DPL Inc.

1065 Woodman Drive
Dayton, Ohio 45432
-----------------

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 9, 2003
-----------------

To Shareholders of
DPL Inc.:

The Annual Meeting of Shareholders of DPL Inc. will be held at Fort
Recovery Elementary/Middle School, 865 Sharpsburg Road, Fort Recovery, Ohio on
Wednesday, April 9, 2003, at 1:30 p.m.

The business of the meeting will be:

1. To elect three directors of DPL Inc., each of whom shall serve for a
term of three years.

2. To transact such other business as may properly come before the
meeting or any adjournments thereof.

Holders of common shares of record at the close of business on February
11, 2003 are entitled to vote at the meeting.

If you are a holder of common shares and will not be present personally,
please mark, sign, date and return the enclosed proxy in the enclosed
self-addressed envelope as promptly as possible so that the presence of a
quorum may be assured and unnecessary expense avoided. Giving the proxy will
not affect your right to vote in person if you attend the meeting.

Your vote is important to us and we thank you for your prompt response and
continued interest in DPL Inc.

Sincerely,

/s/ ARTHUR G. MEYER

ARTHUR G. MEYER
Vice President and Secretary

Dayton, Ohio
March 1, 2003

DPL Inc.
1065 Woodman Drive, Dayton, Ohio 45432

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PROXY STATEMENT
-----------------

This Proxy Statement is furnished to you and other shareholders of DPL
Inc. in connection with the solicitation of proxies by its Board of Directors
to be used at the Annual Meeting of Shareholders to be held at Fort Recovery
Elementary/Middle School, 865 Sharpsburg Road, Fort Recovery, Ohio on April 9,
2003 at 1:30 p.m. and any adjournments thereof. At the close of business on
February 11, 2003, the record date for the Annual Meeting, DPL Inc. had
outstanding 126,501,404 common shares and 6,600,000 Series B voting preferred
shares. Only holders of common shares and Series B voting preferred shares on
such record date are entitled to vote at the Annual Meeting, and each such
shareholder is entitled to one vote per share.

All common shares represented by properly executed proxies received by the
Board of Directors pursuant to this solicitation will be voted in accordance
with the shareholder's directions specified on the proxy. If no directions have
been specified by marking the appropriate squares on the accompanying proxy
card, the shares will be voted "FOR" the proposals as listed. A shareholder
signing and returning the accompanying proxy has the power to revoke it at any
time prior to its exercise.

All expenses in connection with this solicitation of proxies will be paid
by DPL Inc. Proxies will be solicited principally by mail but directors,
officers, and certain other individuals specified by DPL Inc. may personally
solicit proxies. In addition, DPL Inc. has retained Georgeson Shareholder
Communications Inc., a proxy solicitation firm, to assist in the solicitation
of proxies. DPL Inc. will reimburse custodians, nominees or other persons for
their out-of-pocket expenses in sending proxy material to beneficial owners and
will pay Georgeson Shareholder Communications Inc. a fee of approximately
$12,000, plus out-of-pocket expenses.

This Proxy Statement together with the accompanying proxy card were first
mailed to common shareholders on or about March 3, 2003.

BUSINESS OF THE MEETING

1. Election of Directors

The Regulations of DPL Inc. provide for the classification of Directors
into three classes, with each class being of approximately equal size and in no
event shall any class contain fewer than three directors nor more than four
directors. The term of each directorship is three years and the terms of the
three classes are staggered in a manner so that only one class is elected by
the shareholders annually. The Board is presently authorized to consist of ten
directors and one advisory director. These directors are also directors of
DP&L. Three directors are to be elected this year to serve until the Annual
Meeting of Shareholders in 2006 or until their successors are duly elected and
qualified.

Mr. Burnell R. Roberts and Mr. David R. Holmes, who are in the Class of
2003, will be retiring as Directors at the end of their terms in April, and Mr.
Allen M. Hill, who is in the Class of 2004, retired from the Board of Directors
and as President and Chief Executive Officer of DPL Inc. effective January 1,
2003. Messrs. Roberts, Holmes and Hill have collectively served as Directors
for 39 years, making significant and lasting contributions during a very
challenging and successful period of your Company's history. We offer our
sincere appreciation to these gentlemen on behalf of all of our Shareholders,
Directors, Customers and Employees and wish them well in their future
endeavors. Their wisdom and leadership will be greatly missed. Mr. Stephen F.
Koziar, Jr., President and Chief Executive Officer of DPL Inc., has been
appointed to the Board to fill Mr. Hill's position. Mr. George R. Roberts will
participate as an advisory director in 2003.

Mr. Wallace Creek will stand for election to his first term as a member of
the Class of 2006. Mr. Creek had a long and distinguished career with General
Motors Corporation, moving through various financial positions in the Pontiac
Motor Division, Corporate Finance, the Cadillac Motor Car Division and GM
Espana. Mr. Creek was appointed Controller of the Inland Division in 1986, and
most recently was elected Controller of General Motors Corporation in 1992, the
position he held until his retirement in 2002. Mr. Creek is currently Senior
Vice President of Collins & Aikman Corporation in Detroit, Michigan. Collins &
Aikman Corporation produces cockpit modules and automotive floor and acoustic
systems and related products.

Mr. Michael W. Grebe will stand for election to his first term as a member
of the Class of 2006. Since joining Foley and Lardner in Milwaukee, one of the
country's largest law firms, in 1970, Mr. Grebe was a Partner for more than
twenty-five years, and Chairman and Chief Executive Officer the last eight
years. His practice concentrated on corporate and financial law, with extensive
experience in dealing with banking and insurance issues. He was elected
President and Chief Executive Officer of the Lynde and Harry Bradley Foundation
in 2001. The Lynde and Harry Bradley Foundation, Milwaukee, Wisconsin, is a
grant-making institution supporting programs and studies to improve community
life through increasing cultural and educational opportunities, economic
development and effective humane social and health services.

The business experience and community leadership of each of these
individuals will be a valuable asset to DPL Inc. shareholders.

Unless specifically instructed to the contrary, the Proxy Committee named
in the enclosed form of proxy will vote all duly executed proxies "FOR" the
election of the nominees named below. Should any nominee become unable to
accept nomination or election, the Proxy Committee will vote for the election
of such other person as a director as the present directors may recommend in
the place of such nominee. The following information regarding the nominees and
the other directors continuing in office is based on information furnished by
them:

Nominees for Director for Three-year Term Expiring in 2006

WALLACE CREEK, Age 63. --
Senior Vice President, Collins & Aikman Corporation,
Detroit, Michigan, cockpit modules and automotive
components manufacturers.
Director: Columbus McKinnon Corporation, Quantom
Technologies, Inc.

[Photo of Michael W. Grebe]

MICHAEL W. GREBE, Age 61. --
President and Chief Executive Officer, The Lynde and
Harry Bradley Foundation, Milwaukee, Wisconsin, grant-
making institution.
Director: Oshkosh Truck Corporation, Milwaukee Brewers
Baseball Club.

[PHOTO OF ERNIE GREEN]

ERNIE GREEN, Age 64, Director since 1991. 130,742
President and Chief Executive Officer, Ernie Green
Industries, Dayton, Ohio, automotive components
manufacturer.
Director: Pitney Bowes Inc., Eaton Corp.

Common Shares
Beneficially Owned
Principal Occupation and Other Information at February 11, 2003(1)
- -----------------------------------------------------------------------------------------
Class of 2004
- -----------------------------------------------------------------------------------------

[PHOTO OF THOMAS J. DANIS]

THOMAS J. DANIS, Age 53, Director since 1989. 140,958
Chairman and Chief Executive Officer, The Danis
Companies, Dayton, Ohio, construction, real estate
and environmental services.

