Document:

Exhibit 10(l)

 

DPL INC.

EXECUTIVE INCENTIVE COMPENSATION PLAN

(AS AMENDED AND RESTATED THROUGH DECEMBER 31, 2007)

 

ARTICLE I - INTRODUCTION

 

The
Board of Directors of DPL Inc. adopted the DPL Inc. Executive Incentive
Compensation Plan (As Amended and Restated Through December 31, 2007) (the
“Plan”), effective as of the Effective Date. 
This amended and restated version of the Plan is effective December 31,
2007.

 

The purpose of the Plan is
to attract and retain key executives for DPL Inc. and its Subsidiaries and to
provide such persons with incentives for superior performance.

 

ARTICLE II - DEFINITIONS

 

Section 2.1.  “Board” means the Board of
Directors of the Company.

 

Section 2.2.  “Committee” means the Compensation
Committee of the Board or any other committee appointed by the Board to
administer the Plan.

 

Section 2.3.  “Company” means DPL Inc., an Ohio
corporation, and any entity that succeeds DPL Inc. by merger, consolidation,
reorganization or otherwise.

 

Section 2.4.  “Eligible Executive” means the Company’s
Chief Executive Officer and each other officer of the Company that the
Committee determines should be an Eligible Executive hereunder.

 

Section 2.5.  “Incentive Bonus” shall mean,
for each Eligible Executive, a bonus opportunity amount determined by the
Committee pursuant to Article V below.

 

Section 2.6.  “Management Objectives” means the
measurable performance objective or objectives established pursuant to this
Plan for Eligible Executives who have received an award pursuant to this
Plan.  Management Objectives may be
described in terms of Company-wide objectives or objectives that are related to
the performance of the individual Eligible Executive or of the Subsidiary,
division, department, region or function within the Company or Subsidiary in which
the Eligible Executive is employed.  The
Management Objectives may be made relative to the performance of other
companies.  The Management Objectives
applicable to an award under this Plan will be based on specified levels of or
growth in one or more criteria 

 

1

 

such as the following, and other individual
performance criteria specific to the Eligible Executive’s position with the
Company:

 

(a)           Appreciation in value of shares;

 

(b)           Total shareholder return;

 

(c)           Earnings per share;

 

(d)           Operating income;

 

(e)           Net income;

 

(f)            Pretax earnings;

 

(g)           Earnings before interest, taxes,
depreciation and amortization;

 

(h)           Pro forma net income;

 

(i)            Return on equity;

 

(j)            Return on designated assets;

 

(k)           Return on capital;

 

(l)            Economic value added;

 

(m)          Revenues;

 

(n)           Expenses;

 

(o)           Operating cash flow;

 

(p)           Free cash flow;

 

(q)           Cash flow return on investment;

 

(r)            Operating margin or net profit
margin; or

 

(s)           Any of the above criteria as compared
to the performance of a published or a special index deemed applicable by the
Board, including, but not limited to, the Standard & Poor’s Utility
Index.

 

Section 2.7.  “Participation Agreement” means an
agreement between the Company and each Eligible Executive that must be executed
as a condition of the Eligible Executive’s eligibility for this Plan.

 

Section 2.8.  “Plan” means the DPL Inc.
Executive Incentive Compensation Plan, as hereinafter set forth and as the same
may from time to time be amended or restated.

 

2

 

Section 2.9.  “Subsidiary” means a corporation,
partnership, joint venture, unincorporated association or other entity in which
the Company has a direct or indirect ownership or other equity interest.

 

ARTICLE
III - ADMINISTRATION OF THE PLAN

 

The Plan shall be
administered by the Committee, which shall have full power and authority to
construe, interpret and administer the Plan and shall have the exclusive right
to establish Management Objectives and the amount of Incentive Bonus payable to
each Eligible Executive upon the achievement of the specified Management
Objectives.

 

ARTICLE
IV - ELIGIBILITY

 

Eligibility under
this Plan is limited to Eligible Executives designated by the Committee in its
sole and absolute discretion who have each executed a Participation Agreement.

 

ARTICLE
V - AWARDS

 

Not later than the
90th day of each fiscal year of the Company, the Committee shall establish the
Management Objectives and the relative weight assigned thereto for each
Eligible Executive and the amount of Incentive Bonus payable (or formula for
determining such amount) upon full achievement of the specified Management
Objectives.  Guidelines for the weighting
of the Management Objectives and the formula for determining the amount of the
target bonus are set forth on Schedule A
attached hereto.  The Committee may
further specify in respect of the specified Management Objectives a minimum
acceptable level of achievement below which no Incentive Bonus payment will be
made and/or a maximum level of achievement above which no additional Incentive
Bonus payments will be made, and shall set forth a formula for determining the
amount of any payment to be made if performance is at or above the minimum
acceptable level but falls short of full achievement of the specified
Management Objectives, or if performance is at or above full achievement of the
specified Management Objectives but below the maximum level of achievement.  The Committee may
modify the terms of awards established pursuant to this Article V in its
sole discretion to achieve the purposes of the Plan.

 

ARTICLE
VI - COMMITTEE DETERMINATIONS

 

As soon as
reasonably practicable after the end of each fiscal year of the Company, but in
any event at a time that will permit payment by the date specified in Article VII,
the Committee shall determine for such fiscal year whether the Management
Objectives have been achieved, each Eligible Executive’s individual
contribution factor and the amount of the Incentive Bonus to be paid to each
Eligible Executive who remains employed by the Company as of the last date of
such fiscal year, provided, however, in no event shall any Incentive Bonus be
payable for any fiscal year in which

 

3

 

the Company has reduced
dividends payable on its shares.  The
Committee may make such adjustments in its determination of Incentive Bonus
amounts as it determines to be appropriate in its discretion.

 

ARTICLE
VII - PAYMENT OF INCENTIVE BONUSES

 

Subject to a valid
election made by an Eligible Executive with respect to the deferral of all or a
portion of his or her Incentive Bonus pursuant to a deferred compensation plan
maintained by the Company, an Incentive Bonus earned during a fiscal year shall
be paid in cash between January 1 and March 15 of the fiscal year
following the fiscal year in which such Incentive Bonus is earned.

 

ARTICLE
VIII - MISCELLANEOUS

 

Section 8.1.  Amendment of Plan. 
The Committee may at any time amend any or all of the provisions of this
Plan. A proper amendment of this Plan automatically shall effect a
corresponding amendment to all Participants’ rights hereunder.

 

Section 8.2.  No Right to Bonus or Continued Employment. 
Neither the establishment of the Plan, the provision for or payment of
any amounts hereunder nor any action of the Company, the Board or the Committee
with respect to the Plan shall be held or construed to confer upon any person (a) any
legal right to receive, or any interest in, an Incentive Bonus or any other
benefit under the Plan or (b) any legal right to continue to serve as an
officer or employee of the Company or any Subsidiary of the Company.

 

Section 8.3.  Withholding. 
The Company shall have the right to withhold, or require an Eligible
Executive to remit to the Company, an amount sufficient to satisfy any
applicable federal, state, local or foreign withholding tax requirements
imposed with respect to the payment of any Incentive Bonus.

 

Section 8.4.  Nontransferability. 
Except as expressly provided by the Committee, the rights and benefits
under the Plan shall not be transferable or assignable other than by will or
the laws of descent and distribution.

 

Section 8.5.  Effective Date. 
This Plan shall become effective for bonuses earned in years beginning
with the year 2006.

