Document:

Exhibit
10.1

 

April 26, 2006

 

James V. Mahoney

3600 Wood Hollow Road

Dayton, Ohio  45429

 

Dear Jim:

 

You have notified DPL Inc. and The Dayton Power and Light Company
(together with DPL Inc., the “Company”) of your intention to resign from the
Company and the Boards of Directors of the Company on July 31, 2006 (the
“Effective Date”).

 

I personally and on behalf of the Company, wish to express our sincere
appreciation and thanks for your diligent and faithful service to the Company.
We all wish you much success in your future endeavors. This letter will confirm
our agreement regarding your continued employment with the Company through the
Effective Date. We ask that you carefully review the following terms and
indicate your agreement by signing this letter where indicated.

 

1.             You
hereby agree to continue your employment with the Company through the Effective
Date. You will continue as President and Chief Executive Officer of the Company
and will continue to serve on the Boards of Directors of DPL Inc. and The
Dayton Power and Light Company through the Effective Date unless a successor is
engaged before the Effective Date. If a successor is engaged prior to the
Effective Date, you will serve in such other executive position as shall be
determined by the Board to facilitate the transition of leadership.

 

2.             In
consideration for (i) your execution of this letter agreement and
non-revocation thereof, and (ii) the other promises and covenants contained
herein (the “Agreement”):

 

(a)           The
Company shall pay to you on the Effective Date, a lump sum cash payment of (x)
five hundred and fifty thousand dollars ($550,000), less any applicable
withholding taxes and payroll deductions (such amounts to be collectively
reported to the taxing authorities via IRS Form W-2); plus (y) your unpaid base
salary, if any, through the Effective Date (payable at the annual rate of
$550,000).

 

(b)           You
will be eligible to participate in the Executive Incentive Compensation Program
for 2006 (the “EICP”) through the Effective Date. Any payment you may receive
under the EICP will be pro rated for the number of months you are employed by
the Company. Your pro rated payment under the EICP will be paid when 2006 EICP
bonuses are paid to other senior executives of the Company;

 

(c)           You
will be entitled to continued participation in the Company’s health insurance
program as though you were actively employed through the earlier of (x)
December 31, 2006 or (y) the date you obtain health coverage from a subsequent 

 

 

employer.

 

(d)           The
Company will pay you any unpaid out-of pocket business expenses incurred
through the Effective Date.

 

3.             You acknowledge and
agree that there are no unpaid bonus amounts, equity awards or long term
incentives or other compensation with respect to which you have any entitlement
or rights, other than previously vested equity awards, deferred compensation,
and the consideration provided for herein and any
benefits to which you are entitled under the Company’s existing benefit plans
and governing plan documents. You specifically acknowledged that you have no
entitlement to (i) any accelerated vesting of long term incentive or equity
awards; (ii) participation in the Company Long Term Incentive Plan, including
without limitation under the Performance Share Agreement, dated March 7, 2006,
or (iii) any grant of restricted share awards under the Company’s Management
Stock Incentive Plan.

 

4.             The Company agrees
that if you currently are or are made a party to, are threatened to be made a
party to, receive any legal process in, or receive any discovery request or
request for information in connection with, any action, suit or proceeding,
whether civil, criminal, administrative or investigative (a “Proceeding”), by
reason of the fact that you are or were a director, officer, employee, consultant
or agent of the Company, or were serving at the request of, or on behalf of,
the Company as a director, officer, member, employee, consultant or agent of
another corporation, limited liability corporation, partnership, joint venture,
trust or other entity, including service with respect to employee benefit
plans, you shall be indemnified and held harmless by the Company to the fullest
extent permitted or authorized by the Company’s certificate of incorporation or
by-laws or, if greater, by applicable law, against any and all costs, expenses,
liabilities and losses (including, without limitation, attorneys’ fees
reasonably incurred, judgments, fines, taxes or penalties and amounts paid or
to be paid in settlement and any reasonable cost and fees incurred in enforcing
your rights to indemnification or contribution) incurred or suffered by you in
connection therewith, and such indemnification shall continue even though you
cease to be a director, officer, member, employee, consultant or agent of the
Company or other entity.