[PHOTO OF W AUGUST HILLENBRAND]

W AUGUST HILLENBRAND, Age 62, Director since 1992. 111,341
Chief Executive Officer, Hillenbrand Capital Partners,
Retired President and Chief Executive Officer, Hillenbrand
Industries, Batesville, Indiana, a diversified public holding
company that manufactures caskets, hospital furniture,
hospital supplies and provides funeral planning services.
Director: Hillenbrand Industries, Pella Corporation.
Trustee: Batesville Girl Scouts.
Trustee Emeritus: Denison University.

[PHOTO OF STEPHEN F. KOZIAR]

STEPHEN F. KOZIAR, JR., Age 58, Director since 2002. 202,988(2)
President and Chief Executive Officer, DPL Inc.
and The Dayton Power and Light Company.
Board Member: The Miami Valley Council of Boy Scouts
of America, Ohio Electric Utility Institute and The Dayton
Power and Light Company Foundation.

[PHOTO OF SCOTT M. STUART]

SCOTT M. STUART, Age 43, Director since 2000. 55,302(4)
Member, KKR & Co. LLC, New York City,
investment company.
Director: Borden, Inc., The Boyds Collection, Ltd.

Common Shares
Beneficially Owned
Principal Occupation and Other Information at February 11, 2003(1)
- ----------------------------------------------------------------------------------------
Class of 2005
- ----------------------------------------------------------------------------------------

[PHOTO OF JAMES F. DICKE]

JAMES F. DICKE, II, Age 57, Director since 1990. 243,993
President, Crown Equipment Corporation, New Bremen,
Ohio, international manufacturer and distributor of electric
lift trucks and material handling products.
Director: Gulf States Paper Co.
Trustee: Trinity University, Culver Educational Foundation.
Commissioner: Smithsonian American Art Museum

[PHOTO OF PETER H. FORSTER]

PETER H. FORSTER, Age 60, Director since 1979. 912,519(3)
Chairman, DPL Inc. and The Dayton Power and
Light Company.
Chairman: Miami Valley Research Foundation.
Director: Amcast Industrial Corp.
Trustee: F.M. Tait Foundation.

[PHOTO OF JANE G. HALEY]

JANE G. HALEY, Age 72, Director since 1978. 162,540
President and Chief Executive Officer, Gosiger, Inc.,
Dayton, Ohio, national importer and distributor of
machine tools.
Director: The Ultra-Met Company, Urbana, Ohio, ONA
America, Dayton, Ohio.
Trustee: University of Dayton, Chaminade-Julienne High
School, Dayton, Ohio.
Member: Dayton Development Coalition, Area Progress
Council.

Common Shares
Beneficially Owned
Principal Occupation and Other Information at February 11, 2003(1)
- -------------------------------------------------------------------------------------
Advisory Director
- -------------------------------------------------------------------------------------

[PHOTO OF GEORGE R. ROBERTS]

GEORGE R. ROBERTS, Age 59, Director since 2000. 55,041(4)
Partner, Kohlberg Kravis Roberts & Co. L.P. and
Managing Member of KKR & Co. LLC, New York City,
investment company.
Director: Borden, Inc., The Boyds Collection, Ltd.,
KinderCare Learning Center, Inc., KSL Recreation Group,
Inc., Owens-Illinois, Inc., PRIMEDIA, Inc., Safeway Inc.,
Willis Group Holdings Limited.
Trustee: Claremont McKenna College, Culver Military
Academy.
Board Member: San Francisco Symphony, San Francisco
Ballet, Fine Arts Museum.

- ----------------------
(1) The number of shares shown represents in each instance less than 1% of the
outstanding common shares. There were 2,962,550 shares and share units, or
2.3% of the total number of common shares, beneficially owned by all
directors and executive officers of DPL Inc. and DP&L as a group at
February 11, 2003, excluding shares beneficially owned by an affiliate of
KKR. See note (4) below. The number of shares shown includes (i) common
shares transferred to the Master Trust for non-employee directors pursuant
to the Directors' Deferred Stock Compensation Plan, (ii) 50,000 common
shares subject to presently exercisable options for each non-employee
director except Mr. Forster and (iii) share units with no voting rights
held by non-employee directors under the Directors' Deferred Compensation
Plan as follows: Mr. Danis 41,737 units, Mr. Hillenbrand 30,177 units, Mr.
Stuart 5,302 units, Mr. Dicke 39,302 units, Mrs. Haley 40,957 units, Mr.
Green 33,360 units and Mr. Roberts 5,041 units.
(2) The number of shares shown for Mr. Koziar includes 16,554 common shares and
186,434 Restricted Share Units with no voting rights.
(3) The number of shares shown for Mr. Forster includes 45,276 common shares
and 906,165 Restricted Share Units with no voting rights.
(4) Excludes 31,560,000 common shares subject to warrants and 6,600,000 Series
B voting preferred shares beneficially owned by Dayton Ventures LLC, an
affiliate of KKR. George R. Roberts and Scott M. Stuart disclaim beneficial
ownership of all such shares. See "Security Ownership of Certain Beneficial
Owners."

Scott M. Stuart and George R. Roberts are the KKR designees pursuant to
the Securityholders and Registration Rights Agreement among DPL Inc., Dayton
Ventures LLC and Dayton Ventures, Inc. This agreement gives affiliates of KKR
the right to designate one person for election to, and one person to attend as
a non-voting observer at all meetings of the DPL Inc. and DP&L Boards of
Directors for as long as Dayton Ventures LLC and its affiliates continue to
beneficially own at least 12,640,000 common shares of DPL Inc., including
shares issuable upon exercise of the warrants.

The three candidates receiving the greatest number of votes will be
elected as directors. Abstentions and broker non-votes will be treated as
non-votes.

Under Ohio law, if a shareholder gives written notice to the President, a
Vice President or the Secretary, not less than 48 hours before the Annual
Meeting, that such shareholder desires the voting at the election of directors
to be cumulative, and if an announcement of the giving of such notice is made
upon the convening of the meeting by or on behalf of the shareholder giving
such notice, then shareholders will be entitled to give one candidate as many
votes as the number of directors to be elected multiplied by the number of
their shares, or to distribute their votes on the same principle among two or
more candidates. In the event that directors are elected by cumulative voting
and cumulated votes represented by proxies solicited hereby are insufficient to
elect all the nominees, then the Proxy Committee will vote such proxies
cumulatively for the election of as many of such nominees as possible and in
such order as the Proxy Committee may determine.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires DPL Inc.'s
directors and executive officers to file reports of ownership and changes of
ownership of DPL Inc. Common Shares with the Securities and Exchange
Commission. DPL believes that during fiscal 2002, all filing requirements
applicable to its directors and executive officers were met. Mrs. Jane G. Haley
filed a late Form 4 reporting two purchases of DPL Inc. Common Shares in
February 2003.

Information Concerning the Board of Directors and its Committees for 2002

The Board of Directors of DPL Inc. met on eleven occasions and the Board
of Directors of DP&L met on six occasions during 2002. The three standing
committees of DPL Inc.--Executive, Finance and Audit Review and Compensation
and Management Review--held seventeen meetings in total and the standing
committee of DP&L--Community and External Relations--met two times in total.

