EXHIBIT 10(F)
DPL INC.
STOCK OPTION PLAN
Section 1. Purpose
The purpose of the Plan is to promote the interests of the Company and its
shareholders by (i) attracting and retaining individuals eligible to participate
in the Plan; (ii) motivating such individuals by providing incentive to
contribute to the Company's future success; and (iii) aligning the interests of
such individuals with the interests of the Company's shareholders.
Section 2. Definitions
The following terms, as used in the Plan, shall have the meaning specified
below. Other capitalized terms shall have the meaning specified in the Plan.
a. "BOARD OF DIRECTORS" means the Board of Directors of the Company, as
it may be comprised from time to time.
b. "CHANGE OF CONTROL" means Change of Control as defined in Section 10.
c. "CODE" means the Internal Revenue Code of 1986, and any successor
statute, as it or they may be amended from time to time.
d. "COMMITTEE" means the Compensation and Management Review Committee of
the Board of Directors or such other committee as may be designated by
the Board of Directors.
e. "COMPANY" means DPL Inc., and any successor thereto.
f. "COVERED EMPLOYEE" means a covered employee within the meaning of Code
Section 162(m)(3).
g. "CONSULTANT" means a consultant of the Company or a Subsidiary.
h. "DIRECTOR" means a member of the Board of Directors of the Company or
of a Subsidiary, whether or not an Employee.
i. "EMPLOYEE" means an officer or other key employee of the Company or of
a Subsidiary. The term also includes any person who, in connection
with the hiring of such person, has been granted an Option prior to
the date such person first performs services for the Company or a
Subsidiary, provided that no Option granted to such a person shall
become vested prior to the date that such person first performs such
services.
j. "EXCHANGE ACT" means the Securities Exchange Act of 1934, and any
successor statute, as it may be amended from time to time.
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k. "FAIR MARKET VALUE" means (i) the average of the highest and lowest
sale prices of the Shares as reported on the New York Stock Exchange
Composite Transaction Tape on the relevant date (or if the Shares are
not then so traded, the average of the highest and lowest sale prices
of the Shares on the stock exchange or over-the-counter market on
which the Shares are principally trading on such date), or if no sale
of the Shares is reported for such date, the next preceding day for
which there is a reported sale or (ii) if there is no public market
for the Shares on such date, fair market value as determined by the
Committee.
l. "INSIDER" means any person who is subject to Section 16 of the
Exchange Act, and any successor statutory provision, as it may be
amended from time to time.
m. "OPTION" means an option granted pursuant to Section 4.
n. "OPTION AGREEMENT" means a document described in Section 6 setting
forth the terms and conditions applicable to an Option granted to a
Participant.
o. "PARTICIPANT" means any Employee, Director or Consultant who has been
granted an Option.
p. "SHARES" means common shares of the Company or any security of the
Company issued in substitution, exchange or lieu thereof.
q. "SUBSIDIARY" means (i) any corporation or other entity in which the
Company, directly or indirectly, controls 50% or more of the total
combined voting power of such corporation or other entity and (ii) any
other corporation or other entity in which the Company has a
significant equity interest, in either case as determined by the
Committee.
Section 3. Eligibility
The Committee may grant one or more Options to any Employee, Director or
Consultant designated by it to receive an Option.
Section 4. Options
The Committee may grant options to purchase a specific number of Shares
exercisable at such time or times and subject to such terms and conditions as
the Committee may determine subject to the Plan, provided that the term of an
Option shall not exceed ten years.
a. The exercise price of an Option shall not be less than 100% of the Fair
Market Value of the Shares on the date the Option is granted.
