Document:

Exhibit 10(n)

 

DPL INC.

 

AMENDED
AND RESTATED

LONG-TERM
INCENTIVE PLAN - PERFORMANCE SHARES AGREEMENT

 

(Granted
Under the 2006 Equity and Performance Incentive Plan)

 

This Amended and Restated Long-Term Incentive Plan -
Performance Shares Agreement (this “Agreement”) is made as of                     
      , 2008 between DPL Inc., an Ohio
corporation (“DPL”), and                                     ,
an employee of DPL or its Subsidiaries (the “Grantee”).

 

WHEREAS, effective as of                         ,
2008, DPL and the Grantee entered into a Long-Term Incentive Plan — Performance
Shares Agreement (the “Agreement”) to set forth the terms and conditions
applicable to Performance Shares granted to the Grantee under the 2006 Equity
and Performance Incentive Plan (the “Plan”).

 

NOW, THEREFORE, in consideration of the mutual
promises and covenants contained herein, the parties hereto hereby agree as
follows:

 

ARTICLE I - GRANT OF PERFORMANCE SHARES

 

Section 1.1  Performance Shares Granted.  Subject to the terms of the Plan, DPL hereby
grants to the Grantee a targeted number of performance shares equal to                 
(the “Target Performance Shares”), payment of which depends on DPL’s
performance as set forth in this Agreement and in the Statement of Performance
Goals (the “Statement of Performance Goals”) approved by the Compensation
Committee of DPL’s Board of Directors (the “Committee”).

 

Section 1.2  Performance Measure.  The Grantee’s right to receive all, any
portion of, or more than, the Target Performance Shares will be contingent upon
the achievement of specified levels of Total Shareholder Return Relative to
Peers (“TSR Relative to Peers”), as set forth in the Statement of Performance
Goals and will be measured over the period January 1, 2008 through December 31,
2010 (the “Performance Period”).

 

ARTICLE II - EARNING OF PERFORMANCE SHARES

 

Section 2.1  Below Threshold.  If, upon the conclusion of the Performance
Period, TSR Relative to Peers for the Performance Period falls below the
threshold level, as set forth in the Performance Matrix contained in the
Statement of Performance Goals, no performance shares for the Performance
Period shall become earned.

 

 

Section 2.2  Between Threshold and Target.  If, upon the conclusion of the Performance
Period, TSR Relative to Peers equals or exceeds the threshold level, but is
less than the target level, as set forth in the Performance Matrix contained in
the Statement of Performance Goals the Target Performance Shares shall become
earned based on performance during the Performance Period, as determined by
mathematical interpolation between 50% of the targeted Performance Shares and
100% of the targeted Performance Shares.

 

Section 2.3  Between Target and Intermediate.  If, upon the conclusion of the Performance
Period, TSR Relative to Peers equals or exceeds the target level, but is less
than the intermediate level, as set forth in the Performance Matrix contained
in the Statement of Performance Goals the Target Performance Shares shall
become earned based on performance during the Performance Period, as determined
by mathematical interpolation between 100% of the targeted Performance Shares
and 150% of the targeted Performance Shares.

 

Section 2.4  Between Intermediate and Maximum.  If, upon the conclusion of the Performance
Period, TSR Relative to Peers equals or exceeds the intermediate level, but is
less than the maximum level, as set forth in the Performance Matrix contained
in the Statement of Performance Goals the Target Performance Shares shall
become earned based on performance during the Performance Period, as determined
by mathematical interpolation between 150% of the targeted Performance Shares
and 200% of the targeted Performance Shares.

 

Section 2.5  Equals or Exceeds Maximum.  If, upon the conclusion of the Performance
Period, TSR Relative to Peers for the Performance Period equals or exceeds the
maximum level, as set forth in the Performance Matrix contained in the
Statement of Performance Goals, 200% of the Target Performance Shares shall
become earned.

 

Section 2.6  Conditions; Determination of Earned Award.  Except as otherwise provided herein, the
Grantee’s right to receive any performance shares is contingent upon his or her
remaining in the continuous employ of DPL or a Subsidiary through the end of the
Performance Period.  For purposes of this
Agreement, the continuous employ of the Grantee shall not be considered
interrupted or terminated in the case of sick leave, military leave or any
other leave of absence approved by DPL or in the case of transfers between
locations of DPL and its Subsidiaries. 
Following the Performance Period, the Committee (or the independent
members of the Board of Directors) shall determine whether and to what extent
the goals relating to TSR Relative to Peers have been satisfied for the
Performance Period and shall determine the number of performance shares that
shall have become earned hereunder.

 

ARTICLE III - CHANGE OF CONTROL

 

If a
Change of Control (as defined in the Plan) occurs during the Performance Period,
but before the payment of any performance shares as set forth in Article VII
below, DPL shall pay to the Grantee, as soon as practicable following the
Change of 

 

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Control, a pro rata number of the Target Performance Shares based on
the number of full months that have elapsed during the Performance Period prior
to the Change of Control and the remaining performance shares will be forfeited;
provided, however, if the event triggering the right to payment
under this Article III does not constitute a permitted distribution event
under Section 409A(a)(2) of the Code, then notwithstanding anything
in Article III or VII to the contrary, issuance of the Common Shares will
be made, to the extent necessary to comply with Section 409A of the Code,
to the Grantee on the earlier of (a) the Grantee’s “separation from
service” with DPL (determined in accordance with Section 409A); and further
provided, that if the Grantee is a “specified employee” (within the
meaning of Section 409A), the Grantee’s date of issuance of the Common
Shares shall be the date that is the first day of the seventh month after the
date of the Grantee’s separation of service with DPL; (b) the date the
payment would otherwise occur under this Agreement (to the extent it
constitutes a permitted distribution event); or (c) the Grantee’s death.