COMMITTEES OF DPL INC. AND DP&L

Executive Committee

This Committee consists of the following non-employee members of the
Board: Peter H. Forster, Chairman, James F. Dicke, II, W August Hillenbrand,
Burnell R. Roberts and Scott M. Stuart. Allen M. Hill was a non-voting member.

The principal duties of this Committee include evaluating executive
management development, succession and organizational structure in addition to
director selection, tenure and succession. This Committee also serves on a
standby basis for use in an emergency which requires immediate action. This
Committee met five times during 2002.

The non-employee members of the Executive Committee act as a nominating
committee for the Board of Directors and endeavor to identify, seek out, and if
necessary actively recruit, the best available candidates who, in the judgment
of the Committee, have the character, education, training, experience and
proven accomplishments which give promise of significant contribution to the
responsible and profitable conduct of DPL Inc.'s business in the interest of
all shareholders, customers and employees. This Committee considers qualified
nominees submitted to DPL Inc. by shareholders.

Community and External Relations Committee

This Committee consists of the following non-employee members of the
Board: Jane G. Haley, Chairman, Thomas J. Danis, Peter H. Forster, Ernie Green
and David R. Holmes. Allen M. Hill was a non-voting member.

The Community and External Relations Committee provides for a periodic
review of DP&L's relations with all sectors of the community with which it is
vitally concerned--shareholders, customers, governmental bodies and agencies,
political groups, regulatory agencies, elected officials and the media. This
Committee met two times during 2002.

Finance and Audit Review Committee

This Committee consists of the following non-employee members of the
Board: Thomas J. Danis, Chairman, Ernie Green, Jane G. Haley and David R.
Holmes. Committee members are independent as defined by the applicable listing
standards of the NYSE.

The Finance and Audit Review Committee oversees the financial plans,
approves the terms and conditions of financial arrangements and recommends to
the Board of Directors such actions and policies that will best accommodate DPL
Inc.'s objectives and operating strategies while maintaining its sound fiscal
health. It also provides direct communication between DPL Inc.'s internal
auditors, the independent auditors, PricewaterhouseCoopers LLP, and the Board
of Directors. It is intended to assure the independent auditors the freedom,
cooperation and opportunity necessary to accomplish their

functions. It is also intended to assure that appropriate action is taken on
the recommendations of the auditors. This Committee met eight times during
2002.

Finance and Audit Review Committee Report

The Finance and Audit Review Committee (the "Committee") of the Board of
Directors of DPL Inc. is comprised of four non-management Directors and
operates under a written charter attached as an Appendix.

During 2002 meetings of the Committee, audited financial statements were
reviewed and discussed with management and PricewaterhouseCoopers LLP, DPL
Inc.'s independent accountants. Based on these discussions, the Committee
recommended to the Board of Directors that the audited financial statements for
the year ended December 31, 2002 be included in the DPL Inc. Annual Report on
Form 10-K.

Additionally, the Committee discussions held with PricewaterhouseCoopers
LLP included those matters required by Statement on Auditing Standards No. 61.
The Committee received from PricewaterhouseCoopers written disclosure and a
letter regarding its independence as required by Independence Standards Board
Standard No. 1. This information was discussed with PricewaterhouseCoopers LLP.

Finance and Audit Review Committee

Thomas J. Danis, Chairman
Jane G. Haley
David R. Holmes
Ernie Green

Compensation and Management Review Committee

This Committee consists of the following non-employee members of the
Board: Burnell R. Roberts, Chairman, James F. Dicke, II, W August Hillenbrand
and Scott M. Stuart.

The Compensation and Management Review Committee has the broad
responsibility to see that the officers and key management personnel of DPL
Inc. and its subsidiaries perform in accordance with corporate objectives, and
are compensated in terms of salaries, supplemental compensation and benefits
which are internally equitable and externally competitive. The Committee
administers the deferred, incentive and long-term compensation and stock option
plans for directors and officers. This Committee met four times during 2002.

Corporate Governance

In 2002, DPL conducted a rigorous review of its corporate governance
guidelines and policies to ensure that DPL's Code of Business Conduct and
Corporate Governance Guidelines are consistent with the highest standards and
most contemporary thinking on issues of corporate governance and conduct. In
January of 2003, DPL's Board adopted an amended Code of Business Conduct and
new Corporate Governance Guidelines that are consistent with the requirements
of the new federal legislation generated by the Sarbanes-Oxley Act of 2002.

DPL is well ahead of the government's prescribed timetable for the
implementation of many of the new requirements and recommendations. Among the
changes adopted was the reorganization of the Board Committees and the election
of a Lead Director as outlined below.

Board Committees for 2003

Beginning in 2003, the Board reorganized into four committees: Finance and
Audit Review Committee, Nominating and Corporate Governance Committee,
Compensation Committee and Community and External Relations Committee. Each
committee has its own charter. All of the members of these committees are
independent directors, as defined by law and New York Stock Exchange listing
standards. The Board may from time to time, establish or maintain additional
committees as necessary or appropriate. The Board has also elected a Lead
Director, Ernie Green, who will preside over all executive sessions of
non-management directors.

Finance and Audit Review Committee: The Finance and Audit Review Committee
oversees the Company's auditing, accounting, financial reporting and internal
control functions, appoints the Company's independent accounting firm and
approves its services. A copy of the Charter of the Finance and Audit Committee
is included herein.

Nominating and Corporate Governance Committee: The Nominating and
Corporate Governance Committee considers and recommends to the Board nominees
for officers and nominees for election as directors, including nominees
recommended by stockholders, and oversees evaluation of the Board and
management, provides input on setting goals and developing strategies to
achieve employee diversity and oversees the implementation of these strategies
and evaluates their results, and develops and recommends corporate governance
policies to the Board and oversees implementation. During intervals between
Board meetings, this committee exercises all of the powers of the Board except
as provided in the committee's charter.

Compensation Committee: The Compensation Committee makes recommendations
to the Board concerning senior officers' compensation and equity incentive and
other benefit plans.

Community and External Relations Committee: The Community and External
Relations Committee oversees relations with various members of the community
and reports its findings to the Board.

EXECUTIVE COMPENSATION

Compensation Report on Executive Compensation

DPL Inc. has designed its executive compensation programs to create a
strong and direct link between the compensation paid to senior executives, and
current and long term levels of company performance. The program also
recognizes each executive's individual contribution to that performance. Toward
that end, the Compensation and Management Review Committee (the "Committee")
annually reviews individual executive performance and evaluates, with its
outside compensation consultant, the executive compensation program.

The three components of DPL's Executive Compensation Program are Base
Salary, Annual Cash Incentives, and Stock Options.

With the change in the utility industry from a regulated business to a
customer choice business, Base Salary is based either on general industry
median compensation or a combination of utility and general industry depending
on function. In 2002, Base Salary was based solely on general industry median
compensation. Base Salary is subject to annual review and is adjusted based on
competitive movement, executive experience, operational performance, and
individual strategic contributions. 2002 increases were made to all executive
officers based on these criteria.

2002 Annual Cash Incentives were based on achieving individual operating
and financial targets such as managing operating and capital budgets,
optimizing operating efficiency, managing fuel costs, and ensuring customer
satisfaction. Measures and weightings differed from each executive based upon
functional responsibility. Some operational and financial targets were shared.
Target incentive awards ranged from thirty to seventy percent of base salary
depending upon the executive's position based on general industry median
levels. Annual incentives payouts are capped at one hundred and fifty percent
(150%) of target. Performance targets for 2002 were generally met by all
executives. However, the Committee used its discretion to reduce actual payouts
for the Chief Executive Officer and most positions below target incentive
levels, taking into consideration the state of the electric utility industry.

