owns less than 25% of the VotingStock of DPL or DP&L, then no Change of Control shall have occurred as aresult of such Person’s acquisition; or

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### (b)           DPL or DP&L consummates a merger or consolidation, orconsummates a “combination” or “majority share acquisition” in which it is the “acquiringcorporation” (as such terms are defined in Ohio Rev. Code § 1701.01 as ineffect on the Effective Date) and in which shareholders of DPL or DP&L, asthe case 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 DP&L into DPL or of DPL into DP&L; or

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### (c)           DPL or DP&L consummates a sale, lease, exchange orother transfer or disposition of all or substantially all of its assets to anyPerson other than to a wholly owned subsidiary or, in the case of DP&L, toDPL or a wholly owned subsidiary(ies) of the Company; but not including (i) amortgage or pledge of assets granted in connection with a financing or (ii) aspin-off or sale of assets if DPL continues in existence and its common sharesare listed on a national securities exchange, quoted on the automated quotationsystem of a national securities association or traded in the over-the-countermarket; or

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### (d)           the Original Directors and/or their Successors do notconstitute a majority of the whole Board of Directors of DPL or DP&L, asthe case may be; or

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### (e)           approval by the shareholders of DPL or DP&L of acomplete liquidation or dissolution of DPL or DP&L, as the case may be.

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## **Section 3.7.          **“Code”means the Internal Revenue Code of 1986, as amended.

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## **Section 3.8.          **“Company”means DPL Inc., an Ohio corporation, any successor thereto as provided in Article VIIIhereof, and The Dayton Power and Light Company.

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## **Section 3.9.          **“Disability”means a Participant’s inability to perform the duties required of theParticipant in his or her position with the Company on a full-time basis for aperiod of six consecutive months because of physical or mental illness or otherphysical or mental disability or incapacity.

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## **Section 3.10.       **“EffectiveDate” means January 1, 2006.

 

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## **Section 3.11.       **“EICP”means the DPL Inc. Executive Incentive Compensation Plan, as it may be amendedfrom time to time.

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## **Section 3.12.       **“Employee”means a full-time salaried employee of an Employer.

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## **Section 3.13.       **“ERISA”means Employee Retirement Income Security Act of 1974, as amended from time totime.

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## **Section 3.14.       **“Employer”means the Company, any Subsidiary or any Affiliate which employs a Participantor any person or entity that has adopted this Plan pursuant to Article VIIIhereof.

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## **Section 3.15.       **“GoodReason” means, following a Change of Control:

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### (a)           a demotion or a material****reduction in the Participant’s position, duties, responsibilities,and status with the Company in effect immediately prior to a Change of Control;

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### (b)           a material reduction by the Company of a Participant’sbase salary; or

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### (c)           the relocation of the Company’s principal executiveoffices more than 50 miles from their current location, if at the time of aChange of Control the Participant is based at the Company’s principal executiveoffices, or the requirement of the Participant to be based at a location morethan 50 miles from the Participant’s location as of the Change of Control;

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*provided*, *however*, that any event or condition described in clauses (a) through(c) that occurs prior to a Change of Control but which the Participantreasonably demonstrates (i) was at the request of a third party whoeffectuates a Change of Control or (ii) otherwise arose in connection withor in anticipation of a Change of Control which has been threatened or proposedand which actually occurs, shall constitute Good Reason for purposes of thisPlan notwithstanding that it occurred prior to a Change of Control, it beingagreed that any such action taken following shareholder approval of atransaction which if consummated would constitute a Change of Control, shall bedeemed to be in anticipation of a Change of Control provided such transactionis actually consummated.

 

Before a termination by aParticipant will constitute termination for Good Reason, the Participant mustgive the Company a Notice of Termination within 30 calendar days following theoccurrence of the event that constitutes Good Reason.  Failure to provide such Notice of Terminationwithin such 30-day period shall be conclusive proof that the Participant shallnot have Good Reason to terminate employment.

 

Good Reason shall exist only if(i) the Employer fails to remedy the event or events constituting GoodReason within 30 calendar days after receipt of the Notice of Termination fromthe Participant and (ii) the Participant terminates his

 

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or her employment within 90days of the Participant receiving notice of the existence of any event orcondition described in clauses (a) through (c) above.  If the Participant determines that GoodReason for termination exists and timely files a Notice of Termination, suchdetermination shall be presumed to be true and the Company will have the burdenof proving that Good Reason does not exist.

 

## **Section 3.16.       **“KeyEmployee” means a key employee as defined in Section 416(i) ofthe Code (without regard to paragraph (5) thereof) of an Employer.

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## **Section 3.17.       **“Noticeof Termination” means (i) a written notice of termination by theCompany to the Participant provided to the Participant no less than 15 calendardays prior to the specified Termination Date or (ii) a written notice oftermination for Good Reason by the Participant to the Company provided to theCompany in accordance with the terms set forth in Section 3.15 hereof, ineither case, setting forth in reasonable detail the specific reason fortermination and the facts and circumstances claimed to provide a basis fortermination of employment under the provision indicated and the specifiedTermination Date.