 

5.             You, on your own
behalf and on behalf of any and all of your executors, administrators,
successors, heirs, assigns, agents and representatives (your “Related Persons”)
hereby irrevocably and unconditionally remise, release, waive and forever
discharge the Releasees from any and all manner of liabilities, actions, causes
of action, contracts, agreements, promises, claims and demands of any kind or
nature whatsoever, in law or equity, whether known or unknown, fixed or
contingent, liquidated or unliquidated, which you ever had or now have against
the Releasees, including, but not limited to, claims arising out of or relating
to your employment with the Company or compensation and benefits from the
Company; provided that the foregoing shall not apply to claims relating to your
entitlement under this Agreement, or any deferred compensation or other vested
benefit referred to in Paragraph 3. Furthermore, notwithstanding anything else
in this Paragraph 5 or any other term of this Agreement, you will continue to
enjoy the full benefit and protection under the Company’s Directors

 

 

and Officers Insurance
Policy afforded to all Board members and executive management of the Company.
For purposes of this Agreement, the term the “Releasees” shall mean and include
DPL Inc., The Dayton Power & Light Company and their respective past,
present and future directors, officers, agents, insurers, representatives,
attorneys, and employees, their respective past, present and future direct and
indirect parents, subsidiaries (whether or not wholly-owned), and their
respective affiliates, divisions, predecessors, successors and assigns, and the
past, present and future directors, officers, agents, representatives,
attorneys, and employees thereof, and any and all other related individuals and
entities, jointly and individually, and this Agreement shall inure to the
benefit of all such individuals and entities.

 

6.             Consistent with the
terms and conditions of Paragraph 5, you understand and agree that this Agreement
shall act as a complete bar to any claim, demand or action of any kind
whatsoever which could be or which could have been brought by you or on your
behalf which seeks personal equitable or monetary relief for you or any Related
Persons against any of the Releasees, including, without limitation, any claim,
demand or action under the Age Discrimination in Employment Act, 29 U.S.C. §
621, et seq., Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000 (e),
et seq., the Americans with Disabilities Act, 42 U.S.C. 1201, et seq., the
Employee Retirement Income Security Act of 1974, wage and hours laws of the
state of Ohio, and any and all other federal, state or local statutes, or
common laws, except for claims for a breach of this Agreement and with respect
to any benefits in which you have a vested interest under the terms and
conditions of any of the Company’s pension benefit plans. You, on your own
behalf and on behalf of any Related Persons, hereby waive and relinquish any
and all rights you, or they, may have under any federal, state or local
statute, rule, regulation or principle of common law or equity which may in any
way limit the effect of this release with respect to claims which you did not
know or suspect to exist in your favor at the time you executed this
Agreement., provided that it is understood and agreed that you are not waiving
your ability to sue on any claim which may arise in connection with your
entitlement under this Agreement.

 

7.             You agree to return
to the Company all property of the Company or any of its affiliates in your
possession or control (including, without limitation, all correspondence,
manuals, notes, notebooks, reports, financial and other business records and
information, computer records and software, business or strategic plans,
financial projections, computer access codes and tangible property), whether or
not confidential.

 

8.             It is understood
and agreed that at all times you (i) will keep all confidential, nonpublic
and/or proprietary information (including, for example, trade secrets,
financial information, customer information and business and strategic plans)
of the Company (regardless of when you became aware of such information) in
strict confidence; and (ii) will not, directly or indirectly, use or disclose to
any person in any manner any of such information. You will not talk about,
discuss or communicate with anyone, orally or in writing, concerning this
Agreement and its terms and conditions; provided, however, that you may: (A)
discuss this Agreement with your immediate family; (B) permit attorney(s),
accountant(s) and tax advisor(s) of your choice to review

 

 

this Agreement in connection
with the receipt of advice on the taxability of the monetary payment in this
Agreement, your rights hereunder or to answer inquiries with respect thereto;
and (C) disclose the circumstances and the terms of this Agreement as required
by, or in response to inquiries from, any governmental, regulatory or
self-regulatory body or agency with jurisdiction over the activities of the
parties.

