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<SEC-DOCUMENT>0000912057-01-505710.txt : 20010402
<SEC-HEADER>0000912057-01-505710.hdr.sgml : 20010402
ACCESSION NUMBER: 0000912057-01-505710
CONFORMED SUBMISSION TYPE: 10-K405
PUBLIC DOCUMENT COUNT: 11
CONFORMED PERIOD OF REPORT: 20001231
FILED AS OF DATE: 20010330
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: DPL INC
CENTRAL INDEX KEY: 0000787250
STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931]
IRS NUMBER: 311163136
STATE OF INCORPORATION: OH
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 10-K405
SEC ACT:
SEC FILE NUMBER: 001-09052
FILM NUMBER: 1586485
BUSINESS ADDRESS:
STREET 1: PO BOX 8825
CITY: DAYTON
STATE: OH
ZIP: 45401
BUSINESS PHONE: 5132246000
MAIL ADDRESS:
STREET 1: PO BOX 8825
CITY: DAYTON
STATE: OH
ZIP: 45401
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K405
<SEQUENCE>1
<FILENAME>a2043323z10-k405.txt
<DESCRIPTION>FORM 10-K405
<TEXT>
<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended DECEMBER 31, 2000
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission File Number 1-9052
DPL INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
OHIO 31-1163136
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
COURTHOUSE PLAZA SOUTHWEST, DAYTON, OHIO 45402
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code: 937-224-6000
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
OUTSTANDING AT NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS FEBRUARY 28, 2001 WHICH REGISTERED
------------------- ----------------- ----------------
Common Stock, $0.01 par value
and Preferred Share Purchase Rights 127,777,404 New York Stock Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: NONE
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. / X /
----
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
------ ------
The aggregate market value of the voting stock held by nonaffiliates of the
registrant as of February 28, 2001 was $3,667,211,495 based on a closing price
of $28.70 on such date.
DOCUMENTS INCORPORATED BY REFERENCE
Parts I and II incorporate by reference the registrant's 2000 Annual Report to
Shareholders.
Portions of the definitive Proxy Statement for the 2001 Annual Meeting of
Shareholders of the registrant are incorporated by reference into Part III.
<PAGE>
DPL Inc.
Index to Annual Report on Form 10-K
Fiscal Year Ended December 31, 2000
<TABLE>
<CAPTION>
Page No.
Part I
<S> <C> <C>
Item 1 Business............................................................3
Item 2 Properties.........................................................16
Item 3 Legal Proceedings..................................................16
Item 4 Submission of Matters to a Vote of Security Holders................16
Executive Officers.................................................17
Part II
Item 5 Market for Registrant's Common Equity and Related
Shareholder Matters................................................18
Item 6 Selected Financial Data............................................18
Item 7 Management's Discussion and Analysis of Financial Condition and
Results of Operations..............................................18
Item 7A Quantitative and Qualitative Disclosure about Market Risk..........18
Item 8 Financial Statements and Supplementary Data........................19
Item 9 Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure...........................................19
Part III
Item 10 Directors and Executive Officers of the Registrant.................20
Item 11 Executive Compensation.............................................20
Item 12 Security Ownership of Certain Beneficial Owners and Management.....20
Item 13 Certain Relationships and Related Transactions.....................20
Part IV
Item 14 Exhibits, Financial Statement Schedules and Reports on Form 8-K....20
Other
Signatures.........................................................25
</TABLE>
2
<PAGE>
PART I
Item 1 - BUSINESS
- --------------------------------------------------------------------------------
DPL INC.
DPL Inc. ("DPL") was organized in 1985 under the laws of the State of Ohio to
engage in the acquisition and holding of securities of corporations for
investment purposes. The executive offices of DPL are located at Courthouse
Plaza Southwest, Dayton, Ohio 45402 - telephone (937) 224-6000.
DPL's principal subsidiary is The Dayton Power and Light Company ("DP&L"). DP&L
is a public utility incorporated under the laws of Ohio in 1911. DP&L sells
electricity to residential, commercial and governmental customers in a 6,000
square mile area of West Central Ohio. Electricity for DP&L's 24 county service
area is generated at eight power plants and is distributed to 495,000 retail
customers. Principal industries served include electrical machinery, automotive
and other transportation equipment, non-electrical machinery, agriculture,
paper, and rubber and plastic products. DP&L's sales reflect the general
economic conditions and seasonal weather patterns of the area. Subsidiaries of
DPL include Miami Valley Resources, Inc. ("MVR"), a natural gas supply
management company; Miami Valley Leasing, which leases communications equipment
and other miscellaneous equipment and owns real estate; Miami Valley Lighting,
Inc., a street lighting business; Miami Valley Insurance Company, an insurance
company for DPL and its subsidiaries; Miami Valley Development Company, which
has acquired real estate for DP&L; DPL Energy, Inc. ("DPLE"), which has been
granted authority to engage in the business of brokering wholesale electric
energy; Customer Payment Center, Inc., a payment agent for DP&L and an
unaffiliated company; MacGregor Park, Inc., an owner and developer of real
estate; DPL Energy Resources, Inc., a competitive retail electric supplier; and
Plaza Building, Inc., which owns all the capital stock of MVE, Inc. MVE, Inc.
provides financial support services to DPL and its subsidiaries. Miami Valley
CTC, Inc., a subsidiary of MVE, Inc., provides transportation services.
DPL and its subsidiaries are exempt from registration with the Securities and
Exchange Commission under the Public Utility Holding Company Act of 1935 because
its utility business operates solely in the State of Ohio.
DPL and its subsidiaries employed 1,820 persons as of December 31, 2000, of
which 1,540 were full-time employees and 280 were part-time employees.
3
<PAGE>
COMPETITION
In October 1999, legislation became effective in Ohio that gave electric utility
customers a choice of energy providers as of January 1, 2001. Under the
legislation, electric generation, aggregation, power marketing, and power
brokerage services supplied to retail customers in Ohio is deemed to be
competitive and is not subject to supervision and regulation by the Public
Utilities Commission of Ohio ("PUCO"). As required by the legislation, DP&L
filed its transition plan at the PUCO on December 20, 1999. DP&L received PUCO
approval of its plan on September 21, 2000.
The transition plan provides for a three-year transition period, which began
on January 1, 2001 and ends on December 31, 2003, at which time DP&L's
generation assets will no longer be subject to Ohio regulation and will be
able to sell all capacity in the open energy market. The plan also provides
for a 5% residential rate reduction on the generation component of the rates,
which reduces revenue by approximately $13-14 million per year; rate
certainty for the three-year period for customers that continue to purchase
power from DP&L; guaranteed rates for a six-year period for transmission and
delivery services; and recovery of transition costs of approximately $600
million. Under the plan, DPL has the organizational and financial flexibility
to continue its growth initiatives without regulatory restrictions.
On September 30, 1996, the FERC conditionally accepted DP&L's market-based sales
tariff, which will allow DP&L to sell wholesale generation supply at prices that
reflect current market prices. At the same time, the FERC approved the
application and authorization of DPLE to sell and broker wholesale electric
power and also charge market-based prices for such power. DPL Energy Resources,
Inc. and Miami Valley Lighting, Inc. filed at the FERC for market-based rate
authority on November 16, 2000 and received FERC authority on December 13, 2000
and December 15, 2000, respectively. DPL Energy Resources, Inc. received
approval from the PUCO on December 8, 2000 to provide competitive retail
electric service.
