Document:

Exhibit 10.2

                                                                  EXECUTION COPY

                              EMPLOYMENT AGREEMENT
                              --------------------

      THIS EMPLOYMENT AGREEMENT is made as of December 21, 2004 among DPL INC.,
an Ohio corporation ("DPL"), The Dayton Power and Light Company, an Ohio
corporation ("DP&L"; and, collectively with DPL, the "Company") and John J.
Gillen ("Mr. Gillen") under the following circumstances:

      A.    DPL is a holding company headquartered in Dayton, Ohio, having as
            its principal subsidiary DP&L.

      B.    The Company, subject to the terms and conditions set forth herein,
            desires to provide for the continued employment of Mr. Gillen as
            Senior Vice President and Chief Financial Officer of the Company.

      C.    Mr. Gillen desires to be employed as the Chief Financial Officer of
            the Company subject to the terms and conditions set forth herein.

      NOW, THEREFORE, the parties agree as follows:

      Section 1. Employment and Duties. The Company hereby employs Mr. Gillen as
Chief Financial Officer of the Company and Mr. Gillen hereby accepts such
employment. In his capacity as Chief Financial Officer of the Company, Mr.
Gillen shall report directly to the Executive Chairman of the Board of Directors
of the Company and to the Chief Executive Officer of the Company, and shall have
the duties customarily performed by a chief financial officer of a similarly
situated company. In his capacity as Chief Financial Officer of the Company, Mr.
Gillen shall have primary responsibility for the conduct of the Company's
finance-related activities, including accounting, treasury, insurance and
corporate risk management, financial forecasting and operating business reports.
Mr. Gillen shall also perform such other and further duties as may be assigned
to him from time to time by the Chief Executive Officer or the Executive
Chairman, and as are consistent with the position of Chief Financial Officer.
During the Term, Mr. Gillen shall devote his entire business time and attention
to the performance of his duties hereunder and shall use his best efforts to
perform his duties hereunder faithfully and efficiently. The foregoing shall not
preclude Mr. Gillen from devoting reasonable time to the supervision of his
personal investments, civic, charitable and industry affairs, provided that such
activities do not interfere with the performance of his duties hereunder or
conflict with the business interests of the Company.

      Section 2. Term. Subject to the terms of Section 7 hereof, the term of
this Agreement (the "Term") shall be effective as of December 21, 2004 and shall
continue until the first anniversary of such date; provided that the Term shall
automatically renew for successive one-year periods unless either party gives
the other ninety (90) days advance written of its intention to not to renew the
Agreement. In the event the Company issues notice of non-renewal, Mr. Gillen
will be entitled to the benefits provided in either Section 9(b) or Section
10(b), as appropriate,, and in the event Mr. Gillen issues notice of
non-renewal, Mr. Gillen shall be entitled to the benefits provided in either
Section 9(c) or Section 10 (a), as appropriate,.

      Section 3. Compensation. As compensation for his services hereunder, Mr.
Gillen shall receive the following:

      (a) Base Salary. Mr. Gillen shall receive a base salary at the annual rate
of $320,000 or such greater amount as the Compensation Committee of the Board of
Directors of DPL (the "Compensation Committee") may determine from time to time
in its sole discretion (the "Base Salary"), to be paid in installments in
accordance with the Company's customary payroll practices.

      (b) Participation in MICP. For each calendar year during the Term, Mr.
Gillen shall have the opportunity to receive an annual bonus under the DPL's
Management Incentive Compensation Plan ("MICP"), and for each such year Mr.
Gillen will have the opportunity to earn $160,000 at 100% of the target
performance in accordance with the terms of the MICP. Any MICP amounts due for a
given year will be paid by April 1 of the following year.

      (c) Participation in LTIP. For each calendar year during the Term, Mr.
Gillen shall have the opportunity to participate in the DPL's Long Term
Incentive Plan ("LTIP"), and for each such year Mr. Gillen will have the
opportunity to earn $200,000 at 100% of target performance in accordance with
the terms of the LTIP, subject to a maximum LTIP earning opportunity of
$400,000.

      (d) Vesting. Any award earned by Mr. Gillen under the LTIP will vest in
three equal annual installments of one-third each on December 31st of each year
if Mr. Gillen is in the employ of the Company on such date, commencing with the
year to which the award relates.

      (e) Stock Options. On the terms provided in the Management Stock Option
Agreement attached hereto as Exhibit A, which Mr. Gillen and the Company shall
execute immediately after the execution of this Agreement, the Company shall
grant to Mr. Gillen options to purchase up to 30,000 common shares of DPL, which
option shall vest ratably on each of the first three anniversaries of the date
of this Agreement. Options to purchase an additional 20,000 common shares of DPL
shall be granted upon the earlier of (i) the date Mr. Gillen relocates his
primary residence and his family to the Dayton, Ohio area or (ii) the occurrence
of a Change of Control as defined in this employment agreement

      (f) DPL's Executive Stock Ownership Plan. Subject to the last sentence of
this Section 3(f), Mr. Gillen will be required to comply with the provisions of
DPL's Executive Stock Ownership Guidelines which require that Mr. Gillen achieve
a specified minimum threshold of DPL share ownership within five years following
the effective date of this Agreement and thereafter maintain DPL share ownership
at the requisite minimum level. The minimum threshold of share ownership
applicable to Mr. Gillen as Chief Financial Officer of the Company will be equal
to two (2) times the Base Salary. The parties agree that Mr. Gillen's ownership
of DPL shares pursuant to this Section 3(f) will only be acquired with proceeds
from the LTIP and any proceeds from the MICP in excess of the 100% "target"
payout.

      (g) Fringe Benefits. During the Term, Mr. Gillen shall be entitled to
receive such fringe benefits (including, but not limited to, medical, dental and
disability insurance benefits, life insurance benefits and qualified retirement
benefits) as are generally made available to other executive level employees of
the Company in accordance with the plans, practices, programs and policies of
the Company in effect from time to time, including participation in DP&L's
Executive Deferred Compensation Plan, and 401(k) plan. In addition, during the
Term Gillen shall be entitled to the life insurance benefits currently provided
by the Company.

      (f) Relocation Expenses. The Company shall reimburse Mr. Gillen for the
reasonable expenses incurred in relocating his family and single family
residence from a single location in the Philadelphia, Pennsylvania area to the
Dayton, Ohio area. The Company shall reimburse Mr. Gillen for customary real
estate commissions incurred in connection with sale of his current residence in
the Philadelphia area and for the cost of one appraisal for a residence in the
Dayton area. In addition, upon closing of the sale of Mr. Gillen's
Philadelphia-area residence, the Company shall pay Mr. Gillen a moving incentive
bonus equal to 3% of the sale price of the Philadelphia residence up to a
maximum bonus of $50,000. To the extent any of the foregoing payments or
reimbursements are subject to income taxes or other taxes similar to income
taxes, the Company shall pay Mr. Gillen an additional amount sufficient to gross
him up for the amount of such taxes. In the event that Mr. Gillen terminates his
employment for any reason or his employment is terminated by the Company for
"Cause" (as defined below) within one year of the date of the relocation, Mr.
Gillen shall fully reimburse the Company for any payments made by the Company
pursuant to this Section 3(f).

      Section 4. Vacations. During the Term, Mr. Gillen shall be entitled to
paid vacation time of four weeks annually.

      Section 5. Expenses. The Company shall reimburse Mr. Gillen for all
reasonable out-of-pocket expenses properly incurred by him in connection with
the performance of his duties hereunder in accordance with the policies
established from time to time by the Company.

      Section 6. Withholdings. The Company may withhold from any amounts payable
to Mr. Gillen hereunder such federal, state or local taxes or other amounts as
the Company shall be required to withhold pursuant to applicable law.

      Section 7. Termination. (a) This Agreement and Mr. Gillen's employment
with the Company may be terminated at any time, with or without Cause (as
hereinafter defined), by either the Company or Mr. Gillen upon 90 days' prior
written notice; provided this Agreement and Mr. Gillen's employment with the
Company may be terminated by the Company for Cause without prior notice.

      (b) In addition, this Agreement and Mr. Gillen's employment with the
Company shall automatically terminate upon Mr. Gillen's death or Disability (as
hereinafter defined).

      (c) Upon the termination of this Agreement for any reason, this Agreement
shall forthwith be of no further force and effect (except that the provisions of
Sections 8 through 11, and 17 shall continue in full force and effect) and there
shall be no further liability on the part of either party, other than based upon
(i) its obligations under this Agreement arising prior to such termination or
(ii) the obligations of such party contained in Sections 8 through 11, and 17 or
under the agreement attached hereto as Exhibit A.