b. The exercise price of an Option shall be paid in cash or check (subject to
collection); provided that, at the discretion of the Committee, the
exercise price may also be paid by the tender, by either actual delivery or
attestation, of Shares acceptable to the Committee and valued at their Fair
Market Value on the date of exercise; through a combination of Shares and
cash; or
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through such other means as the Committee may determine. Without limiting
the foregoing, to the extent permitted by applicable law:
(i) The Committee may, on such terms and conditions as it may
determine, agree to accept as full or partial payment of the
exercise price the proceeds of a loan from the Company to the
Participant. The loan shall be evidenced by the Participant's
promissory note, which promissory note shall (A) be payable as
determined by the Committee, (B) be secured by a pledge of the
Shares acquired upon exercise of the Option, (C) be full recourse
with respect to the Participant and (D) bear interest at a rate,
established by the Committee, not less than needed to avoid the
imputation of income under the Code; and
(ii) The Committee may, on such terms and conditions as it may
determine, permit a Participant to elect to pay the exercise
price by authorizing a third party, pursuant to a brokerage or
similar arrangement approved in advance by the Committee, to
simultaneously sell all (or a sufficient portion) of the Shares
acquired upon exercise of the Option and to remit to the Company
a sufficient portion of the proceeds from the sale to pay the
entire exercise price of the Option and any required tax
withholding resulting therefrom.
c. No fractional Shares will be issued or accepted. The Committee may
impose such other conditions, restrictions and contingencies with
respect to Shares delivered pursuant to the exercise of an Option as
it deems desirable.
d. Options granted under the Plan are not intended to be incentive stock
options under Section 422 of the Code.
e. The Committee may require or permit Participants to defer the issuance
or vesting of Shares under such rules and procedures as it may
establish under the Plan. The Committee may also provide that deferred
settlements include the payment of, or crediting of interest on, the
deferral amounts or the payment or crediting of dividend equivalents
on deferred settlements denominated in Shares.
Section 5. Shares Available under Plan
a. Subject to the adjustment provisions of Section 9, the number of
Shares with respect to which Options may be granted under the Plan
shall not exceed 8,000,000 Shares; provided that with respect to the
unexercised portion of any terminated or forfeited Option and Shares
tendered or withheld to pay the exercise price of an Option and/or any
required tax withholding with respect to an Option shall be available
for further Option grants. Additional rules for determining the number
of Shares granted under the Plan may be adopted by the Committee, as
it deems necessary and appropriate.
b. Subject to the adjustment provisions of Section 9, no single
Participant shall receive Options with respect to more than 2,500,000
Shares.
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c. The Shares that may be issued pursuant to an Option under the Plan may
be treasury or authorized but unissued Shares, or Shares may be
acquired, subsequently or in anticipation of the transaction, in the
open market to satisfy the requirements of the Plan.
Section 6. Option Agreements
Each Option under the Plan shall be evidenced by an Option Agreement. Each
Option Agreement shall set forth the terms and conditions applicable to the
Option, as determined by the Committee subject to the Plan, including but not
limited to provisions describing the treatment of an Option in the event of the
termination of a Participant's status as an Employee, Director or Consultant.
Section 7. Amendment and Termination
The Board of Directors may at any time amend, suspend or terminate the
Plan, in whole or in part, and the Committee may, subject to the Plan, at any
time alter or amend any or all Option Agreements to the extent permitted by
applicable law; provided that no such action shall impair the rights of any
holder of an Option without the holder's consent. Notwithstanding the foregoing,
neither the Board of Directors nor the Committee shall (except pursuant to
Section 9) amend the Plan or any Option Agreement without the approval of the
shareholders of the Company to (i) increase the number of Shares available for
Options in total and to each Participant as set forth in Section 5, (ii)
decrease the exercise price of any Option or (iii) change the definition of
Employee.
Section 8. Administration
a. The Plan and all Options shall be administered by the Committee. In
the absence of the Committee, or to the extent determined by the Board
of Directors, any action that could be taken by the Committee may be
taken by the Board of Directors, provided that any such action may be
taken with respect to Covered Employees only by those members of the
Board of Directors who are considered "outside directors" within the
meaning of Treasury Reg. ss.1.162-27(e)(3). A majority of the members
of the Committee shall constitute a quorum. The vote of a majority of
a quorum shall constitute action by the Committee.
b. The Committee shall have full and complete authority, in its sole and
absolute discretion, (i) to exercise all of the powers granted to it
under the Plan, (ii) to construe, interpret and implement the Plan and
any related document, (iii) to prescribe, amend and rescind rules
relating to the Plan, (iv) to make all determinations necessary or
advisable in administering the Plan and (v) to correct any defect,
supply any omission and reconcile any inconsistency in the Plan. The
actions and determinations of the Committee on all matters relating to
the Plan and any Options will be final and conclusive. The Committee's
determinations under the Plan need not be uniform and may be made by
it selectively among Participants who receive, or who are eligible to
receive, Options under the Plan, whether or not such persons are
similarly situated.