 

9.             You and the Company
each agree not to issue any communication, written, verbal or otherwise, that
disparages, criticizes or otherwise reflects adversely upon the other party or
which encourages any adverse action, provided that the parties are permitted to
testify truthfully under oath pursuant to a subpoena.

 

10.           You agree that for a
period of 12 months after the date hereof, you will not directly or indirectly
(i) render employment of any kind to any Ohio electric utility or accept employment
with the Ohio utility portion of First Energy, AEP or Duke; (ii) render any
consulting services to any of the aforementioned Ohio electric utilities
without the prior written consent of DPL. Inc., which consent shall not be
unreasonably withheld; or (iii) solicit any employee to leave his or her
employment with the Company or any affiliate of the Company; or (iv) disclose
to any third party the names, backgrounds or qualifications of any employee of
the Company or of any affiliate of the Company or otherwise identify them as
potential candidates for employment.

 

11.           This Agreement may
not be changed orally and no modification, amendment or waiver of any provision
contained in this Agreement, or any future representation, promise or condition
in connection with the subject matter of this Agreement, shall be binding upon
any party hereto unless made in writing and signed by such party.

 

12.           This Agreement
contains the entire agreement and complete settlement between the parties and
supersedes any and all previous agreements of any kind whatsoever between them,
whether written or oral, including without limitation. All prior and
contemporaneous discussions and negotiations have been and are merged and
integrated into, and are superseded by, this Agreement. Neither this Agreement
nor any portion hereof is assignable.

 

13.           In the event that
any provision of this Agreement or the application thereof should be held to be
void, voidable, unlawful or, for any reason, unenforceable, the remaining
portion and application shall remain in full force and effect, and to that end
the provisions of this Agreement are declared to be severable.

 

14.           This Agreement is
made and entered into, and shall be subject to, governed by, and interpreted in
accordance with the laws of the State of Ohio and shall be fully enforceable in
the courts of that state, without regard to principles of conflict of laws. The
parties: (i) agree that any suit, action or other legal proceeding arising
out of this Agreement shall be brought in the courts of the state of Ohio;
(ii) consent to the exclusive jurisdiction of such courts; and
(iii) waive any objection which they may have to the laying of venue in
such courts. The parties also consent to the service of process, pleadings,
notices or other papers by any method of service approved by the

 

 

 

Ohio State and/or federal
courts.

 

15.           You acknowledge,
agree and understand that you have been advised of the opportunity to consult
with counsel of your choice and that you have in fact consulted with counsel.
You further acknowledge that you have been given a reasonable and sufficient
period of time of no less than twenty-one (21) days in which to consider and
return this Agreement. It is further agreed and understood that upon your
execution and return of this Agreement you are thereafter permitted to revoke
the Agreement at any time during a period of seven (7) days following your
execution hereof. This Agreement will not be effective until the seven (7) day
period has expired without revocation. If this Agreement is executed and then
revoked within the aforementioned seven (7) day period, this Agreement will be
of no further force or effect, and neither the you nor the Releasees will have
any rights or obligations hereunder.

 

Please indicate your agreement to the terms
of the Agreement by signing below.

 

	
   

  	
  Sincerely yours,

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Robert D. Biggs

  	
   

  
	
   

  	
  DPL Inc.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Robert D. Biggs

  	
   

  
	
   

  	
  The Dayton Power and Light Company

  

 

Agreed on this 4th day of May, 2006 by

 

	
   

  	
   

  
	
  James V. Mahoney

  

 

	
   

  	
   

  
	
  Subscribed and sworn to before me

  

this 18th day of May, 2006.