      Section 8. Severance Benefits Generally. Notwithstanding any other
provisions of this agreement to the contrary, upon termination of employment for
any reason at any time, the Company shall pay or provide the following amounts
and benefits (the "Section 8 Amounts") to Mr. Gillen in compensation for
services previously rendered:

      (a) the amount of Mr. Gillen's unpaid Base Salary earned through the Date
of Termination at the rate in effect at the Date of Termination;

      (b) the amounts of any MICP and LTIP awards with respect to any completed
period or periods which, pursuant to the MICP or LTIP (as applicable), have been
earned by Mr. Gillen and vested, but which have not yet been paid to him; and

      (c) all other accrued benefits of any kind to which Mr. Gillen is, or
would otherwise have been, entitled through the Date of Termination.

      Section 9. Severance Benefits Prior to a Change of Control. In the event
of a termination of Mr. Gillen's employment prior to a Change of Control, the
following provisions shall apply:

      (a) Termination for Cause; Death or Disability. If (i) the Company
terminates Mr. Gillen's employment for Cause; or (ii) Mr. Gillen's employment is
terminated due to his death or Disability, Mr. Gillen shall receive the Section
8 Amounts.

      (b) Termination Without Cause. If the Company terminates Mr. Gillen's
employment without Cause, Mr. Gillen shall receive:

                  (i) the Section 8 Amounts;

                  (ii) an amount equal to the sum of (i) 1 years' Base Salary
                  and (ii)the amount of Mr. Gillen's target MICP bonus for the
                  year of termination; and

                  (iii) continued coverage under the health benefit plan for
                  executive employees at the same cost and terms as in effect
                  immediately prior to the date of notice until the earlier of
                  (A) first anniversary of his Termination Date or (B) the date
                  an essentially equivalent and no less favorable benefit is
                  made available to Mr. Gillen at substantially similar cost.

      (c) Termination by Mr. Gillen. If Mr. Gillen terminates his employment for
any reason at any time, Mr. Gillen shall receive the Section 8 Amounts.

      (d) Full Satisfaction. The foregoing payments and benefits under this
Section 9, plus the payments and benefits in Section 3.b. of the Management
Stock Option Agreement, shall be the Company's entire obligation to Mr. Gillen
in the event of a termination of Mr. Gillen's employment not related to a Change
of Control, and Mr. Gillen will execute a full and unconditional release of any
claims which he may have against the Company as a condition to receiving such
payment, except for termination pursuant to Section 9(a).

      Section 10. Severance Benefits Related to a Change of Control. In the
event of the occurrence of Change of Control, the following provisions shall
apply:

      (a) Termination for Cause; Resignation without Good Reason; Death or
Disability. If, within 36 months following a Change of Control, (i) the Company
terminates Mr. Gillen's employment for Cause; (ii) Mr. Gillen terminates his
employment without Good Reason; or (iii) Mr. Gillen's employment is terminated
due to his death or Disability, Mr. Gillen shall receive the Section 8 Amounts.

      (b) Termination Without Cause; For Good Reason. If, within 36 months
following a Change of Control, (i) the Company terminates Mr. Gillen's
employment without Cause or (ii) Mr. Gillen terminates his employment for Good
Reason, Mr. Gillen shall receive the following:

                  (i) the Section 8 Amounts;

                  (ii) an amount equal to 200% of the sum of (1) Mr. Gillen's
                  annual Base Salary (which Base Salary is computed before
                  deduction for any deferred compensation or other employee
                  deferrals) at the highest of (A) the rate in effect as of Date
                  of Termination, or (B) the rate in effect at the time of the
                  Change of Control, plus (2) the average of the award payments
                  made to him under the MICP for the three years preceding the
                  Date of Termination (or for the number of years he has
                  participated in such plan, if less than three), including any
                  portion of any such payments that Mr. Gillen elected to defer
                  to his Standard Deferral Account in the Company's Key
                  Employees Deferred Compensation Plan;

                  (iii) the amount of any MICP awards earned with respect to any
                  completed period, but unvested as of the Date of Termination;
                  provided that in the event the Date of Termination precedes
                  the completion of a period in which, pursuant to the MICP, Mr.
                  Gillen could have earned compensation thereunder, or in the
                  event the Date of Termination precedes the determination of
                  compensation that he has earned for a completed period under
                  the MICP, then, with respect to each such period, Mr. Gillen
                  shall be entitled to an amount equal to the average of the
                  award payments made to him under the MICP for the three years
                  preceding the Date of Termination (or for the number of years
                  he has participated in such plan, if less than three),
                  including any portion of any such payments that he elected to
                  defer to his Standard Deferral Account in the Company's Key
                  Employees Deferred Compensation Plan;

                  (iv) the Company shall, at its expense, maintain in full force
                  and effect for Mr. Gillen's continued benefit all life
                  insurance, health and accident, and disability plans in which
                  he was entitled to participate immediately prior to the Date
                  of Termination, or, if more favorable to Mr. Gillen, on the
                  date of a prior Change of Control, provided that his continued
                  participation is possible under the terms of such plans and
                  programs. In the event that the terms of any such plan do not
                  permit Mr. Gillen's continued participation or that any such
                  plan is discontinued or the benefits thereunder materially
                  reduced, the Company shall arrange to provide, at its expense,
                  benefits to Mr. Gillen that are substantially similar to those
                  that he was entitled to receive under such plan immediately
                  prior to the Date of Termination. The Company's obligation
                  under this subsection (iv) shall terminate on the earlier of:
                  (1) the third anniversary date of the earlier of the Date of
                  Termination or (2) the date an essentially equivalent and no
                  less favorable benefit is made available to Mr. Gillen at no
                  cost by a subsequent employer. At the end of the applicable
                  period of coverage set forth above, Mr. Gillen shall have the
                  option to have assigned to him, at no cost and with no
                  apportionment of prepaid premiums, any assignable insurance
                  owned by the Company and relating specifically to Mr. Gillen.
                  In the event that because of their relationship to Mr. Gillen,
                  members of his family or other individuals are covered by a
                  plan described in this subsection (iv) immediately prior to
                  the Date of Termination, the provisions set forth in this
                  subsection (iv) shall apply equally to require the continued
                  coverage of such persons; provided, however, that if under the
                  terms of any such plan, any such person would have ceased to
                  be eligible for coverage during the period in which the
                  Company is obligated to continue coverage for Mr. Gillen,
                  nothing set forth herein shall obligate the Company to
                  continue to provide coverage which would have ceased even if
                  he had remained an employee of the Company during such period;
                  and

                  (v) any gross up amount payable under Section 15 hereof.

The Company shall make the foregoing cash payments to Mr. Gillen as severance in
a lump sum in cash not later than the Date of Termination (or in the case of any
payments due under clause (v), 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).

      (c) Additional Payment. In consideration of Mr. Gillen agreeing to the
covenants in Section 11 hereof, if Mr. Gillen receives payments under Section
10(b), Mr. Gillen shall be paid an additional amount equal to one-half (1/2) the
amount determined under Section 10(b)(ii) payable upon the Date of Termination.

      (d) Enhanced Disability Protection. In addition to the Severance Benefits
provided in Section 10, if Mr. Gillen's employment is terminated because of a
Disability within thirty-six (36) months following the occurrence of a Change of
Control, Mr. Gillen 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 Mr.
Gillen shall be entitled to receive benefits under any similar plan in effect as
of the date of the occurrence of such Change of Control if such plan shall
result in a higher amount of benefits being paid to Mr. Gillen as a result of
the Disability in question.

      (e) Notice of Termination. Any termination of Mr. Gillen's employment
subsequent to a Change of Control, unless by Mr. Gillen without Good Reason or
because of Mr. Gillen's 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 Mr. Gillen with
Good Reason, 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
employment.

      (f) Nature of Payments; No Mitigation. The payments and benefits provided
upon termination of employment under this Section 10 shall not be treated as
damages, but rather shall be treated as severance compensation to which Mr.
Gillen is entitled under the terms and conditions provided herein. Mr. Gillen
shall not be required to mitigate the amount of any benefit provided under this
agreement by seeking other employment or otherwise.

      Section 11. Non-Competition; Non-Solicitation and Confidentiality. In
consideration of the Company's entering into this Agreement and as an inducement
for it to do so, and in consideration of the Company's agreement to pay Mr.
Gillen the amount set forth under Section 10(c) hereof, in the event and only in
the event that he receives the payment under Section 10(c) hereof, Mr. Gillen
agrees as follows:

      (a) Non-Competition. For a period of two years after termination of Mr.
Gillen's employment for any reason, he will not, without the Company's prior
written consent, directly or indirectly, (i) solicit for employment with himself
or any firm or entity with which he is associated, any employee of the Company
or otherwise disrupt, impair, damage or interfere with the Company's
relationship with its employees; (ii) solicit for his 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 his date of
termination or that the Company is actively soliciting or has 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 which the Company has known plans to solicit, (iii) further develop,
on behalf of any person in competition with the Company, any product or pricing
which the Company is in the process of developing on the date of termination of
Mr. Gillen's employment, or (iv) serve, directly or indirectly, as an agent,
employee, officer, director, manager, consultant, contractor, representative or
in any other capacity of any Prohibited Company (as hereinafter defined) or any
Affiliate thereof.

