Document:

Exhibit 10.22

 

December 30, 2004

 

Pawan Gupta

2265 269th Court SE

Sammamish, WA 98075

 

Dear Pawan,

 

BSQUARE CORPORATION is pleased to extend to you an offer for employment
as a Vice President of Product Management. You will be paid bi-weekly at a rate
equivalent to an annual salary of $160,000. In addition you will be eligible
for a 2005 bonus potential of up to 25% of your base salary. Your bonus plan
will be administered cooperatively by the Chief Executive Officer and the
Compensation Committee of the Board of Directors and any bonus payouts will be
subject to achievement of your individual objectives as well as overall
corporate objectives, including profitability. 
Bonus payout is at the sole discretion of the CEO and Compensation
Committee. Also, we agree to re-evaluate your compensation package on your six
month anniversary date of employment to include consideration of a severance
plan. Your job classification is Executive. 
You will be hired as an exempt employee, so you will not be entitled to
overtime.

 

BSQUARE CORPORATION extends the following benefits:

	
  •

  	
  a medical, dental, vision, life and disability plan

  
	
  •

  	
  a 401(k) retirement plan

  
	
  •

  	
  10 paid holidays and 15 days of paid time off

  
	
  •

  	
  Options to purchase 150,000 shares of company stock with such options
  to vest as follows:

  
	
   

  	
  18750 shares to vest after six month

  
	
   

  	
  9375 share to vest each quarter until all shares are vested.

  
	
  •

  	
  Other discretionary benefits

  

 

The strike price for your stock options will be the market closing
price on your first day of employment.

 

BSQUARE CORPORATION is an established product development and
engineering contracting company with a promising outlook.  Your meaningful participation will greatly
enhance our ability to retain our current contracting obligations and, in the future,
will enable BSQUARE CORPORATION to pursue and secure other contracts.  YOUR EMPLOYMENT IS AT-WILL AND ACCORDINGLY,
YOU OR BSQUARE CORPORATION MAY TERMINATE THIS EMPLOYMENT RELATIONSHIP AT
ANY TIME WITH OR WITHOUT NOTICE OR CAUSE.

 

This offer is contingent upon compliance with the Immigration Reform
and Control Act of 1986.  The Act
requires you to establish your identity and employment eligibility.  To do so, on your start date you will be
required to complete Section I of the Employment Eligibility Verification
Form, I-9.  This offer is also contingent
on your acceptance and return of the BSQUARE Proprietary Rights Agreement
provided herewith.

 

Please signify your acceptance of this offer by signing a copy of this
letter and the attached Proprietary Rights Agreement and returning both on or
before your anticipated start date of January 3, 2005.

 

On behalf of BSQUARE CORPORATION, I hope to welcome you aboard.  If you have any questions or concerns, please
feel free to contact me.

 

 

	
  Sincerely,

  	
  Accepted By:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Julie Delles

  	
  Date

  	
  Pawan Gupta

  	
  Date

  
	
  Human
  Resources Generalist

  	
   

  
	
  BSQUARE
  CorporationExhibit 10.15

 

EarthLink, Inc.

Board Compensation

January 2004

 

1.             Retainer

a.               Each non-employee director receives a $25,000
annual retainer, paid semi-annually in advance ($12,500 following January Board
meeting and $12,500 following July Board meeting).

b.              A non-employee Chair of the Board, the
Compensation Committee chair and the Corporate Governance and Nominating
Committee chair each receive an additional $10,000 annual retainer, paid
semi-annually in advance.

c.               The Audit Committee chair receives an additional
$20,000 annual retainer, paid semi-annually in advance.

 

2.             Meeting fees

a.               Each non-employee director is paid $1,000 for
each full Board meeting and Committee meeting he or she attends in person and
$500 for each full Board meeting and Committee meeting he or she attends
telephonically.

 

3.             Stock Options

a.               Non-employee directors receive an initial
option grant of 15,000 options when they join the Board.  These options vest over four years.

b.              Additionally, non-employee directors receive
an annual option grant of 10,000 options on January 1 of each year.  These also vest over four years.

 

4.             Restricted Stock Units

a.               Each non-employee director receives a grant
of Restricted Stock Units valued at $30,000 annually (on the date of the July
Board meeting).  Restricted Stock Units
will vest over four years, and upon vesting may be received in shares of stock
or may be deferred into a deferred compensation plan.

i.                  Note: 
Each RSU is equal to one share of EarthLink stock.  Upon vesting, the RSUs may be received in
shares of stock (in which case the recipient has taxable income equal to the
value of the shares received on the date of vesting), or may be deferred into a
deferred compensation plan where they continue to be equal to shares of
EarthLink stock but where receipt and taxation may be deferred to later dates.

 

5.             Meeting expenses

a.               EarthLink reimburses directors for their
expenses incurred in attending Board of Directors and Committee meetings.

 

 

6.             Education expenses

a.               EarthLink will pay up to $4,000 per year for
program fees and associated travel expenses for each director to participate in
one or more additional relevant director education programs.  In selecting director education programs,
directors should consider general Board governance and specific Committee
focus.

b.              Unused amount will not carry over from year
to year.Exhibit 10(s)

 

July 1, 2004

 

Ms. Patricia K. Swanke

1253 Windsor Drive

Beavercreek, OH  45434

 

Dear Pat:

 

DPL Inc. (“DPL”) and its subsidiary, The Dayton Power
and Light Company (“DP&L”) hereinafter collectively referred to as the “Company”,
considers the establishment and maintenance of a sound and vital management to
be essential to protecting and enhancing the best interests of the Company and
its shareholders.  In this connection,
the Company recognizes that, as is the case with many publicly held corporations,
the possibility of a Change of Control (as defined in paragraph 2) can raise
distracting and disrupting uncertainties and questions among management
personnel, can interfere with their whole-hearted attention and devotion to the
performance of their duties, and can even lead to their departure, all to the
detriment of the best interests of the Company and its shareholders.  Accordingly, the Board of Directors of DPL
(the “Board of Directors”) and the Board of Directors of DP&L have
determined that the best interests of the Company and its shareholders would be
served by assuring to certain executives of the Company, including yourself,
the protection provided by an agreement which defines the respective rights and
obligations of the Company and the executive in the event of termination of
employment subsequent to a Change of Control.