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## **Section 3.18.       **“Participant”means an Employee who meets the eligibility requirements of Article IVhereof, other than an Employee who, after becoming a Participant, has enteredinto an employment, severance or other similar agreement with the Company(other than a stock option, restricted stock, supplemental retirement, deferredcompensation or similar plan or agreement or other form of participationdocument entered into pursuant to an Employer-sponsored plan which may containprovisions operative on a termination of the Participant’s employment or mayincidentally refer to accelerated vesting or accelerated payment upon a Changeof Control (as defined in such separate plan or document)).

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## **Section 3.19.       **“ParticipationAgreement” means an agreement between the Company and each Employee thatmust be executed as a condition of the Participant’s eligibility for this Plan.

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## **Section 3.20.       **“Plan”means this Severance Pay and Change of Control Plan.

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## **Section 3.21.       **“PlanAdministrator” means the Compensation Committee of the Board.

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## **Section 3.22.       **“ProtectionPeriod” means (i) for all Participants, excluding the individual whois the Chief Executive Officer of the Company (the “CEO”) at the time of aChange of Control, the period of time commencing on the date of the firstoccurrence of a Change of Control and continuing until the first anniversary ofthe first occurrence of the Change of Control and (ii) for the CEO of theCompany, the period of time commencing on the date of the first occurrence of aChange of Control and continuing until the second anniversary of the firstoccurrence of the Change of Control.

 

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## **Section 3.23.       **“Separationfrom Service” has the meaning ascribed to such phrase in the 409A Guidance.

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## **Section 3.24.       **“SeverancePayment” or “Severance Payments” means the payment or payments of severancecompensation described in Article V hereof.

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## **Section 3.25.       **“SeverancePeriod” means (i) for the CEO, the period of time commencing on theTermination Date and continuing until the third anniversary of the TerminationDate, (ii) for all officers, other than the CEO, the period of timecommencing on the Termination Date and continuing until the second anniversaryof the Termination Date, and (iii) for all other Participants, the periodof time commencing on the Termination Date and continuing until the firstanniversary of the Termination Date.

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## **Section 3.26.       **“Subsidiary”means a corporation, partnership, joint venture, unincorporated association orother entity in which the Company has a direct or indirect ownership or otherequity interest.

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## **Section 3.27.       **“TerminationDate” means the date of the Participant’s Separation from Service.

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## **Section 3.28.       **“VotingStock” means securities entitled to vote generally in the election ofdirectors.

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## **Section 3.29.       **“409AGuidance” means Section 409A of the Code, including regulations or anyother formal guidance issued by the Secretary of the Treasury and the InternalRevenue Service with respect thereto.

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# **ARTICLEIV  - ELIGIBILITY**

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## **Section 4.1.          **Participation.  Each person who is an Employee, who isdesignated by the Compensation Committee to be a Participant in this Plan, andwho has executed a Participation Agreement shall be a Participant commencing onthe date such Participant executes a Participation Agreement.

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## **Section 4.2.          **Durationof Participation.  A Participantshall cease to be a Participant and shall have no rights hereunder, withoutfurther action, when (a) he or she ceases to be an Employee, unless suchParticipant is then entitled to payment of a Severance Payment as provided in Article Vhereof or (b) prior to a Change of Control, the Compensation Committeedesignates a Participant to be ineligible to continue to participate in thisPlan as a result of a change in the Participant’s job title or duties.  A Participant entitled to a Severance Paymentshall remain a Participant in this Plan until the full amount of the SeverancePayment has been paid to the Participant.

 

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# **ARTICLE V  - SEVERANCE PAYMENTS**

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## **Section 5.1.          **Rightto Severance Payment - Termination Prior to a Change of Control.

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### (a)           Subject to Section 5.3, a Participant shall beentitled to receive from the Company Severance Payments in the amount providedin Section 5.1(b), payable as described in Section 5.1(c), upon thetermination by an Employer of the Participant’s employment without Cause andfor reasons other than death or Disability, if the Participant is not entitledto Severance Payments under Section 5.2 as a result of such termination.

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### (b)           The amount of Severance Payments under this Section 5.1(b) shallequal the sum of (i) the Participant’s Base Pay and (ii) the amountof the Participant’s target award under the Annual Incentive Plan for the yearin which the Termination Date occurs.**** In addition, such Participant will be entitledto receive as Severance Payments (1) continued participation, at the Company’s cost, in theCompany’s medical plan until the earlier of (A) the Participant’seligibility for any such coverage under another employer’s or any other medicalplan or (B) twelve months following the termination of the Participant’semployment; *provided*, *however*, that the period of coverage undersuch plan shall count against such plan’s obligation to provide continuationcoverage pursuant to Part 6 of Subtitle B of Title I of the EmployeeRetirement Income Security Act of 1974, as amended (“COBRA”) and *provided*, *further*, that such coverage shall beprovided only to the extent that such coverage would not be considered “adeferral of compensation” subject to the requirements of Section 409A ofthe Code, and (2) receipt of outplacement services at the Company’s costfor a period of six months following the Participant’s Termination Date.