 

ARTICLE IV  - DISABILITY OR DEATH

 

If the
Grantee’s employment with DPL or a Subsidiary terminates during the Performance
Period, but before the payment of any performance shares as set forth in Article VII
below due to (a) “disability” (as defined in DPL’s long-term disability
plan) or (b) death, DPL shall pay to the Grantee or his or her executor or
administrator, as the case may be, as soon as practicable following such
termination of employment, a pro rata number of the Target Performance Shares
based on the number of full months during the Performance Period during which
the Grantee was employed by DPL and the remaining performance shares will be
forfeited; provided, however, if the event triggering the right
to payment under this Article IV does not constitute a permitted
distribution event under Section 409A(a)(2) of the Code, then
notwithstanding anything in Article IV or VII to the contrary, issuance of
the Common Shares will be made, to the extent necessary to comply with Section 409A
of the Code, to the Grantee on the earlier of (a) the Grantee’s “separation
from service” with DPL (determined in accordance with Section 409A); and further
provided, that if the Grantee is a “specified employee” (within the
meaning of Section 409A), the Grantee’s date of issuance of the Common
Shares shall be the date that is the first day of the seventh month after the
date of the Grantee’s separation of service with DPL; (b) the date the
payment would otherwise occur under this Agreement (to the extent it
constitutes a permitted distribution event); or (c) the Grantee’s death.

 

ARTICLE V - RETIREMENT

 

If the
Grantee’s employment with DPL or a Subsidiary terminates during the Performance
Period, but before the payment of any performance shares as set forth in Article VII
below due to the Grantee’s retirement approved by the Committee or the Board,
DPL shall pay to the Grantee, as soon as practicable following the end of the
Performance Period, the performance shares to which the Grantee would have been
entitled under Article II above, had the Grantee remained employed by DPL
through the end of the Performance Period, prorated based on the number of full
months during the

 

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Performance Period during which the Grantee was employed by DPL and the
remaining performance shares will be forfeited.

 

ARTICLE VI  -
FORFEITING OF PERFORMANCE SHARES

 

If the
Grantee’s employment with DPL or a Subsidiary terminates before the end of the
Performance Period for any reason other than as set forth in Articles IV and V
above, the performance shares will be forfeited.

 

ARTICLE VII - PAYMENT OF PERFORMANCE SHARES

 

Payment
of any performance shares that become earned as set forth herein will be made
in the form of Common Shares.  Except as
otherwise provided in Articles III and IV, payment will be made as soon as
practicable after the last fiscal year of the Performance Period and the
determination by the Committee (or the independent members of the Board of
Directors) of the level of attainment of TSR Relative to Peers, but in no event
shall such payment occur after two and a half months from the end of the
Performance Period.  Performance shares
will be forfeited if they are not earned at the end of the Performance Period
and, except as otherwise provided in this Agreement, if the Grantee ceases to
be employed by DPL or a Subsidiary at any time prior to such shares becoming
earned at the end of the Performance Period. 
To the extent that DPL or any Subsidiary is required to withhold any
federal, state, local or foreign tax in connection with the payment of earned
performance shares pursuant to this Agreement, it shall be a condition to the
receipt of such performance shares that the Grantee make arrangements
satisfactory to DPL or such Subsidiary for payment of such taxes required to be
withheld.  This tax withholding
obligation shall be satisfied by DPL withholding performance shares otherwise
payable pursuant to this award.

 

ARTICLE VIII - DIVIDENDS

 

Except
as provided in Section 11.5 below, no dividends shall be accrued or earned
with respect to the performance shares until such performance shares are earned
by the Grantee as provided in Article II hereof.

 

ARTICLE IX - NON-ASSIGNABILITY

 

The
performance shares and the Common Shares subject to this grant are personal to
the Grantee and may not be sold, exchanged, assigned, transferred, pledged,
encumbered or otherwise disposed of by the Grantee until they become earned as
provided in this Agreement; provided, however, that the Grantee’s
rights with respect to such performance shares and Common Shares may be
transferred by will or pursuant to the laws of descent and distribution.  Any purported transfer or encumbrance in
violation of the provisions of this Article IX shall be void, and the
other party to any such purported transaction shall not obtain any rights to or
interest in such performance shares or Common Shares.

 

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ARTICLE X - ADJUSTMENTS

 

In the
event of any change in the number of Common Shares by reason of a merger,
consolidation, reorganization, recapitalization, or similar transaction, or in
the event of a stock dividend, stock split, or distribution to shareholders
(other than normal cash dividends), the Committee shall adjust the number and
class of shares subject to outstanding Target Performance Shares and Deferred
Units (as defined below) and other value determinations applicable to outstanding
Target Performance Shares and Deferred Units. 
No adjustment provided for in this Article X shall require DPL to
issue any fractional share.

 

ARTICLE XI - DEFERRAL

 

Section 11.1  Ability to Defer.  The Grantee may elect to defer receipt of all
or any portion of the earned performance shares, which will be credited to a
bookkeeping account in the Grantee’s name.

 

Section 11.2  Elections.  An election pursuant Section 11.1 must
be made in writing and delivered to DPL (i) to the extent that the earned
performance shares are considered “performance-based compensation,” within the
meaning of Section 409A of the Code, no later than June 30, 2010, or (ii) otherwise,
within 30 days of the date of grant of such performance shares, provided that
the election is made at least twelve months in advance of the earliest date on
which the performance shares could be earned. 
If the Grantee does not file an election form by the specified date, he
or she will receive the performance shares when they otherwise would have been
paid pursuant to Article VII.

 

Section 11.3  Crediting to Accounts.  If a Grantee elects to defer receipt of the
earned performance shares, there will be credited to the Grantee’s account as
of the day such Common Shares underlying the earned performance shares would
have been paid, a number of deferred units (the “Deferred Units”) equal to the
number of Common Shares that would otherwise have been delivered to the Grantee
pursuant to Article VII on such date. 
The Deferred Units credited to the Grantee’s account (plus any
additional shares credited pursuant to Section 11.5 below) will represent
the number of Common Shares that DPL will issue to the Grantee at the end of
the deferral period.  All Deferred Units
will be 100% vested at all times.