DPL competes through its principal subsidiary, DP&L, with privately and
municipally owned electric utilities and rural electric cooperatives, and other
alternate fuel suppliers. DP&L competes on the basis of price and service.
Like other utilities, DP&L from time to time may have electric generating
capacity available for sale to other utilities. DP&L competes with other
utilities to sell electricity provided by such capacity. The ability of DP&L to
sell this electricity will depend on how DP&L's price, terms and conditions
compare to those of other suppliers. In addition, from time to time, DP&L makes
power purchases from other suppliers.
The National Energy Policy Act of 1992, which reformed the Public Utilities
Holding Company Act of 1935, allows the federal government to mandate access by
others to a utility's electric transmission system and may accelerate
competition in the supply of electricity.
4
<PAGE>
DP&L provides transmission and wholesale electric service to twelve municipal
customers, which distribute electricity within their corporate limits. In
addition to these municipal customers, DP&L maintains an interconnection
agreement with one municipality that has the capability to generate a portion of
its energy requirements. Sales to municipalities represented 1.6% of total
electricity sales in 2000.
The municipal agreements provide, among other things, for the sale of firm power
by DP&L to the municipals on specified terms. However, the parties disagreed in
their interpretation of this portion of the agreement and DP&L filed suit
against the eleven municipals on December 28, 1998. The dispute was subsequently
settled in 1999. In December 1999, DP&L filed a second suit against the
municipals claiming their failure to pay for certain services rendered under the
contract. The municipals filed a complaint at the Federal Energy Regulatory
Commission ("FERC") claiming violation of a mediation clause. On June 29, 2000
the FERC Administrative Law Judge issued an initial decision in the case, which
was favorable to DP&L; however, the FERC has not yet issued a final order. This
dispute is expected to be resolved through the FERC process, and is not expected
to result in a material impact on DP&L's financial position or results of
operations.
On April 24, 1996, the FERC issued orders requiring all electric utilities that
own or control transmission facilities to file open-access transmission service
tariffs. Open-access transmission tariffs provide third parties with
non-discriminatory transmission service comparable to what the utility provides
itself. In its orders, the FERC further stated that FERC-jurisdictional stranded
costs reasonably incurred and costs of complying with the rules will be
recoverable by electric utilities. Both in 1997 and 1998, DP&L reached an
agreement in principle with staff and intervenors in these tariff cases. The
FERC issued an Order accepting the Stipulation between the parties in DP&L's
Open Access Transmission Tariff cases on July 30, 1999 and September 17, 1999.
DP&L was not materially impacted by the Order.
The FERC issued a final rule on December 20, 1999 specifying the minimum
characteristics and functions for Regional Transmission Organizations ("RTO").
The rule required that all public utilities that own, operate or control
interstate transmission file a proposal to join a RTO by October 15, 2000 or
file a description of efforts taken to participate in an RTO, reasons for not
participating in an RTO, any obstacles to participation in an RTO, and any plans
for further work towards participation. DP&L filed with the FERC to join the
Alliance RTO and expects to transfer operational control of its transmission
assets to the Alliance when it is complete.
On July 22, 1998, the PUCO approved the implementation of Minimum Electric
Service Standards for all of Ohio's investor-owned electric utilities. This
Order details minimum standards of performance for a variety of service-related
functions, effective July 1, 1999. On December 21, 1999, the PUCO issued
additional rules proposed by the PUCO staff, which are designed to guide the
electric utility companies as they prepare to enter into deregulation. These
rules include certification of providers of competitive retail electric
services, minimum competitive retail electric service standards, monitoring the
electric utility market, and establishing procedures for alternative dispute
resolution. There were also rules issued to amend existing rules for
noncompetitive electric service and safety standards and electric companies
long-term forecast reporting. DP&L
5
<PAGE>
submitted comments on the proposed rules on January 31, 2000. The rules were
finalized by the PUCO in June 2000 and did not have a material impact on DP&L's
financial position.
MVR, established in 1986 as a subsidiary of DPL, acts as a broker in arranging
and managing natural gas supplies for business and industry. Deliveries of
natural gas to MVR customers can be made through the local gas suppliers'
transportation system, or another transportation system, on the same basis as
deliveries to customers of other gas brokerage firms. Customers with alternate
fuel capability can continue to choose between natural gas and their alternate
fuel based upon overall performance and economics.
Responding to the new Ohio legislation, DP&L is functionally separating its
various business units and is evaluating each unit on a stand-alone basis.
Business units not complementing DPL's going-forward strategy may be divested.
In October 2000, DP&L completed the sale of its natural gas retail distribution
assets and certain liabilities for $468 million in cash.
CONSTRUCTION PROGRAM
Construction additions were $344 million in 2000 and $167 million in 1999. The
capital program for 2001 is approximately $397 million. The major components of
the 2001 capital program include the development of natural gas-fired combustion
turbine generation peaking units at $223 million and environmental compliance at
$64 million.
DPL has had an ongoing regional merchant generation expansion program since the
mid-1990's with Phase One being completed in 1997. Phase One was the
construction of three combustion turbines representing 248 megawatts ("MW") of
capacity at an investment of $75 million. In the second quarter of 2000, DPL
completed Phase Two with the construction of four combustion turbines
representing 224 MW of capacity at an investment of $80 million. In September
2000, DPL announced Phases Three and Four of the construction program
representing 320 MW of combustion turbines at an investment of $110 million to
be completed during the second half of 2001. In January 2001, DPL announced
Phase Five of the program representing an additional 224 MW of combustion
turbines at an investment of $80 million to be completed by the summer of 2001.
These individual Phases of completed and announced combustion turbines expand
DPL's generation capacity by more than 1,000 MW and represent an investment of
$345 million. Under this program, DPL plans to have a total of approximately
5,000 MW of generation capacity online by the summer of 2003.
6
<PAGE>
Construction plans are subject to continuing review and are expected to be
revised in light of changes in financial and economic conditions, load
forecasts, legislative and regulatory developments and changing environmental
standards, among other factors. DPL's ability to complete its capital projects
and the reliability of future service will be affected by its financial
condition, the availability of external funds at reasonable cost, and adequate
and timely rate recovery.
The cost of capital is in part determined by credit ratings assigned by rating
agencies. Credit ratings for DPL and DP&L are investment grade. As a result of
DPL's December 2000 press release regarding its exploration of strategic
alternatives, including the possible sale of all or part of the company,
Standard & Poor's placed DPL and DP&L on credit watch with developing
implications in January 2001. Developing implications indicate that ratings
could be raised, lowered, or affirmed. Also in January, Moody's placed the
ratings of DPL and its affiliates under review. The direction of the review is
uncertain at this time, and will be refined as additional information becomes
available. On February 15, 2001, DPL announced that with the current volatile
electric market environment and renewed emphasis on generation capacity and
reliability, DPL would pursue its growth strategy as an independent company
based on its regional merchant generation expansion plan. DPL will continue to
monitor the market for the strategic deployment and/or purchase of assets that
provide the most value to shareholders.