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### (c)           Subject to the following sentence, the cash SeverancePayments to which a Participant is entitled under this Section 5.1 shallbe paid to the Participant by the Company in equal installments over the twelvemonth period described in this Section 5.1(c) according to theCompany’s then current payroll policies. The amount of each installment shall be equal to the total amount of theSeverance Payments divided by the number of payroll dates in the twelve-monthperiod described in this Section 5.1(c). The period during which Severance Payments pursuant to this Section 5.1will be paid is the twelve-month period beginning on the date 60 calendar daysafter the Participant’s Separation from Service and ending twelve monthslater.  The first installment of theSeverance Payments to which a Participant is entitled under this Section 5.1shall be paid with the first normal pay period that occurs on or after 60calendar days after the Participant’s Separation from Service.  Notwithstanding the foregoing, if theParticipant is a Key Employee, then, if the Severance Payments are consideredto be a “deferral of compensation” (as such phrase is defined for purposes of Section 409Aof the Code), no Severance Payments shall be made during the six month periodfollowing the Participant’s Separation from Service, and the first six monthsof Severance Payments to which a Participant is entitled under this Section 5.1

 

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### shall be paid to theParticipant by the Company in cash and in full on the first day of the seventhmonth****after the Participant’sSeparation from Service.  If aParticipant entitled to Severance Payments under this Section 5.1 shoulddie before all amounts payable to him or her have been paid, such unpaidamounts shall be paid as soon as practicable following the Participant’s deathto the Participant’s spouse, if living, otherwise to the personalrepresentative of the Participant’s estate.

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## **Section 5.2.          **Rightto Severance Payment - Termination After a Change of Control.

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### (a)           Subject to Section 5.3, a Participant shall beentitled to receive from the Company Severance Payments in the amount providedin Section 5.2(b), payable as described in Section 5.2(c), if, aftera Change of Control and within the Protection Period, (i) the Employershall terminate Participant’s employment with the Employers without Cause andfor reasons other than death or Disability or (ii) the Participant shallterminate employment with the Employers for Good Reason.

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### (b)           The amount of Severance Payments under this Section 5.2(b) shallequal the sum of (i) the Participant’s Base Pay multiplied by the factorset forth on Schedule A for the Participant and (ii) the amount ofthe Participant’s target award under the Annual Incentive Plan for the year inwhich the Termination Date occurs multiplied by the factor set forth on ScheduleA for the Participant. ** **In addition, such Participant willbe entitled to receive as Severance Payments (1) a pro rata portion of theParticipant’s target award, if any, under the Annual Incentive Plan and the DPLInc. 2006 Executive Performance and Incentive Plan, as of the Termination Date,****(2) an amount equal to the amount that would becredited to the Participant under the Company’s Supplemental Executive DefinedContribution Retirement Plan for the applicable Severance Period, determined asif the Participant had remained employed during that period and had receivedremuneration each year during that period equal to the sum of the Participant’sBase Pay plus the Participant’s target award under the Annual Incentive Planfor the year in which the Termination Date occurs, and the Code Limit, asdefined in the EICP, remained unchanged during the Severance Period, (3) continuedparticipation in the Company’s medical plan for the Severance Period; *provided*, *however*, thatsuch coverage shall be provided only to the extent that such coverage would notbe considered a “deferral of compensation” subject to the requirements of Section 409Aof the Code, and *provided*, *further*, that the period of coverage undersuch plan shall count against such plan’s obligation to provide continuationcoverage pursuant to COBRA, (4) receipt of outplacement services at theCompany’s cost for a period of six months following the Participant’sTermination Date, and (5) if applicable pursuant to the terms set forth onSchedule A, an amount equal to $20,000 multiplied by the factor setforth on Schedule A forthe Participant.

 

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### (c)           Subject to the following sentence, the cash SeverancePayments to which a Participant is entitled under this Section 5.2 shallbe paid to the Participant by the Company in cash and in full as soon aspracticable after the Participant’s Termination Date (or, if later the date theapplicable revocation period for the release required in Section 5.3 hasexpired).  Notwithstanding the foregoing,if the Participant is a Key Employee, then if the Severance Payments are consideredto be a “deferral of compensation” (as such phrase is defined for purposes of Section 409Aof the Code), the Severance Payment to which a Participant is entitled underthis Section 5.2 shall be paid to the Participant by the Company in cashand in full, on the first day of the seventh month****after the Participant’s Separation from Service.  If a Participant entitled to SeverancePayments under this Section 5.2 should die before all amounts payable tohim or her have been paid, such unpaid amounts shall be paid as soon aspracticable following the Participant’s death to the Participant’s spouse, ifliving, otherwise to the personal representative of the Participant’s estate.