 

4

 

Schedule A

 

(As Amended October 26,
2007)

 

The following are guidelines to be followed by the Committee in
establishing the Management Objectives and their relative weightings, the
target bonuses, and the individual contribution factors for the Eligible
Executives:

 

(a)           Establishment of
Management Objectives and their Relative Weightings: The Management
Objectives selected by the Committee shall fall under two broad categories: (i) corporate
objectives (“Corporate Objectives”) and (ii) business unit and functional
objectives (“Functional Objectives”). 
The Committee shall assign a relative weighting of at least 50% to
Corporate Objectives and the remainder to Functional Objectives.  The Committee shall develop a
performance/payout schedule for the Corporate Objectives and the Functional
Objectives that specifies performance targets and their corresponding payouts
at threshold, target and maximum levels, with threshold payouts set at 50% of target
and maximum payouts set at 200% of target.

 

(b)           Determination of
Target Bonus:  The amount of an
Eligible Executive’s target bonus shall be based on a percentage of the
Eligible Executive’s base salary for the fiscal year.  In no event will the percentage be less than
the factor set forth below:

 

	
  Participant’s
  Position

  	
   

  	
  Factor

  	
   

  
	
  President and Chief
  Executive Officer

  	
   

  	
  60

  	
  %

  
	
  Senior Vice President,
  Generation and Marketing

  	
   

  	
  50

  	
  %

  
	
  Senior Vice President,
  Service Operations

  	
   

  	
  40

  	
  %

  
	
  Vice President,
  Commercial Operations

  	
   

  	
  40

  	
  %

  
	
  Senior Vice President
  and Chief Financial Officer

  	
   

  	
  50

  	
  %

  
	
  Senior Vice President,
  General Counsel and Corporate Secretary

  	
   

  	
  40

  	
  %

  
	
  Senior Vice President,
  Corporate and Regulatory Affairs

  	
   

  	
  35

  	
  %

  
	
  Senior Vice President,
  Human Resources

  	
   

  	
  35

  	
  %

  
	
  Vice President and
  Treasurer

  	
   

  	
  35

  	
  %

  
	
  Vice President and
  Chief Accounting Officer

  	
   

  	
  30

  	
  %

  
	
  Director, Internal
  Audit

  	
   

  	
  25

  	
  %

  

 

(c)           Determination of
Individual Contribution Factor: Each year the Committee will assign an
individual contribution factor to each Eligible Executive, which shall range
from 0.5 to 1.50.  If the Company must
reduce dividends in a fiscal year, the Company will not pay any portion of an
award for that particular year.

 

5Exhibit 10(m)

 

DPL INC.

 

2006 EQUITY AND PERFORMANCE INCENTIVE PLAN

(As Amended and Restated Through December 31, 2007)

 

ARTICLE
I - PURPOSE

 

The
purpose of the 2006 Equity and Performance Incentive Plan is to attract and
retain directors, consultants, officers and other employees of DPL Inc. and its
Subsidiaries, to provide to such persons incentives and rewards for superior
performance and to align their interests with those of shareholders.  This 2006 Equity and Performance Incentive
Plan is intended to replace the Existing Plan (as defined below) and, if
adoption of this Plan is approved by the shareholders of the Company, no new
awards will be granted under the Existing Plan, but shares relating to awards
that are forfeited or terminated under the Existing Plan may be granted
hereunder pursuant to Section 3.1. 
Outstanding awards under the Existing Plan will not be affected by
approval of this Plan.

 

ARTICLE
II - DEFINITIONS

 

Section 2.1.  “Appreciation Right” means a right
granted pursuant to Section 4.2 or Section 5.1 of this Plan, and will
include both Tandem Appreciation Rights and Free-Standing Appreciation Rights.

 

Section 2.2.  “Awards” means Option Rights,
Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance
Shares, Performance Units and any other award granted pursuant to Section 6.1
hereof.

 

Section 2.3.  “Base Price” means the price to be
used as the basis for determining the Spread upon the exercise of a
Free-Standing Appreciation Right and a Tandem Appreciation Right.

 

Section 2.4.  “Board” means the Board of Directors
of the Company and, to the extent of any delegation by the Board to a committee
(or subcommittee thereof) pursuant to Section 8.1 of this Plan, such
committee (or subcommittee).

 

Section 2.5.  “Change of Control” has the meaning
set forth in Section 10.1 hereof.

 

Section 2.6.  “Code” means the Internal Revenue Code
of 1986, as amended from time to time.

 

Section 2.7.  “Common Shares” means the shares of
common stock, par value $0.01 per share, of the Company or any security into
which such Common Shares may be changed by reason of any transaction or event
of the type referred to in Section 7.2 of this Plan.

 

1

 

Section 2.8.  “Company” means DPL Inc., an Ohio corporation.

 

Section 2.9.  “Covered Employee” means a Participant
who is, or is determined by the Board to be likely to become, a “covered
employee” within the meaning of Section 162(m) of the Code (or any
successor provision).

 

Section 2.10.  “Date of Grant” means the date
specified by the Board on which a grant of Option Rights, Appreciation Rights,
Performance Shares, Performance Units or other awards contemplated by Section 6.1
of this Plan, or a grant or sale of Restricted Stock, Restricted Stock Units, or
other awards contemplated by Section 6.1 of this Plan will become
effective (which date will not be earlier than the date on which the Board
takes action with respect thereto).

 

Section 2.11.  “Detrimental Activity” means:

 

(a)           Engaging in any activity, as an employee, principal,
agent, or consultant for another entity that competes with the Company in any
actual, researched, or prospective product, service, system, or business
activity for which the Participant has had any direct responsibility during the
last two years of his or her employment with the Company or a Subsidiary, in
any state where the Company or a Subsidiary owns or operates generation or
electric distribution assets.

 

(b)           Soliciting any employee of the Company or a Subsidiary to
terminate his or her employment with the Company or a Subsidiary.

 

(c)           The disclosure to anyone outside the Company or a
Subsidiary, or the use in other than the Company’s or a Subsidiary’s business,
without prior written authorization from the Company, of any confidential,
proprietary or trade secret information or material relating to the business of
the Company and its Subsidiaries, acquired by the Participant during his or her
employment with the Company or its Subsidiaries or while acting as a consultant
for the Company or its Subsidiaries thereafter.

 

(d)           The failure or refusal to disclose promptly and to assign
to the Company upon request all right, title and interest in any invention or
idea, patentable or not, made or conceived by the Participant during employment
by the Company and any Subsidiary, relating in any manner to the actual or
anticipated business, research or development work of the Company or any
Subsidiary or the failure or refusal to do anything reasonably necessary to
enable the Company or any Subsidiary to secure a patent where appropriate in
the United States and in other countries.

 

(e)           Activity that results in termination for Cause.  For the purposes of this Plan, “Cause” shall
mean (i) any willful or negligent material violation of any applicable
securities laws (including the Sarbanes-Oxley Act of 2002); (ii) any act
of fraud, intentional misrepresentation, embezzlement, misappropriation or
conversion of any asset or business opportunity of the Company; (iii) a
conviction of, or entering into a plea of nolo contendere to, a felony; (iv) an
intentional, repeated or continuing violation of any of the Company’s policies
or procedures that occurs or continues after the 

 

2

 

Company has given notice to the Participant
that he or she has materially violated a Company policy or procedure; or (v) any
breach of a written covenant or agreement with the Company, including the terms
of this Plan (other than a failure to perform Participant’s duties with the
Company resulting from the Participant’s incapacity due to physical or mental
illness or from the assignment to the Participant of duties that would
constitute Good Reason (as defined in the DPL Inc. Severance Pay and Change of
Control Plan), which is material and which is not cured within 30 days after
written notice thereof from the Company to the Participant.  Notwithstanding the foregoing, the
Participant shall not be deemed to have been terminated for Cause unless the
Participant receives a written notice of termination from the Company setting
forth in reasonable detail the specific reason for the termination and the
facts and circumstances claimed to provide a basis for the termination of
employment at least 15 calendar days prior to the specified date of termination
of employment.

 

(f)            Any other conduct or act determined to be injurious,
detrimental or prejudicial to any significant interest of the Company or any
Subsidiary unless the Participant acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
Company.

 

Section 2.12.  “Director” means a member of the Board
of Directors of the Company.