 

Section 11.4  Deferral Period.  The Deferred Units will be subject to a
deferral period beginning on the date of crediting to the Grantee’s account and
ending upon such period as the Grantee may have elected.  The period of deferral will be for a minimum
period of one year, except in the case where the Grantee elects a deferral
period determined by reference to his or her termination of employment.  For purposes of this Agreement, a Grantee’s
termination of employment shall be the Grantee’s separation from service with
DPL within the meaning of Section 409A of the Code (the “separation from
service”).  The Grantee may elect payment
in a lump sum or payment in equal installments. 
The right to the series of installment payments is to be treated as a
right to a series of separate payments and not to the entitlement to a single
payment.

 

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The Grantee may change the period of deferral by filing a subsequent
election with DPL at least twelve months before the date of the previously
elected payment date and the newly elected payment date (or payment
commencement date) must be at least five years after the previously elected
payment date (or the previously elected payment commencement date); provided,
however, that such modification shall not be effective until at least
twelve months after the date on which such modification was made.  During the deferral period, the Grantee will
have no right to transfer any rights under his or her Deferred Units and will
have no other rights of ownership therein.

 

Section 11.5  Dividend Equivalents.  The Grantee’s account will be credited as of
the last day of each calendar quarter with that number of additional Deferred
Units equal to the amount of cash dividends paid by DPL during such quarter on
the number of Common Shares equivalent to the number of Deferred Units in the
Grantee’s account from time to time during such quarter divided by the Market
Value per Share of one Common Share on the day immediately preceding the last
business day of such calendar quarter. 
Such dividend equivalents, which will likewise be credited with dividend
equivalents, will be deferred until the end of the deferral period for the
Deferred Units with respect to which the dividend equivalents were credited.

 

Section 11.6  Early Payment.  Notwithstanding the foregoing provisions, (i) if,
upon the Grantee’s termination of employment, the value of the Grantee’s
account is less than $500, the amount of the Grantee’s account will be
immediately paid to the Grantee in Common Shares, (ii) if a Change of
Control occurs, the amount of the Grantee’s account will immediately be paid to
the Grantee in full in Common Shares and (iii) in the event of an
unforeseeable emergency, as defined in Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”), that is caused by an event
beyond the control of the Grantee and that would result in severe financial
hardship to the Grantee if acceleration was not permitted, the Committee will
accelerate the payment of Common Shares to the Grantee in the Grantee’s
account, but only up to the amount necessary to meet the emergency.  The foregoing notwithstanding, to the extent
the Grantee has a right to receive payment pursuant to clause (ii) above
and the event triggering the right to payment does not constitute a permitted
distribution event under Section 409A(a)(2) of the Code, then upon
such Change of Control, issuance of the Common Shares will be made, to the
extent necessary to comply with Section 409A of the Code, to the Grantee on
the earliest of (a) the Grantee’s separation from service; provided,
however, that if the Grantee is a “specified employee” (within the
meaning of Section 409A), the Grantee’s date of issuance of the Common
Shares shall be the date that is six months after the date of the Grantee’s
separation from service with DPL; (b) the date the payment would otherwise
occur under this Agreement (to the extent it constitutes a permitted
distribution event); or (c) the Grantee’s death.

 

ARTICLE XII - COMPLIANCE WITH SECTION 409A OF THE
CODE

 

To the
extent applicable, it is intended that this Agreement and the Plan comply with
the provisions of Section 409A of the Code, so that the income inclusion
provisions of Section 409A(a)(1) of the Code do not apply to the
Grantee.  This Agreement and the Plan
shall be administered in a manner consistent with this intent.  References to

 

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Section 409A of the Code will also include any regulations or any
other formal guidance promulgated with respect to such Section by the U.S.
Department of the Treasury or the Internal Revenue Service.

 

ARTICLE XIII - MISCELLANEOUS

 

Section 13.1  Interpretation.  The contents of this Agreement are subject in
all respects to the terms and conditions of the Plan as approved by the Board
of Directors and the shareholders of DPL, which are controlling.  The interpretation and construction by the
Board and/or the Committee of any provision of the Plan or this Agreement shall
be final and conclusive upon the Grantee, the Grantee’s estate, executor,
administrator, beneficiaries, personal representative and guardian and DPL and
its successors and assigns.  Unless
otherwise indicated, the capitalized terms used in this Agreement shall have
the same meanings as set forth in the Plan.

 

Section 13.2  Fractional Shares.  Any fractional share earned under this
Agreement will be rounded up or down to the nearest whole share.

 

Section 13.3  No Right to Employment.  The grant of the performance shares is
discretionary and will not be considered to be an employment contract or a part
of the Grantee’s terms and conditions of employment or of the Grantee’s salary
or compensation.

 

Section 13.4  Successors and Assigns.  This Agreement, and the terms and conditions
of the Plan, shall bind, and inure to the benefit of the Grantee, the Grantee’s
estate, executor, administrator, beneficiaries, personal representative and
guardian and DPL and its successors and assigns.

 

Section 13.5  Governing Law.  This Agreement shall be governed by the laws
of the State of Ohio (but not including the choice of law rules thereof).

 

Section 13.6  Amendment.  Any amendment to the Plan shall be deemed to
be an amendment to this Agreement to the extent that the amendment is
applicable hereto.  The terms and
conditions of this Agreement may not be modified, amended or waived, except by
an instrument in writing signed by a duly authorized executive officer at
DPL.  Notwithstanding the foregoing, no
amendment shall adversely affect the Grantee’s rights under this Agreement
without the Grantee’s consent.

 

ARTICLE XIV - NOTICES

 

All
notices under this Agreement to DPL must be delivered personally or mailed to
DPL at its principal office, addressed to the attention of the Corporate
Secretary.  DPL’s address may be changed
at any time by written notice of such change to the Grantee.  All notices under this Agreement to the
Grantee will be delivered personally or mailed to the Grantee at his or her
address as shown from time to time in DPL’s records.

 

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IN WITNESS WHEREOF, the parties hereto have duly executed this Long
Term Incentive Plan - Performance Shares Agreement, or caused this Long-Term
Incentive Plan - Performance Shares Agreement to be duly executed on their
behalf, as of the day and year first above written.