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## **Section 5.3.          **Release.  Notwithstanding anything to the contrarycontained in this Plan, a Participant shall not be entitled to receive anySeverance Payment hereunder unless and until he or she has signed and returnedto the Company a release (the “Release”) by the deadline established by thePlan Administrator (which shall be no later than 50 calendar days after theParticipant’s Termination Date) and the period during which the Participant mayrevoke the Release, if any, has elapsed. The Release, which shall be signed by the Participant no earlier thanthe Participant’s Termination Date, shall be a written document, in a formprescribed by the Company, intended to create a binding agreement by aParticipant to release any claim that the Participant has or may have againstthe Company and certain related entities and individuals, that arise on orbefore the date on which Participant signs the Release, including, withoutlimitation, any claims under the federal Age Discrimination in EmploymentAct.  The Release shall also includeconfidentiality and non-disparagement covenants.

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## **Section 5.4.          **ThirdParty Removal.  Notwithstandinganything to the contrary contained in this Plan, any termination of employmentof the Participant that occurs prior to a Change of Control but which theParticipant reasonably demonstrates occurred at the request of a third partywho had taken steps reasonably calculated to effect the Change of Control shallbe deemed to be a termination or removal of the Participant after a Change ofControl for purposes of this Plan.

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## **Section 5.5.          **Breach.  The Company’s payment obligations and theParticipant’s participation rights under Sections 5.1 and 5.2 shall cease inthe event the Participant breaches any of the covenants contained in theParticipant’s Participation Agreement or the Release.  Any such cessation of payment shall notreduce any monetary damages that may be available to the Company as a result ofsuch breach.

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## **Section 5.6.          **NoMitigation Obligation.  TheParticipant shall not be required to mitigate damages or the amount of his orher Severance Payment by seeking other employment or otherwise, nor shall theamount of such payment be reduced by any

 

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## compensationearned by the Participant as a result of employment after the termination ofhis or her employment by an Employer.

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## **Section 5.7.          **ExcessParachute Payments.

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### (a)           Notwithstanding anyprovision of this Plan to the contrary, if the aggregate “present value” (asdetermined under Section 280G of the Code) of the “parachute payments” (asdefined under Section 280G(b)(2) of the Code) to be paid or providedunder this Plan or any other plan or agreement between the Participant and anEmployer exceeds 300% of the Participant’s “base amount” (as defined in Section 280G(b)(3))(“Excess Parachute Payment”) by more than 10% and is determined to be subjectto the excise tax imposed by Section 4999 of the Code (or any successorprovision thereto) or to any similar tax imposed by state or local law, or anyinterest or penalties with respect to such tax (such tax or taxes, togetherwith any such interest and penalties, being hereafter collectively referred toas the “Excise Tax”), then the Participant shall be entitled to receive anadditional payment or payments (collectively, a “Gross-Up Payment”).  The Gross-Up Payment shall be in an amountsuch that, after payment by the Participant of all taxes (including anyinterest or penalties imposed with respect to such taxes), including any ExciseTax imposed upon the Gross-Up Payment, the Participant retains an amount of theGross-Up Payment equal to the Excise Tax imposed upon the Payment.  The Gross-Up Payment shall be paid noearlier than the first day of the seventh month following the Termination Dateand no later than the end of the year following the year in which the applicableitem of Excise Tax is remitted by the Participant.  Any Gross-Up Payment made by the Company inone taxable year in no event will affect a Gross-Up Payment required to be paidby the Company in any other taxable year.

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### (b)           Notwithstanding anyprovision of this Plan to the contrary, if the aggregate “present value” (asdetermined under Section 280G of the Code) of the “parachute payments” (asdefined under Section 280G(b)(2) of the Code) to be paid or providedunder this Plan or any other plan or agreement between the Participant and anEmployer exceeds 300% of the Participant’s “base amount” (as defined in Section 280G(b)(3))by 10% or less and is determined to be subject to the Excise Tax, then thepayments and benefits to be paid or provided under this Plan shall be reducedto the minimum extent necessary (but in no event to less than zero) so that noportion of any such payment or benefit, as so reduced, constitutes an ExcessParachute Payment.

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### (c)           Procedures for all determinations to be made under this Section 5.7are set forth on Schedule B.

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# **ARTICLEVI  - NON-SOLICITATION**

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## **Section 6.1.          **Non-Solicitation.  In the event that a Participant receives aSeverance Payment pursuant to this Plan, during the Participant’s employmentand for

 

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## a period oftwo years after the Termination Date, Participant will not (i) solicit foremployment with himself or herself or any firm or entity with which he or sheis associated, any employee of the Company, its Subsidiaries or Affiliates, orotherwise disrupt, impair, damage or interfere with the Company’s, itsSubsidiaries’ or Affiliates’ relationships with their employees or (ii) solicitfor Participant’s own behalf or on behalf of any other person(s), any retailcustomer of the Company, its Subsidiaries or Affiliates, that has purchasedproducts or services from the Company, its Subsidiaries or Affiliates, at anytime (a) with respect to solicitation during employment, during theParticipant’s employment, or (b) with respect to solicitation afteremployment, in the twelve months preceding the Participant’s Termination Dateor that the Company, its Subsidiaries or Affiliates are actively soliciting orhave known plans to solicit, for the purpose of marketing or distributing anyproduct, pricing or service competitive with any product, pricing or servicethen offered by the Company or its Subsidiaries or Affiliates or which theCompany or its Subsidiaries or Affiliates have known plans to offer.