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c. The Committee and others to whom the Committee has allocated or
delegated authority or duties shall keep a record of all their
proceedings and actions and shall maintain all such books of account,
records and other data as shall be necessary for the proper
administration of the Plan.
d. The Company shall pay all reasonable expenses of administering the
Plan, including, but not limited to, the payment of professional fees.
e. It is the intent of the Company that this Plan and Options hereunder
satisfy, and be interpreted in a manner that satisfy, (i) in the case
of Participants who are or may be Insiders, the applicable
requirements of Rule 16b-3 of the Exchange Act so that such persons
will be entitled to the benefits of Rule 16b-3, or other exemptive
rules under Section 16, and will not be subjected to avoidable
liability thereunder and (ii) the applicable requirements of Code
Section 162(m). If any provision of this Plan or of any Option
Agreement would otherwise frustrate or conflict with the intent
expressed in this Section 8(e), that provision, to the extent
possible, shall be interpreted and deemed amended so as to avoid such
conflict. To the extent of any remaining irreconcilable conflict with
such intent, such provision shall be deemed void as applicable to
Insiders and/or Covered Employees, as applicable.
f. The Committee may appoint such accountants, counsel and other experts
as it deems necessary or desirable in connection with the
administration of the Plan.
g. Except to the extent prohibited by applicable law or otherwise, the
Committee may from time to time allocate to one or more of its members
and delegate to one or more Employees or Directors all or any portion
of its authority and duties, provided that the Committee may not
allocate or delegate any discretionary authority with respect to
substantive decisions or functions regarding the Plan or Options to
the extent inconsistent with the intent expressed in Section 8(e).
Section 9. Adjustment Provisions
a. In the event of any change in the outstanding Shares by reason of a
stock dividend or stock split, the number of Shares then remaining
subject to this Plan, and the maximum number of Shares that may be
issued to any single Participant pursuant to this Plan, including
those that are then covered by outstanding Options, shall (i) in the
event of an increase in the number of outstanding Shares, be
proportionately increased and the price for each Share then covered by
an outstanding Option shall be proportionately reduced, and (ii) in
the event of a reduction in the number of outstanding Shares, be
proportionately reduced and the price for each Share then covered by
an outstanding Option shall be proportionately increased.
b. In the event of any change in the outstanding Shares by reason of a
recapitalization, merger or consolidation (whether or not the Company
is the surviving corporation), reorganization, combination or exchange
of shares or other similar corporate changes or an extraordinary
dividend in cash or
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property, but not including the repurchase or issuance of Shares by
the Company unrelated to any such corporate change or extraordinary
dividend, the number and kind of shares subject to this Plan, the
maximum number of shares that may be issued to any single Participant,
the number and kind of shares subject to outstanding Options and the
exercise price thereof shall be adjusted by the Committee as it deems
appropriate to prevent dilution or enlargement of the rights and
benefits intended to be conveyed by an Option.
c. The Committee shall make any further adjustments as it deems necessary
to help ensure equitable treatment of any holder of an Option as the
result of any transaction affecting the securities subject to the Plan
not described in Section 9(a) or (b), or as is required or authorized
under the terms of any applicable Option Agreement, provided the
Committee shall not be permitted under this Section 9(c) to increase
the number of Shares available for Options in total or to each
Participant as set forth in Section 5.
d. The existence of the Plan and the Options granted hereunder shall not
affect or restrict in any way the right or power of the Board of
Directors or the shareholders of the Company to make or authorize any
adjustment, recapitalization, reorganization or other capital
structure of its business, any merger or consolidation of the Company,
any issue of bonds, debentures, preferred or prior preference shares
ahead of or affecting the Shares or the rights thereof, the
dissolution or liquidation of the Company or any sale or transfer of
all or any part of its assets or business, or any other corporate act
or proceeding.