 

 

	
   

  	
   

  	
  DPL INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:  

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Paul M.
  Barbas

  
	
   

  	
   

  	
  Title:

  	
  President
  and Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Grantee

  
							

 

8Exhibit 10(o)

 

DPL INC.

SEVERANCE PAY AND
CHANGE OF CONTROL PLAN

(AS AMENDED AND
RESTATED THROUGH DECEMBER 31, 2007)

 

ARTICLE
I  - INTRODUCTION

 

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 of
Control Plan (the “Plan”), effective as of the Effective Date.  This amended and restated version of the Plan
is effective December 31, 2007.

 

The Plan is designed to (a) provide
severance protection to certain Employees of the Company who are expected to
make substantial contributions to the success of the Company and thereby
provide for stability and continuity of operations and (b) enable certain
Employees to make career decisions without regard to the time pressure and
financial uncertainty which may result from a proposed or threatened Change of
Control (as defined herein) transaction, encourage such Employees to remain
employees of the Company and its Subsidiaries notwithstanding the outcome of
any such proposed transaction, and to assure fair treatment of such Employees
in the event of a Change of Control of the Company.

 

ARTICLE
II  - ESTABLISHMENT OF THE PLAN

 

Section 2.1.           Applicability
of Plan.  The benefits provided by
this Plan shall be available to all Employees who, at or after the Effective
Date, meet the eligibility requirements of Article IV hereof.

 

Section 2.2.           Contractual
Right to Benefits.  Subject to the
provisions of Article IX hereof, this Plan establishes and vests in each
Participant a contractual right to the benefits to which he or she is entitled
hereunder, enforceable by the Participant against the Company on the terms and
subject to the conditions hereof.

 

ARTICLE
III  - DEFINITIONS AND CONSTRUCTION

 

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.           “Annual
Incentive Plan” means the EICP or the DPL Inc. Management Incentive Plan,
as applicable to the Participant on his Termination Date.

 

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

 

1

 

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

 

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

 

Section 3.5.           “Cause”
means:

 

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

 

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

 

(c)           a conviction of, or entering into a plea of nolo
contendere to, a felony;

 

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

 

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

 

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

 

Section 3.6.           “Change
of Control” means the consummation of any Change of 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:

 

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(a)           any “Person” (as such term is defined in Sections 13(d) or 14(d)(2) of
the Exchange Act; hereafter, a “Person”) is on the date hereof or becomes the
beneficial owner, directly or indirectly, of securities of DPL or DP&L
representing (i) 25% or more of the combined voting power of the then
outstanding Voting Stock of DPL or DP&L if the acquisition of such
beneficial ownership is not approved by the Board of Directors of DPL prior to
the acquisition or (ii) 50% or more of such combined voting power in all
other cases; provided, however, that:

 

(i)            for purposes of this Section 3.6(a), the following
acquisitions shall not constitute a Change of Control: (A) any acquisition
of Voting Stock of DPL or DP&L directly from DPL or DP&L that is
approved by a majority of those persons serving as directors of the Company or
DP&L on the date of this Plan (the “Original Directors”) or their
Successors (as defined below), (B) any acquisition of Voting Stock of DPL
or DP&L by DPL or any Subsidiary, and (C) any acquisition of Voting
Stock of DPL or DP&L by the trustee or other fiduciary holding securities
under any employee benefit plan (or related trust) sponsored or maintained by
DPL or any Subsidiary (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);

 

(ii)           if any Person is or becomes the beneficial owner of 25% or
more of the combined voting power of the then-outstanding Voting Stock of DPL
or DP&L as a result of a transaction described in clause (A) of Section 3.6(a)(i) above
and such Person thereafter becomes the beneficial owner of any additional
shares of Voting Stock of DPL or DP&L representing 1% or more of the
then-outstanding Voting Stock of DPL or DP&L, other than in an acquisition
directly from DPL or DP&L that is approved by a majority of the Original
Directors 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 all
holders of Voting Stock of DPL or DP&L are treated equally, such subsequent
acquisition shall be treated as a Change in Control;

 

(iii)          a Change in Control will not be deemed to have occurred if
a Person is or becomes the beneficial owner of 25% or more of the Voting Stock
of DPL or DP&L as a result of a reduction in the number of shares of Voting
Stock of DPL or DP&L outstanding pursuant to a transaction or series of
transactions that is approved by a majority of the Original Directors or their
Successors unless and until such Person thereafter becomes the beneficial owner
of any additional shares of Voting Stock of DPL or DP&L representing 1% or
more of the then-outstanding Voting Stock of DPL or DP&L, other than as a
result of a stock dividend, stock split or similar transaction effected by DPL
or 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 their
Successors determine in good faith that a Person has acquired beneficial
ownership 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 number
of shares so that such Person beneficially owns less than 25% of the Voting
Stock of DPL or DP&L, then no Change of Control shall have occurred as a
result of such Person’s acquisition; or

 

(b)           DPL or DP&L consummates a merger or consolidation, or
consummates 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 the Effective Date) 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 DP&L into DPL or of DPL into DP&L; or

 

(c)           DPL or DP&L consummates a sale, lease, exchange or
other transfer or disposition 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 the Company; but not including (i) a
mortgage or pledge of assets granted in connection with a financing or (ii) 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; or

 

(d)           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; or

 

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

 

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

 

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

 

Section 3.9.           “Disability”
means a Participant’s inability to perform the duties required of the
Participant in his or her position with the Company 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.

 

Section 3.10.        “Effective
Date” means January 1, 2006.

 

4

 

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

 

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

 

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

 

Section 3.14.        “Employer”
means the Company, any Subsidiary or any Affiliate which employs a Participant
or any person or entity that has adopted this Plan pursuant to Article VIII
hereof.