See ENVIRONMENTAL CONSIDERATIONS for a description of environmental control
projects and regulatory proceedings that may change the level of future
construction additions. The potential impact of these events on DPL's operations
cannot be estimated at this time.
ELECTRIC OPERATIONS AND FUEL SUPPLY
DPL's present winter generating capability is 3,607,000 KW. Of this
capability, 2,843,000 KW (approximately 79%) is derived from coal-fired steam
generating stations and the balance consists of combustion turbine and
diesel-powered peaking units. Approximately 87% (2,472,000 KW) of the
existing steam generating capability is provided by certain units owned as
tenants in common with The Cincinnati Gas & Electric Company ("CG&E") or with
CG&E and Columbus Southern Power Company ("CSP"). Each company owns a
specified undivided share of each of these units, is entitled to its share of
capacity and energy output, and has a capital and operating cost
responsibility proportionate to its ownership share.
The remaining steam generating capability (371,000 KW) is derived from a
generating station owned solely by DP&L. DP&L's all-time net peak load was
3,130,000 KW, occurring in 1999. The present summer generating capability is
3,461,000 KW.
7
<PAGE>
<TABLE>
<CAPTION>
GENERATING FACILITIES
MW Rating
-----------
Operating DPL
Station Ownership* Company Location Portion Total
- -------------------------- ------------- ------------ ------------------- ---------- -------
<S> <C> <C> <C> <C> <C>
COAL UNITS
- ----------
Hutchings W DP&L Miamisburg, OH 371 371
Killen C DP&L Wrightsville, OH 402 600
Stuart C DP&L Aberdeen, OH 820 2,340
Conesville-Unit 4 C CSP Conesville, OH 129 780
Beckjord-Unit 6 C CG&E New Richmond, OH 210 420
Miami Fort-Units 7 & 8 C CG&E North Bend, OH 360 1,000
East Bend-Unit 2 C CG&E Rabbit Hash, KY 186 600
Zimmer C CG&E Moscow, OH 365 1,300
COMBUSTION TURBINES OR DIESEL
- -----------------------------
Hutchings W DP&L Miamisburg, OH 33 33
Yankee Street W DP&L Centerville, OH 138 138
Monument W DP&L Dayton, OH 12 12
Tait W DP&L Dayton, OH 10 10
Sidney W DP&L Sidney, OH 12 12
Tait Gas Turbine 1 W DP&L Moraine, OH 100 100
Tait Gas Turbine 2 W DP&L Moraine, OH 102 102
Tait Gas Turbine 3 W DP&L Moraine, OH 102 102
Killen C DP&L Wrightsville, OH 16 24
Stuart C DP&L Aberdeen, OH 3 10
Greenville W DPLE Greenville, OH 236 236
</TABLE>
*W = Wholly-Owned
C = Commonly Owned
In order to transmit energy to their respective systems from their commonly
owned generating units, the companies have constructed and own, as tenants in
common, 847 circuit miles of 345,000-volt transmission lines. DP&L has several
interconnections with other companies for the purchase, sale and interchange of
electricity. In addition, DP&L is in the process of constructing an additional
40.2-mile long, 345,000-volt circuit between CG&E's Foster Substation and DP&L's
Bath Substation, with a target in-service date of June 1, 2001. The circuit will
be jointly owned by DP&L and CG&E.
DP&L generated over 99% of its electric output from coal-fired units in 2000.
The remainder was from oil or natural gas-fired units, which were used to meet
peak demands.
DP&L estimates that up to 75% of its coal requirements for the period 2001-2004
will be obtained through long-term contracts, with the balance to be obtained by
spot market purchases. DP&L has been informed by CG&E and CSP for the commonly
owned units which they operate that sufficient coal supplies will be available
during the same planning horizon.
8
<PAGE>
The prices to be paid by DP&L under its long-term coal contracts are subject to
adjustment in accordance with various indices. Each contract has features that
will limit price escalations in any given year.
The average fuel cost per kilowatt-hour ("kWh") generated of fuel burned for
electric generation (coal, gas and oil) for the year was 1.18(cent) in 2000 and
1.30(cent) in both 1999 and 1998. With the onset of competition in January 2001,
the EFC became part of the Standard Offer Generation Rate. See RATE REGULATION
AND GOVERNMENT LEGISLATION and ENVIRONMENTAL CONSIDERATIONS.
GAS OPERATIONS AND GAS SUPPLY
In October 2000, DP&L completed the sale of its natural gas retail distribution
assets and certain liabilities for $468 million in cash. The transaction was
valued pursuant to an arms-length negotiation and resulted in a pre-tax gain of
$183 million ($121 million net of taxes). Proceeds from the sale were used to
finance the regional merchant generation expansion and reduce outstanding
short-term debt.
RATE REGULATION AND GOVERNMENT LEGISLATION
DP&L's sales to retail customers are subject to rate regulation by the PUCO and
various municipalities. DP&L's wholesale electric rates to municipal
corporations and other distributors of electric energy are subject to regulation
by the FERC under the Federal Power Act.
Ohio law establishes the process for determining rates charged by public
utilities. Regulation of rates encompasses the timing of applications, the
effective date of rate increases, the cost basis upon which the rates are based
and other related matters. Ohio law also establishes the Office of the Ohio
Consumers' Counsel (the "OCC"), which has the authority to represent residential
consumers in state and federal judicial and administrative rate proceedings.
Ohio legislation extends the jurisdiction of the PUCO to the records and
accounts of certain public utility holding company systems, including DPL. The
legislation extends the PUCO's supervisory powers to a holding company system's
general condition and capitalization, among other matters, to the extent that
they relate to the costs associated with the provision of public utility
service.
Based on existing regulatory authorization, regulatory assets on the
Consolidated Balance Sheet include:
9
<PAGE>
<TABLE>
<CAPTION>
At December 31,
2000 1999
---------- ----------
($ in millions)
<S> <C> <C>
Income taxes recoverable through
future revenues (b)...................... $ 19.8 $168.5
Regulatory transition costs (a).............. 144.8 --
Other costs (b).............................. 1.6 53.3
------ ------
Total........................................ $166.2 $221.8
====== ======
</TABLE>
(a) As discussed in the COMPETITION section, DP&L received PUCO
approval of its transition plan for the deregulation of its generation
business. Accordingly, DP&L discontinued the use of its regulatory
accounting model for its generation operations. As a result, a $63.7
million before tax benefits ($41.4 million net of taxes) reduction of
generation-related regulatory assets was recorded in the third quarter of
2000 as an extraordinary item and other generation-related regulatory
assets were reclassified to the "Regulatory transition costs" asset.
(b) Certain deferred costs remain authorized for recovery by
regulators. These relate primarily to DP&L's electric transmission and
distribution operations and are being amortized over the recovery period of
the assets involved.
Under the legislation passed in 1999, the percentage of income payment plan
("PIPP") for eligible low-income households will be converted to a universal
service fund. The universal service program will be administered by the Ohio
Department of Development. As part of DP&L's Electric Transition Plan, DP&L was
granted authority to recover PIPP arrearages remaining as of December 31, 2000
as part of a transition charge.