 

	
   

  	
   

  
	
  Shelly A. Williams

  

Notary PublicExhibit 10.1

 

April 26, 2006

 

James V. Mahoney

3600 Wood Hollow Road

Dayton, Ohio  45429

 

Dear Jim:

 

You have notified DPL Inc. and The Dayton Power and Light Company
(together with DPL Inc., the “Company”) of your intention to resign from the
Company and the Boards of Directors of the Company on July 31, 2006 (the “Effective
Date”).

 

I personally and on behalf of the Company, wish to express our sincere
appreciation and thanks for your diligent and faithful service to the
Company.  We all wish you much success in
your future endeavors. This letter will confirm our agreement regarding your
continued employment with the Company through the Effective Date. We ask that
you carefully review the following terms and indicate your agreement by signing
this letter where indicated.

 

1.             You hereby
agree to continue your employment with the Company through the Effective Date.
You will continue as President and Chief Executive Officer of the Company and
will continue to serve on the Boards of Directors of DPL Inc. and The Dayton
Power and Light Company through the Effective Date unless a successor is
engaged before the Effective Date.  If a
successor is engaged prior to the Effective Date, you will serve in such other
executive position as shall be determined by the Board to facilitate the
transition of leadership.

 

2.             In
consideration for (i) your execution of this letter agreement and
non-revocation thereof, and (ii) the other promises and covenants contained
herein (the “Agreement”):

 

(a)           The Company
shall pay to you on the Effective Date, a lump sum cash payment of (x) five
hundred and fifty thousand dollars ($550,000), less any applicable withholding
taxes and payroll deductions (such amounts to be collectively reported to the
taxing authorities via IRS Form W-2); plus (y) your unpaid base salary, if any,
through the Effective Date (payable at the annual rate of $550,000).

 

(b)           You will be
eligible to participate in the Executive Incentive Compensation Program for
2006 (the “EICP”) through the Effective Date. 
Any payment you may receive under the EICP will be pro rated for the
number of months you are employed by the Company.  Your pro rated payment under the EICP will be
paid when 2006 EICP bonuses are paid to other senior executives of the Company;

 

(c)
          You will be entitled to
continued participation in the Company’s health insurance program as though you
were actively employed through the earlier of (x) December 31, 2006 or (y) the
date you obtain health coverage from a subsequent

 

 

employer.

 

(d)            The Company
will pay you any unpaid out-of pocket business expenses incurred through the
Effective Date.

 

3.             You acknowledge
and agree that there are no unpaid bonus amounts, equity awards or long term
incentives or other compensation with respect to which you have any entitlement
or rights, other than previously vested equity awards, deferred compensation,
and the consideration provided for herein and any
benefits to which you are entitled under the Company’s existing benefit plans
and governing plan documents.  You specifically
acknowledged that you have no entitlement to (i) any accelerated vesting of
long term incentive or equity awards; (ii) participation in the Company Long
Term Incentive Plan, including without limitation under the Performance Share
Agreement, dated March 7, 2006, or (iii) any grant of restricted share awards
under the Company’s Management Stock Incentive Plan.

 

4.             The Company agrees that if
you currently are or are made a party to, are threatened to be made a party to,
receive any legal process in, or receive any discovery request or request for
information in connection with, any action, suit or proceeding, whether civil,
criminal, administrative or investigative (a “Proceeding”), by reason of the
fact that you are or were a director, officer, employee, consultant or agent of
the Company, or were serving at the request of, or on behalf of, the Company as
a director, officer, member, employee, consultant or agent of another corporation,
limited liability corporation, partnership, joint venture, trust or other
entity, including service with respect to employee benefit plans, you shall be
indemnified and held harmless by the Company to the fullest extent permitted or
authorized by the Company’s certificate of incorporation or by-laws or, if
greater, by applicable law, against any and all costs, expenses, liabilities
and losses (including, without limitation, attorneys’ fees reasonably incurred,
judgments, fines, taxes or penalties and amounts paid or to be paid in
settlement and any reasonable cost and fees incurred in enforcing your rights
to indemnification or contribution) incurred or suffered by you in connection
therewith, and such indemnification shall continue even though you cease to be
a director, officer, member, employee, consultant or agent of the Company or
other entity.