 

Section 2.13.  “Evidence of Award” means an
agreement, certificate, resolution or other type or form of writing or other
evidence approved by the Board that sets forth the terms and conditions of the
awards granted.  An Evidence of Award may
be in an electronic medium, may be limited to notation on the books and records
of the Company and, with the approval of the Board, need not be signed by a
representative of the Company or a Participant.

 

Section 2.14.  “Exchange Act” means the Securities
Exchange Act of 1934, as amended, and the rules and regulations
thereunder, as such law, rules and regulations may be amended from time to
time.

 

Section 2.15.  “Existing Plan” means the DPL Inc.
Stock Option Plan.

 

Section 2.16.  “Free-Standing Appreciation Right”
means an Appreciation Right granted pursuant to Section 4.2 or Section 5.1
of this Plan that is not granted in tandem with an Option Right.

 

Section 2.17.  “Incentive Stock Options” means Option
Rights that are intended to qualify as “incentive stock options” under Section 422
of the Code or any successor provision.

 

Section 2.18.  “Management Objectives” means the
measurable performance objective or objectives established pursuant to this
Plan for Participants who have received grants of Performance Shares or
Performance Units or, when so determined by the Board, Option Rights,
Appreciation Rights, Restricted Stock, Restricted Stock Units, dividend credits
and other awards pursuant to this Plan. 
Management Objectives 

 

3

 

may be described in terms of Company-wide
objectives or objectives that are related to the performance of the individual
Participant or of the Subsidiary, division, department, region or function
within the Company or Subsidiary in which the Participant is employed.  The Management Objectives may be made
relative to the performance of other companies. 
The Management Objectives applicable to any award to a Covered Employee
will be based on specified levels of or growth in one or more of the following
criteria:

 

(a)           Appreciation in value of shares;

 

(b)           Total shareholder return;

 

(c)           Earnings per share;

 

(d)           Operating income;

 

(e)           Net income;

 

(f)            Pretax earnings;

 

(g)           Earnings before interest, taxes, depreciation and
amortization;

 

(h)           Pro forma net income;

 

(i)            Return on equity;

 

(j)            Return on designated assets;

 

(k)           Return on capital;

 

(l)            Economic value added;

 

(m)          Revenues;

 

(n)           Expenses;

 

(o)           Operating cash flow;

 

(p)           Free cash flow;

 

(q)           Cash flow return on investment;

 

(r)            Operating margin or net profit margin; or

 

(s)           Any of the above criteria as compared to the performance
of a published or a special index deemed applicable by the Board, including,
but not limited to, the Standard & Poor’s Utility Index.

 

4

 

If
the Board determines that a change in the business, operations, corporate structure
or capital structure of the Company, or the manner in which it conducts its
business, or other events or circumstances render the Management Objectives
unsuitable, the Board may in its discretion modify such Management Objectives
or the related minimum acceptable level of achievement, in whole or in part, as
the Board deems appropriate and equitable, except in the case of a Covered
Employee where such action would result in the loss of the otherwise available
exemption of the award under Section 162(m) of the Code.  In such case, the Board will not make any
modification of the Management Objectives or minimum acceptable level of
achievement with respect to such Covered Employee.

 

Section 2.19.  “Market Value per Share” means, as of
any particular date, the closing sales price of the Common Shares as reported
on the New York Stock Exchange Composite Tape or, if not listed on such
exchange, on any other national securities exchange on which the Common Shares
are listed.  If there is no regular
trading market for such Common Shares, the Market Value per Share shall be
determined by the Board.

 

Section 2.20.  “Non-Employee Director” means a person
who is a “non-employee director” of the Company within the meaning of Rule 16b-3
of the Securities and Exchange Commission promulgated under the Exchange Act.

 

Section 2.21.  “Optionee” means the optionee named in
an Evidence of Award evidencing an outstanding Option Right.

 

Section 2.22.  “Option Price” means the purchase
price payable on exercise of an Option Right.

 

Section 2.23.  “Option Right” means the right to
purchase Common Shares upon exercise of an option granted pursuant to Section 4.1
or Section 5.1 of this Plan.

 

Section 2.24.  “Original Directors” has the meaning
set forth in Section 10.1 hereof.

 

Section 2.25.  “Participant” means a person who (a) is
selected by the Board to receive benefits under this Plan and who is at the
time a consultant or an officer, general management employee or other key
employee of the Company or any one or more of its Subsidiaries, or who has
agreed to commence serving in any of such capacities within 90 days of the Date
of Grant, and will also include each Non-Employee Director who receives Common
Shares or an award of Option Rights, Appreciation Rights, Restricted Stock, Restricted
Stock Units or other awards under this Plan and (b) if requested to do so
by the Company, has executed a Participation Agreement.

 

Section 2.26.  “Participation Agreement” means an
agreement between the Company and each Employee that must be executed as a
condition of the Participant’s eligibility for this Plan.

 

5

 

Section 2.27.  “Performance Period” means, in respect
of a Performance Share or Performance Unit, a period of time established
pursuant to Section 4.5 of this Plan within which the Management
Objectives relating to such Performance Share or Performance Unit are to be
achieved.

 

Section 2.28.  “Performance Share” means a
bookkeeping entry that records the equivalent of one Common Share awarded
pursuant to Section 4.5 of this Plan.

 

Section 2.29.  “Performance Unit” means a bookkeeping
entry awarded pursuant to Section 4.5 of this Plan that records a unit
equivalent to $1.00 or such other value as is determined by the Board.

 

Section 2.30.  “Person” has the meaning set forth in Section 10.1
hereof.

 

Section 2.31.  “Plan” means this DPL Inc. 2006 Equity
and Performance Incentive Plan, as may be amended from time to time.

 

Section 2.32.  “Restricted Stock” means Common Shares
granted or sold pursuant to Section 4.3 or Section 5.1 of this Plan
as to which neither the substantial risk of forfeiture nor the prohibition on
transfers has expired.

 

Section 2.33.  “Restriction Period” means the period
of time during which Restricted Stock Units are subject to restrictions.

 

Section 2.34.  “Restricted Stock Unit” means an award
made pursuant to Section 4.4 or Section 5.1 of this Plan of the right
to receive Common Shares or cash at the end of a specified period.

 

Section 2.35.  “Spread” means the excess of the
Market Value per Share on the date when an Appreciation Right is exercised over
the Option Price or Base Price provided for in the related Option Right or
Free-Standing Appreciation Right, respectively.

 

Section 2.36.  “Subsidiary” means a corporation,
company or other entity (i) more than 50 percent of whose outstanding
shares or securities (representing the right to vote for the election of
directors or other managing authority) are, or (ii) which does not have
outstanding shares or securities (as may be the case in a partnership, joint
venture or unincorporated association), but more than 50 percent of whose
ownership interest representing the right generally to make decisions for such
other entity is, now or hereafter, owned or controlled, directly or indirectly,
by the Company except that for purposes of determining whether any person may
be a Participant for purposes of any grant of Incentive Stock Options, “Subsidiary”
means any corporation in which at the time the Company owns or controls, directly
or indirectly, more than 50 percent of the total combined voting power
represented by all classes of stock issued by such corporation.

 

Section 2.37.  “Successors” has the meaning set forth
in Section 10.1 hereof.

 

6

 

Section 2.38.  “Tandem Appreciation Right” means an
Appreciation Right granted pursuant to Section 4.2 or Section 5.1 of
this Plan that is granted in tandem with an Option Right.

 

Section 2.39.  “Voting Stock” means securities
entitled to vote generally in the election of directors.

 

ARTICLE
III - SHARES

 

Section 3.1.  Shares Available Under the Plan.