In 2000, the PUCO amended the rules for Long-Term Forecast Reports for all
investor-owned electric transmission and distribution companies in Ohio. Under
these rules, each transmission and/or distribution company must annually file a
Long-Term Electric Forecast Report, which presents 10-year energy and demand
transmission and distribution forecasts. The reports also must contain
information on the company's existing and planned transmission and distribution
systems, as well as a substantiation of the need for any system upgrades or
additions. DP&L filed a combined 2000/2001 Long-Term Electric Forecast Report
under these amended rules in March 2001.
The PUCO is composed of five commissioners appointed to staggered five-year
terms. The current Commission is composed of the following members:
10
<PAGE>
<TABLE>
<CAPTION>
NAME Beginning of Term End of Term
- ---- ----------------- -----------
<S> <C> <C>
Clarence D. Rogers.................. February 2001 April 2006
Rhonda H. Fergus.................... April 1995 April 2005
Chairman Alan R. Schriber........... April 1999 April 2004
Donald L. Mason..................... April 1998 April 2003
Judith A. Jones..................... April 1997 April 2002
</TABLE>
See COMPETITION for more detail regarding the impact of legislation passed in
October 1999.
ENVIRONMENTAL CONSIDERATIONS
The operations of DPL and DP&L, including the commonly owned facilities operated
by DP&L, CG&E and CSP, are subject to federal, state, and local regulation as to
air and water quality, disposal of solid waste and other environmental matters,
including the location, construction and initial operation of new electric
generating facilities and most electric transmission lines. The possibility
exists that current environmental regulations could be revised which could
change the level of estimated construction expenditures. See CONSTRUCTION
PROGRAM.
AIR QUALITY
The Clean Air Act Amendments of 1990 (the "Act") have limited sulfur dioxide and
nitrogen oxide emissions nationwide. The Act restricts emissions in two phases.
Phase I compliance requirements became effective on January 1, 1995 and Phase II
requirements became effective on January 1, 2000.
DP&L's environmental compliance plan ("ECP") was approved by the PUCO on May 6,
1993, and on November 9, 1995, the PUCO approved the continued appropriateness
of the ECP. Phase I requirements were met by switching to lower sulfur coal at
several commonly owned electric generating facilities and increasing existing
scrubber removal efficiency. Total capital expenditures to comply with Phase I
of the Act were approximately $5.5 million. Phase II requirements are being met
primarily by switching to lower sulfur coal at all non-scrubbed coal-fired
electric generating units.
11
<PAGE>
In November 1999, the United States Environmental Protection Agency ("US
EPA") filed civil complaints and Notices of Violations ("NOV's") against
operators and owners of certain generation facilities for alleged violations of
the Clean Air Act ("CAA"). Generation units operated by partners CG&E (Beckjord
6) and CSP (Conesville 4) and co-owned by DP&L were referenced in these actions.
Numerous northeast states have filed complaints or have indicated that they will
be joining the EPA's action against the partners. DP&L was not identified in the
NOVs, civil complaints or state actions. In December 2000, CG&E announced that
it had reached an Agreement in Principle with the US EPA and other plaintiffs in
an effort to settle the claims. Discussions on the final terms of the settlement
are ongoing, and the outcome of these claims or the impact, if any, on DP&L has
not been determined. In June 2000, the US EPA issued a NOV to J.M. Stuart
Station (co-owned by DP&L, CG&E, and CSP) for alleged violations of the Clean
Air Act. The NOV contained allegations consistent with NOV's and complaints that
the EPA has recently brought against numerous other coal-fired utilities in the
Midwest. DPL will vigorously challenge the NOV. At this time, the outcome of
these claims or the impact, if any, on DP&L is unknown.
In September 1998, the US EPA issued a final rule requiring states to modify
their State Implementation Plans ("SIPs") under the CAA. The modified SIPs are
likely to result in further nitrogen oxide ("NOx") reduction requirements placed
on coal-fired generating units by 2003. In order to meet these NOx requirements,
DP&L's total capital expenditures are estimated to be approximately $175 million
over the next three years. Industry groups and others appealed the rules in
United States District Court. The requirement for states to submit revised
implementation plans has been stayed until the outcome of the litigation. In
March 2000, the United States District Court upheld the rule. Industry groups
and others have appealed this decision. As a result of the litigation, the Court
extended the compliance date of the rule an additional year, until May 31, 2004.
In March 2001, the United States Supreme Court refused to hear further appeals
of the SIP rules. In December 1999, the US EPA issued final rules granting
various CAA Section 126 petitions filed by northeast states. DP&L's facilities
were identified, among many others, in the rulemaking. DP&L's current NOx
reduction strategy and associated expenditures to meet the SIP call should
satisfy the rulemaking reduction requirements.
On December 14, 2000, the US EPA issued a determination that coal- and oil-fired
electric generating units should be regulated for emissions of mercury and
hazardous air pollutants. The US EPA will issue proposed rules by December 2003
and final rules by December 2004. The impact of the regulatory determination
cannot be determined at this time.
LAND USE
DP&L and numerous other parties have been notified by the US EPA or the Ohio
Environmental Protection Agency ("Ohio EPA") that it considers them Potentially
Responsible Parties ("PRP's") for clean-up at two superfund sites in Ohio: the
Sanitary Landfill Site on Cardington Road in Montgomery County, Ohio and the
North Sanitary (a.k.a. Valleycrest) Landfill in Dayton, Montgomery County, Ohio.
12
<PAGE>
DP&L received notification from the US EPA in July 1987 for the Cardington Road
site. DP&L has not joined the PRP group formed at that site because of the
absence of any known evidence that DP&L contributed hazardous substances to this
site. The Record of Decision issued by the US EPA identifies the chosen clean-up
alternative at a cost estimate of $8.1 million. DP&L's settlements with the US
EPA and the PRP group are pending for this site. The final resolution is not
expected to have a material effect on DP&L's financial position, earnings or
cash flow.
DP&L and numerous other parties received notification from the Ohio EPA on July
27, 1994 that it considers them PRP's for clean-up of hazardous substances at
the North Sanitary Landfill site in Dayton, Ohio. DP&L has not joined the PRP
group formed for the site because the available information does not demonstrate
that DP&L contributed wastes to the site. The Ohio EPA has not provided an
estimated cost for this site. In October 2000, the PRP group brought an action
against DP&L and numerous other parties alleging that DP&L and the others are
PRP's that should be liable for a portion of clean-up costs at the site. DP&L
will vigorously challenge this action. The final resolution is not expected to
have a material effect on DP&L's financial position, earnings or cash flow.