Section 10. Change of Control
a. In the event of a Change of Control, in addition to any action
required or authorized by the terms of an Option Agreement, the
Committee may, in its sole discretion, take any of the following
actions as a result, or in anticipation, of any such event to assure
fair and equitable treatment of Participants:
(i) accelerate time periods for purposes of vesting in, or
realizing gain from, any outstanding Option granted pursuant
to this Plan;
(ii) offer to purchase any outstanding Option granted pursuant to
this Plan from the holder for its equivalent cash value, as
determined by the Committee, as of the date of the Change of
Control; or
(iii) make adjustments or modifications to outstanding Options as
the Committee deems appropriate to maintain and protect the
rights and interests of Participants following such Change of
Control.
Notwithstanding the foregoing provisions of this section or any provision in an
Option Agreement to the contrary, in no event shall the Committee be deemed
to have discretion to accelerate or not accelerate or make other changes in
or to any or all Options, in respect of a transaction, if such action or
inaction would be inconsistent with or would
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otherwise frustrate the intended accounting for a proposed transaction as a
pooling of interest under generally accepted accounting principles.
b. A "Change of Control" means any change in control of the Company, or
its principal subsidiary, The Dayton Power and Light Company ("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 Exchange
Act as determined by the Board of Directors 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 the Company or DP&L or an entity then directly or
indirectly controlling, controlled by or under common control with the
Company or DP&L is on the effective date hereof, or becomes the
beneficial owner, directly or indirectly, of securities of the Company
or DP&L representing (A) 15% or more of the combined voting power of
the then outstanding securities of the Company or DP&L if the
acquisition of such beneficial ownership is not approved by the Board
of Directors prior to the acquisition or (B) 50% or more of such
combined voting power in all other cases; (ii) the Company 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. Codess.1701.01 as in effect on December 31,
1990) 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" exercisable on a contingent or deferred basis
as well as immediately exercisable "voting power", excluding any
merger of the Company into DP&L or of DP&L into the Company; (iii) the
Company 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 the Company; 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 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; (iv) any transaction
referred to in (ii) or (iii) above is consummated; or (v) those
persons serving as directors of the Company or DP&L on the date this
Plan is effective (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).
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Section 11. Miscellaneous
a. NONASSIGNABILITY. Except as otherwise provided in this Plan or by the
Committee, no Option or benefit or right related thereto shall be
assignable or transferable except by will or by the laws of descent
and distribution.
b. OTHER PAYMENTS OR AWARDS. Nothing contained in the Plan shall be
deemed in any way to limit or restrict the Company or a Subsidiary
from making any award or payment to any person under any other plan,
arrangement or understanding, whether now existing or hereafter in
effect.
c. PAYMENTS TO OTHER PERSONS. To the extent permitted by law, none of the
benefits payable under or relating to the Plan shall be subject to the
claims or legal process of the creditors of a Participant or of his or
her beneficiary, spouse, prior spouse, or other persons or entity. Any
payment legally required to be made to any person other than the
person to whom any amount is made available under the Plan shall be a
complete discharge of the liability with respect thereto.
d. UNFUNDED PLAN. The Plan shall be unfunded. No provision of the Plan or
any Option Agreement shall require the Company or a Subsidiary, for
the purpose of satisfying any obligations under the Plan, to purchase
assets or place any assets in a trust or other entity to which
contributions are made or otherwise to segregate any assets, nor shall
the Company or a Subsidiary maintain separate bank accounts, books,
records or other evidence of the existence of a segregated or
separately maintained or administered fund for such purposes.
Participants shall have no rights under the Plan other than as
unsecured general creditors of the Company or a Subsidiary, except
that insofar as they may have become entitled to payment of additional
compensation by performance of services, they shall have the same
rights as other employees under generally applicable law.
e. LIMITS OF LIABILITY. Any liability of the Company or a Subsidiary to
any Participant with respect to an Option shall be based solely upon
contractual obligations created by the Plan and the Option Agreement.