 

In order to effect the
foregoing, this letter agreement sets forth the Company’s agreement to extend
to you certain benefits upon a termination of employment whenever occurring and
to set forth the severance benefits which the Company agrees will be provided
to you in the event your employment with the Company or, in the case of a
Change of Control described in clause (iv) of paragraph 2, with the successor
to the Company is terminated subsequent to a Change of Control under the
circumstances described in paragraph 3 below.

 

1.                                      OPERATION
AND TERM OF AGREEMENT.

 

This agreement shall become effective immediately upon
the execution hereof and amends and supercedes your change of control letter
agreement with the Company dated September 15, 2000.  This agreement shall continue until May 1,
2005, and shall automatically renew for each consecutive twelve month period
thereafter (i.e., May 1st to
April 30th), unless either the Company provides you or you provide
the Company a one (1) year prior written notice of its or your intention not to
renew this agreement.  Notwithstanding
the foregoing, the term of this agreement shall continue in effect for a period
of not less than thirty-six (36) months after each Change of Control occurring
during the term of this agreement; and any benefit that accrues

 

 

to you pursuant to
the terms of this agreement shall continue to be an obligation of the Company
and enforceable by you until paid in full, notwithstanding the subsequent
termination of this agreement; provided however that if the event constituting
a Change of Control is either the commencement of a tender offer, or the
entering into of an agreement referred to in item (ii) or (iii) of paragraph 2,
and such tender offer is still pending or such agreement has not been
consummated at the end of the thirty-six month period applicable to such Change
of Control, then without limitation of the other provisions of this paragraph,
such thirty-six month period shall be extended through the date on which the
tender offer or agreement is either (a) terminated or abandoned or (b)
consummated, whichever occurs first, and the thirty-six month period provided
for in paragraph 3.A. shall also be so extended.  If more than one Change of Control occurs
during the term of this agreement, the provisions of this agreement shall be
applicable to each such Change of Control.

 

1.A.                          TERMINATION
FOR ANY REASON.

 

Notwithstanding any other provisions of this agreement
to the contrary, upon termination of employment for any reason at any time, the
following shall be paid or made available to you in compensation for services
previously rendered:

 

(i)                                     The
Company shall pay to you in a lump sum in cash not later than the Date of
Termination (as defined in paragraph 4) your full base salary through the Date
of Termination at the rate in effect at the Date of Termination; and also the
amount of the award or awards, if any, with respect to any completed period or
periods which, pursuant to the Management Incentive Compensation Program or any
other Company incentive compensation plan in which you are then participating
(other than any deferred compensation plan in which a contrary installment
payment election has been made), has been determined to have been earned by you
but which has not yet been paid to you.

 

(ii)                                  The
Company shall pay or make available to you all other accrued benefits of any
kind to which you are, or would otherwise have been, entitled through the Date
of Termination (as defined in paragraph 4).

 

2.                                      CHANGE
OF CONTROL.

 

Except as provided
in paragraph 1.A. above, no benefits shall be payable hereunder unless there
shall have been a Change of Control, as defined below, and your employment by
the Company shall thereafter have been terminated in accordance with paragraph
3 below.  For purposes of this agreement,
a ‘Change of Control’ means any change in control of DPL, or its principal
subsidiary, DP&L, of a nature that would be required to be reported in
response to Item 6 (e) of Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended (the ‘Exchange Act’) 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 to have occurred if (i)
any ‘person’ (as such term is defined in Sections 13 (d) and 14 (d) (2) of the
Exchange Act; hereafter, a ‘Person’) other than DPL or DP&L or an entity
then directly or indirectly controlling, controlled by or under common control
with DPL or DP&L is on the date

 

2

 

hereof or becomes or
commences a tender offer to become the beneficial owner, directly or
indirectly, of securities of DPL or 
DP&L representing (A) 15% or more of the combined voting power of
the then outstanding securities of DPL or DP&L if the acquisition of such
beneficial ownership or such tender offer is not approved by the Board of
Directors of DPL prior to the acquisition or the commencement of such tender
offer or (B) 50% or more of such combined voting power in all other cases; (ii)
DPL or DP&L enters into an agreement to merge or consolidate itself, or an
agreement to consummate a ‘combination’ or ‘majority share acquisition’ in
which it is the ‘acquiring corporation’ (as such terms are defined in Ohio Rev.
Code § 1701.01 as in effect on December 31, 1990) and in which shareholders of
DPL or DP&L, as the case may be, immediately prior to entering into such
agreement, will beneficially own, immediately after the effective time of the
merger, consolidation, combination or majority share acquisition, securities of
DPL or DP&L or any surviving or new corporation, as the case may be, having
less than 50% of the ‘voting power’ of DPL or DP&L or any surviving or new
corporation, as the case may be, including ‘voting power’ exercisable on a
contingent or deferred basis as well as immediately exercisable ‘voting power’,
excluding any merger of DPL into DP&L or of DP&L into DPL; (iii) DPL or
DP&L enters into an agreement to sell, lease, exchange or otherwise
transfer or dispose of all or substantially all of its assets to any Person
other than to a wholly owned subsidiary or, in the case of DP&L, to DPL or
a wholly owned subsidiary(ies) of DPL; but not including (A) a mortgage or
pledge of assets granted in connection with a financing or (B) a spin-off or
sale of assets if DPL continues in existence and its common shares are listed
on a national securities exchange, quoted on the automated quotation system of
a national securities association or traded in the over-the-counter market;
(iv) any transaction referred to in (ii) or (iii) above is consummated; or (v)
those persons serving as directors of DPL or DP&L on February 1, 2000 (the ‘Original
Directors’) and/or their Successors do not constitute a majority of the whole
Board of Directors of DPL or DP&L, as the case may be (the term ‘Successors’
shall mean those directors whose election or nomination for election by
shareholders has been approved by the vote of at least two-thirds of the
Original Directors and previously qualified Successors serving as directors of
DPL or DP&L, as the case may be, at the time of such election or nomination
for election).