 

(a)           Subject to adjustment as provided in Section 7.2 of
this Plan, the number of Common Shares that may be issued or transferred (i) upon
the exercise of Option Rights or Appreciation Rights, (ii) as Restricted
Stock and released from substantial risks of forfeiture thereof, (iii) as
Restricted Stock Units, (iv) in payment of Performance Shares or
Performance Units that have been earned, (v) as awards to Non-Employee
Directors, (vi) as awards contemplated by Section 6.1 of this Plan,
or (vii) in payment of dividend equivalents paid with respect to awards
made under the Plan will not exceed in the aggregate 4,500,000 Common Shares,
plus any shares relating to Awards that expire or are forfeited, terminated or
cancelled.  In addition to the Common
Shares authorized by the preceding sentence, to the extent any award under the
Existing Plan otherwise terminates without the issuance of some or all of the
Common Shares underlying the award to a participant or if any option under the
Existing Plan terminates without having been exercised in full, the Common
Shares underlying such award, to the extent of any such forfeiture or
termination, shall be available for future grant under the Plan and credited
toward the Plan limit.  Common Shares
covered by an award granted under the Plan shall not be counted as used unless
and until they are actually issued and delivered to a Participant.  Without limiting the generality of the
foregoing, upon payment in cash of the benefit provided by any award granted
under the Plan, any Common Shares that were covered by that award will be
available for issue or transfer hereunder. 
Notwithstanding anything to the contrary contained herein: (A) shares
tendered in payment of the Option Price of a Option Right shall not be added to
the aggregate plan limit described above; (B) shares withheld by the
Company to satisfy the tax withholding obligation shall not be added to the
aggregate plan limit described above; (C) shares that are repurchased by
the Company with Option Right proceeds shall not be added to the aggregate plan
limit described above; and (D) all shares covered by an Appreciation
Right, to the extent that it is exercised and settled in Common Shares, and
whether or not shares are actually issued to the Participant upon exercise of
the right, shall be considered issued or transferred pursuant to the Plan.  Such shares may be shares of original
issuance or treasury shares or a combination of the foregoing.

 

(b)           If, under this Plan, a Participant has elected to give up
the right to receive compensation in exchange for Common Shares based on fair
market value, such Common Shares will not count against the number of shares
available in Section 3.1(a) above.

 

7

 

(c)           Notwithstanding anything in this Section 3.1, or
elsewhere in this Plan, to the contrary and subject to adjustment as provided
in Section 7.2 of this Plan: (i) the aggregate number of Common
Shares actually issued or transferred by the Company upon the exercise of
Incentive Stock Options will not exceed 500,000
Common Shares; (ii) no Participant will be granted Option Rights or
Appreciation Rights, in the aggregate, for more than 500,000 Common Shares during any calendar year; (iii) no
Participant will be granted Restricted Stock or Restricted Stock Units that
specify Management Objectives, Performance Shares or other awards under Section 6.1
of this Plan, in the aggregate, for more than 500,000 Common Shares during any calendar year; and (iv) awards will not be granted under Section 5.1
or Section 6.1 of the Plan to the extent they would involve the issuance
of more than 1,000,000 shares in the aggregate.

 

(d)           Notwithstanding any other provision of this Plan to the
contrary, in no event will any Participant in any calendar year receive an
award of Performance Units having an aggregate maximum value as of their
respective Dates of Grant in excess of $5.0 million.

 

ARTICLE
IV - AUTHORIZED AWARDS

 

Section 4.1.  Option Rights.  The Board may, from time to time and upon
such terms and conditions as it may determine, authorize the granting to
Participants of options to purchase Common Shares.  Each such grant may utilize any or all of the
authorizations, and will be subject to all of the requirements contained in the
following provisions:

 

(a)           Each grant will specify the number of Common Shares to
which it pertains subject to the limitations set forth in Section 3.1 of
this Plan.

 

(b)           Each grant will specify an Option Price per share, which
may not be less than the Market Value per Share on the day immediately
preceding the Date of Grant.

 

(c)           Each grant will specify whether the Option Price will be
payable (i) in cash or by check acceptable to the Company or by wire
transfer of immediately available funds, (ii) by the actual or
constructive transfer to the Company of Common Shares owned by the Optionee for
at least 6 months (or other consideration authorized pursuant to Section 4.1(d))
having a value at the time of exercise equal to the total Option Price, (iii) by
a combination of such methods of payment, or (iv) by such other methods as
may be approved by the Board.

 

(d)           To the extent permitted by law, any grant may provide for
deferred payment of the Option Price from the proceeds of sale through a bank
or broker on a date satisfactory to the Company of some or all of the Common
Shares to which such exercise relates.

 

(e)           Successive grants may be made to the same Participant
whether or not any Option Rights previously granted to such Participant remain
unexercised.

 

8

 

(f)            Each grant will specify the period or periods of
continuous service by the Optionee with the Company or any Subsidiary that is
necessary before the Option Rights or installments thereof will become
exercisable; provided, however, that, subject to sub-section (g) below,
Option Rights may not become exercisable by the passage of time sooner than
one-third per year over three years.  A
grant of Option Rights may provide for the earlier exercise of such Option
Rights in the event of the retirement, death or disability of a Participant.

 

(g)           Any grant of Option Rights may specify Management
Objectives that must be achieved as a condition to the exercise of such rights;
provided, however, that, except in the case of the retirement,
death or disability of a Participant, Option Rights that become exercisable
upon the achievement of Management Objectives may not become exercisable sooner
than one year from the Date of Grant.

 

(h)           Option Rights granted under this Plan may be (i) options,
including, without limitation, Incentive Stock Options, that are intended to
qualify under particular provisions of the Code, (ii) options that are not
intended so to qualify, or (iii) combinations of the foregoing.  Incentive Stock Options may only be granted
to Participants who meet the definition of “employees” under Section 3401(c) of
the Code.

 

(i)            The Board may at the Date of Grant of any Option Rights
(other than Incentive Stock Options), provide for the payment of dividend
equivalents to the Optionee on either a current or deferred or contingent
basis, either in cash or in additional Common Shares.

 

(j)            The exercise of an Option Right will result in the
cancellation on a share- for-share basis of any Tandem Appreciation Right
authorized under Section 4.2 of this Plan.

 

(k)           No Option Right will be exercisable more than 10 years
from the Date of Grant.

 

(l)            The Board reserves the discretion at or after the Date of
Grant to provide for (i) the payment of a cash bonus at the time of
exercise; (ii) the availability of a loan at exercise; and (iii) the
right to tender in satisfaction of the Option Price nonforfeitable,
unrestricted Common Shares, which are already owned by the Optionee and have a
value at the time of exercise that is equal to the Option Price.

 

(m)          Each grant of Option Rights will be evidenced by an
Evidence of Award.  Each Evidence of
Award shall be subject to the Plan and shall contain such terms and provisions
as the Board may approve.

 

Section 4.2.  Appreciation Rights.

 

(a)           The Board may authorize the granting (i) to any
Optionee, of Tandem Appreciation Rights in respect of Option Rights granted
hereunder, and (ii) to any Participant, of Free-Standing Appreciation
Rights.  A Tandem Appreciation Right will
be a right of the Optionee, exercisable by surrender of the related Option
Right, to 

 

9

 

receive from the Company an amount determined
by the Board, which will be expressed as a percentage of the Spread (not
exceeding 100 percent) at the time of exercise. 
Tandem Appreciation Rights may be granted at any time prior to the
exercise or termination of the related Option Rights; provided, however,
that a Tandem Appreciation Right awarded in relation to an Incentive Stock
Option must be granted concurrently with such Incentive Stock Option.  A Free-Standing Appreciation Right will be a
right of the Participant to receive from the Company an amount determined by
the Board, which will be expressed as a percentage of the Spread (not exceeding
100 percent) at the time of exercise.

 

(b)           Each grant of Appreciation Rights may utilize any or all
of the authorizations, and will be subject to all of the requirements,
contained in the following provisions:

 

(i)                                     Any grant may
specify that the amount payable on exercise of an Appreciation Right may be
paid by the Company in cash, in Common Shares or in any combination thereof and
may either grant to the Participant or retain in the Board the right to elect
among those alternatives.