Neither the Company or its Subsidiaries, nor any member of the Board
of Directors or of the Committee, nor any other person participating
in any determination of any question under the Plan, or in the
interpretation, administration or application of the Plan, shall have
any liability to any party for any action taken, or not taken, in good
faith under the Plan.
f. RIGHTS OF PARTICIPANTS. Status as an eligible Employee, Director or
Consultant shall not be construed as a commitment that any Option
shall be granted under this Plan to such eligible Employee, Director
or Consultant or to eligible Employees, Directors and Consultants
generally. Nothing contained in this Plan or in any Option Agreement
shall confer upon any Participant any right to continue in the employ
or other service of the Company or a Subsidiary or constitute any
contract or limit in any way the right of the Company or a Subsidiary
to change such person's compensation or other benefits or to terminate
the employment or other service of such person with or without cause.
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Except as provided otherwise in an Option Agreement, a Participant's
(i) transfer from the Company to a Subsidiary or affiliate of the
Company, whether or not incorporated, or vice versa, or from one
Subsidiary to another; (ii) change in status to or from Employee,
Director or Consultant; or (iii) leave of absence, duly authorized in
writing by the Company or a Subsidiary, shall not be deemed a
termination of such Participant's employment or other service.
g. RIGHTS AS A SHAREHOLDER. A Participant shall have no rights as a
shareholder with respect to any Shares covered by an Option until the
date the Participant becomes the holder of record of such Shares.
Except as provided in Section 9, no adjustment shall be made for
dividends or other rights, unless the Option Agreement specifically
requires such adjustment.
h. WITHHOLDING. Applicable taxes, to the extent required by law, shall be
withheld in respect of all Options. A Participant may satisfy the
withholding obligation by paying the amount of any taxes in cash,
check (subject to collection) or Shares, or with the approval of the
Committee, Shares may be deducted from the payment to satisfy the
obligation in full or in part. The amount of the withholding and the
number of Shares to be paid or deducted in satisfaction of the
withholding requirement shall be determined by the Committee with
reference to the Fair Market Value of the Shares when the withholding
is required to be made.
i. SECTION HEADINGS. The section headings contained herein are for the
purpose of convenience only, and in the event of any conflict, the
text of the Plan, rather than the section headings, shall control.
j. CONSTRUCTION. In interpreting the Plan, the masculine gender shall
include the feminine, the neuter gender shall include the masculine or
feminine, and the singular shall include the plural unless the context
clearly indicates otherwise.
k. INVALIDITY. If any term or provision contained herein or in any Option
Agreement shall to any extent be invalid or unenforceable, such term
or provision will be reformed so that it is valid, and such invalidity
or unenforceability shall not affect any other provision or part
hereof or thereof.
l. APPLICABLE LAW. The Plan, the Option Agreements and all actions taken
hereunder or thereunder shall be governed by, and construed in
accordance with, the laws of the State of Ohio without regard to the
conflict of law principles thereof.
m. COMPLIANCE WITH LAWS. Notwithstanding anything contained herein or in
any Option Agreement to the contrary, the Company shall not be
required to sell or issue Shares hereunder or thereunder if the
issuance would constitute a violation by the Participant or the
Company of any provisions of any law or regulation of any governmental
authority or any national securities exchange; and as a condition of
any sale or issuance, the Company may require such agreements or
undertakings, if any, as the Company may deem necessary or advisable
to assure compliance with any such law or regulation.
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n. EFFECTIVE DATE AND TERM. The Plan was adopted by the Board of
Directors effective as of February 1, 2000, subject to approval by the
Company's shareholders. The Committee may grant Options prior to
shareholder approval, provided, however, that Options granted prior to
such shareholder approval are automatically cancelled if shareholder
approval is not obtained at or prior to the period ending 12 months
after the date the Plan is effective and provided further that no
Option may be exercisable prior to the date shareholder approval is
obtained. The Plan shall remain in effect until all Options granted
under the Plan have been exercised or terminated under the terms of
the Plan and applicable Option Agreements.
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