13
<PAGE>
<TABLE>
<CAPTION>
THE DAYTON POWER AND LIGHT COMPANY
OPERATING STATISTICS
ELECTRIC OPERATIONS
Years Ended December 31
-----------------------------------------------
<S> <C> <C> <C>
2000 1999 1998
-------- -------- --------
Electric Output (millions of kWh)
General-
Coal-fired units............................. 17,053 16,539 16,854
Other units.................................. 79 189 99
Power purchases.................................. 1,675 1,523 1,475
Company use and line losses...................... (1,284) (1,384) (947)
----------- ---------- ----------
Total........................................ 17,523 16,867 17,481
========== ========== ==========
Electric Sales (millions of kWh)
Residential...................................... 4,816 4,725 4,790
Commercial....................................... 3,539 3,390 3,518
Industrial....................................... 4,851 4,876 4,655
Public authorities and railroads................. 1,371 1,305 1,360
Private utilities and wholesale (a).............. 2,946 2,571 3,158
---------- ---------- ----------
Total........................................ 17,523 16,867 17,481
========== ========== ==========
Electric Customers at End of Period
Residential...................................... 444,683 441,468 437,674
Commercial....................................... 46,218 45,470 44,716
Industrial....................................... 1,928 1,917 1,909
Public authorities and railroads................. 6,108 5,994 5,838
Other............................................ 48 46 43
---------- ---------- ----------
Total........................................ 498,985 494,895 490,180
========== ========== ==========
Operating Revenues (thousands)
Residential...................................... $ 422,733 $ 412,808 $ 419,948
Commercial....................................... 245,097 235,309 242,526
Industrial....................................... 236,670 242,410 228,685
Public authorities and railroads................. 74,484 69,777 76,686
Private utilities and wholesale (a).............. 112,328 79,196 86,485
Other............................................ 18,743 18,844 18,651
---------- ---------- ----------
Total........................................ $1,110,055 $1,058,344 $1,072,981
========== ========== ==========
</TABLE>
NOTE:
a) Sales and revenue numbers for private utilities and wholesale include
merchant electric peaking generation capacity sales, which are reported
in "Other revenues" on the Consolidated Statement of Results of Operations.
b) See Note 15 to Consolidated Financial Statements for additional information.
14
<PAGE>
<TABLE>
<CAPTION>
THE DAYTON POWER AND LIGHT COMPANY
OPERATING STATISTICS
GAS OPERATIONS
Years Ended December 31
-----------------------------------------------
<S> <C> <C> <C>
2000 1999 1998
-------- -------- --------
Gas Output (thousands of MCF)
Direct market purchases........................... 27,723 37,865 36,497
Liquefied petroleum gas........................... 57 2 3
Company use and unaccounted for................... (546) (2,116) (912)
Transportation gas received....................... 16,057 19,964 18,125
-------- --------- --------
Total......................................... 43,291 55,715 53,713
======== ========= ========
Gas Sales (thousands of MCF)
Residential....................................... 18,538 24,450 24,877
Commercial........................................ 5,838 7,647 7,433
Industrial........................................ 2,034 2,246 1,916
Public authorities................................ 776 1,182 1,699
Transportation gas delivered...................... 16,105 20,190 17,788
-------- --------- --------
Total......................................... 43,291 55,715 53,713
======== ========= ========
Gas Customers at End of Period
Residential....................................... -- 282,706 279,784
Commercial........................................ -- 22,635 22,491
Industrial........................................ -- 1,303 1,441
Public authorities................................ -- 1,173 1,509
-------- --------- --------
Total......................................... -- 307,817 305,225
======== ======== ========
Operating Revenues (thousands)
Residential....................................... $119,460 $139,545 $138,802
Commercial........................................ 35,262 40,225 38,243
Industrial........................................ 11,114 11,017 9,291
Public authorities................................ 4,466 5,908 8,230
Other............................................. 13,554 18,284 16,640
-------- -------- --------
Total......................................... $183,856 $214,979 $211,206
======== ======== ========
</TABLE>
NOTE:
1) DP&L completed the sale of its natural gas retail distribution assets and
certain liabilities in October 2000.
2) See Note 15 to Consolidated Financial Statements for additional
information.
15
<PAGE>
Item 2 - PROPERTIES
ELECTRIC
Information relating to DP&L's electric properties is contained in Item 1 -
BUSINESS, DPL INC. (page 3), CONSTRUCTION PROGRAM (pages 6 and 7) and ELECTRIC
OPERATIONS AND FUEL SUPPLY (pages 7-9) - Notes 4 and 12 of Notes to Consolidated
Financial Statements on pages 22 and 25, respectively, of the registrant's 2000
Annual Report, which pages are incorporated herein by reference.
GAS
Information relating to DP&L's gas properties is contained in Item 1 - BUSINESS,
DPL INC. (page 3) and GAS OPERATIONS AND GAS SUPPLY (page 9) - Note 3 of Notes
to Consolidated Financial Statements on page 22, which page is incorporated
herein by reference.
OTHER
"Other property" reported on the Consolidated Balance Sheet includes the natural
gas-fired combustion turbine generation peaking units. Information relating to
these properties is contained in Item 1 - CONSTRUCTION PROGRAM (pages 6 and 7)
and ELECTRIC OPERATIONS AND FUEL SUPPLY (pages 7-9), as well as page 14 of the
registrant's 2000 Annual Report, which page is incorporated herein by reference.
Substantially all property and plant of DP&L is subject to the lien of the
Mortgage securing DP&L's First Mortgage Bonds.
Item 3 - LEGAL PROCEEDINGS
- --------------------------------------------------------------------------------
Information relating to legal proceedings involving DP&L is contained in Item 1
- - BUSINESS, DPL INC. (page 3), COMPETITION (pages 4-6), ELECTRIC OPERATIONS AND
FUEL SUPPLY (pages 7-9), GAS OPERATIONS AND GAS SUPPLY (page 9), RATE REGULATION
AND GOVERNMENT LEGISLATION (pages 9-11), ENVIRONMENTAL CONSIDERATIONS (pages
11-13) and Note 4 of Notes to Consolidated Financial Statements on page 22 of
the registrant's Annual Report, which page is incorporated herein by reference.
Item 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- --------------------------------------------------------------------------------
There were no submissions to the security holders in the fourth quarter.
16
<PAGE>
EXECUTIVE OFFICERS OF THE REGISTRANT
(AS OF MARCH 1, 2001)
<TABLE>
<CAPTION>
Business Experience,
Last Five Years
(Positions with Registrant
Name Age Unless Otherwise Indicated) Dates
- -------------------- --------- --------------------------------- ----------------
<S> <C> <C> <C>
Allen M. Hill 55 President and Chief Executive 1/01/97 - 3/01/01
Officer
President and Chief Operating 9/26/95 - 1/01/97
Officer
President and Chief Executive 9/26/95 - 1/01/97
Officer, DP&L
Susan Flanagan 38 Vice President, Mergers and 9/11/00 - 3/01/01
Acquisitions
Director, PricewaterhouseCoopers 12/01/95 - 8/31/00
LLP, New York, NY
Stephen F. Koziar, Jr. 56 Group Vice President and 1/31/95 - 3/01/01
Secretary, DPL Inc. and
DP&L
Elizabeth M. McCarthy 41 Vice President and Chief 9/26/00 - 3/01/01
Officer, Chief Accounting
Financial Officer, DPL Inc.
and DP&L
Vice President and Chief 4/01/00 - 9/26/00
Accounting Officer, DPL Inc.