 

(ii)                                  Any grant may
specify that the amount payable on exercise of an Appreciation Right may not
exceed a maximum specified by the Board at the Date of Grant.

 

(iii)                               Any grant may
specify waiting periods before exercise and permissible exercise dates or
periods; provided, however, that Appreciation Rights may not
become exercisable by the passage of time sooner than one-third per year over
three years.

 

(iv)                              Any grant may
provide for the payment to the Participant of dividend equivalents thereon in
cash or Common Shares on a current, deferred or contingent basis.

 

(v)                                 Any grant of
Appreciation Rights may specify Management Objectives that must be achieved as
a condition of the exercise of such Appreciation Rights; provided, however,
that Appreciation Rights that become exercisable upon the achievement of
Management Objectives may not become exercisable sooner than one year from the
Date of Grant.

 

(vi)                              Any grant may
specify that such Appreciation Right may be exercised in the event of, or
earlier in the event of, the retirement, death or disability of a Participant.

 

(vii)                           Each grant of
Appreciation Rights will be evidenced by an Evidence of Award, which Evidence
of Award will describe such Appreciation Rights, identify the related Option
Rights (if applicable), and contain 

 

10

 

such other terms and provisions, consistent with this Plan, as the
Board may approve.

 

(c)           Any grant of Tandem Appreciation Rights will provide that
such Tandem Appreciation Rights may be exercised only at a time when the
related Option Right is also exercisable and at a time when the Spread is
positive, and by surrender of the related Option Right for cancellation.

 

(d)           Regarding Free-Standing Appreciation Rights only:

 

(i)                                     Each grant will
specify in respect of each Free-Standing Appreciation Right a Base Price, which
will be equal to or greater than the Market Value per Share on the day
immediately preceding the Date of Grant;

 

(ii)                                  Successive
grants may be made to the same Participant regardless of whether any
Free-Standing Appreciation Rights previously granted to the Participant remain
unexercised; and

 

(iii)                               No
Free-Standing Appreciation Right granted under this Plan may be exercised more
than 10 years from the Date of Grant.

 

Section 4.3.  Restricted Stock.  The Board may also authorize the grant or
sale of Restricted Stock to Participants. Each such grant or sale may utilize
any or all of the authorizations, and will be subject to all of the
requirements, contained in the following provisions:

 

(a)           Each such grant or sale will constitute an immediate
transfer of the ownership of Common Shares to the Participant in consideration
of the performance of services, entitling such Participant to voting, dividend
and other ownership rights, but subject to the substantial risk of forfeiture
and restrictions on transfer hereinafter referred to.

 

(b)           Each such grant or sale may be made without additional
consideration or in consideration of a payment by such Participant that is less
than the Market Value per Share at the Date of Grant.

 

(c)           Each such grant or sale will provide that the Restricted
Stock covered by such grant or sale that vests solely upon the passage of time
will be subject to a “substantial risk of forfeiture” within the meaning of Section 83
of the Code for a period of not less than three years to be determined by the
Board at the Date of Grant and may provide for the earlier lapse of such
substantial risk of forfeiture as provided in Section 4.3(e) below or
in the event of the retirement, death or disability of a Participant.

 

(d)           Each such grant or sale will provide that during the
period for which such substantial risk of forfeiture is to continue, the
transferability of the Restricted Stock will be prohibited or restricted in the
manner and to the extent prescribed by the Board at the Date of Grant (which
restrictions may include, without limitation, rights of 

 

11

 

repurchase or first refusal in the Company or
provisions subjecting the Restricted Stock to a continuing substantial risk of
forfeiture in the hands of any transferee).

 

(e)           Any grant of Restricted Stock may specify Management
Objectives that, if achieved, will result in termination or early termination
of the restrictions applicable to such Restricted Stock; provided, however,
that, except in the case of the retirement, death or disability of a
Participant, restrictions relating to Restricted Stock that vests upon the
achievement of Management Objectives may not terminate sooner than one year
from the Date of Grant.  Each grant may
specify in respect of such Management Objectives a minimum acceptable level of
achievement and may set forth a formula for determining the number of shares of
Restricted Stock on which restrictions will terminate if performance is at or
above the minimum level, but falls short of full achievement of the specified
Management Objectives.

 

(f)            Any such grant or sale of Restricted Stock may require
that any or all dividends or other distributions paid thereon during the period
of such restrictions be automatically deferred and reinvested in additional
shares of Restricted Stock, which may be subject to the same restrictions as
the underlying award.

 

(g)           Each grant or sale of Restricted Stock will be evidenced
by an Evidence of Award and will contain such terms and provisions, consistent
with this Plan, as the Board may approve. 
Unless otherwise directed by the Board, all certificates representing
shares of Restricted Stock will be held in custody by the Company until all
restrictions thereon will have lapsed, together with a stock power or powers
executed by the Participant in whose name such certificates are registered, endorsed
in blank and covering such Shares.

 

Section 4.4.  Restricted Stock Units.  The Board may also authorize the granting or
sale of Restricted Stock Units to Participants. 
Each such grant or sale may utilize any or all of the authorizations,
and will be subject to all of the requirements contained in the following
provisions:

 

(a)           Each such grant or sale will constitute the agreement by
the Company to deliver Common Shares or cash to the Participant in the future
in consideration of the performance of services, but subject to the fulfillment
of such conditions (which may include the achievement of Management Objectives)
during the Restriction Period as the Board may specify.  If a grant of Restricted Stock Units specifies
that the Restriction Period will terminate only upon the achievement of
Management Objectives, such Restriction Period may not terminate sooner than
one year from the Date of Grant, except in the case of the retirement, death or
disability of a Participant.  Each grant
may specify in respect of such Management Objectives a minimum acceptable level
of achievement and may set forth a formula for determining the number of shares
of Restricted Stock Units on which restrictions will terminate if performance
is at or above the minimum level, but falls short of full achievement of the
specified Management Objectives.

 

12

 

(b)           Each such grant or sale may be made without additional
consideration or in consideration of a payment by such Participant that is less
than the Market Value per Share at the Date of Grant.

 

(c)           If the Restriction Period lapses solely by the passage of
time, each such grant or sale will be subject to a Restriction Period of not
less than three years, as determined by the Board at the Date of Grant, and may
provide for the earlier lapse or other modification of such Restriction Period
in the event of the retirement, death or disability of a Participant.

 

(d)           During the Restriction Period, the Participant will have
no right to transfer any rights under his or her award and will have no rights
of ownership in the Restricted Stock Units and will have no right to vote them,
but the Board may at the Date of Grant, authorize the payment of dividend
equivalents on such Restricted Stock Units on either a current or deferred or
contingent basis, either in cash or in additional Common Shares.

 

(e)           Each grant or sale of Restricted Stock Units will be
evidenced by an Evidence of Award and will contain such terms and provisions,
consistent with this Plan, as the Board may approve.

 

Section 4.5.  Performance Shares and Performance Units.  The Board may also authorize the granting of
Performance Shares and Performance Units that will become payable to a
Participant upon achievement of specified Management Objectives during the
Performance Period.  Each such grant may
utilize any or all of the authorizations, and will be subject to all of the
requirements, contained in the following provisions:

 

(a)           Each grant will specify the number of Performance Shares
or Performance Units to which it pertains, which number may be subject to
adjustment to reflect changes in compensation or other factors; provided,
however, that no such adjustment will be made in the case of a Covered
Employee where such action would result in the loss of the otherwise available
exemption of the award under Section 162(m) of the Code.

 

(b)           The Performance Period with respect to each Performance
Share or Performance Unit will be such period of time (not less than three
years) as will be determined by the Board at the time of grant, which may be
subject to earlier lapse or other modification in the event of the retirement,
death or disability of a Participant.

