Document:

Exhibit 10(u)

 

DPL INC.

STOCK OPTION PLAN

 

Management Stock Option Agreement

 

This Agreement
is made as of December 29, 2004 (the “Grant Date”), by and between DPL Inc., an
Ohio corporation (the “Company”) and John J. Gillen (the “Participant”).

 

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

 

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

 

1.                                     Award.  The Participant is hereby granted a stock
option (an” Option”) to purchase from the Company up to a total of 30,000
Common Shares of the Company at the Fair Market Value, as
defined in the Plan, on the Grant Date, or $25.00 per share (the “Exercise Price”).  The term of such Option shall be ten years, commencing on the Grant Date (the “Term”). This
Option is not intended to qualify as an incentive stock option under Code
Section 422.

 

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

 

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

 

	
  Cumulative
  Fraction

  Of Option

  	
   

  	
  Vested as of December 21

  	
   

  
	
  1/3 (10,000 shares)

  	
   

  	
  2005

  	
   

  
	
  2/3 (20,000 shares)

  	
   

  	
  2006

  	
   

  
	
  3/3 (30,000 shares)

  	
   

  	
  2007

  	
   

  

 

b.                                    Exercise.  Each vested portion of the Option shall become
exercisable on the date of its
vesting.  The Option may be exercised for
less than the full number of Shares for which the Option is then exercisable.
To the extent then exercisable, the Option may be exercised by the Participant by giving written notice of
exercise to the Company in such
form as may be 

 

 

provided by the Committee, specifying the number of Shares with respect
to which the Option is to be exercised and such other

 

information as the Committee may require. Such exercise shall be
effective upon receipt by the Company of such written notice together with the
required payment of the Exercise Price and any applicable withholding taxes.
Notwithstanding the foregoing, in the event a Person acquires beneficial
ownership of securities of the Company representing 15% or more of the combined
voting power of the then outstanding securities of the Company and such
acquisition has been approved by the Board of Directors, the vested portion of
the Option shall be exercisable prior to January 1, 2005 to enable the
Participant to sell Shares to the extent permitted under clause (ii) of Section
5 and for no other purpose.

 

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

 

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

 

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

 

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

 

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

 

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

 

 

5.                                     Restriction on Sale of Shares. If, after
January 1, 2000, a Person acquires beneficial ownership of securities of the
Company representing 15% or more of the combined voting power of the then
outstanding securities of the Company, such acquisition has been approved by
the Board of Directors, and if the Participant exercises the Option at any time
following such acquisition, the Participant may not sell or dispose of the
Shares acquired upon exercise in any manner, whether pursuant to a cashless
exercise or otherwise, except that the Participant (i) may sell such number of
Shares as are necessary to pay the Participant’s income tax liability arising
from the exercise (calculated using the highest federal and state income tax
rates for ordinary income in effect at the time of exercise), (ii) may sell
additional Shares in proportion to any sale of Shares made by the Person who
made such acquisition (e.g., if
such Person sells 10% of its Shares, the Participant may sell pursuant to this clause (ii) 10% of the Shares acquired on exercise) and (iii)
may sell all the Shares following termination of the Participant’s employment by or other service to the Company or one of its affiliates.  The
restrictions in this Section 5 shall lapse on January 1, 2005.

 

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

 

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

 

 

and, in the discretion of the Committee, shall also apply to the right
to transfer ancillary rights associated with the Option.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

between any term or provision of this Agreement and any term or
provision of the Plan, the term or provision of the Plan shall control.

 

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

 

a.                                     “Cause” means (i) the commission of a
felony, (ii) embezzlement, (iii) the illegal use of drugs or (iv) if no Change
of Control has occurred other than the entering into of an agreement referred
to in items (ii) or

 

 

(iii) of the
definition of Change of Control, the failure by the Participant to
substantially perform his duties with the Company or any Subsidiary (other than
any such failure resulting from his Disability) as determined by the Committee.
Notwithstanding the foregoing, “Cause” shall not be deemed to exist unless and
until there shall have been delivered to the Participant a copy of a resolution
duly adopted by the written consent of not less than three-fourths of the
number of directors of the Company then in office (after reasonable notice to
the Participant and an opportunity for the Participant, 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 such directors the
Participant was guilty of conduct set forth in clauses (i), (ii), (Hi) or (iv)
of the preceding sentence and specifying the particulars thereof in detail.