      (b) Confidentiality. At all times, Mr. Gillen (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 he 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 his performance of the duties
assigned to him by the Company. Mr. Gillen will take all appropriate steps to
safeguard such information and to protect it against unauthorized disclosure,
misuse, loss or theft. Upon termination of his employment, Mr. Gillen 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 his possession or control. For
purposes of this Section 11(b), information shall be deemed not to be
confidential information if such information becomes a matter of public record
or is published in a newspaper, magazine or other periodical or on electronic or
other media available to the general public, other than as a result of any act
or omission of Mr. Gillen.

      Section 12. Certain Definitions. For purposes of this Agreement, the
following terms have the following meanings:

      "Affiliate" means, with respect to any Prohibited Company, any Person
directly or indirectly controlling or controlled by, or under direct or indirect
common control with, such Prohibited Company. A Person shall be deemed to
control a Prohibited Company if such Person possesses, directly or indirectly,
the power to direct or cause the direction of the management and policies of
such Prohibited Company, whether through the ownership of voting securities or
other ownership interests, contract or otherwise.

      "Cause" means (a) proven commission of a felony, (b) proven embezzlement,
(c) the proven 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 the definition of Change of
Control, the willful and continuous failure by Mr. Gillen to substantially
perform his duties with the Company (other than any such failure resulting from
his physical or mental illness or other physical or mental incapacity) as
determined in good faith by the Board of Directors. Notwithstanding the
foregoing, Cause shall not be deemed to exist unless and until there shall have
been delivered to Mr. Gillen 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 him and an opportunity for him, together with his
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
he was guilty of conduct set forth above in clauses (a), (b), (c) or (d) of the
first sentence of this definition and specifying the particulars thereof in
detail. For purposes of this Section 12, no act or failure to act on Mr.
Gillen's part shall be considered "willful" unless it is done, or omitted to be
done, by him in bad faith or without reasonable belief that his action or
omission was in the best interests of the Company.

      "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 (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 hereof or becomes the beneficial owner,
directly or indirectly, of securities of DPL or DP&L representing (A) 25% 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 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 ss. 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
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
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; or (iv) those persons serving as
directors of DPL or DP&L on the date of this Agreement (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).

      "Date of Termination" means:

            (a)   if Mr. Gillen's employment is terminated by the Company for
                  Cause, the date specified in the Notice of Termination;

            (b)   if Mr. Gillen terminates his employment for Good Reason, the
                  date specified in his Notice of Termination; or

            (c)   if Mr. Gillen's employment is terminated by the Company or by
                  him for any other reason, the date of such termination.

      "Disability" means, for the purposes of this agreement, Mr. Gillen's
inability to perform the duties required of him 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 him
thirty days' written notice of its intention to terminate his employment by
reason thereof, and Mr. Gillen's failure because of physical or mental illness
or other physical or mental disability or incapacity to resume the full-time
performance of his duties within such period of thirty days and thereafter
perform the same for a period of two consecutive months.

      "Good Reason" means:

            (a)   The assignment to Mr. Gillen, without his express consent, of
                  any duties inconsistent with the duties of Senior Vice
                  President and Chief Financial Officer and/or written
                  objectives approved by the Company with respect to his
                  position, duties, responsibilities and status with the Company
                  in effect immediately prior to a Change of Control, or a
                  change in his reporting responsibilities, titles or offices as
                  in effect immediately prior to a Change of Control, or his
                  removal from or any failure to re-elect him to any of such
                  positions or offices, except in connection with the
                  termination of his employment for Disability or Cause, or by
                  him other than for Good Reason, or as a result of Mr. Gillen's
                  death.

            (b)   Failure by the Company to increase Mr. Gillen's annual Base
                  Salary, at the time when salary adjustments were historically
                  made by the Company prior to the Change of Control, by an
                  amount that at least equals on a percentage basis the average
                  percentage increase in his Base Salary during the three (3)
                  full calendar years immediately preceding the Change of
                  Control (or for the number of years he has been employed by
                  the Company, if less than three).

            (c)   A reduction by the Company of Mr. Gillen's 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  MICP,  Key Employees  Deferred  Compensation
                  Plan or any other pension,  employee stock  ownership,  life
                  insurance,  medical,  health  and  accident,  or  disability
                  plan) in which Mr. Gillen is  participating at the time of a
                  Change  of  Control  or  plans  providing  Mr.  Gillen  with
                  substantially  similar benefits; or the taking of any action
                  by the Company  which would  adversely  affect Mr.  Gillen's
                  participation  in or  materially  reduce his benefits  under
                  any of such  plans or  deprive  him of any  material  fringe
                  benefit  enjoyed  by him  at  the  time  of  the  Change  of
                  Control;  or the  failure  by the  Company  to  provide  Mr.
                  Gillen  with the  number of paid  vacation  days to which he
                  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 Mr. Gillen is based at the Company's
                  principal executive offices.

            (f)   The   Company's   requiring   Mr.   Gillen   to   be   based
                  anywhere  more than fifty miles from the  location  where he
                  is  based at the time of a Change  of  Control  (except  for
                  required  travel  on the  Company's  business  to an  extent
                  substantially  consistent with Mr. Gillen's  business travel
                  obligations  as they  existed  at the  time of a  Change  of
                  Control);  or,  in the event Mr.  Gillen  consents  to being
                  based  anywhere  more than fifty  miles from such  location,
                  the  failure by the  Company to pay (or  reimburse  him for)
                  all reasonable  moving expenses  incurred by him relating to
                  a change of his principal  residence in connection with such
                  relocation  and to indemnify  him 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)
                  Mr. Gillen's  aggregate  investment in such residence or (2)
                  the fair market value of such  residence as  determined by a
                  real  estate  appraiser  designated  by him  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 Mr. Gillen to perform duties or
                  services which necessitate absence overnight from his 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 Section 14 hereof.

            (i)   The Company's termination of Mr. Gillen's employment without
                  satisfying any applicable requirements in connection with
                  termination for Cause or sending a Notice of Termination.

      "Person" means any individual, corporation, association, partnership,
firm, limited liability company, trust or other entity or enterprise.

      "Prohibited Company" means each of Firstenergy Corp., Cinergy Corp., and
American Electric Power Company, Inc.

      Section 13. Rights As Former Employee. Nothing contained in this agreement
shall be construed as preventing Mr. Gillen, and shall not prevent him,
following any termination of his employment whether pursuant to this agreement
or otherwise, from thereafter participating in any benefit or insurance plans
(including, without limitation thereto, any retirement plans) in the same manner
and to the same extent that he, as a former employee of the Company, would have
been entitled to participate had this agreement not have been entered into.

      Section 14. Successors. (a) 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 Mr. Gillen to compensation
from the Company in the same amount and on the same terms as he would be
entitled hereunder if he terminated his employment for Good Reason regardless of
whether he in fact has 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 foregoing provisions of this Section 14(a)
shall not apply to (i) a spin-off or sale of assets, or (ii) a transaction
described in item (ii) of the definition of Change of Control 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.

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

      Section 15. 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 Mr. Gillen an
additional amount (the "Gross-Up Payment") such that the net amount retained by
Mr. Gillen after deduction of any Excise Tax on such payments (excluding
payments pursuant to this Section 15), and after deduction for any federal,
state and local income tax and Excise Tax upon the payment provided for by this
Section 15, shall be equal to the amount of such payments (excluding payments
pursuant to this Section 15) 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 Mr. Gillen in
connection with a Change of Control or his 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 Mr.
Gillen such payments or benefits do not constitute parachute payments or excess
parachute payments. For purposes of determining the amount of the Gross-Up
Payment, Mr. Gillen 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 his 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 Mr. Gillen's
employment, Mr. Gillen 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 his 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.

      Section 16. 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 Mr. Gillen hereunder if
his employment was terminated on the date of the Change of Control under
circumstances in which payments under Section 10 hereof would become due and
payable to him, including, without limitation, cash in an amount sufficient to
fund payments of all future medical, life insurance, accident and disability
plans as provided in Sections 10 hereof, and the Gross-Up Payment as defined in
Section 15 herein, in each case based on reasonable estimates.

      Section 17. Legal Fees. The Company shall reimburse Mr. Gillen in full for
all legal fees and expenses reasonably incurred by him in enforcing his rights
under this Agreement in connection with a termination of his employment. The
Company shall pay the reasonable attorneys fees, costs and expenses incurred by
Mr. Gillen in connection with the negotiation, execution and delivery of this
Agreement.

      Section 18. 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 the Corporate Secretary of the Company at:

                  The Dayton Power and Light Company
                  MacGregor Park
                  1065 Woodman Drive
                  Dayton, Ohio  45432
                  Attention:  Corporate Secretary

and if to Mr. Gillen, addressed to Mr. John J. Gillen at the address of his
personal residence on file in the Company's records. 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
Section 18.