 

(c)           Any grant of Performance Shares or Performance Units will
specify Management Objectives which, if achieved, will result in payment or
early payment of the award, and each grant may specify in respect of such
specified Management Objectives a minimum acceptable level of achievement and
will set forth a formula for determining the number of Performance Shares or
Performance Units that will be earned if performance is at or above the minimum
level, but falls short of full achievement of the specified Management
Objectives.  The grant of Performance
Shares or Performance Units will specify that, before the Performance Shares or

 

13

 

Performance Units will be earned and paid,
the Board must certify that the Management Objectives have been satisfied.

 

(d)           Each grant will specify the time and manner of payment of
Performance Shares or Performance Units that have been earned.  Any grant may specify that the amount payable
with respect thereto may be paid by the Company in cash, in Common Shares or in
any combination thereof and may either grant to the Participant or retain in
the Board the right to elect among those alternatives.

 

(e)           Any grant of Performance Shares may specify that the
amount payable with respect thereto may not exceed a maximum specified by the
Board at the Date of Grant.  Any grant of
Performance Units may specify that the amount payable or the number of Common
Shares issued with respect thereto may not exceed maximums specified by the
Board at the Date of Grant.

 

(f)            The Board may at the Date of Grant of Performance Shares,
provide for the payment of dividend equivalents to the holder thereof on either
a current or deferred or contingent basis, either in cash or in additional
Common Shares.

 

(g)           Each grant of Performance Shares or Performance Units will
be evidenced by an Evidence of Award and will contain such other terms and
provisions, consistent with this Plan, as the Board may approve.

 

ARTICLE
V - AWARDS TO NON-EMPLOYEE DIRECTORS

 

Section 5.1.  Awards to Non-Employee Directors.  The Board may, from time to time and upon
such terms and conditions as it may determine, authorize the granting to
Non-Employee Directors Option Rights, Appreciation Rights or other awards
contemplated by Section 6.1 of this Plan and may also authorize the grant
or sale of Common Shares, Restricted Stock or Restricted Stock Units to
Non-Employee Directors.  Each grant of an
Award to a Non-Employee Director will be upon such terms and conditions as
approved by the Board and will be evidenced by an Evidence of Award in such
form as will be approved by the Board. 
Each grant will specify in the case of an Option Right an Option Price
per share, and in the case of a Free-Standing Appreciation Right, a Base Price
per share, which will not be less than the Market Value per Share on the day
immediately preceding the Date of Grant. 
Each Option Right and Free-Standing Appreciation Right granted under the
Plan to a Non-Employee Director will expire not more than 10 years from the
Date of Grant and will be subject to earlier termination as hereinafter provided.  If a Non-Employee Director subsequently
becomes an employee of the Company or a Subsidiary while remaining a member of
the Board, any Award held under the Plan by such individual at the time of such
commencement of employment will not be affected thereby.  Non-Employee Directors, pursuant to this Section 5.1,
may be awarded, or may be permitted to elect to receive, pursuant to procedures
established by the Board, all or any portion of their annual retainer, meeting
fees or other fees in Common Shares in lieu of cash.

 

14

 

ARTICLE
VI - OTHER AWARDS

 

Section 6.1.  Other Awards.

 

(a)           The Board may, subject to limitations under applicable
law, grant to any Participant 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, Common Shares or factors that may influence the value of such
shares, including, without limitation, convertible or exchangeable debt
securities, other rights convertible or exchangeable into Common Shares,
purchase rights for Common Shares, awards with value and payment contingent
upon performance of the Company or specified Subsidiaries, affiliates or other
business units thereof or any other factors designated by the Board, and awards
valued by reference to the book value of Common Shares or the value of
securities of, or the performance of specified Subsidiaries or affiliates or
other business units of the Company.  The
Board may consider recommendations from the Chief Executive Officer or the
Chairman of the Board relating to such awards and shall determine the terms and
conditions of such awards.  Common Shares
delivered pursuant to an award in the nature of a purchase right granted under
this Section 6.1 shall be purchased for such consideration, paid for at
such time, by such methods, and in such forms, including, without limitation,
cash, Common Shares, other awards, notes or other property, as the Board shall
determine.

 

(b)           Cash awards, as an element of or supplement to any other
award granted under this Plan, may also be granted pursuant to this Section 6.1
of this Plan.

 

(c)           The Board may grant Common Shares as a bonus, or may grant
other awards in lieu of obligations of the Company or a Subsidiary to pay cash
or deliver other property under this Plan or under other plans or compensatory
arrangements, subject to such terms as shall be determined by the Board.

 

ARTICLE
VII - GENERAL PROVISIONS

 

Section 7.1.  Transferability.

 

(a)           Except as otherwise determined by the Board, no Option
Right, Appreciation Right or other derivative security granted under the Plan
shall be transferable by the Participant except by will or the laws of descent
and distribution or, except with respect to an Incentive Stock Option, pursuant
to a domestic relations order (within the meaning of Rule 16a-12
promulgated under the Exchange Act). 
Except as otherwise determined by the Board, Option Rights and
Appreciation Rights will be exercisable during the Participant’s lifetime only
by him or her or, in the event of the Participant’s legal incapacity to do so,
by his or her guardian or legal representative acting on behalf of the
Participant in a fiduciary capacity under state law and/or
court supervision.

 

(b)           The Board may specify at the Date of Grant that part or
all of the Common Shares that are (i) to be issued or transferred by the
Company upon the exercise of Option Rights or Appreciation Rights, upon the
termination of the Restriction 

 

15

 

Period applicable to Restricted Stock Units
or upon payment under any grant of Performance Shares or Performance Units or (ii) no
longer subject to the substantial risk of forfeiture and restrictions on
transfer referred to in Section 6.1 of this Plan, will be subject to
further restrictions on transfer.

 

Section 7.2.  Adjustments.  The Board may make or provide for such
adjustments in the numbers of Common Shares covered by outstanding Option
Rights, Appreciation Rights, Restricted Stock Units, Performance Shares and
Performance Units granted hereunder and, if applicable, in the number of Common
Shares covered by other awards granted pursuant to Section 6.1 hereof, in
the Option Price and Base Price provided in outstanding Appreciation Rights, and
in the kind of shares covered thereby, as the Board, in its sole discretion,
exercised in good faith, may determine is equitably required to prevent
dilution or enlargement of the rights of Participants or Optionees that
otherwise would result from (a) any stock dividend, stock split,
combination of shares, recapitalization or other change in the capital
structure of the Company, or (b) any merger, consolidation, spin-off,
split- off, spin-out, split-up, reorganization, partial or complete liquidation
or other distribution of assets, issuance of rights or warrants to purchase
securities, or (c) any other corporate transaction or event having an
effect similar to any of the foregoing. 
Moreover, in the event of any such transaction or event or in the event
of a Change of Control, the Board, in its discretion, may provide in
substitution for any or all outstanding awards under this Plan such alternative
consideration (including cash), if any, as it, in good faith, may determine to
be equitable in the circumstances and may require in connection therewith the
surrender of all awards so replaced.  The
Board may also make or provide for such adjustments in the numbers of shares
specified in Section 3.1 of this Plan as the Board in its sole discretion,
exercised in good faith, may determine is appropriate to reflect any
transaction or event described in this Section 7.2; provided, however,
that any such adjustment to the number specified in Section 3.1(c)(i) will
be made only if and to the extent that such adjustment would not cause any
option intended to qualify as an Incentive Stock Option to fail so to qualify.

 

Section 7.3.  Fractional Shares.  The Company will not be required to issue any
fractional Common Shares pursuant to this Plan. 
The Board may provide for the elimination of fractions or for the
settlement of fractions in cash.