and DP&L
Accounting Officer
Partner, PricewaterhouseCoopers 7/01/94 - 3/31/00
LLP, New York, NY
Arthur G. Meyer 50 Vice President, Legal and 11/21/97 - 3/01/01
Corporate Affairs, DP&L
Director, Corporate Relations, 5/14/96 - 11/21/97
DP&L
Treasurer, DP&L 6/27/95 - 5/14/96
Bryce W. Nickel 44 Assistant Vice President, DP&L 1/01/94 - 3/01/01
H. Ted Santo 50 Group Vice President, DP&L 12/08/92 - 3/01/01
Patricia K. Swanke 41 Vice President, Operations, 9/29/99 - 3/01/01
DP&L
Managing Director, DP&L 9/08/96 - 9/29/99
Operations Director, DP&L 7/27/95 - 9/08/96
Judy Wyatt 49 Group Vice President, 1/31/95 - 3/01/01
DPL Inc. and DP&L
</TABLE>
17
<PAGE>
PART II
Item 5 - MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
- --------------------------------------------------------------------------------
As of December 31, 2000, there were 35,903 holders of record of DPL common
equity, excluding individual participants in security position listings.
As long as any Preferred Stock is outstanding, DP&L's Amended Articles of
Incorporation contain provisions restricting the payment of cash dividends on
any of its Common Stock if, after giving effect to such dividend, the aggregate
of all such dividends distributed subsequent to December 31, 1946 exceeds the
net income of DP&L available for dividends on its Common Stock subsequent to
December 31, 1946, plus $1,200,000. As of year-end, all earnings reinvested in
the business of DP&L were available for Common Stock dividends.
Item 6 - SELECTED FINANCIAL DATA
- --------------------------------------------------------------------------------
The information required by this item of Form 10-K is set forth on page 28 of
the registrant's 2000 Annual Report, which page is incorporated herein by
reference.
Item 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
- --------------------------------------------------------------------------------
The information required by this item of Form 10-K is set forth in Note 4 to the
Consolidated Financial Statements on page 22 and on pages 1 and 13 through 16 of
the registrant's 2000 Annual Report, which pages are incorporated herein by
reference.
This report contains certain forward-looking statements regarding plans and
expectations for the future. Investors are cautioned that actual outcomes and
results may vary materially from those projected due to various factors beyond
DP&L's control, including abnormal weather, unusual maintenance or repair
requirements, changes in fuel costs, increased competition, regulatory changes
and decisions, changes in accounting rules, and adverse economic conditions.
Item 7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
- --------------------------------------------------------------------------------
The information required by this item of Form 10-K is set forth in the Market
Risk section on page 15 of the registrant's 2000 Annual Report, which page is
incorporated herein by reference.
18
<PAGE>
Item 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
- --------------------------------------------------------------------------------
The information required by this item of Form 10-K is set forth on pages 17
through 28 of the registrant's 2000 Annual Report, which pages are incorporated
herein by reference.
REPORT OF INDEPENDENT ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULE
-------------------------------
To the Board of Directors of DPL inc.
Our audits of the consolidated financial statements referred to in our report
dated January 29, 2001 appearing on page 27 of the 2000 Annual Report to
Shareholders of DPL Inc. (which report and consolidated financial statements are
incorporated by reference in this Annual Report on Form 10-K) also included an
audit of the Financial Statement Schedule listed in Item 14(a)(2) of this Form
10-K. In our opinion, this Financial Statement Schedule presents fairly, in all
material respects, the information set forth therein when read in conjunction
with the related consolidated financial statements.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Dayton, Ohio
January 29, 2001
Item 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
- --------------------------------------------------------------------------------
None.
19
<PAGE>
PART III
Item 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
- --------------------------------------------------------------------------------
DIRECTORS OF THE REGISTRANT
The information required by this item of Form 10-K is set forth in DPL's
definitive Proxy Statement relating to the 2001 Annual Meeting of Shareholders
("2001 Proxy Statement"), which is incorporated herein by reference, and on page
17 of this Form 10-K.
Item 11 - EXECUTIVE COMPENSATION
- --------------------------------------------------------------------------------
The information required by this item of Form 10-K is set forth in the 2001
Proxy Statement, which is incorporated herein by reference.
Item 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
- --------------------------------------------------------------------------------
The information required by this item of Form 10-K is set forth in the 2001
Proxy Statement, which is incorporated herein by reference.
Item 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- --------------------------------------------------------------------------------
None.
PART IV
Item 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULE AND REPORTS ON FORM 8-K
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Pages of 2000
Form 10-K
Incorporated by
Reference
---------------
<S> <C>
Report of Independent Accountants...................... 19
</TABLE>
(a) Documents filed as part of the Form 10-K
20
<PAGE>
<TABLE>
<CAPTION>
Pages of 2000
Annual Report
Incorporated by
Reference
-----------------------
1. FINANCIAL STATEMENTS
--------------------
<S> <C>
Consolidated Statement of Results of Operations for the three
years in the period ended December 31, 2000..................................... 17
Consolidated Statement of Cash Flows for the three years in the
period ended December 31, 2000.................................................. 18
Consolidated Balance Sheet as of December 31, 2000 and 1999..................... 19
Consolidated Statement of Shareholders' Equity for the three years
in the period ended December 31, 2000 .......................................... 20
Notes to Consolidated Financial Statements ..................................... 21-27
Report of Independent Accountants .............................................. 27
The following schedule is filed herewith:
Page No.
----------------------
2. FINANCIAL STATEMENT SCHEDULE
----------------------------
For the three years in the period ended December 31, 2000:
Schedule II - Valuation and qualifying accounts................................. 27
The information required to be submitted in schedules I, III, IV and V is
omitted as not applicable or not required under rules of Regulation S-X.
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
3. EXHIBITS
--------
The exhibits filed as a part of this Annual Report on Form 10-K are:
Incorporated Herein by
Reference as Filed With
---------------------------------
<S> <C> <C>
2(a) Copy of the Agreement of Merger among DPL Inc., Holding Sub Inc. and Exhibit A to the 1986 Proxy
DP&L dated January 6, 1986........................................... Statement (File No. 1-2385)
2(b) Copy of Asset Purchase Agreement, dated December 14, 1999, between Exhibit 2 to Report on Form 10-Q
the Dayton Power and Light Company, Indiana Energy, Inc., and for the quarter ended September
Number-3CHK, Inc..................................................... 30, 2000
(File No. 1-9052)
3 Copy of Amended Articles of Incorporation of DPL Inc. dated February Filed herewith as Exhibit 3 on
1, 2000.............................................................. page 28
4(a) Copy of Composite Indenture dated as of October 1, 1935, between DP&L Exhibit 4(a) to Report on Form
and The Bank of New York, Trustee with all amendments through the 10-K for the year ended
Twenty-Ninth Supplemental Indenture.................................. December 31, 1985 (File No.