      Section 19. Parties in Interest. This Agreement is for the sole benefit of
the parties and shall not create any rights to any person not a party. This
Agreement is personal and may not be assigned by any party without the prior
written consent of the other party. Subject to the foregoing, this Agreement
shall be binding upon, inure to the benefit of, and be enforceable by, the
respective successors and assigns of the parties, but on assignment shall, of
itself, relieve any party of its obligations hereunder.

      Section 20. Entire Agreement. This Agreement, including the Management
Stock Option Agreement attached hereto as Exhibit A and the Deferral Election
Form attached hereto as Exhibit B, sets forth the entire agreement and
understandings of the parties in respect to the subject matter hereof and
supersedes all prior agreements, arrangements and understandings relating to the
subject matter hereof.

      Section 21. Interpretation. The section and other headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement. Words used in this Agreement in
the singular number shall include the plural, and vice versa, unless the context
requires otherwise. Words of gender used in this Agreement may be read as
masculine, feminine or neuter as the context may require. The terms "this
Agreement", "hereto" "herein", "hereby", "hereof" and similar expressions refer
to this Agreement in its entirety and not to any particular provision or portion
of this Agreement. When a reference is made to Sections, such reference shall be
to a Section of this Agreement, unless otherwise indicated. Whenever the words
"include", "includes" or "including" are used herein, they shall be deemed to be
followed by the words "without limitation".

      Section 22. Law Governing. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Ohio without
regard to its conflicts of laws rules.

      Section 23. Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original but all of
which taken together shall constitute one and the same instrument.

      Section 24. Amendment. Any amendment to this Agreement or any waiver of
rights or any consent hereunder shall not be operative unless it is in writing
and signed by the party sought to be charged.

      Section 25. Equitable Relief. Mr. Gillen acknowledges that the Company may
be irreparably injured by any breach of Section 11. Accordingly, the Company
shall be entitled to specific performance and other injunctive relief as
remedies for any breach (or threatened breach) of such Section, in addition to
all other remedies available at law or in equity.

      Section 26. Severability. If any provision of this Agreement or the
application thereof to any party or circumstance shall be held invalid or
unenforceable to any extent, the remainder of this Agreement and the application
of such provision to another party or circumstance shall not be affected thereby
and such provision shall be enforced to the greatest extent permitted by
applicable law.

      Section 27. Waiver. The failure or delay on the part of any party to
insist upon strict performance of any of the terms or conditions of this
Agreement will not constitute a waiver of any of its rights hereunder. No right
or remedy herein conferred upon or reserved to any party is intended to be
exclusive of any other right or remedy and all such rights and remedies shall be
cumulative.

      Section 28. No Right to Employment. Nothing in this agreement shall confer
upon Mr. Gillen the right to continue employment with the Company, or obligate
Mr. Gillen to continue employment with the Company; nor shall it interfere with
the rights of the Company to discharge Mr. Gillen or take other action with
respect to Mr. Gillen, subject to the Company's providing the benefits specified
herein in accordance with the terms hereof.

      Section 29. Insurance and Indemnification. To the extent that Company
provides directors and officers liability insurance or similar indemnification
for its officers and directors, the Company shall provide the same coverage or
indemnification to Mr. Gillen, in accordance with and subject to the same terms
and conditions.

<PAGE>

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

                                       DPL Inc.

                                       By: /s/ Robert D. Biggs
                                          -------------------------------
                                             Robert D. Biggs
                                             Executive Chairman

                                       By: /s/ James Mahoney
                                          -------------------------------
                                             James Mahoney
                                             Chief Executive Officer

                                       The Dayton Power and Light Company

                                       By: /s/ Robert D. Biggs
                                          -------------------------------
                                             Robert D. Biggs
                                             Executive Chairman

                                       By: /s/ James Mahoney
                                          -------------------------------
                                             James Mahoney
                                             Chief Executive Officer

 /s/ John J. Gillen
-----------------------
John J. GillenATLAS AIR WORLDWIDE HOLDINGS, INC.
                  2004 LONG TERM INCENTIVE AND SHARE AWARD PLAN

          1. PURPOSES.

          The purposes of the 2004 Long Term Incentive and Share Award Plan are
to advance the interests of Atlas Air Worldwide Holdings, Inc. and its
shareholders by providing a means to attract, retain, and motivate employees,
consultants and directors of the Company, its subsidiaries and affiliates, to
provide for competitive compensation opportunities, to encourage long term
service, to recognize individual contributions and reward achievement of
performance goals, and to promote the creation of long term value for
stockholders by aligning the interests of such persons with those of
stockholders.

          2. DEFINITIONS.

          For purposes of the Plan, the following terms shall be defined as set
forth below:

          (a) "Affiliate" means any entity other than the Company and its
Subsidiaries that is designated by the Board or the Committee as a participating
employer under the Plan; PROVIDED, HOWEVER, that the Company directly or
indirectly owns at least 20% of the combined voting power of all classes of
stock of such entity or at least 20% of the ownership interests in such entity.

          (b) "Award" means any Option, SAR, Restricted Share, Restricted Share
Unit, Performance Share, Performance Unit, Dividend Equivalent, or Other
Share-Based Award granted to an Eligible Person under the Plan.

          (c) "Award Agreement" means any written agreement, contract, or other
instrument or document evidencing an Award.

          (d) "Beneficiary" means the person, persons, trust or trusts which
have been designated by an Eligible Person in his or her most recent written
beneficiary designation filed with the Company to receive the benefits specified
under this Plan upon the death of the Eligible Person, or, if there is no
designated Beneficiary or surviving designated Beneficiary, then the person,
persons, trust or trusts entitled by will or the laws of descent and
distribution to receive such benefits.

          (e) "Board" means the Board of Directors of the Company.

<PAGE>

                                      -2-

          (f) "Code" means the Internal Revenue Code of 1986, as amended from
time to time. References to any provision of the Code shall be deemed to include
successor provisions thereto and regulations thereunder.

          (g) "Committee" means the Compensation Committee of the Board, or such
other Board committee (which may include the entire Board) as may be designated
by the Board to administer the Plan; PROVIDED, HOWEVER, that, unless otherwise
determined by the Board, the Committee shall consist of two or more directors of
the Company, each of whom is a "non-employee director" within the meaning of
Rule 16b-3 under the Exchange Act, to the extent applicable, and each of whom is
an "outside director" within the meaning of Section 162(m) of the Code, to the
extent applicable; PROVIDED, FURTHER, that the mere fact that the Committee
shall fail to qualify under either of the foregoing requirements shall not
invalidate any Award made by the Committee which Award is otherwise validly made
under the Plan.

          (h) "Company" means Atlas Air Worldwide Holdings, Inc., a corporation
organized under the laws of Delaware, or any successor corporation.

          (i) "Director" means a member of the Board who is not an employee of
the Company, a Subsidiary or an Affiliate.

          (j) "Dividend Equivalent" means a right, granted under Section 5(g),
to receive cash, Shares, or other property equal in value to dividends paid with
respect to a specified number of Shares. Dividend Equivalents may be awarded on
a free-standing basis or in connection with another Award, and may be paid
currently or on a deferred basis.

          (k) "Eligible Person" means (i) an employee or consultant of the
Company, a Subsidiary or an Affiliate, including any director who is an
employee, or (ii) a Director. Notwithstanding any provisions of this Plan to the
contrary, an Award may be granted to an employee, consultant or Director, in
connection with his or her hiring or retention prior to the date the employee,
consultant or Director first performs services for the Company, a Subsidiary or
an Affiliate; PROVIDED, HOWEVER, that any such Award shall not become vested or
exercisable prior to the date the employee, consultant or Director first
performs such services.

          (l) "Effective Date" means the date on which the Company's joint
Chapter 11 plan is consummated and the Company emerges from its Chapter 11 case.

          (m) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time. References to any provision of the Exchange Act shall
be deemed to include successor provisions thereto and regulations thereunder.

          (n) "Fair Market Value" means, with respect to Shares or other
property, the fair market value of such Shares or other property determined by
such methods or procedures

<PAGE>

                                      -3-

as shall be established from time to time by the Committee. If the Shares are
listed on any established stock exchange or a national market system, unless
otherwise determined by the Committee in good faith, the Fair Market Value of
Shares shall mean the mean between the high and low selling prices per Share on
the date (or, if the Shares were not traded on that day, the next preceding day
that the Shares were traded) on the principal exchange or market system on which
the Shares are traded, as such prices are officially quoted on such exchange.

          (o) "ISO" means any Option intended to be and designated as an
incentive stock option within the meaning of Section 422 of the Code.

          (p) "NQSO" means any Option that is not an ISO.

          (q) "Option" means a right, granted under Section 5(b), to purchase
Shares.

          (r) "Other Share-Based Award" means a right, granted under Section
5(h), that relates to or is valued by reference to Shares.

          (s) "Participant" means an Eligible Person who has been granted an
Award under the Plan.

          (t) "Performance Share" means a performance share granted under
Section 5(f).

          (u) "Performance Unit" means a performance unit granted under Section
5(f).

          (v) "Plan" means this 2004 Long Term Incentive and Share Award Plan.