 

3.                                      TERMINATION
FOLLOWING CHANGE OF CONTROL.

 

A.                                   If
any of the events described in paragraph 2 constituting a Change of Control
shall have occurred, then upon any subsequent termination of your employment at
any time within thirty-six months following the occurrence of any such event,
you shall be entitled to the benefits set forth in paragraph 5, unless such
termination is

 

(i)                                     by
the Company because of your Disability or for Cause;

 

(ii)                                  by
you without Good Reason, except that if no Change of Control has occurred other
than the commencement of a tender offer or the entering into of an agreement
referred to in item (ii) or (iii) of paragraph 2 by you for any reason; or

 

(iii)                               because
of your death.

 

3

 

Notwithstanding the foregoing sentence and any other provision herein
to the contrary, if (a) the event constituting the Change of Control is only
the commencement of a tender offer or the entering into of an agreement
referred to in item (ii) or (iii) of paragraph 2 above, (b) the tender offer or
agreement is abandoned or terminated, and (c) a majority of the Original
Directors and/or their Successors (as defined in paragraph 2 above) of DPL Inc.
determine that the tender offer or agreement will not effectuate or otherwise
result in a subsequent Change of Control and gives you written notice of such
determination, then, as to that particular event only, a subsequent termination
of your employment will not entitle you to the benefits set forth in paragraph
5.

 

For purposes of this agreement, termination of your
employment shall be deemed to have occurred within thirty-six months following
the occurrence of a Change of Control if a Notice of Termination (as defined in
paragraph 4) with respect thereto is given within such three year period.

 

B.                                     As
used in this agreement, the terms “Disability”, “Cause” and “Good Reason” shall
have the meaning set forth below:

 

(i)                                     Disability.   “Disability” shall mean, for the purposes of
this agreement, your inability to perform the duties required of you on a
full-time basis for a period of six consecutive months because of physical or
mental illness or other physical or mental disability or incapacity, followed
by the Company giving you thirty days’ written notice of its intention to
terminate your employment by reason thereof, and your failure because of
physical or mental illness or other physical or mental disability or incapacity
to resume the full-time performance of your duties within such period of thirty
days and thereafter perform the same for a period of two consecutive months.

 

(ii)                                  Cause.  “Cause” shall mean (a) commission of a
felony, (b) embezzlement, (c) the illegal use of drugs, or (d) if no Change of
Control has occurred other than the commencement of a tender offer and/or the
entering into of an agreement referred to in items (ii) or (iii) of paragraph
2, the failure by you to substantially perform your duties with the Company
(other than any such failure resulting from your physical or mental illness or
other physical or mental incapacity) as determined by the Board of
Directors.  Notwithstanding the
foregoing, Cause shall not be deemed to exist unless and until there shall have
been delivered to you a copy of a resolution duly adopted by written consent of
not less than three-fourths of the number of directors then in office (after
reasonable notice to you and an opportunity for you, together with you counsel,
to be heard at a meeting of the Board of Directors called and held for that
purpose), finding that in the good faith opinion of the Board of Directors you
were guilty of conduct set forth above in clauses (a), (b), (c) or (d) of the
first sentence of this subparagraph and specifying the particulars thereof in
detail.

 

4

 

(iii)                               Good
Reason.  “Good Reason” shall mean:

 

(a)                                  The
assignment to you, without your express consent, of any duties inconsistent
with the written objectives approved by the Company with respect to your
position, duties, responsibilities and status with the Company in effect
immediately prior to a Change of Control, or a change in your reporting
responsibilities, titles or offices as described in the Company’s written
objectives in effect immediately prior to a Change of Control, or your removal
from or any failure to re-elect you to any of such positions or offices, except
in connection with the termination of your employment for Disability or Cause,
or by you other than for Good Reason, or as a result of your death.

 

(b)                                 Failure
by the Company to increase your annual base salary, at the time when salary
adjustments were historically made by the Company prior to the Change of
Control, by an amount which at least equals on a percentage basis the average
percentage increase in your base salary during the three (3) full calendar
years immediately preceding the Change of Control.

 

(c)                                  A
reduction by the Company of your base salary as in effect on the date hereof or
as the same may be increased from time to time.

 

(d)                                 Failure
by the Company to continue in effect any benefit or compensation plan (including
but not limited to the Company’s Management Incentive Compensation Program, Key
Employees Deferred Compensation Plan or any other pension, employee stock
ownership, life insurance, medical, health and accident, or disability plan) in
which you are participating at the time of a Change of Control or plans
providing you with substantially similar benefits; or the taking of any action
by the Company which would adversely affect your participation in or materially
reduce your benefits under any of such plans or deprive you of any material
fringe benefit enjoyed by you at the time of the Change of Control; or the
failure by the Company to provide you with the number of paid vacation days to
which you would then be entitled in accordance with the Company’s vacation
policy in effect at the time of the Change of Control.

 

(e)                                  The
relocation of the Company’s principal executive offices to a location outside
Montgomery County, Ohio, if at the time of a Change of Control you are based at
the Company’s principal executive offices.