1-2385)
4(b) Copy of the Thirtieth Supplemental Indenture dated as of March 1, Exhibit 4(h) to Registration
1982, between DP&L and The Bank of New York, Trustee................. Statement No. 33-53906
4(c) Copy of the Thirty-First Supplemental Indenture dated as of Exhibit 4(h) to Registration
November 1, 1982, between DP&L and The Bank of New York, Trustee..... Statement No. 33-56162
4(d) Copy of the Thirty-Second Supplemental Indenture dated as of Exhibit 4(i) to Registration
November 1, 1982, between DP&L and The Bank of New York, Trustee..... Statement No. 33-56162
4(e) Copy of the Thirty-Third Supplemental Indenture dated as of Exhibit 4(e) to Report on Form
December 1, 1985, between DP&L and The Bank of New York, Trustee..... 10-K for the year ended
December 31, 1985 (File No.
1-2385)
4(f) Copy of the Thirty-Fourth Supplemental Indenture dated as of April 1, Exhibit 4 to Report on Form 10-Q
1986, between DP&L and The Bank of New York, Trustee................. for the quarter ended June 30,
1986
(File No. 1-2385)
4(g) Copy of the Thirty-Fifth Supplemental Indenture dated as of December Exhibit 4(h) to Report on Form
1, 1986, between DP&L and The Bank of New York, Trustee.............. 10-K for the year ended December
31, 1986 (File No. 1-9052)
</TABLE>
22
<PAGE>
<TABLE>
<S> <C> <C>
4(h) Copy of the Thirty-Sixth Supplemental Indenture dated as of Exhibit 4(i) to Registration
August 15, 1992, between DP&L and The Bank of New York, Trustee...... Statement No. 33-53906
4(i) Copy of the Thirty-Seventh Supplemental Indenture dated as of Exhibit 4(j) to Registration
November 15, 1992, between DP&L and The Bank of New York, Trustee.... Statement No. 33-56162
4(j) Copy of the Thirty-Eighth Supplemental Indenture dated as of Exhibit 4(k) to Registration
November 15, 1992, between DP&L and The Bank of New York, Trustee.... Statement No. 33-56162
4(k) Copy of the Thirty-Ninth Supplemental Indenture dated as of January Exhibit 4(k) to Registration
15, 1993, between DP&L and The Bank of New York, Trustee............. Statement No. 33-57928
4(l) Copy of the Fortieth Supplemental Indenture dated as of February 15, Exhibit 4(m) to Report on
1993, between DP&L and The Bank of New York, Trustee................. Form 10-K for the year ended
December 31, 1992 (File No.
1-2385)
4(m) Copy of Forty-First Supplemental Indenture dated as of February 1, Exhibit 4(m) to Report on Form
1999, between DP&L and the Bank of New York, Trustee................. 10-K for the year ended December
31, 1998 (File No. 1-2385)
4(n) Copy of the Credit Agreement dated as of November 2, 1989 between DPL Exhibit 4(k) to DPL Inc.'s
Inc., the Bank of New York, as agent, and the banks named therein.... Registration Statement on Form
S-3 (File No. 33-32348)
4(o) Copy of the Note Purchase Agreement dated as of April 6, 1999 for Exhibit 4 to Report on Form 10-Q
$500 million of 6.32% Senior Notes due 2004.......................... dated June 30, 1999 (File No.
1-9052)
4(p) Copy of Shareholder Rights Agreement between DPL Inc. and The First Exhibit 4 to Report on Form 8-K
National Bank of Boston.............................................. dated December 13, 1991
(File No. 1-9052)
4(q) Copy of Securities Purchase Agreement dated as of February 1, 2000 by Exhibit 99(b) to Schedule TO
and among DPL Inc. and DPL Capital Trust I, Dayton Ventures LLC and dated February 4, 2000 (File No.
Dayton Ventures Inc. and certain exhibits thereto.................... 1-9052)
10(a) Copy of Directors' Deferred Stock Compensation Plan amended December Filed herewith as Exhibit 10(a)
31, 2000............................................................. on page 38
</TABLE>
23
<PAGE>
<TABLE>
<S> <C> <C>
10(b) Copy of Directors' Deferred Compensation Plan amended December 31, Filed herewith as Exhibit 10(b)
2000................................................................. on page 50
10(c) Copy of Management Stock Incentive Plan amended December 31, 2000.... Filed herewith as Exhibit 10(c)
on page 70
10(d) Copy of Key Employees Deferred Compensation Plan amended December 31, Filed herewith as Exhibit 10(d)
2000................................................................. on page 84
10(e) Form of Change of Control Agreement with Certain Executive Officers.. Filed herewith as Exhibit 10(e)
on page 103
10(f) Copy of Stock Option Plan............................................ Filed herewith as Exhibit 10(f)
on page 115
13 Copy of DPL's 2000 Annual Report to Shareholders (pages 1 and 13-28). Filed herewith as Exhibit 13 on
page 125
18 Copy of preferability letter relating to change Exhibit 18 to Report on Form
in accounting for unbilled revenues from 10-K for the year ended
Price Waterhouse LLP................................................. December 31, 1987 (File No.
1-9052)
21 List of Subsidiaries of DPL Inc...................................... Filed herewith as Exhibit 21 on
page 154
23 Consent of PricewaterhouseCoopers LLP................................ Filed herewith as Exhibit 23 on
page 154
</TABLE>
Pursuant to paragraph (b) (4) (iii) (A) of Item 601 of Regulation S-K, DPL Inc.
has not filed as an exhibit to this Form 10-K certain instruments with respect
to long-term debt if the total amount of securities authorized thereunder does
not exceed 10% of the total assets of DPL Inc. and its subsidiaries on a
consolidated basis, but hereby agrees to furnish to the SEC on request any such
instruments.
(b) REPORTS ON FORM 8-K
None.
24
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
DPL Inc.
Registrant
March 30, 2001 /s/ Allen M. Hill
----------------------------------
Allen M. Hill
President and Chief Executive Officer
(principal executive officer)
25
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
/s/ T. J. Danis Director March 30, 2001
- ------------------------
(T. J. Danis)
Director March 30, 2001
- ------------------------
(J. F. Dicke, II)
/s/ P. H. Forster Director and Chairman March 30, 2001
- ------------------------
(P. H. Forster)
/s/ E. Green Director March 30, 2001
- ------------------------
(E. Green)
/s/ J. G. Haley Director March 30, 2001
- ------------------------
(J. G. Haley)
/s/ A. M. Hill Director, President and Chief March 30, 2001
- ------------------------ Executive Officer
(A. M. Hill)
Director March 30, 2001
- ------------------------
(W. A. Hillenbrand)
/s/ D. R. Holmes Director March 30, 2001
- ------------------------
(D. R. Holmes)
/s/ B. R. Roberts Director March 30, 2001
- ------------------------
(B. R. Roberts)
Director March 30, 2001
- ------------------------
(G. R. Roberts)
Director March 30, 2001
- ------------------------
(S. M. Stuart)
/s/ E. M. McCarthy Vice President and Chief Financial March 30, 2001
- ------------------------ Officer (principal financial and
(E. M. McCarthy) accounting officer)
26
<PAGE>
SCHEDULE II
<TABLE>
<CAPTION>
DPL Inc.