 

Section 7.4.  Withholding Taxes.  To the extent that the Company is required to
withhold federal, state, local or foreign taxes in connection with any payment
made or benefit realized by a Participant or other person under this Plan, and
the amounts available to the Company for such withholding are insufficient, it
will be a condition to the receipt of such payment or the realization of such
benefit that the Participant or such other person make arrangements
satisfactory to the Company for payment of the balance of such taxes required
to be withheld, which arrangements (in the discretion of the Board) may include
relinquishment of a portion of such benefit.

 

16

 

ARTICLE
VIII - ADMINISTRATION

 

Section 8.1.  Administration of the Plan.

 

(a)           This Plan will be administered by the Board, which may
from time to time delegate all or any part of its authority under this Plan to
the Compensation Committee of the Board or any other committee of the Board (or
a subcommittee thereof), as constituted from time to time.  To the extent of any such delegation,
references in this Plan to the Board will be deemed to be references to such
committee or subcommittee.  A majority of
the committee (or subcommittee) will constitute a quorum, and the action of the
members of the committee (or subcommittee) present at any meeting at which a
quorum is present, or acts unanimously approved in writing, will be the acts of
the committee (or subcommittee).

 

(b)           The interpretation and construction by the Board of any
provision of this Plan or of any agreement, notification or document evidencing
the grant of Option Rights, Appreciation Rights, Restricted Stock, Restricted
Stock Units, Performance Shares, Performance Units or other awards pursuant to Section 6.1
of this Plan and any determination by the Board pursuant to any provision of
this Plan or of any such agreement, notification or document will be final and
conclusive.  No member of the Board will
be liable for any such action or determination made in good faith.

 

(c)           The Board or, to the extent of any delegation as provided
in Section 8.1(a), the committee, may delegate to one or more of its
members or to one or more officers of the Company, or to one or more agents or
advisors, such administrative duties or powers as it may deem advisable, and
the Board, the committee, or any person to whom duties or powers have been
delegated as aforesaid, may employ one or more persons to render advice with
respect to any responsibility the Board, the committee or such person may have
under the Plan.  The Board or the
committee may, by resolution, authorize one or more officers of the Company to
do one or both of the following on the same basis as the Board or the
committee: (i) designate employees to be recipients of awards under this
Plan; (ii) determine the size of any such awards; provided, however,
that (A) the Board or the Committee shall not delegate such
responsibilities to any such officer for awards granted to an employee who is
an officer, Director, or more than 10% beneficial owner of any class of the
Company’s equity securities that is registered pursuant to Section 12 of
the Exchange Act, as determined by the Board in accordance with Section 16
of the Exchange Act; (B) the resolution providing for such authorization
sets forth the total number of Common Shares such officer(s) may grant;
and (iii) the officer(s) shall report periodically to the Board or
the committee, as the case may be, regarding the nature and scope of the awards
granted pursuant to the authority delegated.

 

17

 

ARTICLE
IX - AMENDMENTS AND TERMINATION

 

Section 9.1.  Amendments, Etc.

 

(a)           The Board may at any time and from time to time amend the
Plan in whole or in part; provided, however, that if an amendment
to the Plan (i) would materially increase the benefits accruing to
participants under the Plan, (ii) would materially increase the number of
securities which may be issued under the Plan, (iii) would materially
modify the requirements for participation in the Plan or (iv) must
otherwise be approved by the shareholders of the Company in order to comply
with applicable law or the rules of the New York Stock Exchange or, if the
Common Shares are not traded on the New York Stock Exchange, the principal
national securities exchange upon which the Common Shares are traded or quoted,
then, such amendment will be subject to shareholder approval and will not be effective
unless and until such approval has been obtained.

 

(b)           The Board will not, without the further approval of the
shareholders of the Company, authorize the amendment of any outstanding Option
Right to reduce the Option Price. 
Furthermore, no Option Right will be cancelled and replaced with awards
having a lower Option Price without further approval of the shareholders of the
Company.  This Section 9.1(b) is
intended to prohibit the repricing of “underwater” Option Rights and will not
be construed to prohibit the adjustments provided for in Section 7.2 of
this Plan.

 

(c)           The Board may condition the grant of any award or
combination of awards authorized under this Plan on the surrender or deferral
by the Participant of his or her right to receive a cash bonus or other
compensation otherwise payable by the Company or a Subsidiary to the
Participant.

 

(d)           If permitted by Section 409A of the Code, in case of
termination of employment by reason of death, disability or normal or early
retirement, or in the case of unforeseeable emergency or other special
circumstances, of a Participant who holds an Option Right or Appreciation Right
not immediately exercisable in full, or any shares of Restricted Stock as to
which the substantial risk of forfeiture or the prohibition or restriction on
transfer has not lapsed, or any Restricted Stock Units as to which the
Restriction Period has not been completed, or any Performance Shares or
Performance Units which have not been fully earned, or any other awards made
pursuant to Section 6.1 subject to any vesting schedule or transfer
restriction, or who holds Common Shares subject to any transfer restriction
imposed pursuant to Section 7.1(b) of this Plan, the Board may, in
its sole discretion, accelerate the time at which such Option Right,
Appreciation Right or other award may be exercised or the time at which such
substantial risk of forfeiture or prohibition or restriction on transfer will
lapse or the time when such Restriction Period will end or the time at which
such Performance Shares or Performance Units will be deemed to have been fully
earned or the time when such transfer restriction will terminate or may waive
any other limitation or requirement under any such award.

 

18

 

(e)           This Plan will not confer upon any Participant any right
with respect to continuance of employment or other service with the Company or
any Subsidiary, nor will it interfere in any way with any right the Company or
any Subsidiary would otherwise have to terminate such Participant’s employment
or other service at any time.

 

(f)            To the extent that any provision of this Plan would
prevent any Option Right that was intended to qualify as an Incentive Stock
Option from qualifying as such, that provision will be null and void with
respect to such Option Right.  Such
provision, however, will remain in effect for other Option Rights and there
will be no further effect on any provision of this Plan.

 

(g)           The Board may amend the terms of any award theretofore granted
under this Plan prospectively or retroactively, but subject to Section 7.2
above, no such amendment shall impair the rights of any Participant without his
or her consent.  The Board may, in its
discretion, terminate this Plan at any time. 
Termination of this Plan will not affect the rights of Participants or
their successors under any awards outstanding hereunder and not exercised in
full on the date of termination.

 

ARTICLE
X - CHANGE OF CONTROL

 

Section 10.1.  Change of Control.  For purposes of this Plan, except as may be
otherwise prescribed by the Board in an Evidence of Award made under this Plan,
a “Change of Control” means the consummation of any Change of Control of the
Company, or its principal subsidiary, DP&L (“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 in its sole
discretion; provided that, without limitation, such a Change of Control shall
be deemed to have occurred if:

 

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

 

(i)                                     for purposes of
this Section 10.1(a), the following acquisitions shall not constitute a
Change of Control: (A) any acquisition of Voting Stock of the Company or
DP&L directly from the Company or DP&L that is approved by a majority
of the Original Directors or their Successors (as defined below), (B) any
acquisition of Voting Stock of the Company or DP&L by the Company or any
Subsidiary, and (C) any acquisition of Voting Stock of the Company or
DP&L by the trustee or other fiduciary holding securities under any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any Subsidiary;

 

19

 

(ii)                                  if any Person
is or becomes the beneficial owner of 25% or more of the combined voting power
of the then-outstanding Voting Stock of the Company or DP&L as a result of
a transaction described in clause (A) of Section 10.1(a)(i) above
and such Person thereafter becomes the beneficial owner of any additional
shares of Voting Stock of the Company or DP&L representing 1% or more of
the then-outstanding Voting Stock of the Company or DP&L, other than in an
acquisition directly from the Company or DP&L that is approved by a
majority of the Original Directors or their Successors or other than as a
result of a stock dividend, stock split or similar transaction effected by the
Company or DP&L in which all holders of Voting Stock of the Company or
DP&L are treated equally, such subsequent acquisition shall be treated as a
Change in Control;