Long-term compensation consisted of the Stock Option Plan adopted by
shareholders in 2000. It replaced the annual Management Stock Incentive Plan
("MSIP") and the Supplemental Executive Retirement Plan that had been in place
prior to 2000. Mr. Forster, Mr. Hill, Mr. Koziar and Mr. Santo were granted
options in 2000, when the plan was introduced, based on competitive general
industry levels. The initial grant covered a three-year period and vests over
five years. Mr. Forster and Mr. Koziar also received stock options in 2002. The
options were granted to recognize Mr. Koziar's promotion and the additional
responsibilities of both executives.

DPL Inc. has a policy of encouraging stock ownership by management. As
such, Mr. Forster, Mr. Hill, Mr. Koziar and Mr. Santo have a high level of
ownership, which compares favorably to executives in utility and general
industry peer companies. To further reinforce executive ownership, such
individuals have previously been required to lock up and not sell certain
shares they individually own for five years.

DPL Inc. also maintains an incentive program for individuals managing all
financial assets of DPL Inc. This program is described in note (3) to the
Summary Compensation Table.

CEO Compensation

The Chief Executive Officer's total compensation potential for 2002 was
based on the median of general industry practices. The Chief Executive
Officer's annual and long-term incentive programs are variable enough to
provide actual total compensation at median general industry levels.

Overall, Mr. Hill's performance met expectations for 2002. Mr. Hill's
salary was increased by 8% for 2002 based on the Committee's assessment of his
individual contributions, consistent with the performance criteria used for all
executives. He also received a bonus for 2002 based on meeting operation and
maintenance targets and capital budgets which were weighted equally.

Conclusion

As a result of the cash settlement of the one-time restricted stock unit
(RSU) awards earned in 2000 (see page 15, footnote 3), a portion of the
compensation payable to executives was subject to the limitation on
deductibility imposed by Section 162(m) of the Internal Revenue Code. However,
the Committee generally attempts to structure compensation to preserve tax
deductibility.

The Committee believes that DPL Inc.'s annual and long-term incentive plan
goals have contributed to DPL Inc.'s total return on common equity being higher
than the utility industry as a whole between 1997 and 2002.

Compensation and Management Review Committee

Burnell R. Roberts, Chairman
James F. Dicke, II
W August Hillenbrand
Scott M. Stuart

Other Matters

In 2002, DPL Inc. directors who are not employees received an annual award
of 1,500 common share units for services as a director. The annual share unit
award replaced cash director fees effective July 1, 2000. Previously, directors
received $12,000 annually plus meeting attendance and committee fees.

Non-employee directors were eligible to receive grants of stock options
under the DPL Inc. Stock Option Plan. Each non-employee director, except Mr.
Forster, was granted an option to purchase 50,000 shares on February 1, 2000 at
an above market exercise price of $21 per share. The closing price on February
1, 2000 was $19 1/16 per share. These options represent a three-year block
grant, are currently exercisable and expire on February 1, 2010.

With the expiration of the Director Stock Option Plan, beginning in 2003,
Director Compensation will consist of a Retainer of $55,000, Board Meeting fees
of $5,000 per meeting, Committee Chair Retainer of $10,000, Committee Meeting
Fees of $4,000 per meeting and a Special Meeting fee of $3,000 per meeting.

DPL Inc. maintains a Deferred Compensation Plan for non-employee directors
in which payment of directors' fees may be deferred. Under the standard
deferred income program directors are entitled to receive a lump sum payment or
payments in installments over a period up to 20 years. Effective January 31,
2000, the supplementary deferred income program was terminated for current
directors and the value of each director's supplementary account transferred to
his or her standard deferral account. All current directors have designated
their standard deferral account be invested in DPL Inc. common share units.

Mr. Forster, who retired as Chief Executive Officer of DPL Inc. effective
December 31, 1996, entered into a three year agreement with DPL Inc. and DP&L
pursuant to which he serves as Chairman of the Board of DPL Inc. and DP&L and
provides advisory and strategic planning services. The term of the agreement is
automatically extended each December 31 for an additional year unless either
party gives advance notice of nonrenewal. For these services, Mr. Forster
receives an annual fee of $650,000 (as well as such bonuses, if any, as may be
determined by the Compensation and Management Review Committee in its
discretion) and is eligible to receive grants of stock options under the DPL
Inc. Stock Option Plan. As Chairman, Mr. Forster is responsible for the
long-term strategic planning of the Company, the oversight of financial assets,
and the evaluation and recommendations relating to the merger, acquisition and
disposition of utility assets. Mr. Forster participates in an incentive program
for individuals managing financial assets.

Certain Transactions

On March 13, 2000, Dayton Ventures, Inc. and Dayton Ventures LLC,
affiliates of Kohlberg Kravis Roberts & Co. L.P. ("KKR"), purchased a
combination of trust preferred securities issued by a trust established by DPL
Inc., voting preferred shares of DPL Inc. and warrants to purchase common
shares of DPL Inc. for $550 million. The trust preferred securities were
redeemed at par in 2001 with proceeds of a new issuance of trust preferred
securities and DPL Inc. Senior Notes. The 6.6 million Series B voting preferred
shares have voting power not exceeding 4.9% of the total outstanding voting
power of DPL Inc.'s voting securities and were purchased by Dayton Ventures LLC
for an aggregate purchase price of $68,000. The warrants to purchase 31.6
million common shares (representing approximately 19.9% of the common shares
then outstanding) have a term of 12 years, an exercise price of $21 per share,
and were purchased by Dayton Ventures LLC for an aggregate purchase price of
$50 million. DPL Inc. has agreed to pay KKR an annual management, consulting
and financial services fee of $1 million. At December 31, 2002 DPL Inc. had
subscribed to invest up to $190 million over time in KKR-sponsored investment
funds on customary terms.

[THE FOLLOWING MATERIAL WAS REPRESENTED AS A LINE CHART IN PRINTED VERSION]

Performance Comparison

Investment Returns
Value of $1000 Invested

Dow Jones S&P Electric
Date DPL Inc. Industrial Avg. Utilities S&P Utilities

Dec-97 $1,000.00 $1,000.00 $1,000.00 $1,000.00
Dec-98 $1,183.23 $1,181.27 $1,161.80 $1,146.06
Dec-99 $999.32 $1,502.30 $972.89 $1,041.91
Dec-00 $1,986.11 $1,431.39 $1,494.55 $1,635.74
Dec-01 $1,493.50 $1,354.69 $1,245.04 $1,139.76
Dec-02 $997.60 $1,152.36 $1,057.31 $798.47

Dividends Reinvested

Summary Compensation Table

Set forth below is certain information concerning the compensation of the
Chief Executive Officer and each of the other four most highly compensated
executive officers of DPL Inc. and its major subsidiary DP&L, for the last
three fiscal years, for services rendered in all capacities.