 

5

 

(f)                                    The
Company’s requiring you to be based anywhere more than fifty miles from the
location where you are based at the time of a Change of Control (except for
required travel on the Company’s business to an extent substantially consistent
with your business travel obligations as they existed at the time of a Change
of Control); or, in the event you consent to being based anywhere more than
fifty miles from such location, the failure by the Company to pay (or reimburse
you for) all reasonable moving expenses incurred by you relating to a change of
your principal residence in connection with such relocation and to indemnify
you against any loss (defined as the difference between the actual sale price
of such residence after the deduction of all real estate brokerage charges and
related selling expenses and the higher of (1) your aggregate investment in
such residence or (2) the fair market value of such residence as determined by
a real estate appraiser designated by you and reasonably satisfactory to the
Company realized upon the sale of such residence in connection with any such
change of residence.

 

(g)                                 The
Company’s requiring you to perform duties or services which necessitate absence
overnight from your place of residence, because of travel involving the
business or affairs of the Company, to a degree not substantially consistent
with the extent of such absence necessitated by such travel during the period
of twelve months immediately preceding a Change of Control.

 

(h)                                 The
failure of the Company to obtain the assumption of this agreement by any
successor as provided in paragraph 7 hereof.

 

(i)                                     The
Company’s termination of your employment without satisfying any applicable
requirements of subparagraph (ii) above or of paragraph 4.

 

(j)                                     If,
within thirty-six months after the date of a Change of Control you determine in
good faith that due to the Change of Control, you are not able to effectively
discharge your duties.

 

C.                                     Should
your employment be terminated because of a Disability within thirty-six (36)
months following the occurrence of a Change of Control, you shall be entitled
to receive benefits under any Company employee salary continuation plan or
employee disability insurance plan then in effect in accordance with the then
applicable terms thereof; provided that if the Change of Control is other than
a Change of Control consisting only of the commencement of a tender offer
and/or the entering into of an agreement referred to in item (ii) or (iii) of
paragraph 2 above, you shall be entitled to receive such benefits or benefits
under any similar plan in effect as of the date of the occurrence of such
Change of Control, whichever shall result in the highest amount of benefits
being paid to you as a result of the Disability in question.

 

6

 

D.                                    If
subsequent to a Change of Control your employment is terminated by the Company
for Cause, the Company shall pay or make available to you, in compensation for
services previously rendered, the amounts provided under paragraph 1.A. above;
and the Company shall thereupon have no further obligation to you under this
agreement.

 

4.                                      NOTICE
UPON TERMINATION.

 

A.                                   Any
termination of your employment subsequent to a Change of Control, unless by you
without Good Reason or because of your death, shall be consummated by written
Notice of Termination given to the other party. 
For purposes of this agreement, “Notice of Termination” shall mean a
notice given by the Company, or by you following the event specified in
subparagraph 3.B(iii), which indicates the specific termination provision or
provisions in this agreement relied upon, if any, and sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination
of your employment.

 

B.                                     “Date
of Termination” shall mean

 

(i)                                     if
your employment is terminated by the Company for Cause, the date specified in
the Notice of Termination;

 

(ii)                                  if
you terminate your employment for Good Reason, the date specified in your
Notice of Termination; or

 

(iii)                               if
your employment is terminated by the Company or by you for any other reason,
the date of such termination.

 

5.                                      COMPENSATION
UPON TERMINATION.

 

A.                                   If
you are entitled to benefits under paragraph 3.A., then

 

(i)                                     The
Company shall pay to you as severance pay in a lump sum in cash not later than
the Date of Termination (or in the case of payments under (e), if, and to the
extent the amount of such payments are not known or calculable as of such due
date, as soon as the amount is known and calculable), subject, however, to any
contrary deferral election you may have made with respect thereto, the amounts
determined as provided below:

 

(a)                                  In
the event the Date of Termination precedes the completion of a period in which,
pursuant to the Management Incentive Compensation Plan or any other Company
incentive compensation plan in which you are then participating or have
participated (except for the MSIP), you could have earned compensation
thereunder had your employment not been terminated prior to the completion of
such period, or in the event the Date of Termination precedes the determination
of compensation that you have earned

 

7

 

for a completed period under the Management Incentive
Compensation Plan or other incentive plan, then, with respect to each such
period, you shall be entitled to an amount equal to the average of the three
highest of the last 10 annual award payments made to you under the Management
Incentive Compensation Plan or other incentive plan prior to the Date of
Termination (or for the years you have participated in the Plan, if less than
three or 10), including any portion of any such payments which you elected to
defer to your Standard Deferral Account in the Company’s Key Employees Deferred
Compensation Plan.

 

(b)                                 In
lieu of further salary payments to you for periods subsequent to the Date of
Termination, an amount equal to 200% of the sum of (1) your annual base salary
(which base salary is computed before deduction for any deferred compensation
or other employee deferrals) at the rate in effect as of Date of Termination
(or, if higher, at the rate in effect at the time of the Change of Control)
plus (2) the average of the three highest of the last 10 annual award payments
made to you under the Company’s Management Incentive Compensation Plan prior to
the Date of Termination (or for the years you have participated in the Plan if
less than three or 10), including any portion of any such payments which you
elected to defer to your Standard Deferral Account in the Company’s Key
Employees Deferred Compensation Plan.

 

(c)                                  In
consideration of your agreeing to the following covenants in this paragraph
5.A.(i)(c), if you are due an amount under paragraph 5.A.(i)(b), an additional
amount equal to one-half (1/2) the amount determined under paragraph
5.A.(i)(b).  In consideration of the
Company’s agreement to make this payment per the terms of this paragraph
5.A.(i)(c), you agree that in the event and only in the event that you receive
any payments under this paragraph 5.A., then during the term of your employment
with the Company and for a period of three years after termination of your
employment for any reason, you will not, without our prior written consent,
engage, participate or be interested, directly or indirectly, in any
business:  (i) which is engaged in Ohio,
Indiana, Kentucky, Michigan and/or Pennsylvania in providing (as a public
utility or otherwise) gas and/or electric power or services on a retail and/or
wholesale basis or in providing energy marketing, aggregation and/or
procurement services or (ii) which is engaged in any other business being
conducted or proposed to be conducted by the Company.