 

(iii)                               a Change in
Control will not be deemed to have occurred if a Person is or becomes the
beneficial owner of 25% or more of the Voting Stock of the Company or DP&L
as a result of a reduction in the number of shares of Voting Stock of the
Company or DP&L outstanding pursuant to a transaction or series of
transactions that is approved by a majority of the Original Directors or their
Successors unless and until such Person thereafter becomes the beneficial owner
of any additional shares of Voting Stock of the Company or DP&L
representing 1% or more of the then-outstanding Voting Stock of the Company or
DP&L, other than as a result of a stock dividend, stock split or similar
transaction effected by the Company or DP&L in which all holders of Voting
Stock are treated equally; and

 

(iv)                              if at least a
majority of the Original Directors or their Successors determine in good faith
that a Person has acquired beneficial ownership of 25% or more of the Voting
Stock of the Company or DP&L inadvertently, and such Person divests as
promptly as practicable but no later than the date, if any, set by the Original
Directors or their Successors a sufficient number of shares so that such Person
beneficially owns less than 25% of the Voting Stock of the Company or DP&L,
then no Change of Control shall have occurred as a result of such Person’s
acquisition; or

 

(b)           the Company or DP&L consummates a merger or
consolidation, or consummates a “combination” or “majority share acquisition”
in which it is the “acquiring corporation” (as such terms are defined in Ohio
Rev. Code § 1701.01 as in effect on the Effective Date) and in which
shareholders of the Company 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 the Company or DP&L or any surviving or new
corporation, as the case may be, having less than 50% of the “voting power” of
the Company or DP&L or any surviving or new corporation, as the case may
be, including “voting power” 

 

20

 

exercisable on a contingent or deferred basis
as well as immediately exercisable “voting power”, excluding any merger of
DP&L into the Company or of the Company into DP&L; or

 

(c)           the Company 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 the Company or a wholly owned subsidiary(ies) of the Company; but
not including (i) a mortgage or pledge of assets granted in connection
with a financing or (ii) a spin-off or sale of assets if the Company
continues in existence and its common shares are listed on a national
securities exchange, quoted on the automated quotation system of a national
securities association or traded in the over-the-counter market; or

 

(d)           those persons serving as directors of the Company or
DP&L on the Effective Date (the “Original Directors”) and/or their
Successors do not constitute a majority of the whole Board of Directors of the
Company 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 the Company or
DP&L, as the case may be, at the time of such election or nomination for
election); or

 

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

 

Section 10.2.  Acceleration.  Notwithstanding anything to the contrary
contained in this Plan and except and unless the Board determines otherwise at
the time of grant of an Award under the Plan (and as set forth in the
applicable Evidence of Award), upon the occurrence of a Change of Control: (a) any
Awards that are outstanding as of the date of such Change of Control that are
subject to vesting requirements and that are not then vested, shall become
fully vested; (b) all then-outstanding Option Rights and Appreciation
Rights shall be fully vested and immediately exercisable, provided that in no
event shall any Option Right or Appreciation Right be exercisable beyond its
original expiration date; and (c) all restrictions and other conditions
prescribed by the Board, if any, with respect to grants of Restricted Stock,
Restricted Stock Units, Performance Shares, Performance Units, and other awards
granted pursuant to Section 6.1 hereof, shall automatically lapse, expire
and terminate and all such awards shall be deemed to be fully earned.

 

Section 10.3.  Section 409A.  To the extent an Award shall be deemed to be
vested or restrictions lapse, expire or terminate upon the occurrence of a
Change of Control pursuant to Section 10.2 and such Change of Control does
not constitute a “change in the ownership or effective control” or a “change in
the ownership of a substantial portion of the assets” of the Company within the
meaning of Section 409A(a)(2)(A)(v) of the Code, then notwithstanding
that the award shall be deemed to be vested or restrictions lapse, expire or
terminate upon the occurrence of the Change of Control or any other provision
of this Plan, payment will be made, to the extent 

 

21

 

necessary to comply with the provisions of Section 409A
of the Code, to the Participant on the earliest of (i) the Participant’s “separation
from service” with the Company (determined in accordance with Section 409A
of the Code); provided, however, that if the Participant is a “specified
employee” (within the meaning of Section 409A of the Code), the payment
date shall be the date that is six months after the date of the Participant’s
separation from service with the Company, 
(ii) the date payment otherwise would have been made in the absence
of Section 10.2  (provided such
date is a permissible distribution date under Section 409A of the Code),
or (iii) the Participant’s death.

 

ARTICLE
XI - MISCELLANEOUS

 

Section 11.1.  Detrimental Activity.  Any Evidence of Award may provide that if a
Participant, either during employment by the Company or a Subsidiary or within
a specified period after termination of such employment, shall engage in any
Detrimental Activity, and the Board shall so find, forthwith upon notice of
such finding, the Participant shall:

 

(a)           Forfeit any Award granted under the Plan then held by the
Participant;

 

(b)           Return to the Company, in exchange for payment by the
Company of any amount actually paid therefor by the Participant, all Common
Shares that the Participant has not disposed of that were offered pursuant to
this Plan within a specified period prior to the date of the commencement of
such Detrimental Activity, and

 

(c)           With respect to any Common Shares so acquired that the
Participant has disposed of, pay to the Company in cash the difference between:

 

(i)                                     Any amount
actually paid therefor by the Participant pursuant to this Plan, and

 

(ii)                                  The Market
Value per Share of the Common Shares on the date of such acquisition.

 

To
the extent that such amounts are not paid to the Company, the Company may set
off the amounts so payable to it against any amounts that may be owing from
time to time by the Company or a Subsidiary to the Participant, whether as
wages, deferred compensation or vacation pay or in the form of any other
benefit or for any other reason.

 

Section 11.2.  Compliance with Section 409A of the
Code.  To the extent applicable, it
is intended that this Plan and any grants made hereunder comply with the
provisions of Section 409A of the Code. 
The Plan and any grants made hereunder shall be administered in a manner
consistent with this intent.  Any
reference in this Plan to Section 409A of the Code will also include any
regulations, or any other formal guidance, promulgated with respect to such Section by
the U.S. Department of the Treasury or the Internal Revenue Service.

 

22

 

Section 11.3.  Governing Law.  The Plan and all grants and awards and
actions taken thereunder shall be governed by and construed in accordance with
the internal substantive laws of the State of Ohio.

 

Section 11.4.  Termination.  No grant will be made under this Plan more
than 10 years after the date on which this Plan is first approved by the
shareholders of the Company, but all grants made on or prior to such date will
continue in effect thereafter subject to the terms thereof and of this Plan.

 

Section 11.5.  General Provisions.

 

(a)           No award under this Plan may be exercised by the holder
thereof if such exercise, and the receipt of cash or stock thereunder, would
be, in the opinion of counsel selected by the Board, contrary to law or the
regulations of any duly constituted authority having jurisdiction over this
Plan.

 

(b)           Absence on leave approved by a duly constituted officer of
the Company or any of its Subsidiaries shall not be considered interruption or
termination of service of any employee for any purposes of this Plan or awards
granted hereunder, except that no awards may be granted to an employee while he
or she is absent on leave.

 

(c)           No Participant shall have any rights as a stockholder with
respect to any shares subject to awards granted to him or her under this Plan
prior to the date as of which he or she is actually recorded as the holder of
such shares upon the stock records of the Company.

 

(d)           If any provision of the Plan is or becomes invalid,
illegal or unenforceable in any jurisdiction, or would disqualify the Plan or
any award under any law deemed applicable by the Board, such provision shall be
construed or deemed amended or limited in scope to conform to applicable laws
or, in the discretion of the Board, it shall be stricken and the remainder of
the Plan shall remain in full force and effect.

 

23

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00136-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00136-of-00352.parquet"}]]