Long Term Compensation
-----------------------------------------------------
Annual
Compensation Securities
------------------------ Underlying LTIP All Other
Salary Bonus(1) Options(2) Payouts(3) Compensation(4)
Name and Principal Position Year ($) ($) (No. of Shares) ($) ($)
--------------------------- ---- ------ -------- --------------- ---------- ---------------

Allen M. Hill (5) 2002 $730,000 $210,000 -- -- $ 1,000
President and Chief Executive 2001 675,000 -- -- -- 1,000
Officer -- DPLInc. and DP&L 2000 600,000 300,000 1,350,000 sh. $2,180,000 1,000

Stephen F. Koziar, Jr. (6) 2002 $375,000 $210,000 300,000 sh. -- $ 1,000
President and Chief Executive 2001 302,000 -- -- -- 1,000
Officer -- elect DPL Inc. and 2000 272,000 100,000 495,000 sh. $1,100,000 1,000
DP&L

Peter H. Forster (7) 2002 $650,000 $100,000 300,000 sh. $ 840,000 $39,375
Chairman -- DPL Inc. and 2001 600,000 -- -- -- 43,000
DP&L 2000 550,000 300,000 2,400,000 sh. $3,312,000 61,000

Elizabeth M. McCarthy (8) 2002 $345,000 $ 47,000 -- -- $ 1,000
Group Vice President and Chief 2001 330,000 -- 125,000 sh. -- 1,000
Financial Officer -- DPL Inc. 2000 280,000 220,000 250,000 sh. $ 300,000 1,000
and DP&L

H. Ted Santo (9) 2002 $291,000 $ 79,000 -- -- $ 1,000
Group Vice President -- DP&L 2001 283,000 -- -- -- 1,000
2000 271,000 109,350 375,000 sh. $ 100,000 1,000

- ----------------------
(1) Amounts in this column represent awards made under the Management Incentive
Compensation Program ("MICP"). Awards are based on achievement of specific
predetermined operating and management goals in the year indicated and paid
in the year earned or in the following year.

(2) Amounts in this column for 2000 represent a three-year block grant of stock
options to the named executive under the DPL Inc. Stock Option Plan in lieu
of awards under the MSIP. Each executive, except Ms. McCarthy, was granted
a number of option shares equal to three times the executive's earned RSUs
held in the Master Trust under the MSIP. See "Option Grants in Last Fiscal
Year."

(3) Amounts shown for 2000 include the dollar value of a one-time contingent
award of RSUs approved by the Compensation Committee in 1999 which could be
earned only if the closing price of DPL Inc. common shares on the NYSE
Consolidated Transactions Tape achieved $26 per share between June 1999 and
July 1, 2001. These RSUs were earned in 2000 and settled in cash.

Amounts in this column also represent annualized incentives earned by the
named executive officer under a long-term incentive program for individuals
managing all financial assets of DPL Inc. For 2000, incentives were earned
based on annual performance and include $100,000 for Mr. Hill, $1.232
million for Mr. Forster and $100,000 for Mr. Koziar. In 2001 no incentives
were awarded under this program. In 2002, Mr. Forster was awarded $840,000
based on financial asset performance in 2001.

(4) Amounts in this column represent employer matching contributions on behalf
of each named executive, except Mr. Forster, under the DP&L Employee
Savings Plan made to the DPL Inc. Employee Stock Ownership Plan.

(5) Mr. Hill retired from the Company effective January 1, 2003 after over 37
years of service and from the Board of Directors. We offer our sincere
appreciation to Mr. Hill and wish him well in his future endeavors.

(6) Mr. Koziar has an employment agreement with DPL Inc. which provides for an
annual base salary of not less than $600,000, participation in the MICP,
Stock Option Plan, other incentive programs and fringe benefits for
executives. The agreement continues until December 31, 2005 unless earlier
terminated as provided in the agreement and provides for salary
continuation under certain circumstances.

(7) Annual compensation shown for Mr. Forster for 2000, 2001 and 2002 was paid
pursuant to an agreement with DPL Inc. and DP&L. All other compensation
shown for 2001 and 2002 represents the dollar value of the annual award of
1,500 shares to each non-employee director in lieu of directors fees, and
for 2000 represents directors fees of $26,700 and the dollar value of the
annual award of 1,500 shares to each non-employee director in lieu of
directors fee. Participation in the Director compensation program by Mr.
Forster was terminated during the year 2000. See "Information Concerning
the Board of Directors and its Committees -- Other Matters."

(8) Ms. McCarthy joined DPL Inc. in March 2000. Ms. McCarthy has an employment
agreement with DPL Inc. which provides for annual base salary as determined
by the Compensation Committee, participation in the MICP, a stock option
grant, $100,000 signing bonus subject to forfeiture and severance benefits.

(9) Mr. Santo retired from the Company effective January 1, 2003 after 27 years
of service. We offer our sincere appreciation to Mr. Santo and wish him
well in his future endeavors.

Option Grants in Last Fiscal Year

The following table sets forth information concerning individual grants of
stock options made to the named executive officers during the fiscal year ended
December 31, 2002.

Individual Grants
-------------------------------------------------------
Number of
Securities % of Total
Underlying Options Granted Exercise
Options to Employees in Price Expiration Grant Date
Name Granted(#)(1) Fiscal Year ($/Sh) Date Present Value($)(2)
---- ------------- --------------- -------- ---------- -------------------

Stephen F. Koziar, Jr. ......... 300,000 33% $14.95 9/24/12 768,000
Peter H. Forster ............... 300,000 33% $14.95 9/24/12 768,000

- ----------------------

(1) Options granted pursuant to the DPL Inc. Stock Option Plan on September 24,
2002. These options vest in three cumulative installments of 33 1/3% on
December 31, 2002, 2003 and 2004 and become exercisable on January 1, 2005.

(2) The grant date present value was determined using the Black-Scholes pricing
model. Significant assumptions used in the model were: expected volatility
24.0%, risk-free rate of return 3.44%, dividend yield of 4.28% and time of
exercise 8 years.

Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values

The following table sets forth information concerning each exercise of
stock options during fiscal 2002 by each of the named executive officers and
the fiscal year-end value of unexercised options.

Number of Securities Value of Unexercised
Shares Underlying Unexercised In-the-Money
Acquired Options at Fiscal Options at Fiscal
on Value Year-End (Number) Year-End ($)(1)
Exercise Realized ----------------------------- -----------------------------
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
---- -------- -------- ----------- ------------- ----------- -------------

Allen M. Hill .................. -- -- -- 810,000 -- --
Stephen F. Koziar, Jr. ......... -- -- -- 795,000 -- 117,000
Peter H. Forster ............... -- -- -- 2,700,000 -- 117,000
Elizabeth M. McCarthy .......... -- -- -- 375,000 -- --
H. Ted Santo ................... -- -- -- 225,000 -- --

- ----------------------
(1) Unexercised options were in-the-money if the fair market value of the
underlying shares exceeded the exercise price of the option at December 31,
2002.

Equity Compensation Plan Information

Number of securities
remaining available for
Number of securities to be Weighted-average future issuance under
issued upon exercise of exercise price of equity compensation plans
outstanding options, outstanding options, (excluding securities
warrants and rights warrants and rights reflected in column (a))
-------------------------- -------------------- -------------------------
Plan category (a) (b) (c)

Equity compensation plans approved by
security holders:
DPL Inc. Stock Option Plan .............. 7,359,500 $20.90 642,500
Equity compensation plans not approved
by security holders .....................
Directors' Deferred Stock Compensation
Plan .................................... 232,205 N/A See Note 1
Management Incentive Stock Plan .......... 2,123,998 N/A See Note 2
Total ..................................

- ----------------------
(1) The Directors' Deferred Stock Compensation Plan (the "Directors' Stock
Plan") provided for the annual award of DPL Inc. common shares to
non-employee directors for services as a director. All shares awarded under
the Directors' Stock Plan are transferred to the Master Trust. There was no
stated maximum number of shares that may have been awarded under the
Directors' Stock Plan.