          (w) "Restricted Shares" means an Award of Shares under Section 5(d)
that may be subject to certain restrictions and to a risk of forfeiture.

          (x) "Restricted Share Unit" means a right, granted under Section 5(e),
to receive Shares or cash at the end of a specified deferral period.

          (y) "Rule 16b-3" means Rule 16b-3, as from time to time in effect and
applicable to the Plan and Participants, promulgated by the Securities and
Exchange Commission under Section 16 of the Exchange Act.

          (z) "SAR" or "Share Appreciation Right" means the right, granted under
Section 5(c), to be paid an amount measured by the difference between the
exercise price of the right and the Fair Market Value of Shares on the date of
exercise of the right, with payment to be made in cash, Shares, or property as
specified in the Award or determined by the Committee.

<PAGE>

                                      -4-

          (aa) "Shares" means common stock, $.01 par value per share, of the
Company, and such other securities as may be substituted for Shares pursuant to
Section 4(c) hereof.

          (bb) "Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if each of the
corporations (other than the last corporation in the unbroken chain) owns shares
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in the chain.

          (cc) "Termination of Service" means the termination of the
Participant's employment, consulting services or directorship with the Company,
its Subsidiaries and its Affiliates, as the case may be. A Participant employed
by a Subsidiary of the Company or one of its Affiliates shall also be deemed to
incur a Termination of Service if the Subsidiary of the Company or Affiliate
ceases to be such a Subsidiary or an Affiliate, as the case may be, and the
Participant does not immediately thereafter become an employee or director of,
or a consultant to, the Company, another Subsidiary of the Company or an
Affiliate. Temporary absences from employment because of illness, vacation or
leave of absence and transfers among the Company and its Subsidiaries and
Affiliates shall not be considered a Termination of Service.

           3. ADMINISTRATION.

          (a) AUTHORITY OF THE COMMITTEE. The Plan shall be administered by the
Committee, and the Committee shall have full and final authority to take the
following actions, in each case subject to and consistent with the provisions of
the Plan:

          (i) to select Eligible Persons to whom Awards may be granted;

          (ii) to designate Affiliates;

          (iii) to determine the type or types of Awards to be granted to each
      Eligible Person;

          (iv) to determine the type and number of Awards to be granted, the
      number of Shares to which an Award may relate, the terms and conditions of
      any Award granted under the Plan (including, but not limited to, any
      exercise price, grant price, or purchase price, any restriction or
      condition, any schedule for lapse of restrictions or conditions relating
      to transferability or forfeiture, exercisability, or settlement of an
      Award, and waiver or accelerations thereof, and waivers of performance
      conditions relating to an Award, based in each case on such considerations
      as the Committee shall determine), and all other matters to be determined
      in connection with an Award;

<PAGE>

                                      -5-

          (v) to determine whether, to what extent, and under what circumstances
      an Award may be settled, or the exercise price of an Award may be paid, in
      cash, Shares, other Awards, or other property, or an Award may be
      canceled, forfeited, exchanged, or surrendered;

          (vi) to determine whether, to what extent, and under what
      circumstances cash, Shares, other Awards, or other property payable with
      respect to an Award will be deferred either automatically, at the election
      of the Committee, or at the election of the Eligible Person;

          (vii) to prescribe the form of each Award Agreement, which need not be
      identical for each Eligible Person;

          (viii) to adopt, amend, suspend, waive, and rescind such rules and
      regulations and appoint such agents as the Committee may deem necessary or
      advisable to administer the Plan;

          (ix) to correct any defect or supply any omission or reconcile any
      inconsistency in the Plan and to construe and interpret the Plan and any
      Award, rules and regulations, Award Agreement, or other instrument
      hereunder;

          (x) to accelerate the exercisability or vesting of all or any portion
      of any Award or to extend the period during which an Award is exercisable;

          (xi) to determine whether uncertificated Shares may be used in
      satisfying Awards and otherwise in connection with the Plan; and

          (xii) to make all other decisions and determinations as may be
      required under the terms of the Plan or as the Committee may deem
      necessary or advisable for the administration of the Plan.

          (b) MANNER OF EXERCISE OF COMMITTEE AUTHORITY. The Committee shall
have sole discretion in exercising its authority under the Plan. Any action of
the Committee with respect to the Plan shall be final, conclusive, and binding
on all persons, including the Company, Subsidiaries, Affiliates, Eligible
Persons, any person claiming any rights under the Plan from or through any
Eligible Person, and shareholders. The express grant of any specific power to
the Committee, and the taking of any action by the Committee, shall not be
construed as limiting any power or authority of the Committee. The Committee may
delegate to other members of the Board or officers or managers of the Company or
any Subsidiary or Affiliate the authority, subject to such terms as the
Committee shall determine, to perform administrative functions and, with respect
to Awards granted to persons not subject to Section

<PAGE>

                                      -6-

16 of the Exchange Act, to perform such other functions as the Committee may
determine, to the extent permitted under Rule 16b-3 (if applicable) and
applicable law.

          (c) LIMITATION OF LIABILITY. Each member of the Committee shall be
entitled to, in good faith, rely or act upon any report or other information
furnished to him or her by any officer or other employee of the Company or any
Subsidiary or Affiliate, the Company's independent certified public accountants,
or other professional retained by the Company to assist in the administration of
the Plan. No member of the Committee, and no officer or employee of the Company
acting on behalf of the Committee, shall be personally liable for any action,
determination, or interpretation taken or made in good faith with respect to the
Plan, and all members of the Committee and any officer or employee of the
Company acting on their behalf shall, to the extent permitted by law, be fully
indemnified and protected by the Company with respect to any such action,
determination, or interpretation.

          (d) LIMITATION ON COMMITTEE'S DISCRETION. Anything in this Plan to the
contrary notwithstanding, in the case of any Award which is intended to qualify
as "performance-based compensation" within the meaning of Section 162(m)(4)(C)
of the Code, if the Award Agreement so provides, the Committee shall have no
discretion to increase the amount of compensation payable under the Award to the
extent such an increase would cause the Award to lose its qualification as such
performance-based compensation.

          4. SHARES SUBJECT TO THE PLAN.

          (a) Subject to adjustment as provided in Section 4(c) hereof, the
total number of Shares reserved for issuance in connection with Awards under the
Plan shall be 2,772,559, of which 2,277,256 shall be reserved for issuance to
management employees and Board members and 495,303 shall be reserved for
issuance to non-management employees or other Eligible Persons. No Award may be
granted if the number of Shares to which such Award relates, when added to the
number of Shares previously issued under the Plan, exceeds the number of Shares
reserved under the preceding sentence. If any Awards are forfeited, canceled,
terminated, exchanged or surrendered or such Award is settled in cash or
otherwise terminates without a distribution of Shares to the Participant, any
Shares counted against the number of Shares reserved and available under the
Plan with respect to such Award shall, to the extent of any such forfeiture,
settlement, termination, cancellation, exchange or surrender, again be available
for Awards under the Plan. Upon the exercise of any Award granted in tandem with
any other Awards, such related Awards shall be canceled to the extent of the
number of Shares as to which the Award is exercised.

          (b) Subject to adjustment as provided in Section 4(c) hereof, the
maximum number of Shares (i) with respect to which Options or SARs may be
granted during a calendar year to any Eligible Person under this Plan shall be
500,000 Shares, and (ii) with respect to Performance Shares, Performance Units,
Restricted Shares or Restricted Share Units intended

<PAGE>

                                      -7-

to qualify as performance-based compensation within the meaning of Section
162(m)(4)(C) of the Code shall be the equivalent of 500,000 Shares during a
calendar year to any Eligible Person under this Plan.

          (c) In the event that the Committee shall determine that any dividend
in Shares, recapitalization, Share split, reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase, or share exchange, or other
similar corporate transaction or event, affects the Shares such that an
adjustment is appropriate in order to prevent dilution or enlargement of the
rights of Eligible Persons under the Plan, then the Committee shall make such
equitable changes or adjustments as it deems appropriate and, in such manner as
it may deem equitable, adjust any or all of (i) the number and kind of shares
which may thereafter be issued under the Plan, (ii) the number and kind of
shares, other securities or other consideration issued or issuable in respect of
outstanding Awards, and (iii) the exercise price, grant price, or purchase price
relating to any Award; PROVIDED, HOWEVER, in each case that, with respect to
ISOs, such adjustment shall be made in accordance with Section 424(a) of the
Code, unless the Committee determines otherwise. In addition, the Committee is
authorized to make adjustments in the terms and conditions of, and the criteria
and performance objectives, if any, included in, Awards in recognition of
unusual or non-recurring events (including, without limitation, events described
in the preceding sentence) affecting the Company or any Subsidiary or Affiliate
or the financial statements of the Company or any Subsidiary or Affiliate, or in
response to changes in applicable laws, regulations, or accounting principles;
PROVIDED, HOWEVER, that, if an Award Agreement specifically so provides, the
Committee shall not have discretion to increase the amount of compensation
payable under the Award to the extent such an increase would cause the Award to
lose its qualification as performance-based compensation for purposes of Section
162(m)(4)(C) of the Code and the regulations thereunder.