 

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

 

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

 

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

 

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

 

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

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
  DPL INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  James V.
  Mahoney

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Chief
  Executive Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  John J.
  Gillen

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  ParticipantExhibit 10(bb)

 

December 15, 2000

 

Mr. Arthur G. Meyer

3325 Ridgeway Road

Kettering, OH
45429

 

Dear Art:

 

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

 

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

 

 

1.                                      OPERATION
AND TERM OF AGREEMENT.

 

This
agreement, which amends and restates in its entirety the existing letter
agreement between the Company and you dated July 1, 1998, shall become effective
immediately upon the execution hereof. This agreement shall continue until May 1,
2002, and shall automatically renew for each consecutive twelve month period
thereafter (i.e., May 1st
to April 30th), unless either the Company provides you or you
provide the Company a one (1) year prior written notice of its or your
intention not to renew this agreement. Notwithstanding the foregoing, the term
of this agreement shall continue in effect for a period of not less than
thirty-six (36) months after each Change of Control occurring during the term
of this agreement; and any benefit that accrues to you pursuant to the terms of
this agreement shall continue to be an obligation of the Company and
enforceable by you until paid in full, notwithstanding the subsequent
termination of this agreement; provided however that if the event constituting
a Change of Control is either the commencement of a tender offer, or the
entering into of an agreement referred to in item (ii) or

 

 

(iii) of paragraph 2, and such tender
offer is still pending or such agreement has not been consummated at the end of
the thirty-six month period applicable to such Change of Control,

 

 

then without limitation of the other
provisions of this paragraph, such thirty-six month period shall be extended
through the date on which the tender offer or agreement is either (a) terminated
or abandoned or (b) consummated, whichever occurs first, and the
thirty-six month period provided for in paragraph 3.A. shall also be so
extended. If more than one Change of Control occurs during the term of this
agreement, the provisions of this agreement shall be applicable to each such
Change of Control.

 

1.A.                        TERMINATION
FOR ANY REASON.

 

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

 

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

 

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

 

2.                                      CHANGE
OF CONTROL.

 

Except as
provided in paragraph 1.A. above, no benefits shall be payable hereunder unless
there shall have been a Change of Control, as defined below, and your
employment by the Company shall thereafter have been terminated in accordance
with paragraph 3 below. For purposes of this agreement, a ‘Change of Control’
means any change in control of DPL, or its principal subsidiary, DP&L, of a
nature that would be required to be reported in response to Item 6 (e) of Schedule 14A
of Regulation 14A promulgated under the Securities Exchange Act of 1934, as
amended (the ‘Exchange Act’) as determined by the Board of Directors of DPL in
its sole discretion; provided that, without limitation, such a Change of
Control shall be deemed to have occurred if (i) any ‘person’ (as such term
is defined in Sections 13 (d) and 14 (d) (2) of the Exchange
Act; hereafter, a ‘Person’) other than DPL or DP&L or an entity then
directly or indirectly controlling, controlled by or under common control with
DPL or DP&L is on the date hereof or becomes or commences a tender offer to
become the beneficial owner, directly or indirectly, of securities of DPL or
DP&L representing (A) 15% or more of the combined voting power of the
then outstanding securities of DPL or DP&L if the acquisition of such
beneficial ownership or such tender offer is not approved by the Board of
Directors of DPL prior to the acquisition or the commencement of such tender
offer or (B) 50% or more of such combined voting power in all other cases;
(ii) DPL or DP&L enters into an agreement to merge or consolidate
itself, or an agreement to consummate a ‘combination’ or ‘majority share
acquisition’ in which it is the ‘acquiring corporation’ (as such terms are defined
in Ohio Rev.