(2) The Management Stock Incentive Plan (the "MSIP") provided for the award of
Restricted Share Units ("RSUs") to executives. Earning of RSUs was
dependent on the performance of DPL Inc. over a three-year performance
period. For each RSU which was earned and vests, a participant received the
equivalent of one DPL Inc. common share plus dividend equivalents from the
date of award. All payouts of vested RSUs under the MSIP are deferred until
retirement and are made in DPL Inc. common shares. The Stock Option Plan
replaced the MSIP and no additional awards have been made under the MSIP.

Change in Control Agreements

DPL Inc. has in place agreements with each of Mr. Koziar and Ms. McCarthy
providing for the payment of benefits upon the consummation of a change in
control of DPL Inc. or DP&L (generally, defined as the acquisition of 50% or
more of the voting securities (15% or more without board approval) or certain
mergers or other business combinations). The agreements require the individuals
to remain with DPL Inc. throughout the period during which any change of
control transaction is pending in order to help put in place the best plan for
the shareholders. The principal benefits under each agreement include payment
of the following: (i) 300% of the sum of the individual's annual base salary at
the rate in effect on the date of the change in control plus the average amount
paid to the individual under the MICP for the three preceding years; (ii) all
awarded or earned but unpaid RSUs; and (iii) continuing medical, life, and
disability insurance. In addition, upon termination of the individual's
employment under specified circumstances during the pendency of a change of
control, the individual is entitled to receive the individual's full base
salary and accrued benefits through the date of termination and the
individual's award for the current period under the MICP (or for a completed
period if no award for that period has yet been determined) fixed at an amount
equal to his average annual award paid for the preceding three years. In the
event any payments under these agreements are subject to an excise tax under
the Internal Revenue Code of 1986, the payments will be adjusted so that the
total payments received on an after-tax basis will equal the amount the
individual would have received without imposition of the excise tax. The
agreements are effective for one year but are automatically renewed each year
unless DPL Inc. or the participant notifies the other one year in advance of
its or his or her intent not to renew. DPL Inc. is obligated at the time of a
change of control to fund its obligations under the agreements and under the
Directors' and Officers' Compensation Plans by transferring required payments
to a grantor trust (the "Master Trust."). Mr. Forster's agreement with DPL Inc.
and DP&L contains similar benefits provisions.

Pension Plans

The following table sets forth the estimated total annual benefits payable
under the DP&L retirement income plan and the supplemental executive retirement
plan to executive officers at normal retirement date (age 65) based upon years
of credited service and final average annual compensation (including base and
incentive compensation) for the three highest years during the last five:

Total Annual Retirement Benefits for
Years of Credited Service at Age 65
------------------------------------------------
Final Average
Annual Earnings 10 Years 15 Years 20 Years 30 Years
- --------------- -------- -------- -------- ---------

$ 200,000 .............. $ 48,288 $ 72,432 $ 96,576 $128,821
400,000 .............. 105,288 157,932 210,576 242,821
600,000 .............. 162,288 243,432 324,576 356,821
800,000 .............. 219,288 328,932 438,576 470,821
1,000,000 .............. 276,288 414,432 552,576 584,821
1,200,000 .............. 233,288 499,932 666,576 698,821
1,400,000 .............. 390,288 585,432 780,576 812,821

The years of credited service for the named executive officers are Mr.
Hill--33 yrs.; Mr. Koziar--33 yrs.; Ms. McCarthy--20 yrs. and Mr. Santo--27
years. Benefits are computed on a straight-life annuity basis, are subject to
deduction for Social Security benefits and may be reduced by benefits payable
under retirement plans of other employers. Mr. Forster ceased to accrue benefits
under the retirement plan effective upon his retirement as an employee of DPL
Inc. and DP&L.

Benefits paid by the supplemental plan was modified in 2000 for the named
executive officers other than Ms. McCarthy and the benefits enumerated above
reduced by 21%. The present value of these individual's accrued benefit under
the supplemental plan determined by DPL Inc.'s actuary was segregated and
benefits thereafter are determined on the basis of selected asset performance.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

The following table sets forth certain information with respect to the
beneficial ownership of common shares and Series B voting preferred shares of
DPL Inc. as of February 11, 2003 by each person or group known by the Company
to own more than 5% of the common shares or Series B voting preferred shares.

Common Shares Series B Voting Preferred Shares
Beneficially Owned Beneficially Owned
-------------------------------- --------------------------------
Name Number Percent of Class Number Percent of Class
- ---- ------------- ---------------- ------------ ----------------

Dayton Ventures LLC(1) ........ 31,560,000(2) 24.9% 6,600,000(3) 100%
c/o Kohlberg Kravis
Roberts & Co. LP
9 W. 57th Street
New York, NY 10019

- ----------------------
(1) Dayton Ventures LLC is a Delaware limited liability company, the sole
members of which are KKR 1996 Fund L.P. and KKR Partners II, L.P. As a
member of each of KKR 1996 GP LLC and Strata LLC, the ultimate parent
entities of KKR 1996 Fund and KKR Partners II, respectively, each of
Messrs. George R. Roberts and Scott M. Stuart, who are directors of DPL
Inc. and DP&L, may be deemed to beneficially own any shares or warrants
beneficially owned by Dayton Ventures LLC, although each such individual
disclaims beneficial ownership of such shares and warrants.

(2) Dayton Ventures LLC does not own any common shares. Number of common shares
represents the number of common shares issuable upon exercise of warrants.

(3) The 6,600,000 Series B voting preferred shares, which represent up to 4.9%
of the outstanding voting power of DPL Inc.'s voting securities and were
issued to Dayton Ventures LLC in the KKR transaction, may be redeemed on a
share for share basis to the extent common shares are issued upon exercise
of the warrants held by Dayton Ventures LLC.

SECURITY OWNERSHIP OF CERTAIN EXECUTIVE OFFICERS

Set forth below is information concerning the beneficial ownership of
common shares of DPL Inc. by each executive officer of DPL Inc. or DP&L named
in the Summary Compensation Table (other than executive officers who are
directors of DPL Inc. whose security ownership is found under "Election of
Directors") as of February 11, 2003. Please refer to Note (1) on Page 6 for the
security ownership of all directors and executive officers of DPL Inc. and
DP&L.

Name of Amount and Nature of Percent of
Executive Officer Beneficial Ownership Class
----------------- -------------------- ----------

Allen M. Hill ................. 547,920 shares (1) *
H. Ted Santo .................. 146,828 shares (2) *
Elizabeth M. McCarthy ......... 78 shares *

- ----------------------
* Less than one percent

(1) The number of shares shown for Mr. Hill includes 37,421 common shares and
510,499 Restricted Share Units. RSUs have no voting rights.

(2) The number of shares shown for Mr. Santo includes 4,636 Common Shares and
142,192 Restricted Share Units. RSUs have no voting rights.

INDEPENDENT PUBLIC ACCOUNTANTS

PricewaterhouseCoopers LLP served as independent public accountants of DPL
Inc. for the year 2002. The Finance and Audit Review Committee has not yet
selected independent public accountants for DPL Inc. for 2003 and is currently
soliciting competitive proposals from several accounting firms, including
PricewaterhouseCoopers LLP. A representative of PricewaterhouseCoopers LLP will
be present at the Annual Meeting with the opportunity to make a statement if he
desires to do so and to respond to appropriate questions from shareholders.

Audit Fees

PricewaterhouseCoopers billed DPL Inc. $614,000 for professional services
rendered for the audit of DPL Inc.'s financial statements and reviews of
financial statements included in DPL Inc.'s Form 10-Qs for 2002.