 

Section 3.15.        “Good
Reason” means, following a Change of Control:

 

(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;

 

(b)           a material reduction by the Company of a Participant’s
base salary; or

 

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

 

provided, however, that any event or condition described in clauses (a) through
(c) that occurs prior to a Change of Control but which the Participant
reasonably demonstrates (i) was at the request of a third party who
effectuates a Change of Control or (ii) otherwise arose in connection with
or in anticipation of a Change of Control which has been threatened or proposed
and which actually occurs, shall constitute Good Reason for purposes of this
Plan notwithstanding that it occurred prior to a Change of Control, it being
agreed that any such action taken following shareholder approval of a
transaction which if consummated would constitute a Change of Control, shall be
deemed to be in anticipation of a Change of Control provided such transaction
is actually consummated.

 

Before a termination by a
Participant will constitute termination for Good Reason, the Participant must
give the Company a Notice of Termination within 30 calendar days following the
occurrence of the event that constitutes Good Reason.  Failure to provide such Notice of Termination
within such 30-day period shall be conclusive proof that the Participant shall
not have Good Reason to terminate employment.

 

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

 

5

 

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

 

Section 3.16.        “Key
Employee” means a key employee as defined in Section 416(i) of
the Code (without regard to paragraph (5) thereof) of an Employer.

 

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

 

Section 3.18.        “Participant”
means an Employee who meets the eligibility requirements of Article IV
hereof, other than an Employee who, after becoming a Participant, has entered
into an employment, severance or other similar agreement with the Company
(other than a stock option, restricted stock, supplemental retirement, deferred
compensation or similar plan or agreement or other form of participation
document entered into pursuant to an Employer-sponsored plan which may contain
provisions operative on a termination of the Participant’s employment or may
incidentally refer to accelerated vesting or accelerated payment upon a Change
of Control (as defined in such separate plan or document)).

 

Section 3.19.        “Participation
Agreement” means an agreement between the Company and each Employee that
must be executed as a condition of the Participant’s eligibility for this Plan.

 

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

 

Section 3.21.        “Plan
Administrator” means the Compensation Committee of the Board.

 

Section 3.22.        “Protection
Period” means (i) for all Participants, excluding the individual who
is the Chief Executive Officer of the Company (the “CEO”) at the time of a
Change of Control, the period of time commencing on the date of the first
occurrence of a Change of Control and continuing until the first anniversary of
the first occurrence of the Change of Control and (ii) for the CEO of the
Company, the period of time commencing on the date of the first occurrence of a
Change of Control and continuing until the second anniversary of the first
occurrence of the Change of Control.

 

6

 

Section 3.23.        “Separation
from Service” has the meaning ascribed to such phrase in the 409A Guidance.

 

Section 3.24.        “Severance
Payment” or “Severance Payments” means the payment or payments of severance
compensation described in Article V hereof.

 

Section 3.25.        “Severance
Period” means (i) for the CEO, the period of time commencing on the
Termination Date and continuing until the third anniversary of the Termination
Date, (ii) for all officers, other than the CEO, the period of time
commencing on the Termination Date and continuing until the second anniversary
of the Termination Date, and (iii) for all other Participants, the period
of time commencing on the Termination Date and continuing until the first
anniversary of the Termination Date.

 

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

 

Section 3.27.        “Termination
Date” means the date of the Participant’s Separation from Service.

 

Section 3.28.        “Voting
Stock” means securities entitled to vote generally in the election of
directors.

 

Section 3.29.        “409A
Guidance” means Section 409A of the Code, including regulations or any
other formal guidance issued by the Secretary of the Treasury and the Internal
Revenue Service with respect thereto.

 

ARTICLE
IV  - ELIGIBILITY

 

Section 4.1.           Participation.  Each person who is an Employee, who is
designated by the Compensation Committee to be a Participant in this Plan, and
who has executed a Participation Agreement shall be a Participant commencing on
the date such Participant executes a Participation Agreement.

 

Section 4.2.           Duration
of Participation.  A Participant
shall cease to be a Participant and shall have no rights hereunder, without
further action, when (a) he or she ceases to be an Employee, unless such
Participant is then entitled to payment of a Severance Payment as provided in Article V
hereof or (b) prior to a Change of Control, the Compensation Committee
designates a Participant to be ineligible to continue to participate in this
Plan as a result of a change in the Participant’s job title or duties.  A Participant entitled to a Severance Payment
shall remain a Participant in this Plan until the full amount of the Severance
Payment has been paid to the Participant.

 

7

 

ARTICLE V  - SEVERANCE PAYMENTS

 

Section 5.1.           Right
to Severance Payment - Termination Prior to a Change of Control.

 

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

 

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

 

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

 

8

 

shall be paid to the
Participant by the Company in cash and in full on the first day of the seventh
month  after the Participant’s
Separation from Service.  If a
Participant entitled to Severance Payments under this Section 5.1 should
die before all amounts payable to him or her have been paid, such unpaid
amounts shall be paid as soon as practicable following the Participant’s death
to the Participant’s spouse, if living, otherwise to the personal
representative of the Participant’s estate.

 

Section 5.2.           Right
to Severance Payment - Termination After a Change of Control.

 

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

 

(b)           The amount of Severance Payments under this Section 5.2(b) shall
equal the sum of (i) the Participant’s Base Pay multiplied by the factor
set forth on Schedule A for the Participant and (ii) the amount of
the Participant’s target award under the Annual Incentive Plan for the year in
which the Termination Date occurs multiplied by the factor set forth on Schedule
A for the Participant.  In addition, such Participant will
be entitled to receive as Severance Payments (1) a pro rata portion of the
Participant’s target award, if any, under the Annual Incentive Plan and the DPL
Inc. 2006 Executive Performance and Incentive Plan, as of the Termination Date,  (2) an amount equal to the amount that would be
credited to the Participant under the Company’s Supplemental Executive Defined
Contribution Retirement Plan for the applicable Severance Period, determined as
if the Participant had remained employed during that period and had received
remuneration each year during that period equal to the sum of the Participant’s
Base Pay plus the Participant’s target award under the Annual Incentive Plan
for the year in which the Termination Date occurs, and the Code Limit, as
defined in the EICP, remained unchanged during the Severance Period, (3) continued
participation in the Company’s medical plan for the Severance Period; provided, however, that
such coverage shall be provided only to the extent that such coverage would not
be considered a “deferral of compensation” subject to the requirements of Section 409A
of the Code, and provided, further, that the period of coverage under
such plan shall count against such plan’s obligation to provide continuation
coverage pursuant to COBRA, (4) receipt of outplacement services at the
Company’s cost for a period of six months following the Participant’s
Termination Date, and (5) if applicable pursuant to the terms set forth on
Schedule A, an amount equal to $20,000 multiplied by the factor set
forth on Schedule A for
the Participant.