 

Furthermore, you agree that, during the aforementioned
three year period, you will not (i) directly or indirectly, solicit for

 

8

 

employment with yourself or any firm or entity with
which you are associated, any employee of the Company or otherwise disrupt,
impair, damage or interfere with the Company’s relationship with its employees;
(ii) solicit for your own behalf or on behalf of any other person(s), any
customer of the Company that has purchased goods from the Company at any time
in the twelve (12) months preceding your date of termination or that the
Company is actively soliciting, for the purpose of marketing or distributing
any product or service competitive with any product or service then offered by
the Company in any geographic market where the Company is doing or preparing to
do business; or (iii) engage yourself or be affiliated with any person(s), in
the development or marketing, including but not limited to  the establishment of product prices, of any
product which will compete with any product the Company is then developing or
marketing in any geographic market where the Company is doing or preparing to
do business.

 

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, except to the extent
directly related to and required by your performance of the duties assigned to
you by the Company.  You will take all
appropriate steps to safeguard such information and to protect it against
unauthorized disclosure, misuse, loss or theft. 
Upon termination of your employment, you will promptly return to the
Company, without retaining any copies, all written or computer readable
material containing any of such information, as well as all other property and
records of the Company, in your possession or control.

 

The payment under this paragraph 5.A.(i)(c) and the
payment under paragraph 5.A.(i)(b) are herein together referred to as the “Additional
Compensation Payment.”

 

Notwithstanding the above, you may elect to defer
payment of all or a portion of the Additional Compensation Payment by executing
and delivering to the Company a Deferral Election Form in the form attached as
Exhibit A, in which event the portion of the Additional Compensation Payment so
deferred shall be credited to your Standard Deferral Account in the Company’s
Key Employees Deferred Compensation Plan.

 

9

 

(d)                                 Anything
in the Management Incentive Compensation Plan or any action taken by the Board
of Directors or any committee of the Board of Directors pursuant thereto to the
contrary notwithstanding, any awards, whether in cash or Company shares, made
under such plan prior to the Date of Termination which have been credited to
your account but the payment of which has been deferred.

 

(e)                                  Any
amount payable under paragraph 9 hereof.

 

(ii)                                  The
Company shall, at its expense, maintain in full force and effect for your
continued benefit all life insurance, health and accident, and disability
plans, programs and arrangements in which you were entitled to participate
immediately prior to the Date of Termination, or, if more favorable to you, on
the date of a prior Change of Control, provided that your continued
participation is possible under the terms of such plans, programs and
arrangements.  In the event that the
terms of any such plan, program or arrangement do not permit your continued
participation or that any such plan, program or arrangement is discontinued or
the benefits thereunder materially reduced, the Company shall arrange to
provide, at its expense, benefits to you which are substantially similar to
those which you were entitled to receive under such plan, program or
arrangement immediately prior to the Date of Termination.  The Company’s obligation under this
subparagraph (ii) shall terminate on the earliest of the following dates:

 

(a)                                  the
third anniversary date of the Date of Termination; or

 

(b)                                 the
date an essentially equivalent and no less favorable benefit is made available
to you at no cost by a subsequent employer.

 

At the end of the applicable period of coverage set
forth above, you shall have the option to have assigned to you, at no cost and
with no apportionment of prepaid premiums, any assignable insurance owned by
the Company and relating specifically to you.

 

(iii)                               In
the event that because of their relationship to you, members of your family or
other individuals are covered by a plan, program, or arrangement described in
subparagraph (ii) above immediately prior to the Date of Termination, the
provisions set forth in the above subparagraph shall apply equally to require
the continued coverage of such persons; provided, however, that if under the
terms of any such plan, program or arrangement, any such person would have
ceased to be eligible for coverage during the period in which the Company is
obligated to continue coverage for you, nothing set forth herein shall obligate
the Company to

 

10

 

continue to provide coverage which would have ceased
even if you had remained an employee of the Company during such period.

 

B.                                     The
benefits provided under this agreement shall not be treated as damages, but
rather shall be treated as severance compensation to which you are entitled
under the terms and conditions provided herein. 
You shall not be required to mitigate the amount of any benefit provided
under this agreement by seeking other employment or otherwise.

 

6.                                      RIGHTS
AS FORMER EMPLOYER.

 

Nothing contained in this agreement shall be construed
as preventing you, and shall not prevent you, following any termination of your
employment whether pursuant to this agreement or otherwise, from thereafter
participating in any benefit or insurance plans, programs or arrangements
(including, without limitation thereto, any retirement plans or programs) in
the same manner and to the same extent that you, as a former employee of the
Company, would have been entitled to participate had this agreement not have
been entered into.

 

7.                                      SUCCESSORS.

 

The Company shall require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, by agreement to
expressly and unconditionally assume and agree to perform this agreement in the
same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place.  Failure of the Company to obtain such
agreement prior to the effectiveness of such succession shall be a breach of
this agreement and shall entitle you to compensation from the Company in the
same amount and on the same terms as you would be entitled hereunder if you
terminated your employment for Good Reason regardless of whether you in fact
have done so, except that for purposes of implementing the foregoing, the date
on which any such succession becomes effective shall be deemed the Date of
Termination.

 

The above provisions of this paragraph 7 shall not
apply to a) a spin-off or sale of assets, or b) a transaction described in item
(ii) of paragraph 2 above involving only DP&L if in each case DPL continues
in existence and its common shares are listed on a national securities
exchange, quoted on the automated quotation system of a national securities
association or traded in the over-the-counter market.