All Other Fees

PricewaterhouseCoopers billed DPL Inc. $296,000 for all other non-audit
services rendered in 2002. These other fees were related principally to other
audit-related services and tax matters. There were no services performed with
respect to financial information systems design and implementation.

The Finance and Audit Review Committee considered whether the provision of
the other non-audit services described above is compatible with maintaining
PricewaterhouseCoopers' independence.

SHAREHOLDER PROPOSALS

A proposal by a shareholder intended for inclusion in the proxy materials
of DPL Inc. for the 2004 Annual Meeting of Shareholders pursuant to Rule 14a-8
must be received by DPL Inc. at P.O. Box 1247, Dayton, Ohio 45401, Attn.:
Secretary, on or before November 1, 2003 in order to be considered for such
inclusion. Shareholder proposals intended to be submitted at the 2004 Annual
Meeting of Shareholders outside the framework of Rule 14a-8 will be considered
untimely under Rule 14a-4(c)(1) if not received by DPL Inc. at the above
address on or before (i) 50 days before the date of the 2004 meeting (or 10
days after notice of the meeting if less than sixty days notice is given) for
proposals relating to nomination of persons for election as directors or (ii)
January 15, 2004 for any other proposals. If DPL Inc. does not receive notice
of the matter by the applicable date, the Proxy Committee will vote on the
matter, if presented at the meeting, in its discretion.

OTHER BUSINESS

The Board of Directors does not intend to present, and has no knowledge
that others will present, any other business at the meeting. However, if any
other matters are properly brought before the meeting, it is intended that the
holders of proxies will vote thereon in their discretion.

By order of the Board of Directors,

/s/ ARTHUR G. MEYER

ARTHUR G. MEYER
Vice President and Secretary

Appendix

FINANCE AND AUDIT REVIEW COMMITTEE CHARTER
(Adopted January 29, 2003)

Organization

The Finance and Audit Review Committee of DPL Inc. (the "Company") shall
have at least three members comprised solely of "independent" directors as
defined by relevant law and the New York Stock Exchange listing standards. The
members of the Committee must also satisfy the financial literacy requirements
of the NYSE and at least one member should be a "financial expert" as required
by relevant law and have accounting or related financial management expertise.

The members of the Committee shall be appointed by the Board on the
recommendation of the Nominating and Governance Committee. Committee members
shall hold their offices for one year and until their successors are elected
and qualified, or until their earlier resignation or removal. The Chairman of
the Committee, who shall be appointed by the Board, shall meet the definition
of "financial expert."

No member of the Committee may serve on the audit committee of more than
three public companies, including the Company, unless the Board of Directors
(1) determines that such simultaneous service would not impair the ability of
such member to effectively serve on the Committee and (2) discloses such
determination in the annual proxy statement.

The Committee shall meet at least four times each year, or more frequently
as circumstances dictate. As part of the responsibility to foster open
communication, the Committee should meet at least twice per year with
management and the internal audit staff and the independent auditors in
separate sessions to discuss any matters that the Committee or either of these
groups believe should be discussed privately. When, deemed appropriate,
meetings may be held in person or by telephone.

The Committee shall keep a separate book of minutes of its proceedings and
actions. A representative from the Company shall give notice, personally or by
mail, telephone, facsimile or electronically, to each member of the Committee
of all meetings not later than 12 noon of the day before the meeting, unless
all of the members of the Committee in office waive notice thereof in writing
at or before the meeting, in which case the meeting may be held without the
aforesaid advance notice. A majority of the members of the Committee shall
constitute a quorum for the transaction of business.

The Committee may form one or more subcommittees, each of which may take
such actions as may be delegated by the Committee. The Committee shall
periodically report on its activities to the Board and make such
recommendations and findings as it deems appropriate. Each Committee must
perform an annual evaluation of such Committee in accordance with the NYSE
listing standards.

A-1

Purpose

The Committee is charged with overseeing the financial plan of the Company
and recommending to the Board actions and policies that will best accommodate
the Company's objectives and operating strategies while maintaining its sound
fiscal health. In order to fulfill its responsibilities to the Company's
stockholders, potential stockholders, and the investment community, the
Committee will provide independent and objective oversight of the accounting
functions and internal controls and will monitor the integrity of the
independent auditors and the objectivity of the Company's financial statements
and disclosures. Specifically, the Committee's primary duties and
responsibilities shall be to:

o Monitor the integrity of the Company's financial reporting process and
systems of internal controls regarding finance, accounting, legal and
regulatory compliance;

o Monitor the independence and performance of the Company's independent
auditors and monitor the performance of the Company's internal audit
function;

o Appoint or replace the Company's independent auditors and approve any
audit and non-audit work performed for the Company;

o Provide an avenue of communication among the independent auditors,
management and the Board of Directors;

o Prepare the report that SEC rules require to be included in the Company's
annual proxy statement; and

o Perform such other similar duties and responsibilities which may be
referred to the Committee from time to time by the full Board of
Directors.

The Committee has the authority to conduct any investigation appropriate
to fulfilling its responsibilities, and it has direct access to the independent
auditors as well as anyone in the organization. The Committee has the ability
to retain, at the Company's expense, special legal, accounting or other
consultants or experts it deems necessary in the performance of its duties.

While the Committee has the responsibilities and powers set forth in this
Charter, it is not the duty of the Committee to plan or conduct audits or to
determine that the Company's financial statements are complete and accurate and
are in accordance with generally accepted accounting principles. This is the
responsibility of management and the independent auditors. Nor is it the duty
of the Committee to conduct general investigations, to resolve disagreements,
if any, between management and the independent auditors or to assure compliance
with laws and regulations and the Company's compliance policies.

A-2

Responsibilities And Duties

To fulfill its responsibilities and duties, the Committee shall:

Review Procedures

1. Review and reassess the adequacy of this Charter at least annually.
Submit this Charter to the Board for approval and have the document
published in accordance with the SEC and NYSE rules.

2. Review the Company's annual audited financial statements and quarterly
financial statements prior to filing with the SEC or distribution to
stockholders and the public. Review should include discussion with
management and independent auditors of significant issues regarding
accounting principles, practices and judgments, including the Company's
disclosures under "Management's Discussion and Analysis of Financial
Condition and Results of Operations." Based on review and discussions,
make recommendations to the Board whether the Company's annual audited
financial statements should be filed with the SEC. Discuss any
significant changes to the Company's accounting principles and any items
required to be communicated by the independent auditors in accordance
with Statement on Auditing Standards (SAS) 61.

3. Discuss earnings press releases in general (i.e., discussion of the
types of information to be discussed and the type of presentation to be
made); these discussions need not take place in advance of each earnings
release or each instance in which the Company may provide earnings
guidance.

4. In consultation with management, review and assess audits conducted by
federal, state and other regulatory agencies (including FERC and PUCO)
with respect to the Company's electric operations.

Independent Auditors

1. Appoint or replace the independent auditors and pre-approve all audit
engagement fees and terms and all non-audit engagements with the
independent auditors as required by applicable law and NYSE listing
rules. The Committee may consult with management but shall not delegate
these responsibilities. Ensure the rotation of the lead audit partner as
required by law and consider whether to rotate the audit firm itself.
Verify that none of the Company's senior executives were employed by the
independent auditors during the year preceding the date of initiation of
an audit.

2. On an annual basis, review and discuss with the independent auditors all
significant relationships they have with the Company that could impair
the auditors' independence. The Company's independent auditors may not
perform the following services for the Company:

o accounting or bookkeeping services;

o internal audit services related to accounting controls, financial
systems or financial statements;

o financial information systems design implementation;

o broker, dealer, investment banking or investment adviser services;

o appraisal or valuation services;

A-3

o actuarial services;

o management services or human resources; and

o legal or other expert services, or any other service that the Public
Accounting Oversight Board prohibits through regulation.