 

5.             You, on your own behalf and
on behalf of any and all of your executors, administrators, successors, heirs,
assigns, agents and representatives (your “Related Persons”) hereby irrevocably
and unconditionally remise, release, waive and forever discharge the Releasees
from any and all manner of liabilities, actions, causes of action, contracts,
agreements, promises, claims and demands of any kind or nature whatsoever, in
law or equity, whether known or unknown, fixed or contingent, liquidated or
unliquidated, which you ever had or now have against the Releasees, including,
but not limited to, claims arising out of or relating to your employment with
the Company or compensation and benefits from the Company; provided that the foregoing
shall not apply to claims relating to your entitlement under this Agreement, or
any deferred compensation or other vested benefit referred to in Paragraph
3.  Furthermore, notwithstanding anything
else in this Paragraph 5 or any other term of this Agreement, you will continue
to enjoy the full benefit and protection under the Company’s Directors

 

 

and Officers Insurance Policy afforded to all Board
members and executive management of the Company.  For purposes of this Agreement, the term the “Releasees”
shall mean and include DPL Inc., The Dayton Power & Light Company and their
respective past, present and future directors, officers, agents, insurers,
representatives, attorneys, and employees, their respective past, present and
future direct and indirect parents, subsidiaries (whether or not wholly-owned),
and their respective affiliates, divisions, predecessors, successors and
assigns, and the past, present and future directors, officers, agents,
representatives, attorneys, and employees thereof, and any and all other
related individuals and entities, jointly and individually, and this Agreement
shall inure to the benefit of all such individuals and entities.

 

6.             Consistent with the terms
and conditions of Paragraph 5, you understand and agree that this Agreement
shall act as a complete bar to any claim, demand or action of any kind
whatsoever which could be or which could have been brought by you or on your
behalf which seeks personal equitable or monetary relief for you or any Related
Persons against any of the Releasees, including, without limitation, any claim,
demand or action under the Age Discrimination in Employment Act, 29 U.S.C. §
621, et seq., Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000 (e),
et seq., the Americans with Disabilities Act, 42 U.S.C. 1201, et seq., the
Employee Retirement Income Security Act of 1974, wage and hours laws of the
state of Ohio, and any and all other federal, state or local statutes, or
common laws, except for claims for a breach of this Agreement and with respect
to any benefits in which you have a vested interest under the terms and
conditions of any of the Company’s pension benefit plans.  You, on your own behalf and on behalf of any
Related Persons, hereby waive and relinquish any and all rights you, or they,
may have under any federal, state or local statute, rule, regulation or
principle of common law or equity which may in any way limit the effect of this
release with respect to claims which you did not know or suspect to exist in
your favor at the time you executed this Agreement., provided that it is
understood and agreed that you are not waiving your ability to sue on any claim
which may arise in connection with your entitlement under this Agreement.

 

7.             You agree to return to the
Company all property of the Company or any of its affiliates in your possession
or control (including, without limitation, all correspondence, manuals, notes,
notebooks, reports, financial and other business records and information,
computer records and software, business or strategic plans, financial
projections, computer access codes and tangible property), whether or not
confidential.

 

8.             It is understood and agreed
that at all times you (i) will keep all confidential, nonpublic and/or
proprietary information (including, for example, trade secrets, financial
information, customer information and business and strategic plans) of the
Company (regardless of when you became aware of such information) in strict
confidence; and (ii) will not, directly or indirectly, use or disclose to any
person in any manner any of such information. 
You will not talk about, discuss or communicate with anyone, orally or
in writing, concerning this Agreement and its terms and conditions; provided,
however, that you may: (A) discuss this Agreement with your immediate family;
(B) permit attorney(s), accountant(s) and tax advisor(s) of your choice to
review

 

 

this Agreement in connection with the receipt of
advice on the taxability of the monetary payment in this Agreement, your rights
hereunder or to answer inquiries with respect thereto; and (C) disclose the
circumstances and the terms of this Agreement as required by, or in response to
inquiries from, any governmental, regulatory or self-regulatory body or agency
with jurisdiction over the activities of the parties.