          (d) Any Shares distributed pursuant to an Award may consist, in whole
or in part, of authorized and unissued Shares or treasury Shares including
Shares acquired by purchase in the open market or in private transactions.

          5. SPECIFIC TERMS OF AWARDS.

          (a) GENERAL. Awards may be granted on the terms and conditions set
forth in this Section 5. In addition, the Committee may impose on any Award or
the exercise thereof, at the date of grant or thereafter (subject to Section
8(d)), such additional terms and conditions, not inconsistent with the
provisions of the Plan, as the Committee shall determine, including terms
regarding forfeiture of Awards or continued exercisability of Awards in the
event of Termination of Service by the Eligible Person.

          (b) OPTIONS. The Committee is authorized to grant Options, which may
be NQSOs or ISOs, to Eligible Persons on the following terms and conditions:

<PAGE>

                                      -8-

          (i) EXERCISE PRICE. The exercise price per Share purchasable under an
      Option shall be determined by the Committee. The Committee may, without
      limitation, set an exercise price that is based upon achievement of
      performance criteria if deemed appropriate by the Committee.

          (ii) OPTION TERM. The term of each Option shall be determined by the
      Committee; PROVIDED, HOWEVER, that such term shall not be longer than ten
      years from the date of grant of the Option.

          (iii) TIME AND METHOD OF EXERCISE. The Committee shall determine at
      the date of grant or thereafter the time or times at which an Option may
      be exercised in whole or in part (including, without limitation, upon
      achievement of performance criteria if deemed appropriate by the
      Committee), the methods by which such exercise price may be paid or deemed
      to be paid (including, without limitation, broker-assisted exercise
      arrangements), the form of such payment (including, without limitation,
      cash, Shares or other property), and the methods by which Shares will be
      delivered or deemed to be delivered to Eligible Persons; provided,
      HOWEVER, that in no event may any portion of the exercise price be paid
      with Shares acquired either under an Award granted pursuant to this Plan,
      upon exercise of a stock option granted under another Company plan or as a
      stock bonus or other stock award granted under another Company plan
      unless, in any such case, the Shares were acquired and vested more than
      six months in advance of the date of exercise.

          (iv) ISOS. The terms of any ISO granted under the Plan shall comply in
      all respects with the provisions of Section 422 of the Code, including but
      not limited to the requirement that the ISO shall be granted within ten
      years from the earlier of the date of adoption or shareholder approval of
      the Plan. ISOs may only be granted to employees of the Company or a
      Subsidiary.

          (c) SARS. The Committee is authorized to grant SARs (Share
Appreciation Rights) to Eligible Persons on the following terms and conditions:

          (i) RIGHT TO PAYMENT. A SAR shall confer on the Eligible Person to
      whom it is granted a right to receive with respect to each Share subject
      thereto, upon exercise thereof, the excess of (1) the Fair Market Value of
      one Share on the date of exercise (or, if the Committee shall so determine
      in the case of any such right, the Fair Market Value of one Share at any
      time during a specified period before or after the date of exercise) over
      (2) the exercise price per Share of the SAR as determined by the Committee
      as of the date of grant of the SAR (which, in the case of a SAR granted in
      tandem with an Option, shall be equal to the exercise price of the
      underlying Option).

<PAGE>

                                      -9-

          (ii) OTHER TERMS. The Committee shall determine, at the time of grant
or thereafter, the time or times at which a SAR may be exercised in whole or in
part (which shall not be more than ten years after the date of grant of the
SAR), the method of exercise, method of settlement, form of consideration
payable in settlement, method by which Shares will be delivered or deemed to be
delivered to Eligible Persons, whether or not a SAR shall be in tandem with any
other Award, and any other terms and conditions of any SAR. Unless the Committee
determines otherwise, a SAR (1) granted in tandem with an NQSO may be granted at
the time of grant of the related NQSO or at any time thereafter and (2) granted
in tandem with an ISO may only be granted at the time of grant of the related
ISO.

          (d) RESTRICTED SHARES. The Committee is authorized to grant Restricted
Shares to Eligible Persons on the following terms and conditions:

          (i) ISSUANCE AND RESTRICTIONS. Restricted Shares shall be subject to
      such restrictions on transferability and other restrictions, if any, as
      the Committee may impose at the date of grant or thereafter, which
      restrictions may lapse separately or in combination at such times, under
      such circumstances (including, without limitation, upon achievement of
      performance criteria if deemed appropriate by the Committee), in such
      installments, or otherwise, as the Committee may determine. Except to the
      extent restricted under the Award Agreement relating to the Restricted
      Shares, an Eligible Person granted Restricted Shares shall have all of the
      rights of a shareholder including, without limitation, the right to vote
      Restricted Shares and the right to receive dividends thereon.

          (ii) FORFEITURE. Except as otherwise determined by the Committee, at
      the date of grant or thereafter, upon Termination of Service during the
      applicable restriction period, Restricted Shares and any accrued but
      unpaid dividends or Dividend Equivalents that are at that time subject to
      restrictions shall be forfeited; PROVIDED, HOWEVER, that the Committee may
      provide, by rule or regulation or in any Award Agreement, or may determine
      in any individual case, that restrictions or forfeiture conditions
      relating to Restricted Shares will be waived in whole or in part in the
      event of Termination of Service resulting from specified causes, and the
      Committee may in other cases waive in whole or in part the forfeiture of
      Restricted Shares.

          (iii) CERTIFICATES FOR SHARES. Restricted Shares granted under the
      Plan may be evidenced in such manner as the Committee shall determine. If
      certificates representing Restricted Shares are registered in the name of
      the Eligible Person, such certificates shall bear an appropriate legend
      referring to the terms, conditions, and restrictions applicable to such
      Restricted Shares, the Company shall retain physical possession of the
      certificate and the Participant shall deliver a stock power to the
      Company, endorsed in blank, relating to the Restricted Shares.

<PAGE>

                                      -10-

          (iv) DIVIDENDS. Dividends paid on Restricted Shares shall be either
      paid at the dividend payment date, or deferred for payment to such date as
      determined by the Committee, in cash or in unrestricted Shares having a
      Fair Market Value equal to the amount of such dividends. Shares
      distributed in connection with a Share split or dividend in Shares, and
      other property distributed as a dividend, shall be subject to restrictions
      and a risk of forfeiture to the same extent as the Restricted Shares with
      respect to which such Shares or other property has been distributed.

          (e) RESTRICTED SHARE UNITS. The Committee is authorized to grant
Restricted Share Units to Eligible Persons, subject to the following terms and
conditions:

          (i) AWARD AND RESTRICTIONS. Delivery of Shares or cash, as the case
      may be, will occur upon expiration of the deferral period specified for
      Restricted Share Units by the Committee (or, if permitted by the
      Committee, as elected by the Eligible Person). In addition, Restricted
      Share Units shall be subject to such restrictions as the Committee may
      impose, if any (including, without limitation, the achievement of
      performance criteria if deemed appropriate by the Committee), at the date
      of grant or thereafter, which restrictions may lapse at the expiration of
      the deferral period or at earlier or later specified times, separately or
      in combination, in installments or otherwise, as the Committee may
      determine.

          (ii) FORFEITURE. Except as otherwise determined by the Committee at
      date of grant or thereafter, upon Termination of Service during the
      applicable deferral period or portion thereof to which forfeiture
      conditions apply (as provided in the Award Agreement evidencing the
      Restricted Share Units), or upon failure to satisfy any other conditions
      precedent to the delivery of Shares or cash to which such Restricted Share
      Units relate, all Restricted Share Units that are at that time subject to
      deferral or restriction shall be forfeited; PROVIDED, HOWEVER, that the
      Committee may provide, by rule or regulation or in any Award Agreement, or
      may determine in any individual case, that restrictions or forfeiture
      conditions relating to Restricted Share Units will be waived in whole or
      in part in the event of Termination of Service resulting from specified
      causes, and the Committee may in other cases waive in whole or in part the
      forfeiture of Restricted Share Units.

          (iii) DIVIDEND EQUIVALENTS. Unless otherwise determined by the
      Committee at date of grant, Dividend Equivalents on the specified number
      of Shares covered by a Restricted Share Unit shall be either (A) paid with
      respect to such Restricted Share Unit at the dividend payment date in cash
      or in unrestricted Shares having a Fair Market Value equal to the amount
      of such dividends, or (B) deferred with respect to such Restricted Share
      Unit and the amount or value thereof automatically deemed reinvested in
      additional Restricted Share Units or other Awards, as the Committee shall
      determine or permit the Participant to elect.