3. Review the independent auditors' audit plan. Discuss scope, staffing,
locations, reliance upon management and general audit approach.

4. Recommend to the Board policies for the Company's hiring of employees or
former employees of the independent auditors who were engaged on the
Company's account.

5. Obtain and review a report by independent auditors describing auditors'
independence and internal quality-control procedures and all material
issues raised by the most recent internal quality-control review or by
any inquiry or investigation by governmental or professional
authorities, within the preceding five years, respecting one or more
independent audits carried out by the firm, and all steps to deal with
such issues.

Financial Reporting Process

1. Prior to releasing year-end earnings, discuss the results of the audit
with the independent auditors. Discuss certain matters required to be
communicated to the Committee in accordance with SAS No. 61, including
such things as management judgments and accounting estimates,
significant audit adjustments, disagreements with management and
difficulties encountered in performing the audit.

2. Consider the independent auditors' judgments about the quality, not just
the acceptability, and appropriateness of the Company's accounting
principles as applied in financial accounting. Inquire as to the
independent auditors' views about whether management's choices of
accounting principles appear reasonable from the perspective of income,
asset and liability recognition, and whether those principles are common
practices or minority practices.

3. In consultation with management and the independent auditors, consider
the integrity of the Company's financial reporting processes and
controls, both external and internal. Discuss significant financial risk
exposures and the steps management has taken to monitor, control and
report such exposures, including the Company's risk assessment and risk
management policies. Review significant findings prepared by the
independent auditors together with management's responses, including the
status of previous recommendations.

4. Review (a) the accounting treatment accorded significant transactions,
(b) any significant accounting issues, including any second opinions
sought by management on accounting issues, (c) the development,
selection and disclosure of critical accounting estimates and analyses
of the effects of alternative GAAP methods, regulatory and accounting
initiatives, and off-balance sheet structures on the financial
statements of the Company and (d) the Company's use of reserves and
accruals, as reported by management and the independent auditors.

A-4

Internal Controls and Legal Compliance

1. Review and discuss with the independent auditors the budget, plan,
changes in plan, activities, organizational structure and qualifications
of the CFO and Controller's office and internal audit group, as needed.
Review significant reports prepared by the CFO and Controller's office
and internal audit group, together with management's response and
follow-up to these reports.

2. Review the appointment, performance and replacement of the controller
and any other senior personnel responsible for financial reporting.

3. Evaluate whether management is setting the appropriate tone at the top
by communicating the importance of internal controls and ensuring that
all individual's possess an understanding of their roles and
responsibilities.

4. Consider and review with management, the internal audit group and the
independent auditors the effectiveness or weakness of the Company's
internal controls. Develop in consultation with management a timetable
for implementing recommendations to correct identified weaknesses.
Monitor significant changes in internal controls.

5. Review the coordination between the independent public accountants and
internal auditors and review the risk assessment processes, scopes and
procedures of the Company's internal audit work and whether such risk
assessment processes, scopes and procedures are adequate to attain the
internal audit objectives as determined by the Company's management and
approved by the committee; and review the quality and composition of the
Company's internal audit staff.

6. Review with the Company's counsel the Company's compliance with laws,
regulations and the Company's Code of Business Conduct and confirm that
management has proper review systems in place to ensure that the
Company's financial statements, reports and other information
disseminated to governmental organizations, and the public, satisfy
legal and regulatory requirements.

7. Establish and maintain procedures for (a) the receipt, retention and
treatment of complaints received by the Company regarding accounting,
internal accounting controls and auditing matters; and (b) the
confidential, anonymous submission by Company employees of concerns
regarding questionable accounting or auditing matters.

8. Obtain from the independent auditors assurance that Section 10A (audit
requirements) of the Securities Exchange Act of 1934 has not been
implicated.

9. Request and receive reports on the design and implementation of internal
controls. Monitor significant changes in internal controls and address
any weaknesses.

Finance

1. Review analyses prepared by management regarding the Company's financial
structure, dividend policy and financings. When applicable, make
recommendations to the Board regarding financial advisors and financing
transactions.

2. Review credit ratings, credit facilities and external financing.

A-5

Miscellaneous

1. Annually cause to be filed in the company's annual proxy statement a
report to stockholders as required by the reporting requirements of the
SEC.

2. Make or authorize investigations into any matters within the Committee's
scope of responsibilities and, in connection therewith, may retain
independent counsel, accountants or others to assist it without having
to seek the approval of the Board.

3. Make regular reports to the Board and evaluate annually its performance
in accordance with relevant law and NYSE listing rules.

4. The Audit and Finance Committee shall perform any other activities
consistent with this Charter, the Company's By-laws and governing law,
as the Audit and Finance Committee deems appropriate or necessary.

A-6 42-PS-03

NOTICE OF

ANNUAL
MEETING

OF SHAREHOLDERS

April 9, 2003

AND

PROXY
STATEMENT

[DPL GRAPHIC]

-------------

DPL Inc.
Dayton, Ohio

[0942 - DPL INC.] [FILE NAME: ZDPL5B.ELX] [VERSION - (1)] [02/12/03] [orig.
02/12/03]

ZDPL5B DETACH HERE IF YOU ARE RETURNING YOUR PROXY CARD BY MAIL

PROXY

DPL INC.

PROXY Solicited by the Board of Directors
for 2003 Annual Meeting of Shareholders

James F. Dickie, II, Jane G. Haley and W August Hillenbrand or any of them
with full power of substitution, are hereby appointed proxies to vote as
specified at the Annual Meeting of Shareholders of DPL Inc. on Wednesday, April
9, 2003, at 1:30 P.M., and at any adjournments thereof, all Common Shares which
the undersigned is entitled to vote and in their discretion upon any other
matters which may properly come before the meeting.

UNLESS OTHERWISE MARKED, YOUR PROXY WILL BE VOTED FOR THE PROPOSALS BY
SIMPLY SIGNING YOUR NAME ON THE REVERSE SIDE AND RETURNING THIS CARD.

- ------------- ---------------
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
- ------------ ---------------

DPL INC.

C/O EQUISERVE TRUST COMPANY N.A.
P.O. BOX 8560
EDISON, NJ 08818-8694

[0942 - DPL INC.] [FILE NAME: ZDPL5A.ELX] [VERSION - (3)] [02/20/03] [orig.
02/12/03]

ZDPL5A DETACH HERE IF YOU ARE RETURNING YOUR PROXY BY MAIL.

Please mark
[ X ] votes as in
this example

This proxy is solicited on behalf of the Board of Directors. If no boxes are
marked, your vote will be cast as recommended by the Board of Directors by
simply signing your name below and returning this card.

1. Election of Three Directors.
Nominees: (01) Wallace Creek, (02) Michael W. Grebe, (03) Ernie Green.

FOR WITHHELD
ALL [ ] [ ] FROM ALL
NOMINEES NOMINEES

[ ] ---------------------------------------- The Annual Meeting of Shareholders will be held at Fort
For all nominees except as written aboce Recovery Elementary/Middle School. Fort Recovery, Ohio. To
request an attendance card for the meeting, please mark below;

MARK HERE FOR ATTENDANCE CARD [ ]

MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]

Please sign exactly as your name appears. If acting as attorney,
executor, trustee, or in a fiduciary capacity, sign name and title.

Signature: Date: Signature: Date:
---------------------------- --------- --------------------------- --------