 

9.             You and the Company each
agree not to issue any communication, written, verbal or otherwise, that
disparages, criticizes or otherwise reflects adversely upon the other party or
which encourages any adverse action, provided that the parties are permitted to
testify truthfully under oath pursuant to a subpoena.

 

10.           You agree that for a period
of 12 months after the date hereof, you will not directly or indirectly (i)
render employment of any kind to any Ohio electric utility or accept employment
with the Ohio utility portion of First Energy, AEP or Duke; (ii) render any
consulting services to any of the aforementioned Ohio electric utilities
without the prior written consent of DPL. Inc., which consent shall not be
unreasonably withheld; or (iii) solicit any employee to leave his or her
employment with the Company or any affiliate of the Company; or (iv) disclose
to any third party the names, backgrounds or qualifications of any employee of
the Company or of any affiliate of the Company or otherwise identify them as
potential candidates for employment.

 

11.           This Agreement may not be
changed orally and no modification, amendment or waiver of any provision
contained in this Agreement, or any future representation, promise or condition
in connection with the subject matter of this Agreement, shall be binding upon
any party hereto unless made in writing and signed by such party.

 

12.           This Agreement contains the
entire agreement and complete settlement between the parties and supersedes any
and all previous agreements of any kind whatsoever between them, whether
written or oral, including without limitation. 
All prior and contemporaneous discussions and negotiations have been and
are merged and integrated into, and are superseded by, this Agreement.  Neither this Agreement nor any portion hereof
is assignable.

 

13.           In the event that any
provision of this Agreement or the application thereof should be held to be
void, voidable, unlawful or, for any reason, unenforceable, the remaining portion
and application shall remain in full force and effect, and to that end the
provisions of this Agreement are declared to be severable.

 

14.           This Agreement is made and
entered into, and shall be subject to, governed by, and interpreted in
accordance with the laws of the State of Ohio and shall be fully enforceable in
the courts of that state, without regard to principles of conflict of
laws.  The parties: (i) agree that
any suit, action or other legal proceeding arising out of this Agreement shall
be brought in the courts of the state of Ohio; (ii) consent to the
exclusive jurisdiction of such courts; and (iii) waive any objection which
they may have to the laying of venue in such courts.  The parties also consent to the service of
process, pleadings, notices or other papers by any method of service approved
by the

 

 

Ohio State and/or federal courts.

 

15.           You acknowledge, agree and
understand that you have been advised of the opportunity to consult with
counsel of your choice and that you have in fact consulted with counsel.  You further acknowledge that you have been
given a reasonable and sufficient period of time of no less than twenty-one
(21) days in which to consider and return this Agreement.  It is further agreed and understood that upon
your execution and return of this Agreement you are thereafter permitted to
revoke the Agreement at any time during a period of seven (7) days following
your execution hereof.  This Agreement
will not be effective until the seven (7) day period has expired without revocation.  If this Agreement is executed and then
revoked within the aforementioned seven (7) day period, this Agreement will be
of no further force or effect, and neither the you nor the Releasees will have
any rights or obligations hereunder.

 

Please indicate your agreement to the terms
of the Agreement by signing below.

 

 

	
   

  	
  Sincerely yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Robert D. Biggs

  	
   

  
	
   

  	
  DPL Inc.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Robert D. Biggs

  	
   

  
	
   

  	
  The Dayton Power and Light
  Company

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Agreed on this 4th day of May,
  2006 by

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  James V. Mahoney

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Subscribed and sworn to
  before me

  	
   

  	
   

  
	
  this 18th day of May,
  2006.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Shelly A. Williams

  	
   

  	
   

  
	
  Notary Public

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