 

9

 

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

 

Section 5.3.           Release.  Notwithstanding anything to the contrary
contained in this Plan, a Participant shall not be entitled to receive any
Severance Payment hereunder unless and until he or she has signed and returned
to the Company a release (the “Release”) by the deadline established by the
Plan Administrator (which shall be no later than 50 calendar days after the
Participant’s Termination Date) and the period during which the Participant may
revoke the Release, if any, has elapsed. 
The Release, which shall be signed by the Participant no earlier than
the Participant’s Termination Date, shall be a written document, in a form
prescribed by the Company, intended to create a binding agreement by a
Participant to release any claim that the Participant has or may have against
the Company and certain related entities and individuals, that arise on or
before the date on which Participant signs the Release, including, without
limitation, any claims under the federal Age Discrimination in Employment
Act.  The Release shall also include
confidentiality and non-disparagement covenants.

 

Section 5.4.           Third
Party Removal.  Notwithstanding
anything to the contrary contained in this Plan, any termination of employment
of the Participant that occurs prior to a Change of Control but which the
Participant reasonably demonstrates occurred at the request of a third party
who had taken steps reasonably calculated to effect the Change of Control shall
be deemed to be a termination or removal of the Participant after a Change of
Control for purposes of this Plan.

 

Section 5.5.           Breach.  The Company’s payment obligations and the
Participant’s participation rights under Sections 5.1 and 5.2 shall cease in
the event the Participant breaches any of the covenants contained in the
Participant’s Participation Agreement or the Release.  Any such cessation of payment shall not
reduce any monetary damages that may be available to the Company as a result of
such breach.

 

Section 5.6.           No
Mitigation Obligation.  The
Participant shall not be required to mitigate damages or the amount of his or
her Severance Payment by seeking other employment or otherwise, nor shall the
amount of such payment be reduced by any

 

10

 

compensation
earned by the Participant as a result of employment after the termination of
his or her employment by an Employer.

 

Section 5.7.           Excess
Parachute Payments.

 

(a)           Notwithstanding any
provision of this Plan to the contrary, if the aggregate “present value” (as
determined under Section 280G of the Code) of the “parachute payments” (as
defined under Section 280G(b)(2) of the Code) to be paid or provided
under this Plan or any other plan or agreement between the Participant and an
Employer 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 subject
to the excise tax imposed by Section 4999 of the Code (or any successor
provision thereto) or to any similar tax imposed by state or local law, or any
interest or penalties with respect to such tax (such tax or taxes, together
with any such interest and penalties, being hereafter collectively referred to
as the “Excise Tax”), then the Participant shall be entitled to receive an
additional payment or payments (collectively, a “Gross-Up Payment”).  The Gross-Up Payment shall be in an amount
such that, after payment by the Participant of all taxes (including any
interest or penalties imposed with respect to such taxes), including any Excise
Tax imposed upon the Gross-Up Payment, the Participant retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payment.  The Gross-Up Payment shall be paid no
earlier than the first day of the seventh month following the Termination Date
and no later than the end of the year following the year in which the applicable
item of Excise Tax is remitted by the Participant.  Any Gross-Up Payment made by the Company in
one taxable year in no event will affect a Gross-Up Payment required to be paid
by the Company in any other taxable year.

 

(b)           Notwithstanding any
provision of this Plan to the contrary, if the aggregate “present value” (as
determined under Section 280G of the Code) of the “parachute payments” (as
defined under Section 280G(b)(2) of the Code) to be paid or provided
under this Plan or any other plan or agreement between the Participant and an
Employer 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 the
payments and benefits to be paid or provided under this Plan shall be reduced
to the minimum extent necessary (but in no event to less than zero) so that no
portion of any such payment or benefit, as so reduced, constitutes an Excess
Parachute Payment.

 

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

 

ARTICLE
VI  - NON-SOLICITATION

 

Section 6.1.           Non-Solicitation.  In the event that a Participant receives a
Severance Payment pursuant to this Plan, during the Participant’s employment
and for

 

11

 

a period of
two years after the Termination Date, Participant will not (i) solicit for
employment with himself or herself or any firm or entity with which he or she
is associated, any employee of the Company, its Subsidiaries or Affiliates, or
otherwise disrupt, impair, damage or interfere with the Company’s, its
Subsidiaries’ or Affiliates’ relationships with their employees or (ii) solicit
for Participant’s own behalf or on behalf of any other person(s), any retail
customer of the Company, its Subsidiaries or Affiliates, that has purchased
products or services from the Company, its Subsidiaries or Affiliates, at any
time (a) with respect to solicitation during employment, during the
Participant’s employment, or (b) with respect to solicitation after
employment, in the twelve months preceding the Participant’s Termination Date
or that the Company, its Subsidiaries or Affiliates are actively soliciting or
have known plans to solicit, for the purpose of marketing or distributing any
product, pricing or service competitive with any product, pricing or service
then offered by the Company or its Subsidiaries or Affiliates or which the
Company or its Subsidiaries or Affiliates have known plans to offer.

 

ARTICLE
VII  - OTHER RIGHTS AND BENEFITS NOT
AFFECTED

 

Section 7.1.           Other
Benefits.  Except as provided in Section 5.7,
neither the provisions of this Plan nor the Severance Payments provided for
hereunder shall reduce or increase any amounts otherwise payable, or in any
other way affect a Participant’s rights as an employee of an Employer, whether
existing now or hereafter, under any benefit, incentive, retirement, stock
option, stock bonus, stock purchase or employment agreement, plan (other than
this Plan), program or arrangement (collectively, the “Other Plans”), except to
the extent specifically provided under such Other Plans.