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# **ARTICLEVII  - OTHER RIGHTS AND BENEFITS NOTAFFECTED**

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## **Section 7.1.          **OtherBenefits.  Except as provided in Section 5.7,neither the provisions of this Plan nor the Severance Payments provided forhereunder shall reduce or increase any amounts otherwise payable, or in anyother way affect a Participant’s rights as an employee of an Employer, whetherexisting now or hereafter, under any benefit, incentive, retirement, stockoption, stock bonus, stock purchase or employment agreement, plan (other thanthis Plan), program or arrangement (collectively, the “Other Plans”), except tothe extent specifically provided under such Other Plans.

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## **Section 7.2.          **CertainLimitations.  This Plan does notconstitute a contract of employment or impose on any Participant, the Companyor any other Employer any obligation to retain any Participant as an employeeor in any other capacity, to change or not change the status, terms orconditions of any Participant’s employment, or to change or not change theEmployer’s policies regarding termination of employment.

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# **ARTICLE VIII  - SUCCESSORS**

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## **Section 8.1.          **Company’sSuccessor.  Without limiting theobligations of any person or entity under applicable law, the Company shallrequire any successor or assignee, whether direct or indirect, by purchase,merger, consolidation or otherwise, to all or substantially all the business orassets of the Company, expressly and unconditionally to assume and agree toperform the Company’s obligations under this Plan, in the same manner and tothe same extent that the Company would be required to perform if no suchsuccession or assignment had taken place. In such event, the term “Company,” as used in this Plan, shall mean theCompany as hereinbefore defined and any successor or assignee to the businessor assets which by reason hereof becomes bound by the terms and provisions ofthis Plan.

 

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## **Section 8.2.          **Participant’sSuccessor.

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### (a)           This Plan shall inure to the benefit of and be enforceableby the Participant’s personal or legal representatives, executors,administrators, successors, heirs, distributees and/or legatees.

###  

### (b)           The rights under this Plan are personal in nature andneither the Company nor any Participant shall, without the consent of theother, assign, transfer or delegate any rights or obligations hereunder exceptas expressly provided in this Article VIII.  Without limiting the generality of theforegoing, the Participant’s right to receive a Severance Payment hereundershall not be assignable, transferable or delegable, whether by pledge, creationof a security interest or otherwise, other than by a transfer by his or herwill or by the laws of descent and distribution and, in the event of anyattempted assignment or transfer contrary to this Section 8.2(b), theCompany shall have no liability to pay any amount so attempted to be assigned,transferred or delegated.

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# **ARTICLE IX - AMENDMENT AND TERMINATION**

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## **Section 9.1.          **Amendment.  This Plan may be amended by the CompensationCommittee or terminated in any respect by resolution adopted by a majority ofthe members of the Compensation Committee. However, if a Change of Control occurs, notwithstanding the foregoing,during the Protection Period that follows such Change of Control or followingsuch Protection Period with respect to all Participants receiving SeverancePayments attributable to terminations of employment that occurred during theProtection Period, no amendment or termination shall be effective unless, (a) inthe case of amendments or terminations adopted during the Protection Period,such amendment or termination is consented to by all Participants, and (b) inthe case of amendments or terminations adopted after the Protection Period,such amendment or termination is consented to by all Participants who are receivingSeverance Payments attributable to terminations of employment that occurredduring the Protection Period.

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## **Section 9.2.          **Effectof Amendment or Termination.  Aproper amendment of this Plan automatically shall effect a correspondingamendment to all Participants’ rights hereunder.  A proper termination of this Planautomatically shall effect a termination of all Participants’ rights andbenefits hereunder without further action; *provided*, *however*, no termination shall reduce or terminate anyParticipant’s right to receive, or continue to receive, any Severance Paymentsthat became payable prior to the date of such termination of the Plan.

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# **ARTICLEX  ADMINISTRATION OF PLAN**

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## **Section 10.1.       **Administration.

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### (a)           The Plan shall be administered by the Plan Administrator.  The Plan Administrator shall have discretionto interpret where necessary all provisions of the Plan (including, withoutlimitation, by supplying omissions from, correcting deficiencies in, or resolvinginconsistencies or ambiguities in, the language of the

 

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### Plan), to make factual findingswith respect to any issue arising under the Plan, to determine the rights andstatus under the Plan of Participants or other persons, to resolve questions(including factual questions) or disputes arising under the Plan and to makeany determinations with respect to the benefits payable under the Plan and thepersons entitled thereto as may be necessary for the purposes of the Plan.  Without limiting the generality of theforegoing, the Plan Administrator is hereby granted the authority (i) todetermine whether a particular employee is a Participant, and (ii) todetermine if a person is entitled to benefits hereunder and, if so, the amountand duration of such benefits.  The PlanAdministrator’s determination of the rights of any person hereunder shall befinal and binding on all persons, subject only to the provisions of Section 10.3hereof.  Notwithstanding the foregoing,it is intended that in the event of litigation arising from a claim forbenefits under Section 5.2, a reviewing court shall review de novo thePlan Administrator’s determinations with respect to such claim, and the PlanAdministrator’s determinations shall not be given deference.