 

This agreement shall inure to the benefit of and be
enforceable by your personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.  If you should die while any amounts would
still be payable to you hereunder if you had continued to live, all such
amounts, unless otherwise provided herein, shall be paid to such beneficiary or
beneficiaries as you shall have designated by written notice delivered to the
Company prior to your death or, failing written notice, to your estate.

 

11

 

8.                                      LEGAL
FEES.

 

The Company shall reimburse you in full for all legal
fees and expenses reasonably incurred by you in connection with this agreement
(including, without limitation, all such fees and expenses, if any, incurred in
contesting or disputing any termination of your employment subsequent to a
Change of Control or in seeking to obtain or enforce any right or benefit
provided by this agreement, regardless of the outcome, unless, in the case of a
legal action brought by you or in your name, a court finally determines that
such action was not brought in good faith by you).

 

9.                                      GROSS-UP
PAYMENT.

 

In the event that any payment pursuant to this
agreement or any other agreement will be subject to the tax (the “Excise Tax”)
imposed by Section 4999 of the Internal Revenue Code of 1986 (“Code”) or any
successor or similar provision, the Company shall pay you an additional amount
(the “Gross-Up Payment”) such that the net amount retained by you after
deduction of any Excise Tax on such payments (excluding payments pursuant to
this paragraph 9), and after deduction for any federal, state and local income
tax and Excise Tax upon the payment provided for by this paragraph, shall be
equal to the amount of such payments (excluding payments pursuant to this
paragraph 9) before payment of any Excise Tax (hereinafter the “Excise Tax
Compensation Net Payment”).  For purposes
of determining whether any of such payments will be subject to the Excise Tax
and the amount of such Excise Tax, any payments or benefits received or to be
received by you in connection with a Change of Control or your termination of
employment shall be treated as “parachute payments” within the meaning of
Section 280G of the Code, and all “excess parachute payments” within the
meaning of Section 280G of the Code shall be treated as subject to the Excise
Tax, unless in the opinion of tax counsel selected by the Company’s independent
auditors and acceptable to you such payments or benefits do not constitute
parachute payments or excess parachute payments.  For purposes of determining the amount of the
Gross-Up Payment, you shall be deemed to pay all federal income taxes at the
highest marginal rate of federal income taxation in the calendar year in which
the Gross-Up Payment is to be made and state and local income taxes at the
highest marginal rates of taxation in the state and locality of your residence
on the Date of Termination, net of the maximum reduction in federal income
taxes which could be obtained from deduction of such state and local
taxes.  In the event that the Excise Tax
is subsequently determined to be less than the amount taken into account
hereunder at the time of termination of your employment, you shall repay to the
Company, at the time that the amount of such reduction in Excise Tax is finally
determined, an amount necessary so that the total payments hereunder equal the
Excise Tax Compensation Net Payment, plus interest on the amount of such
repayment at a rate equivalent to the rate described in Section 280G (d) (4) of
the Code.  In the event that the Excise
Tax is determined to exceed the amount taken into account hereunder at the time
of the termination of your employment, the Company shall make an additional
Gross-Up Payment in respect of such excess (plus any interest payable with
respect to such excess) at the time that the amount of such excess is finally
determined.

 

The Gross-Up Payment shall be paid not later than the
Date of Termination or, if and to the extent such payment is not known or
calculable as of such date, as soon as the amount is known and calculable.

 

12

 

10.                               AGREEMENT
TO PROVIDE SERVICES.

 

In the event that (i) a Person commences a tender
offer to become the beneficial owner, directly or indirectly, of securities of
DPL or DP&L representing fifteen percent (15%) or more of the combined
voting power of the then outstanding securities of DPL or DP&L, as the case
may be, or (ii) a Change of Control occurs consisting of the entering into of
an agreement referred to in item (ii) or (iii) of paragraph 2 above, you agree
that you will perform services for the Company and that you will not
voluntarily terminate your employment with the Company until the first to occur
of the following:

 

(i)                                     the
abandonment or termination of such tender offer or the transaction that is the
subject of the agreement; or

 

(ii)                                  the
occurrence of a Change of Control (other than the commencement of the tender
offer or the entering into of an agreement referred to in item (ii) or (iii) of
paragraph 2 above).

 

11.                               FUNDING
OF MASTER TRUST.

 

Upon a Change of Control, the Company shall
immediately transfer to the Amended and Restated Master Trust dated February 1,
1995, as amended (or to an Other Trust as defined in such Trust) previously
established to secure the Company’s obligations to participants under various
Company deferred and incentive compensation plans, cash in an amount sufficient
to fund all payments which would be made to you hereunder if your employment
was terminated on the date of the Change of Control under circumstances in
which payments under paragraph 5 hereof would become due and payable to you,
including, without limitation, cash in an amount sufficient to fund payments of
all future medical, life insurance, accident and disability plans as provided
in paragraphs 5.A (ii) and (iii) hereof, and the Gross-Up Payment as defined in
paragraph 9 above, in each case based on reasonable estimates.

 

12.                               NOTICES.

 

All notices required or permitted to be given under
this agreement shall be in writing and shall be mailed (postage prepaid by
either registered or certified mail) or delivered, if to the Company, addressed
to

 

(a)                                  Prior
to a Change of Control, to the Corporate Secretary of the Company at:

 

The Dayton Power and Light Company

MacGregor Park

1065 Woodman Drive

Dayton, Ohio 
45432

Attention: 
Corporate Secretary

 

13

 

(b)                                 After
a Change of Control, to the Trustees at:

 

Chernesky, Heyman & Kress P.L.L.