 

Section 7.2.           Certain
Limitations.  This Plan does not
constitute a contract of employment or impose on any Participant, the Company
or any other Employer any obligation to retain any Participant as an employee
or in any other capacity, to change or not change the status, terms or
conditions of any Participant’s employment, or to change or not change the
Employer’s policies regarding termination of employment.

 

ARTICLE VIII  - SUCCESSORS

 

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

 

12

 

Section 8.2.           Participant’s
Successor.

 

(a)           This Plan shall inure to the benefit of and be enforceable
by 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 and
neither the Company nor any Participant shall, without the consent of the
other, assign, transfer or delegate any rights or obligations hereunder except
as expressly provided in this Article VIII.  Without limiting the generality of the
foregoing, the Participant’s right to receive a Severance Payment hereunder
shall not be assignable, transferable or delegable, whether by pledge, creation
of a security interest or otherwise, other than by a transfer by his or her
will or by the laws of descent and distribution and, in the event of any
attempted assignment or transfer contrary to this Section 8.2(b), the
Company shall have no liability to pay any amount so attempted to be assigned,
transferred or delegated.

 

ARTICLE IX 
- AMENDMENT AND TERMINATION

 

Section 9.1.           Amendment.  This Plan may be amended by the Compensation
Committee or terminated in any respect by resolution adopted by a majority of
the 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 following
such Protection Period with respect to all Participants receiving Severance
Payments attributable to terminations of employment that occurred during the
Protection Period, no amendment or termination shall be effective unless, (a) in
the case of amendments or terminations adopted during the Protection Period,
such amendment or termination is consented to by all Participants, and (b) in
the case of amendments or terminations adopted after the Protection Period,
such amendment or termination is consented to by all Participants who are receiving
Severance Payments attributable to terminations of employment that occurred
during the Protection Period.

 

Section 9.2.           Effect
of Amendment or Termination.  A
proper amendment of this Plan automatically shall effect a corresponding
amendment to all Participants’ rights hereunder.  A proper termination of this Plan
automatically shall effect a termination of all Participants’ rights and
benefits hereunder without further action; provided, however, no termination shall reduce or terminate any
Participant’s right to receive, or continue to receive, any Severance Payments
that became payable prior to the date of such termination of the Plan.

 

ARTICLE
X  ADMINISTRATION OF PLAN

 

Section 10.1.        Administration.

 

(a)           The Plan shall be administered by the Plan Administrator.  The Plan Administrator shall have discretion
to interpret where necessary all provisions of the Plan (including, without
limitation, by supplying omissions from, correcting deficiencies in, or resolving
inconsistencies or ambiguities in, the language of the

 

13

 

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

 

(b)           The Plan Administrator may delegate any of its
administrative duties, including, without limitation, duties with respect to
the processing, review, investigation, approval and payment of benefits, to a
named administrator or administrators.

 

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

 

Section 10.3.        Claims
Procedures.

 

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

 

(b)           The Plan Administrator will notify the claimant of its
decision regarding his or her claim within a reasonable period of time, but not
later than 90 days following the date on which the claim is filed, unless
special circumstances require a longer period for adjudication and the claimant
is notified in writing of the reasons for an extension of time prior to the end
of the initial 90-day period and the date by which the Plan Administrator
expects to make the final decision.  In
no event will the Plan Administrator be given an extension for processing the
claim beyond 180 days after the date on which the claim is first filed with the
Plan Administrator.

 

14

 

If such a claim is denied, the Plan
Administrator’s notice will be in writing, will be written in a manner
calculated to be understood by the claimant and will contain the following
information:

 

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

 

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

 

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

 

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

 

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

 

Within 60 days after receipt of a denial of a
claim, the claimant must file with the Plan Administrator, a written request
for review of such claim.  If a request
for review is not filed within such 60-day period, the claimant shall be deemed
to have acquiesced in the original decision of the Plan Administrator on his or
her claim.  If a request for review is
filed, the Plan Administrator shall conduct a full and fair review of the
claim.  The claimant will be provided,
upon request and free of charge, reasonable access to and copies of all
documents and information relevant to the claim for benefits.  The claimant may submit issues and comments
in writing, and the review must take into account all information submitted by
the claimant regardless of whether it was reviewed as part of the initial
determination.  The decision by the Plan
Administrator with respect to the review must be given within 60 days after
receipt of the request for review, unless circumstances warrant an extension of
time not to exceed an additional 60 days. 
If this occurs, written notice of the extension will be furnished to the
claimant before the end of the initial 60-day period, indicating the special
circumstances requiring the extension and the date by which the Plan
Administrator expects to make the final decision.  The decision shall be written in a manner
calculated to be understood by the claimant, and it shall include

 

(A)          The
specific reason(s) for the denial;

 

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

 

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

 

15

 

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

 

The Plan Administrator’s decision on review
shall be, to the extent permitted by applicable law, final and binding on all
interested persons.

 

ARTICLE
XI  - MISCELLANEOUS

 

Section 11.1.        Legal
Fees and Expenses.  It is the intent
of the Company that Participants not be required to incur any expenses
associated with the enforcement of rights under Section 5.2 of this Plan
because the cost and expense thereof would substantially detract from the
benefits intended to be extended to Participants hereunder.  Accordingly, if any Employer has failed to
comply with any of its obligations under Section 5.2 of this Plan or in
the event that any Employer, or any other person takes any action to declare Section 5.2
of this Plan void or unenforceable, or institutes any litigation designed to
deny, or to recover from, a Participant the benefits intended to be provided to
the Participant under Section 5.2 of this Plan, each Employer irrevocably
authorizes the Participant from time to time to retain counsel of his or her
choice, at the expense of the Company, as hereafter provided, to represent the
Participant 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 and
shall be solely responsible for any and all reasonable attorneys’ fees and
expenses incurred by the Participant in enforcing his or her rights under Section 5.2
of this Plan individually (but not as a representative of any class) as a
result of any Employer’s failure to perform under Section 5.2 of this Plan
or as a result of any Employer or any person contesting the validity or
enforceability of Section 5.2 of this Plan.  Any payment made by the Company pursuant to
this Section 11.1 shall be for expenses incurred by the Participant during
his or her lifetime and such payment shall be made no later than the last day
of the calendar year following the calendar year in which the Participant
incurs the expense.  In no event will the
amount of expenses so paid by the Company in one year affect the amount of
expenses eligible for reimbursement, or in-kind benefits to be provided, in any
other taxable year.  In no event will the
Company reimburse any expense under this Section 11.1 any earlier than the
first day of the seventh month following the Participant’s Termination Date.