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### (b)           The Plan Administrator may delegate any of itsadministrative duties, including, without limitation, duties with respect tothe processing, review, investigation, approval and payment of benefits, to anamed administrator or administrators.

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## **Section 10.2.       **Regulations.  The Plan Administrator shall promulgate any rules andregulations it deems necessary in order to carry out the purposes of the Planor to interpret the provisions of the Plan; provided, however, that no rule,regulation or interpretation shall be contrary to the provisions of the Plan orthe 409A Guidance.  The rules,regulations and interpretations made by the Plan Administrator shall, subjectonly to the provisions of Section 10.3 hereof, be final and binding on allpersons.

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## **Section 10.3.       **ClaimsProcedures.

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### (a)           The Plan Administrator shall determine the rights of anyperson to any benefit hereunder.  Anyperson who believes that he or she has not received the benefit to which he orshe is entitled under the Plan must file a claim in writing with the PlanAdministrator specifying the basis for his or her claim and the facts uponwhich he or she relies in making such a claim.

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### (b)           The Plan Administrator will notify the claimant of itsdecision regarding his or her claim within a reasonable period of time, but notlater than 90 days following the date on which the claim is filed, unlessspecial circumstances require a longer period for adjudication and the claimantis notified in writing of the reasons for an extension of time prior to the endof the initial 90-day period and the date by which the Plan Administratorexpects to make the final decision.  Inno event will the Plan Administrator be given an extension for processing theclaim beyond 180 days after the date on which the claim is first filed with thePlan Administrator.

 

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If such a claim is denied, the PlanAdministrator’s notice will be in writing, will be written in a mannercalculated to be understood by the claimant and will contain the followinginformation:

 

#### (i)            The specific reason(s) for the denial;

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#### (ii)           A specific reference to the pertinent Plan provision(s) onwhich the denial is based;

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#### (iii)          A description of additional information or materialnecessary for the claimant to perfect his or her claim, if any, and anexplanation of why such information or material is necessary; and

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#### (iv)          An explanation of the Plan’s claim review procedure and theapplicable time limits under such procedure and a statement as to the claimant’sright to bring a civil action under ERISA after all of the Plan’s reviewprocedures have been satisfied.

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If additional information is needed, theclaimant shall be provided at least 45 days within which to provide theinformation and any otherwise applicable time period for making a determinationshall be suspended during the period the information is being obtained.

 

Within 60 days after receipt of a denial of aclaim, the claimant must file with the Plan Administrator, a written requestfor review of such claim.  If a requestfor review is not filed within such 60-day period, the claimant shall be deemedto have acquiesced in the original decision of the Plan Administrator on his orher claim.  If a request for review isfiled, the Plan Administrator shall conduct a full and fair review of theclaim.  The claimant will be provided,upon request and free of charge, reasonable access to and copies of alldocuments and information relevant to the claim for benefits.  The claimant may submit issues and commentsin writing, and the review must take into account all information submitted bythe claimant regardless of whether it was reviewed as part of the initialdetermination.  The decision by the PlanAdministrator with respect to the review must be given within 60 days afterreceipt of the request for review, unless circumstances warrant an extension oftime not to exceed an additional 60 days. If this occurs, written notice of the extension will be furnished to theclaimant before the end of the initial 60-day period, indicating the specialcircumstances requiring the extension and the date by which the PlanAdministrator expects to make the final decision.  The decision shall be written in a mannercalculated to be understood by the claimant, and it shall include

 

(A)          Thespecific reason(s) for the denial;

 

(B)           Areference to the specific Plan provision(s) on which the denial is based;

 

(C)           Astatement that the claimant is entitled to receive, upon request and free ofcharge, reasonable access to and copies of all information relevant to theclaimant’s claim for benefits; and

 

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(D)          Astatement describing any voluntary appeal procedures offered by the Plan and astatement of the claimant’s right to bring a civil action under ERISA.

 

The Plan Administrator’s decision on reviewshall be, to the extent permitted by applicable law, final and binding on allinterested persons.

 