Suite 1100

10 Courthouse Plaza, S.W.

Dayton, Ohio 
45402

Attn:                    Richard
J. Chernesky, Esq.

Richard A. Broock, Esq.

Frederick J. Caspar, Esq.

 

and if to you, addressed to

 

Patricia K. Swanke

1253 Windsor Drive

Beavercreek, OH  45434

 

Any party may change the address to which notices to such party are to
be directed by giving written notice of such change to the other parties in the
manner specified in this paragraph.

 

13.                               MISCELLANEOUS.

 

No provision of this agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in
writing, signed by you and such officer of the Company as may be specifically
designated by the Board of Directors.  No
waiver by any party hereto at any time of any breach by any other party hereto
of, or of compliance by such other party with, any condition or provision of
this agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.  No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not set forth
expressly in this agreement.

 

14.                               GOVERNING
LAW.

 

The validity, interpretation, construction and
performance of this agreement shall be governed by the laws of the State of
Ohio, without giving effect to the principles of conflicts of law thereof.

 

15.                               VALIDITY.

 

The provisions of this agreement are divisible; if any
provision of this agreement is ruled invalid or unenforceable by any court,
such invalidity or enforceability, shall not affect the validity or
enforceability of any other provision, which shall remain in full force and
effect; and such provision shall be modified by such court consistent with the
intent of the parties to the extent necessary to render it valid and
enforceable, if possible.

 

14

 

16.                               NO
RIGHT TO EMPLOYMENT.

 

Nothing in this agreement shall confer upon you the
right to continue employment with the Company, or obligate you to continue
employment with the Company (except as provided in paragraph 10); nor shall it
interfere with the rights of the Company to discharge you or take other action
with respect to you, subject to the Company’s providing the benefits specified
herein in accordance with the terms hereof.

 

If this letter correctly sets forth our agreement on
the subject matter hereof, please so confirm by signing and returning the
enclosed copy.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  DPL INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James V. Mahoney

  	
   

  
	
   

  	
   

  	
  Its President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE DAYTON POWER AND LIGHT COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James V. Mahoney

  	
   

  
	
   

  	
   

  	
  Its President

  
	
   

  	
   

  
	
   

  	
   

  
	
  CONFIRMED AND AGREED TO:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Patricia K. Swanke

  	
   

  	
   

  
	
  Patricia K. Swanke

  	
   

  
	
   

  	
   

  
	
  Date: 6/30/04

  	
   

  
					

 

15

 

DPL
INC.

STOCK
OPTION PLAN

 

Management
Stock Option Agreement

 

This Agreement is made as
of January 1, 2001 (the “Grant Date”), by and between DPL Inc., an Ohio
corporation (the “Company”) and Patricia Swanke (the “Participant”).

 

WHEREAS, the Committee,
pursuant to the Company’s Stock Option Plan (the “Plan”), has made an award to
the Participant and authorized and directed the execution and delivery of this
Agreement;

 

NOW, THEREFORE, in
consideration of the foregoing, the mutual promises hereinafter set forth, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and the Participant hereby agree as follows:

 

1.                                       Award.  The
Participant is hereby granted a stock option (an “Option”) to purchase from the
Company up to a total of 50,000 Common Shares of the Company at $29 5/8
per share (the “Exercise Price”).  The term
of such Option shall be ten years, commencing on the Grant Date (the “Term”).  This Option is not intended to qualify as an
incentive stock option under Code Section 422.

 

2.                                       Vesting and  Exercise.  The Option may be exercised only in
accordance with the Plan, as supplemented by this Agreement, and not otherwise.

 

a.                                       Vesting.  During its
Term and prior to its earlier termination in accordance with Section 3 of this
Agreement, and subject to Section 4 of this Agreement, the Option shall vest in
accordance with the following schedule:

 

16

 

	
  Cumulative Percent

  of Option

  	
   

  	
  Vested as of December 31

  
	
  20%

  	
   

  	
  2001

  
	
  40%

  	
   

  	
  2002

  
	
  60%

  	
   

  	
  2003

  
	
  80%

  	
   

  	
  2004

  
	
  100%

  	
   

  	
  2005

  

 

b.                                      Exercise.  The vested
portion of the Option shall become exercisable on January 1, 2006.  The Option may be exercised for less than the
full number of Shares for which the Option is then exercisable.  To the extent then exercisable, the Option
may be exercised by the Participant by giving written notice of exercise to the
Company in such form as may be provided by the Committee, specifying the number
of Shares with respect to which the Option is to be exercised and such other
information as the Committee may require. 
Such exercise shall be effective upon receipt by the Company of such
written notice together with the required payment of the Exercise Price and any
applicable withholding taxes.

 

c.                                       Payment of Exercise Price. 
Payment of the Exercise Price may be made by cash, check (subject to
collection) or, provided that the Shares have been owned by the Participant for
at least six months prior to such payment, by the delivery (or attestation of
ownership) of Shares having a Fair Market Value equal to the aggregate Exercise
Price and any applicable withholding taxes. 
Alternatively, the Participant may make such payment by authorizing the
simultaneous sale of Shares (or a sufficient portion thereof) acquired upon
exercise through a brokerage or similar arrangement approved in advance by the
Committee.  Subject to the foregoing and
except as otherwise provided by the Committee before the Option is exercised,
the Company will deliver to the Participant, within a reasonable period of time
thereafter, a certificate or certificates representing the Shares so acquired, registered
in the name of the Participant or in accordance with other delivery
instructions provided by the Participant and acceptable to the Committee.

 

3.                                       Termination.  Except
as otherwise provided in this Section 3, the Option shall terminate upon the expiration
of its Term.

 

a.                                       If
the Participant’s employment or other service terminates for Cause, the Option,
whether or not vested, shall be forfeited.