 

 

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

 

3.                                      TERMINATION
FOLLOWING CHANGE OF CONTROL.

 

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

 

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

 

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

 

(iii)                               because
of your death.

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

 

Disability or
Cause, or by you other than for Good Reason, or as a result of your death.

 

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

 

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

 

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

 

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

 

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

 

 

(1) your
aggregate investment in such residence or (2) the fair market value of
such residence as determined by a real estate appraiser designated by you and
reasonably satisfactory to the Company realized upon the sale of such residence
in connection with any such change of residence.

 

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

 

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

 

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

 

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

 

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

 

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

 

4.                                      NOTICE
UPON TERMINATION.

 

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

 

 

B.                                     “Date
of Termination” shall mean

 

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

 

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

 

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

 

5.                                      COMPENSATION
UPON TERMINATION.

 

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

 

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

 

(a)                                  In
the event the Date of Termination precedes the completion of a period in which,
pursuant to the Management Incentive Compensation Plan or any other Company
incentive compensation plan in which you are then participating or have participated
except for the MSIP), you could have earned compensation thereunder had your
employment not been terminated prior to the completion of such period, or in the event the Date of Termination
precedes the determination of compensation that you have earned for a completed
period under the Management Incentive Compensation Plan or other incentive plan
(except for the MSIP), then, with respect to each such period, you shall be
entitled to an amount equal to the average of the last three annual award payments
made to you under the Management Incentive Compensation Plan or other incentive
plan (except for the MSIP) prior to the Date of Termination (or for the years
you have participated in the Plan, if less than three), including any portion
of any such payments which you elected to defer to your Standard Deferral Account
in the Company’s Key Employees Deferred Compensation Plan.

 

(b)                                 In
lieu of further salary payments to you for periods subsequent to the Date of Termination,
an amount equal to 300% of the sum of (1) your annual base salary (which
base salary is computed before deduction for any deferred compensation or other
employee deferrals) at the rate in effect as of Date of Termination (or, if

 

 

higher, at the
rate in effect at the time of the Change of Control) plus (2) the average
of the last three annual award payments made to you under the Company’s
Management Incentive Compensation Plan prior to the Date of Termination (or for
the years you have participated in the Plan if less than three), including any
portion of any such payments which you elected to defer to your Standard
Deferral Account in the Company’s Key Employees Deferred Compensation Plan.

 

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

 

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

 

At all times,
you (i) will keep all confidential, nonpublic and/or proprietary
information (including, for example, trade secrets,

 

 

financial information,
customer information and business and strategic plans) of the Company
(regardless of when you became aware of such information) in strict confidence
and (ii) will not, directly or indirectly, use or disclose to any person
in any manner any of such information, except to the extent directly related to
and required by your performance of the duties assigned to you by the Company.
You will take all appropriate steps to safeguard such information and to
protect it against unauthorized disclosure, misuse, loss or theft. Upon
termination of your employment, you will promptly return to the Company,
without retaining any copies, all written or computer readable material
containing any of such information, as well as all other property and records
of the Company, in your possession or control.

 

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

 

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

 

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

 

(e)                                  Any
amount payable under paragraph 9 hereof.

 

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

 

 

immediately
prior to the Date of Termination. The Company’s obligation under this
subparagraph (ii) shall terminate on the earliest of the following dates:

 

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

 

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

 

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

 

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

 

(iv)                              The
Company shall enable you to purchase the automobile, if any, which the Company
was providing for your use at the time Notice of Termination was given at the
wholesale value of such automobile at such time, or to assume the lease
obligation on any such Company automobile leased by the Company.