# **ARTICLEXI  - MISCELLANEOUS**

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## **Section 11.1.       **LegalFees and Expenses.  It is the intentof the Company that Participants not be required to incur any expensesassociated with the enforcement of rights under Section 5.2 of this Planbecause the cost and expense thereof would substantially detract from thebenefits intended to be extended to Participants hereunder.  Accordingly, if any Employer has failed tocomply with any of its obligations under Section 5.2 of this Plan or inthe event that any Employer, or any other person takes any action to declare Section 5.2of this Plan void or unenforceable, or institutes any litigation designed todeny, or to recover from, a Participant the benefits intended to be provided tothe Participant under Section 5.2 of this Plan, each Employer irrevocablyauthorizes the Participant from time to time to retain counsel of his or herchoice, at the expense of the Company, as hereafter provided, to represent theParticipant in connection with the initiation or defense of any legal action,whether by or against any Employer, in any jurisdiction.  The Company shall pay or cause to be paid andshall be solely responsible for any and all reasonable attorneys’ fees andexpenses incurred by the Participant in enforcing his or her rights under Section 5.2of this Plan individually (but not as a representative of any class) as aresult of any Employer’s failure to perform under Section 5.2 of this Planor as a result of any Employer or any person contesting the validity orenforceability of Section 5.2 of this Plan.  Any payment made by the Company pursuant tothis Section 11.1 shall be for expenses incurred by the Participant duringhis or her lifetime and such payment shall be made no later than the last dayof the calendar year following the calendar year in which the Participantincurs the expense.  In no event will theamount of expenses so paid by the Company in one year affect the amount ofexpenses eligible for reimbursement, or in-kind benefits to be provided, in anyother taxable year.  In no event will theCompany reimburse any expense under this Section 11.1 any earlier than thefirst day of the seventh month following the Participant’s Termination Date.

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## **Section 11.2.       **Withholdingof Taxes.  The Employer may withholdfrom any amounts payable under this Plan all foreign, federal, provincial,state, city or other taxes as shall be required pursuant to any law orgovernment regulation or ruling.

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## **Section 11.3.       **Remedyat Law.  The Company and eachParticipant recognize that each party will have no adequate remedy at law forbreach by the other of any of the agreements contained herein and, in the eventof any such breach, the Company hereby, and each Participant by execution of aParticipation Agreement, agree and consent that the other shall be entitled toa decree of specific performance, mandamus or other appropriate remedy to enforceperformance of this Plan.

 

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## **Section 11.4.       **Notices.  For all purposes of this Plan, allcommunications, including without limitation notices, consents, requests orapprovals provided for herein, shall be in writing and shall be deemed to havebeen duly given when delivered or five business days after having been mailedby registered or certified mail, return receipt requested, postage prepaid,addressed to the Company (to the attention of the Secretary of the Company), atits principal office and to any Participant at his or her principal residenceas shown in the relevant records of the Employer, or to such other address asany party may have furnished to the other in writing and in accordanceherewith, except that notices of change of address shall be effective only uponreceipt.

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## **Section 11.5.       **GoverningLaw.  This Plan shall beadministered, construed and enforced according to the laws of the State of Ohioto the extent they are not preempted by the ERISA.

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## **Section 11.6.       **Severability.  If a provision of this Plan shall be heldillegal or invalid, the illegality or invalidity shall not affect the remainingparts of this Plan and this Plan shall be construed and enforced as if theillegal or invalid provision had not been included.

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## **Section 11.7.       **Headings.  The headings are intended only forconvenience in finding the subject matter and do not constitute part of thetext of this Plan and shall not be considered in the interpretation of thisPlan.

 

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**Schedule A**

 
| **Participant’s Position**                           | ** ** | **Factor** |
|-----------------------------------------------------------|------------|------------|
| Chief Executive Officer of the Company  (“CEO”) |       | 3x         |
| Officers other than the CEO                               |       | 2x         |
| Non Officer Vice Presidents*                              |       | 1.5x       |
| All Other Participants*                                   |       | 1x         |

 

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*  For Participants who fallunder the category of “Non Officer Vice Presidents” or “All Other Participants,”Severance Payments under Section 5.2 (b)(iv) shall be equal to $0.00.

 

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**Schedule B**

 

**Gross-Up Payment Determination Procedures**

 

### (a)           Subject to the provisions of Section (e) of thisSchedule B, all determinations required to be made under this Schedule B,including whether (i) pursuant to Section 5.7(a), a Gross-Up Paymentis required to be paid by the Company to the Participant and the amount of suchGross-Up Payment or (ii) pursuant to Section 5.7(b), a reduction inthe payments and benefits to be provided under this Plan is required, shall bemade by the accounting firm or law firm selected by the Company (the **“Tax Professional”**). The Company shall direct the TaxProfessional to submit its determination and detailed supporting calculationsto both the Company and the Participant within thirty calendar days after theTermination Date, if applicable, and any such other time or times as may berequested by the Company or the Participant. As a result of the uncertainty in the application of Section 4999of the Code (or any successor provision thereto) and the possibility of similaruncertainty regarding applicable state or local tax law at the time of anydetermination by the Tax Professional hereunder, it is possible that Gross-UpPayments which will not have been made by the Company should have been made (an**“Underpayment”**), consistent with thecalculations required to be made hereunder. In the event that the Company exhausts or fails to pursue its remediespursuant to Section (e) of this Section and the Participantthereafter is required to make a payment of any Excise Tax, the Participantshall direct the Tax Professional to determine the amount of the Underpaymentthat has occurred and to submit its determination and detailed supportingcalculations to both the Company and the Participant as promptly as possible.