 

17

 

b.                                      If
the Participant’s employment or other service terminates for any reason other
than for Cause, the Participant shall be entitled to the then vested portion of
the Option and the unvested portion shall be forfeited.

 

c.                                       In
no event may the Option be exercised beyond its Term.

 

4.                                       Change of Control.  Notwithstanding
the provisions of Sections 2(a) and 2(b) hereof, in the event of a Change of
Control, the Option shall immediately vest and become exercisable in its
entirety, provided that the Participant’s employment or other service has not
terminated prior to the date of such Change of Control.

 

5                                          Withholding.  The
Company shall withhold all applicable taxes required by law from all amounts
paid in respect of the Option.  A
Participant may satisfy the withholding obligation (i) by paying the amount of
any such taxes in cash or check (subject to collection), (ii) by the delivery
(or attestation of ownership) of Shares or (iii) with the approval of the
Committee, by having Shares deducted from the payment.  Alternatively, the Participant may satisfy
such obligation by authorizing the simultaneous sale of Shares (or a sufficient
portion thereof) acquired upon exercise through a brokerage or similar
arrangement approved in advance by the Committee.  The amount of the withholding and, if
applicable, the number of Shares to be delivered or deducted, as the case may
be, shall be determined by the Committee as of when the withholding is required
to be made, provided that the number of Shares so delivered or withheld shall
not exceed the minimum required amount of such withholding.

 

6.                                       Non-Assignability. 
Except as otherwise provided in this Section, the Option is not
assignable or transferable other than by will or by the laws of descent and
distribution and, during the Participant’s life, may be exercised only by the
Participant.  The Participant, with the
approval of the Committee, which approval may be withheld in its sole
discretion, may transfer the Option for no consideration to or for the benefit
of any member or members of the Participant’s Immediate Family (including,
without limitation, to a trust for the benefit of any member or members of the
Participant’s Immediate Family or to a partnership or limited liability company
for one or more members of the Participant’s Immediate Family) subject to such
limits as the Committee may establish, and the transferee shall remain subject
to all the terms and conditions applicable to the Option prior to such
transfer.  The foregoing right to
transfer the Option shall apply to the right to consent to amendments to this Agreement
and, in the discretion of the Committee, shall also apply to the right to
transfer ancillary rights associated with the Option.

 

7.                                       Rights as a Shareholder.  A
Participant shall have no rights as a shareholder with respect to any Shares
subject to this award until the date the Participant becomes the holder of
record of the Shares.

 

18

 

8.                                       No Right to Continued Service.  Nothing
herein shall obligate the Company or any Subsidiary to continue the Participant’s
employment or other service for any particular period or on any particular
basis of compensation.

 

9.                                       Burden and Benefit. 
The terms and provisions of this Agreement shall be binding upon, and
shall inure to the benefit of, the Participant and his or her executors or
administrators, heirs, and personal and legal representatives.

 

10.                                 Execution.  This
Option is not enforceable until this Agreement has been signed by the
Participant and the Company.  By
executing this Agreement, the Participant shall be deemed to have accepted and
consented to any action taken or to be taken under the Plan by the Committee,
the Board of Directors or their delegates.

 

11.                                 Governing Law.  This
Agreement shall be construed and enforced in accordance with the laws of the State
of Ohio, without regard to the conflict of laws principles thereof.

 

12.                                 Modifications.  Except
for alterations and amendments permitted under the Plan without the consent of
the Participant, no change or modification of this Agreement shall be valid
unless it is in writing and signed by the parties hereto.

 

13.                                 Entire Agreement. 
This Agreement, together with the Plan, sets forth all of the promises,
agreements, conditions, understandings, warranties and representations between
the parties hereto with respect to the Option, and there are no promises,
agreements, conditions, understandings, warranties or representations, oral or
written, express or implied, between them with respect to the Option other than
as set forth herein or therein.  The
terms and conditions of the Plan, a copy of which has been furnished to the
Participant, are incorporated by reference herein, and to the extent that any
conflict may exist between any term or provision of this Agreement and any term
or provision of the Plan, the term or provision of the Plan shall control.

 

14.                                 Additional Definitions. 
Any capitalized term to the extent not defined below or elsewhere in
this Agreement shall have the same meaning as set forth in the Plan.

 

a.                                       “Cause” means (i) the commission of a felony, (ii)
embezzlement, (iii) the illegal use of drugs or (iv) if no Change of Control
has occurred other than the entering into of an agreement referred to in items
(ii) or (iii) of the definition of Change of Control, the failure by the
Participant to substantially perform his duties with the Company or any
Subsidiary (other than any such failure resulting from his Disability) as
determined by the Committee.

 

19

 

b.                                      “Immediate Family” means the Participant’s spouse, parents,
parents-in-law, children, stepchildren, adoptive relationships, sisters,
brothers and grandchildren (and, for this purpose, shall also include the
Participant).

 

15.                                 Construction.  The use
of any gender herein shall be deemed to include the other gender and the use of
the singular herein shall be deemed to include the plural and vice versa,
wherever appropriate.

 

20

 

16.                                 Notices.  Any and all
notices required herein shall be addressed: (i) if to the Company, to the
principal executive offices of the Company; and (ii) if to the Participant, to
his or her address as reflected in the records of the Company.

 

17.                                 Invalid or Unenforceable Provisions.  The invalidity or unenforceability of any particular
provision of this Agreement shall not affect the other provisions hereof, and
this Agreement shall be construed in all respects as if the invalid or
unenforceable provisions were omitted.

 

IN WITNESS WHEREOF, the Company and the Participant
have executed this Agreement as of the date first above written.

 

	
   

  	
  DPL INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
     /s/ Allen M. Hill

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  President & CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
     /s/ Patricia K. Swanke

  	
   

  
	
   

  	
   

  
	
   

  	
  Patricia Swanke

  

 

21

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