 

Section 11.2.        Withholding
of Taxes.  The Employer may withhold
from any amounts payable under this Plan all foreign, federal, provincial,
state, city or other taxes as shall be required pursuant to any law or
government regulation or ruling.

 

Section 11.3.        Remedy
at Law.  The Company and each
Participant recognize that each party will have no adequate remedy at law for
breach by the other of any of the agreements contained herein and, in the event
of any such breach, the Company hereby, and each Participant by execution of a
Participation Agreement, agree and consent that the other shall be entitled to
a decree of specific performance, mandamus or other appropriate remedy to enforce
performance of this Plan.

 

16

 

Section 11.4.        Notices.  For all purposes of this Plan, all
communications, including without limitation notices, consents, requests or
approvals provided for herein, shall be in writing and shall be deemed to have
been duly given when delivered or five business days after having been mailed
by registered or certified mail, return receipt requested, postage prepaid,
addressed to the Company (to the attention of the Secretary of the Company), at
its principal office and to any Participant at his or her principal residence
as shown in the relevant records of the Employer, or to such other address as
any party may have furnished to the other in writing and in accordance
herewith, except that notices of change of address shall be effective only upon
receipt.

 

Section 11.5.        Governing
Law.  This Plan shall be
administered, construed and enforced according to the laws of the State of Ohio
to the extent they are not preempted by the ERISA.

 

Section 11.6.        Severability.  If a provision of this Plan shall be held
illegal or invalid, the illegality or invalidity shall not affect the remaining
parts of this Plan and this Plan shall be construed and enforced as if the
illegal or invalid provision had not been included.

 

Section 11.7.        Headings.  The headings are intended only for
convenience in finding the subject matter and do not constitute part of the
text of this Plan and shall not be considered in the interpretation of this
Plan.

 

17

 

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

  

 

*  For Participants who fall
under 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.

 

18

 

Schedule B

 

Gross-Up Payment Determination Procedures

 

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

 

(b)           The Company and the Participant shall each provide the Tax
Professional access to and copies of any books, records and documents in the
possession of the Company or the Participant, as the case may be, reasonably
requested by the Tax Professional, and otherwise cooperate with the Tax
Professional in connection with the preparation and issuance of the
determinations and calculations contemplated by Section (a) of this
Schedule B.  Any determination by the Tax
Professional shall be binding upon the Company and the Participant.

 

(c)           The federal, state and local income or other tax returns
filed by the Participant shall be prepared and filed on a consistent basis with
the 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 correct
copies (with any amendments) of his or her federal income tax return as filed
with the Internal Revenue Service and corresponding state and local tax
returns, if relevant, as filed with the applicable taxing authority, and such
other documents reasonably requested by the Company, evidencing such
payment.  If prior to the filing of the
Participant’s federal income tax return, or corresponding state or local tax
return, if relevant, the Tax Professional determines that the amount of the
Gross-Up Payment

 

19

 

should be reduced, the
Participant shall within five business days pay to the Company the amount of
such reduction.

 

(d)           The fees and expenses of the Tax Professional for its
services in connection with the determinations and calculations contemplated by
Section (a) of this Schedule B shall be borne by the Company.  If such fees and expenses are initially paid
by the Participant, the Company shall reimburse the Participant the full amount
of such fees and expenses.

 

(e)           The Participant shall notify the Company in writing of any
claim by the Internal Revenue Service or any other taxing authority that, if
successful, would require the payment by the Company of a Gross-Up
Payment.  Such notification shall be
given as promptly as practicable but no later than ten business days after the
Participant actually receives notice of such claim and the Participant shall
further apprise the Company of the nature of such claim and the date on which
such claim is requested to be paid (in each case, to the extent known by the
Participant).  The Participant shall not
pay such claim prior to the earlier of (i) the expiration of the 30-calendar-day
period following the date on which he or she gives such notice to the Company
and (ii) the date that any payment of amount with respect to such claim is
due.  If the Company notifies the
Participant in writing prior to the expiration of such period that it desires
to contest such claim, the Participant shall:

 

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

 

(ii)           take such action in connection with contesting such claim
as the Company shall reasonably request in writing from time to time, including
without limitation accepting legal representation with respect to such claim by
an attorney competent in respect of the subject matter and reasonably selected
by the Company;

 

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

 

(iv)          permit the Company to participate in any proceedings
relating to such claim;

 

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

 

20

 

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 her
own cost and expense) and may, at its option, either direct the Participant to
pay the tax claimed and sue for a refund or contest the claim in any
permissible manner, and the Participant agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Participant to
pay the tax claimed and sue for a refund, the Company shall indemnify and hold
the Participant harmless, on an after-tax basis, from any Excise Tax or income
or other tax, including interest or penalties with respect thereto, imposed
with respect to such advance; and provided further, however, that any extension
of the statute of limitations relating to payment of taxes for the taxable year
of the Participant with respect to which the contested amount is claimed to be
due is limited solely to such contested amount. 
Furthermore, the Company’s control of any such contested claim shall be
limited to issues with respect to which a Gross-Up Payment would be payable
hereunder and the Participant shall be entitled to settle or contest, as the
case may be, any other issue raised by the Internal Revenue Service or any
other taxing authority.

 

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

 

21

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