###  

### (b)           The Company and the Participant shall each provide the TaxProfessional access to and copies of any books, records and documents in thepossession of the Company or the Participant, as the case may be, reasonablyrequested by the Tax Professional, and otherwise cooperate with the TaxProfessional in connection with the preparation and issuance of thedeterminations and calculations contemplated by Section (a) of thisSchedule B.  Any determination by the TaxProfessional shall be binding upon the Company and the Participant.

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### (c)           The federal, state and local income or other tax returnsfiled by the Participant shall be prepared and filed on a consistent basis withthe determination of the Tax Professional. The Executive shall make proper payment of the amount of any Excise Tax,and at the request of the Company, provide to the Company true and correctcopies (with any amendments) of his or her federal income tax return as filedwith the Internal Revenue Service and corresponding state and local taxreturns, if relevant, as filed with the applicable taxing authority, and suchother documents reasonably requested by the Company, evidencing suchpayment.  If prior to the filing of theParticipant’s federal income tax return, or corresponding state or local taxreturn, if relevant, the Tax Professional determines that the amount of theGross-Up Payment

 

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### should be reduced, theParticipant shall within five business days pay to the Company the amount ofsuch reduction.

###  

### (d)           The fees and expenses of the Tax Professional for itsservices in connection with the determinations and calculations contemplated bySection (a) of this Schedule B shall be borne by the Company.  If such fees and expenses are initially paidby the Participant, the Company shall reimburse the Participant the full amountof such fees and expenses.

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### (e)           The Participant shall notify the Company in writing of anyclaim by the Internal Revenue Service or any other taxing authority that, ifsuccessful, would require the payment by the Company of a Gross-UpPayment.  Such notification shall begiven as promptly as practicable but no later than ten business days after theParticipant actually receives notice of such claim and the Participant shallfurther apprise the Company of the nature of such claim and the date on whichsuch claim is requested to be paid (in each case, to the extent known by theParticipant).  The Participant shall notpay such claim prior to the earlier of (i) the expiration of the 30-calendar-dayperiod following the date on which he or she gives such notice to the Companyand (ii) the date that any payment of amount with respect to such claim isdue.  If the Company notifies theParticipant in writing prior to the expiration of such period that it desiresto contest such claim, the Participant shall:

###  

#### (i)            provide the Company with any written records or documentsin his or her possession relating to such claim reasonably requested by theCompany;

####  

#### (ii)           take such action in connection with contesting such claimas the Company shall reasonably request in writing from time to time, includingwithout limitation accepting legal representation with respect to such claim byan attorney competent in respect of the subject matter and reasonably selectedby the Company;

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#### (iii)          cooperate with the Company in good faith in order toeffectively contest such claim; and

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#### (iv)          permit the Company to participate in any proceedingsrelating to such claim;

####  

*provided, however*,that the Company shall bear and pay directly all costs and expenses (includinginterest and penalties) incurred in connection with such contest and shallindemnify and hold harmless the Participant, on an after-tax basis, for andagainst any Excise Tax or income tax, including interest and penalties withrespect thereto, imposed as a result of such representation and payment ofcosts and expenses.  Without limiting theforegoing provisions of this subsection, the Company shall control allproceedings taken in connection with the contest of any claim contemplated bythis subsection and, at its sole option,

 

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may pursue or forego any and all administrative appeals, proceedings,hearings and conferences with the taxing authority in respect of such claim(provided, however, that the Participant may participate therein at his or herown cost and expense) and may, at its option, either direct the Participant topay the tax claimed and sue for a refund or contest the claim in anypermissible manner, and the Participant agrees to prosecute such contest to adetermination before any administrative tribunal, in a court of initialjurisdiction and in one or more appellate courts, as the Company shalldetermine; provided, however, that if the Company directs the Participant topay the tax claimed and sue for a refund, the Company shall indemnify and holdthe Participant harmless, on an after-tax basis, from any Excise Tax or incomeor other tax, including interest or penalties with respect thereto, imposedwith respect to such advance; and provided further, however, that any extensionof the statute of limitations relating to payment of taxes for the taxable yearof the Participant with respect to which the contested amount is claimed to bedue is limited solely to such contested amount. Furthermore, the Company’s control of any such contested claim shall belimited to issues with respect to which a Gross-Up Payment would be payablehereunder and the Participant shall be entitled to settle or contest, as thecase may be, any other issue raised by the Internal Revenue Service or anyother taxing authority.

 

(f)            Notwithstanding anyother provision of this Schedule B to the contrary, all taxes described in thisSchedule B shall be paid or reimbursed no earlier than the first day of theseventh month following the Termination Date and no later than the end of theyear following the year in which the applicable taxes are remitted.  Any expenses, including interest andpenalties assessed on the taxes described in this Schedule B and fees andexpenses of the Tax Professional described in Section (d) of thisSchedule B, incurred by the Participant shall be reimbursed promptly after theParticipant submits evidence of the incurrence of such expenses, whichreimbursement in no event will be earlier than the first day of the seventhmonth following the Termination Date and no later than the end of the yearfollowing the year in which the Participant incurs the expense.  Any expense reimbursed by the Company in onetaxable year in no event will affect the amount of expenses required to bereimbursed by the Company in any other taxable year.

 

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