<PAGE>

                                      -11-

          (f) PERFORMANCE SHARES AND PERFORMANCE UNITS. The Committee is
authorized to grant Performance Shares or Performance Units or both to Eligible
Persons on the following terms and conditions:

          (i) PERFORMANCE PERIOD. The Committee shall determine a performance
      period (the "Performance Period") of one or more years and shall determine
      the performance objectives for grants of Performance Shares and
      Performance Units. Performance objectives may vary from Eligible Person to
      Eligible Person and shall be based upon the performance criteria as the
      Committee may deem appropriate. The performance objectives may be
      determined by reference to the performance of the Company, or of a
      Subsidiary or Affiliate, or of a division or unit of any of the foregoing.
      Performance Periods may overlap and Eligible Persons may participate
      simultaneously with respect to Performance Shares and Performance Units
      for which different Performance Periods are prescribed.

          (ii) AWARD VALUE. At the beginning of a Performance Period, the
      Committee shall determine for each Eligible Person or group of Eligible
      Persons with respect to that Performance Period the range of number of
      Shares, if any, in the case of Performance Shares, and the range of dollar
      values, if any, in the case of Performance Units, which may be fixed or
      may vary in accordance with such performance or other criteria specified
      by the Committee, which shall be paid to an Eligible Person as an Award if
      the relevant measure of Company performance for the Performance Period is
      met.

          (iii) SIGNIFICANT EVENTS. If during the course of a Performance Period
      there shall occur significant events as determined by the Committee which
      the Committee expects to have a substantial effect on a performance
      objective during such period, the Committee may revise such objective;
      PROVIDED, HOWEVER, that, if an Award Agreement so provides, the Committee
      shall not have any discretion to increase the amount of compensation
      payable under the Award to the extent such an increase would cause the
      Award to lose its qualification as performance-based compensation for
      purposes of Section 162(m)(4)(C) of the Code and the regulations
      thereunder.

          (iv) FORFEITURE. Except as otherwise determined by the Committee, at
      the date of grant or thereafter, upon Termination of Service during the
      applicable Performance Period, Performance Shares and Performance Units
      for which the Performance Period was prescribed shall be forfeited;
      PROVIDED, HOWEVER, that the Committee may provide, by rule or regulation
      or in any Award Agreement, or may determine in an individual case, that
      restrictions or forfeiture conditions relating to Performance Shares and
      Performance Units will be waived in whole or in part in the event of
      Termination of Service resulting from specified causes, and the Committee
      may in other cases waive in whole or in part the forfeiture of Performance
      Shares and Performance Units.

<PAGE>

                                      -12-

          (v) PAYMENT. Each Performance Share or Performance Unit may be paid in
      whole Shares, or cash, or a combination of Shares and cash either as a
      lump sum payment or in installments, all as the Committee shall determine,
      at the time of grant of the Performance Share or Performance Unit or
      otherwise, commencing as soon as practicable after the end of the relevant
      Performance Period.

          (g) DIVIDEND EQUIVALENTS. The Committee is authorized to grant
Dividend Equivalents to Eligible Persons. The Committee may provide, at the date
of grant or thereafter, that Dividend Equivalents shall be paid or distributed
when accrued or shall be deemed to have been reinvested in additional Shares, or
other investment vehicles as the Committee may specify; PROVIDED, HOWEVER, that
Dividend Equivalents (other than freestanding Dividend Equivalents) shall be
subject to all conditions and restrictions of the underlying Awards to which
they relate.

          (h) OTHER SHARE-BASED AWARDS. The Committee is authorized, subject to
limitations under applicable law, to grant to Eligible Persons such other Awards
that may be denominated or payable in, valued in whole or in part by reference
to, or otherwise based on, or related to, Shares, as deemed by the Committee to
be consistent with the purposes of the Plan, including, without limitation,
unrestricted shares awarded purely as a "bonus" and not subject to any
restrictions or conditions, other rights convertible or exchangeable into
Shares, purchase rights for Shares, Awards with value and payment contingent
upon performance of the Company or any other factors designated by the
Committee, and Awards valued by reference to the performance of specified
Subsidiaries or Affiliates. The Committee shall determine the terms and
conditions of such Awards at date of grant or thereafter. Shares delivered
pursuant to an Award in the nature of a purchase right granted under this
Section 5(h) shall be purchased for such consideration, paid for at such times,
by such methods, and in such forms, including, without limitation, cash, Shares,
notes or other property, as the Committee shall determine. Cash awards, as an
element of or supplement to any other Award under the Plan, shall also be
authorized pursuant to this Section 5(h).

          6. CERTAIN PROVISIONS APPLICABLE TO AWARDS.

          (a) STAND-ALONE, ADDITIONAL, TANDEM AND SUBSTITUTE AWARDS. Awards
granted under the Plan may, in the discretion of the Committee, be granted to
Eligible Persons either alone or in addition to, in tandem with, or in exchange
or substitution for, any other Award granted under the Plan or any award granted
under any other plan or agreement of the Company, any Subsidiary or Affiliate,
or any business entity to be acquired by the Company or a Subsidiary or
Affiliate, or any other right of an Eligible Person to receive payment from the
Company or any Subsidiary or Affiliate. Awards may be granted in addition to or
in tandem with such other Awards or awards, and may be granted either as of the
same time as or a different time from the grant of such other Awards or awards.
The per Share exercise price of any Option or grant price of any SAR which is
granted in connection with the substitution of

<PAGE>

                                      -13-

awards granted under any other plan or agreement of the Company or any
Subsidiary or Affiliate or any business entity to be acquired by the Company or
any Subsidiary or Affiliate shall be determined by the Committee, in its
discretion.

          (b) TERM OF AWARDS. The term of each Award granted to an Eligible
Person shall be for such period as may be determined by the Committee; PROVIDED,
HOWEVER, that in no event shall the term of any Option or a SAR granted in
tandem therewith exceed a period of ten years from the date of its grant (or
such shorter period as may be applicable under Section 422 of the Code).

          (c) FORM OF PAYMENT UNDER AWARDS. Subject to the terms of the Plan and
any applicable Award Agreement, payments to be made by the Company or a
Subsidiary or Affiliate upon the grant, maturation, or exercise of an Award may
be made in such forms as the Committee shall determine at the date of grant or
thereafter, including, without limitation, cash, Shares, notes or other
property, and may be made in a single payment or transfer, in installments, or
on a deferred basis. The Committee may make rules relating to installment or
deferred payments with respect to Awards, including the rate of interest to be
credited with respect to such payments, and the Committee may require deferral
of payment under an Award if, in the sole judgment of the Committee, it may be
necessary in order to avoid nondeductibility of the payment under Section 162(m)
of the Code.

          (d) NONTRANSFERABILITY. Unless otherwise set forth by the Committee in
an Award Agreement, Awards shall not be transferable by an Eligible Person
except by will or the laws of descent and distribution (except pursuant to a
Beneficiary designation) and shall be exercisable during the lifetime of an
Eligible Person only by such Eligible Person or his guardian or legal
representative. An Eligible Person's rights under the Plan may not be pledged,
mortgaged, hypothecated, or otherwise encumbered, and shall not be subject to
claims of the Eligible Person's creditors.

          (e) NONCOMPETITION. The Committee may, by way of the Award Agreements
or otherwise, establish such other terms, conditions, restrictions and/or
limitations, if any, of any Award, provided they are not inconsistent with the
Plan, including, without limitation, the requirement that the Participant not
engage in competition with the Company.

          7. PERFORMANCE AWARDS.

          (a) PERFORMANCE AWARDS GRANTED TO COVERED EMPLOYEES. If the Committee
determines that an Award (other than an Option or SAR) to be granted to an
Eligible Person should qualify as "performance-based compensation" for purposes
of Section 162(m) of the Code, the grant, vesting, exercise and/or settlement of
such Award (each, a "Performance Award") shall be contingent upon achievement of
preestablished performance goals and other terms set forth in this Section 7(a).

<PAGE>

                                      -14-

          (i) PERFORMANCE GOALS GENERALLY. The performance goals for such
      Performance Awards shall consist of one or more business criteria and a
      targeted level or levels of performance with respect to each of such
      criteria, as specified by the Committee consistent with this Section 7(a).
      The performance goals shall be objective and shall otherwise meet the
      requirements of Section 162(m) of the Code and regulations thereunder
      (including Treasury Regulation 1.162-27 and successor regulations
      thereto), including the requirement that the level or levels of
      performance targeted by the Committee result in the achievement of
      performance goals being "substantially uncertain." The Committee may
      determine that such Performance Awards shall be granted, vested, exercised
      and/or settled upon achievement of any one performance goal or that two or
      more of the performance goals must be achieved as a condition to grant,
      vesting, exercise and/or settlement of such Performance Awards.
      Performance goals may differ for Performance Awards granted to any one
      Participant or to different Participants.