 

B.                                     With
respect to the Management Stock Incentive Plan (“MSIP”), upon a Change of Control except for a Change of Control
consisting only of the commencement of a tender offer or the entering into of
an agreement referred to in items (ii) or (iii) of paragraph 2 above,
any and all awarded Stock Incentive Units (other than to the extent related to
a completed Incentive Period for which the determination of the number of
Earned Stock Incentive Units has already been made; and not to exceed the number
of Stock Incentive Units comprising the target award under the applicable Stock
Incentive Award regardless of the potential to earn more than such target award
if and as provided in such Stock Incentive Award), shall be deemed to be Earned
Stock Incentive Units which are vested, and all such Earned Stock Incentive
Units including, without limitation, the 1997 award (which covers the period
1998-2000) and the 1998 award (which covers the period 1999-2001) shall be
payable to you as provided in Section l0(b) (or successor provision)
of the MSIP. All capitalized terms in this paragraph B shall have the same
meaning as in the MSIP. Stock Incentive Units are sometimes referred to as “Restricted
Stock Units.”

 

 

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

 

6.                                      RIGHTS
AS FORMER EMPLOYER.

 

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

 

7.                                      SUCCESSORS.

 

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

 

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

 

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

 

8.                                      LEGAL
FEES.

 

The Company
shall reimburse you in full for all. legal fees and expenses reasonably
incurred by you in connection with this agreement (including, without
limitation, all such fees and expenses, if any, incurred in contesting or
disputing any termination of your employment subsequent to a Change of Control
or in seeking to obtain or enforce any right or benefit

 

 

provided by this agreement, regardless of the
outcome, unless, in the case of a legal action brought by you or in your name,
a court finally determines that such action was not brought in good faith by
you).

 

9.                                      GROSS-UP
PAYMENT.

 

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

 

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

 

10.                               AGREEMENT
TO PROVIDE SERVICES.

 

In the event
that (i) a Person commences a tender offer to become the beneficial owner,
directly or indirectly, of securities of DPL or DP&L representing fifteen percent (15%) or
more of the combined voting power of the then outstanding securities of DPL or
DP&L, as the case may be, or (ii) a Change of Control occurs
consisting of the entering into of an agreement

 

 

referred to in item (ii) or (iii) of
paragraph 2 above, you agree that you will perform services for the Company and
that you will not voluntarily terminate your employment with the Company until
the first to occur of the following:

 

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

 

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

 

11.                               FUNDING
OF MASTER TRUST.

 

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

 

12.                               NOTICES.

 

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

 

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

 

	
   

  	
  The Dayton
  Power and Light Company

  
	
   

  	
  MacGregor
  Park

  
	
   

  	
  1065 Woodman
  Drive

  
	
   

  	
  Dayton, Ohio
  45432

  
	
   

  	
  Attention:
  Corporate Secretary

  

 

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

 

	
   

  	
  Chernesky,
  Heyman & Kress P.L.L.

  
	
   

  	
  Suite 1100

  
	
   

  	
  10
  Courthouse Plaza, S.W.

  
	
   

  	
  Dayton, Ohio
  45402

  
	
   

  	
  Attn:

  	
  Richard J.
  Chernesky, Esq.

  
	
   

  	
   

  	
  Richard A.
  Broock, Esq.

  
	
   

  	
   

  	
  Frederick J.
  Caspar, Esq.

  

 

 

and if to you,
addressed to

 

	
   

  	
  Arthur G.
  Meyer 3325

  
	
   

  	
  Ridgeway
  Road

  
	
   

  	
  Kettering,
  Ohio 45429

  

 

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

 

13.                               MISCELLANEOUS.

 

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

 

14.                               GOVERNING
LAW.

 

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

 

15.                               VALIDITY.

 

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

 

16.                               NO
RIGHT TO EMPLOYMENT.

 

Nothing in
this agreement shall confer upon you the right to continue employment with the
Company, or obligate you to continue employment with the Company (except as
provided in paragraph l0); nor shall it interfere with the rights of the
Company to discharge you or take other action with respect to you, subject to
the Company’s providing the benefits specified herein in accordance with the
terms hereof.

 

 

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

 

	
   

  	
  Very truly
  yours,

  
	
   

  	
   

  
	
   

  	
  DPL INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Its President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE DAYTON
  POWER AND LIGHT COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Its President

  
	
   

  	
   

  
	
   

  	
   

  
	
  Confirmed
  and agreed to:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Date:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00098-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00098-of-00352.parquet"}]]