          (ii) BUSINESS CRITERIA. One or more of the following business criteria
      for the Company, on a consolidated basis, and/or for specified
      Subsidiaries or Affiliates or other business units or lines of business of
      the Company shall be used by the Committee in establishing performance
      goals for such Performance Awards: (1) earnings per share (basic or fully
      diluted); (2) revenues; (3) earnings, before or after taxes, from
      operations (generally or specified operations), or before or after
      interest expense, depreciation, amortization, incentives, or extraordinary
      or special items; (4) cash flow, free cash flow, cash flow return on
      investment (discounted or otherwise), net cash provided by operations, or
      cash flow in excess of cost of capital; (5) return on net assets, return
      on assets, return on investment, return on capital, return on equity; (6)
      economic value added; (7) operating margin or operating expense; (8) net
      income; (9) Share price or total stockholder return; and (10) strategic
      business criteria, consisting of one or more objectives based on meeting
      specified market penetration, geographic business expansion goals,
      facility construction or completion goals, geographic facility relocation
      or completion goals, cost targets, customer satisfaction, supervision of
      litigation or information technology, and goals relating to acquisitions
      or divestitures of Subsidiaries, Affiliates or joint ventures. The
      targeted level or levels of performance with respect to such business
      criteria may be established at such levels and in such terms as the
      Committee may determine, in its discretion, including in absolute terms,
      as a goal relative to performance in prior periods, or as a goal compared
      to the performance of one or more comparable companies or an index
      covering multiple companies.

          (iii) PERFORMANCE PERIOD; TIMING FOR ESTABLISHING PERFORMANCE GOALS;
      PER-PERSON LIMIT. Achievement of performance goals in respect of such
      Performance Awards shall be measured over a performance period, as
      specified by the Committee. A performance goal shall be established not
      later than the earlier of (A) 90 days after

<PAGE>

                                      -15-

      the beginning of any performance period applicable to such Performance
      Award or (B) the time 25% of such performance period has elapsed.
      In all cases, the maximum Performance Award of any Participant shall be
      subject to the limitation set forth in Section 4(b).

          (iv) SETTLEMENT OF PERFORMANCE AWARDS; OTHER TERMS. Settlement of such
      Performance Awards shall be in cash, Shares, other Awards or other
      property, in the discretion of the Committee. The Committee may, in its
      discretion, reduce the amount of a settlement otherwise to be made in
      connection with such Performance Awards, but may not exercise discretion
      to increase any such amount payable to the Participant in respect of a
      Performance Award subject to this Section 7(a). Any settlement which
      changes the form of payment from that originally specified shall be
      implemented in a manner such that the Performance Award and other related
      Awards do not, solely for that reason, fail to qualify as
      "performance-based compensation" for purposes of Section 162(m) of the
      Code. The Committee shall specify the circumstances in which such
      Performance Awards shall be paid or forfeited in the event of Termination
      of Service of the Participant or other event (including a Change of
      Control) prior to the end of a performance period or settlement of such
      Performance Awards.

          (b) WRITTEN DETERMINATIONS. Determinations by the Committee as to the
establishment of performance goals, the amount potentially payable in respect of
Performance Awards, the level of actual achievement of the specified performance
goals relating to Performance Awards and the amount of any final Performance
Award shall be recorded in writing in the case of Performance Awards intended to
qualify under Section 162(m) of the Code. Specifically, the Committee shall
certify in writing, in a manner conforming to applicable regulations under
Section 162(m), prior to settlement of each such Award, that the performance
objective relating to the Performance Award and other material terms of the
Award upon which settlement of the Award was conditioned have been satisfied.

          8. GENERAL PROVISIONS.

          (a) COMPLIANCE WITH LEGAL AND TRADING REQUIREMENTS. The Plan, the
granting and exercising of Awards thereunder, and the other obligations of the
Company under the Plan and any Award Agreement, shall be subject to all
applicable federal, state and foreign laws, rules and regulations, and to such
approvals by any stock exchange, regulatory or governmental agency as may be
required. The Company, in its discretion, may postpone the issuance or delivery
of Shares under any Award until completion of such stock exchange or market
system listing or registration or qualification of such Shares or other required
action under any state, federal or foreign law, rule or regulation as the
Company may consider appropriate, and may require any Participant to make such
representations and furnish such information as it may consider appropriate in
connection with the issuance or delivery of Shares in compliance with applicable
laws, rules and regulations. No provisions of the Plan shall be

<PAGE>

                                      -16-

interpreted or construed to obligate the Company to register any Shares under
federal, state or foreign law. The Shares issued under the Plan may be subject
to such other restrictions on transfer as determined by the Committee.

          (b) NO RIGHT TO CONTINUED EMPLOYMENT OR SERVICE. Neither the Plan nor
any action taken thereunder shall be construed as giving any employee,
consultant or director the right to be retained in the employ or service of the
Company or any of its Subsidiaries or Affiliates, nor shall it interfere in any
way with the right of the Company or any of its Subsidiaries or Affiliates to
terminate any employee's, consultant's or director's employment or service at
any time.

          (c) TAXES. The Company or any Subsidiary or Affiliate is authorized to
withhold from any Award granted, any payment relating to an Award under the
Plan, including from a distribution of Shares, or any payroll or other payment
to an Eligible Person, amounts of withholding and other taxes due in connection
with any transaction involving an Award, and to take such other action as the
Committee may deem advisable to enable the Company and Eligible Persons to
satisfy obligations for the payment of withholding taxes and other tax
obligations relating to any Award. This authority shall include authority to
withhold or receive Shares or other property and to make cash payments in
respect thereof in satisfaction of an Eligible Person's tax obligations.

          (d) CHANGES TO THE PLAN AND AWARDS. The Board may amend, alter,
suspend, discontinue, or terminate the Plan or the Committee's authority to
grant Awards under the Plan without the consent of shareholders of the Company
or Participants, except that any such amendment or alteration as it applies to
ISOs shall be subject to the approval of the Company's shareholders to the
extent such shareholder approval is required under Section 422 of the Code and
any such amendment or alteration shall be subject to the approval of the
Company's shareholders to the extent such approval is required under the rules
of any stock exchange or automated quotation system on which the Shares may then
be listed or quoted; PROVIDED, HOWEVER, that, without the consent of an affected
Participant, no amendment, alteration, suspension, discontinuation, or
termination of the Plan may materially and adversely affect the rights of such
Participant under any Award theretofore granted to him or her. The Committee may
waive any conditions or rights under, amend any terms of, or amend, alter,
suspend, discontinue or terminate, any Award theretofore granted, prospectively
or retrospectively; PROVIDED, HOWEVER, that, without the consent of a
Participant, no amendment, alteration, suspension, discontinuation or
termination of any Award may materially and adversely affect the rights of such
Participant under any Award theretofore granted to him or her.

          (e) NO RIGHTS TO AWARDS; NO SHAREHOLDER RIGHTS. No Eligible Person or
employee shall have any claim to be granted any Award under the Plan, and there
is no obligation for uniformity of treatment of Eligible Persons and employees.
No Award shall confer on any Eligible Person any of the rights of a shareholder
of the Company unless and until Shares

<PAGE>

                                      -17-

are duly issued or transferred to the Eligible Person in accordance with the
terms of the Award.

          (f) UNFUNDED STATUS OF AWARDS. The Plan is intended to constitute an
"unfunded" plan for incentive compensation. With respect to any payments not yet
made to a Participant pursuant to an Award, nothing contained in the Plan or any
Award shall give any such Participant any rights that are greater than those of
a general creditor of the Company; PROVIDED, HOWEVER, that the Committee may
authorize the creation of trusts or make other arrangements to meet the
Company's obligations under the Plan to deliver cash, Shares, other Awards, or
other property pursuant to any Award, which trusts or other arrangements shall
be consistent with the "unfunded" status of the Plan unless the Committee
otherwise determines with the consent of each affected Participant.

          (g) NONEXCLUSIVITY OF THE PLAN. Neither the adoption of the Plan by
the Board nor its submission to the shareholders of the Company for approval
shall be construed as creating any limitations on the power of the Board to
adopt such other incentive arrangements as it may deem desirable, including,
without limitation, the granting of options and other awards otherwise than
under the Plan, and such arrangements may be either applicable generally or only
in specific cases.

          (h) NOT COMPENSATION FOR BENEFIT PLANS. No Award payable under this
Plan shall be deemed salary or compensation for the purpose of computing
benefits under any benefit plan or other arrangement of the Company for the
benefit of its employees, consultants or directors unless the Company shall
determine otherwise.

          (i) NO FRACTIONAL SHARES. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award. The Committee shall determine
whether cash, other Awards, or other property shall be issued or paid in lieu of
such fractional Shares or whether such fractional Shares or any rights thereto
shall be forfeited or otherwise eliminated.

          (j) GOVERNING LAW. The validity, construction, and effect of the Plan,
any rules and regulations relating to the Plan, and any Award Agreement shall be
determined in accordance with the laws of New York without giving effect to
principles of conflict of laws thereof.

          (k) EFFECTIVE DATE; PLAN TERMINATION. The Plan shall become effective
as of the Effective Date. The Plan shall terminate as to future awards on the
date which is ten (10) years after the Effective Date.

          (l) TITLES AND HEADINGS. The titles and headings of the sections in
the Plan are for convenience of reference only. In the event of any conflict,
the text of the Plan, rather than such titles or headings, shall control.

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