VALUATION AND QUALIFYING ACCOUNTS
For the years ended December 31, 2000, 1999, and 1998
($ in thousands)
- ----------------------------------------------------------------------------------------------------------------------
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
- ----------------------------------------------------------------------------------------------------------------------
Additions
------------------------
Balance at Charged Balance at
Beginning of to Deductions End of
Description Period Income Other (1) Period
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
2000:
Deducted from accounts receivable--
Provision for uncollectible accounts $ 4,355 $ 9,115 $ -- $ 6,619 $ 6,851
1999:
Deducted from accounts receivable--
Provision for uncollectible accounts $ 4,744 $ 5,171 $ -- $ 5,560 $ 4,355
1998:
Deducted from accounts receivable--
Provisions for uncollectible accounts $ 5,007 $ 8,182 $ -- $ 8,445 $ 4,744
</TABLE>
(1) Amounts written off, net of recoveries of accounts previously written off.
27
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3
<SEQUENCE>2
<FILENAME>a2043323zex-3.txt
<DESCRIPTION>EXHIBIT 3
<TEXT>
<PAGE>
EXHIBIT 3
AMENDED ARTICLES OF INCORPORATION
OF
DPL INC.
----------------
FIRST: The name of the Corporation is DPL Inc.
SECOND: The place in the State of Ohio where its principal office is to be
located is the City of Dayton, Montgomery County, Ohio.
THIRD: The purpose for which the Corporation is formed is to engage in any
lawful act or activity for which corporations may be formed under Section
1701.01 to 1701.98, inclusive, of the Ohio Revised Code.
FOURTH: The authorized number of shares of the Corporation is 258,000,000,
which shall be classified as follows:
8,000,000 Preferred Shares, without par value (hereinafter called
"Preferred Shares"); and
250,000,000 Common Shares, with a par value of $.01 per Share (hereinafter
called "Common Shares").
SECTION 1. Preferred Shares. The express terms and provisions of the
Preferred Shares are as follows:
I. Preferred Shares may be issued in series from time to time. Within the
limitations and restrictions set forth in this Article Fourth, the Board of
Directors is expressly authorized, at one time or from time to time, to adopt
amendments to the Articles of Incorporation in respect of any authorized and
unissued Preferred Shares to fix or alter the division of such shares into
series, the designation and number of shares of each series, the dividend rates,
redemption rights, redemption prices, liquidation prices, sinking fund
requirements, conversion rights, and restrictions on issuance of shares of the
same series or of any other class or series. The express terms and provisions of
Preferred Shares of different series shall be identical except that there may be
variations in respect of any or all of the particulars hereinbefore set forth in
this subsection I. In case the stated dividends or the amounts payable on
dissolution, liquidation, or sale of assets of the Corporation are not paid in
full, all Preferred Shares of all series shall participate ratably in the
payment of dividends, including accumulations, if any, in proportion to the sums
which would be payable thereon if all dividends thereon were paid in full, and,
in any distribution of assets other than by way of dividends, in proportion to
the sums which would be payable on such distribution if all sums payable thereon
to holders of Preferred Shares were discharged in full.
II. The holders of Preferred Shares shall be entitled to receive when and
as declared out of the surplus of the Corporation, subject to any limitations
prescribed by statute, cash dividends at the respective rates and on the
respective dates fixed by the Board of Directors for the shares
28
<PAGE>
of the several series of Preferred Shares, and no more. Dividends on each
Preferred Share shall be cumulative from the date fixed therefor by the Board of
Directors.
III. Except as otherwise expressly provided in this Article Fourth, the
Corporation shall have the right to redeem the Preferred Shares of any one or
more series at any time, either in whole or in such portions, as, from time to
time, the Board of Directors may determine, upon the payment to the respective
holders thereof of the "General Redemption Price" thereof. The General
Redemption Price for shares of each series shall be an amount equal to the sum
of (a) the redemption price fixed by the Board of Directors for the shares of
such series prior to the initial issuance of the first shares of such series;
and (b) an amount equivalent to all accumulated and unpaid dividends on the
shares to be redeemed to the date fixed for redemption (hereinafter referred to
as the "Redemption Date"), whether or not such dividends shall have been earned
or declared. In lieu of such payment the Corporation may deposit the General
Redemption Price of the shares to be redeemed on or prior to the Redemption
Date, with such responsible bank or trust company as may be designated by the
Board of Directors, in trust, for payment on or after the date of such deposit
(without awaiting the Redemption Date) to the holders of Preferred Shares then
to be redeemed. If less than the whole amount of outstanding Preferred Shares of
any particular series shall be redeemed at any time, the shares thereof to be
redeemed shall be selected by lot.
Notice of any such redemption, in whole or in part, and of any such deposit
made or to be made of such General Redemption Price, shall be mailed to each
holder of Preferred Shares so to be redeemed, at his address registered with the
Corporation, not less than thirty days prior to the Redemption Date, and, if
less than all of such shares owned by such shareholders are to be redeemed, the
notice shall specify the number of shares thereof which are to be redeemed. Such
notice having been so given, or irrevocable written authority to the depository
having been given at the time of making the deposit provided for herein
forthwith to give such notice, all rights of the respective holders of such
shares as shareholders of the Corporation by reason of the ownership of such
shares, except the right to receive the General Redemption Price of such shares
upon presentation and surrender of their respective certificates representing
such shares, shall cease from and after the Redemption Date (unless default
shall be made by the Corporation in providing moneys for the payment of the
General Redemption Price), or, if the General Redemption Price shall have been
deposited on or prior to the Redemption Date as above permitted, from and after
the date of such deposit; provided, however, that in lieu of the right to
receive the General Redemption Price, any rights of conversion or exchange may
be exercised up to the close of business on the Redemption Date. If after such
deposit any Preferred Shares so called shall be so converted or exchanged, the
amount theretofore deposited with the depository for the redemption thereof
shall forthwith be paid over by it to the Corporation. Any other moneys so
deposited which shall remain unclaimed by the holders of Preferred Shares so
called for redemption at the end of two years after the Redemption Date shall be
paid by such depository to the Corporation, after which the holders of such
Preferred Shares shall look only to the Corporation for payment of the General
Redemption Price thereof, without interest.
IV. Upon the dissolution, liquidation or sale of all or substantially all
the assets of the Corporation, the holders of Preferred Shares shall be entitled
to receive the following sums, before any payment shall be made to the holders
of Common Shares with respect to payment upon dissolution, liquidation or sale
of assets:
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(a) in case of any involuntary dissolution or liquidation or forced sale of
all or substantially all of the assets of the Corporation, each Preferred Share
of each series shall be entitled to receive the amount fixed for such
contingency by the Board of Directors for the shares of such series prior to the
issuance of the first shares of such series, together with a sum, whether or not
earned or declared, equivalent to all accumulated and unpaid dividends thereon
to the date of such payment; or
(b) in case of any voluntary dissolution or liquidation or voluntary sale
of all or substantially all of the assets of the Corporation, each Preferred
Share of each series shall be entitled to receive the amount fixed for such
contingency by the Board of Directors for the shares of such series prior to the
initial issuance of the first shares of such series, together with a sum,
whether or not earned or declared, equivalent to all accumulated and unpaid
dividends thereon to the date of such payment.
After all sums payable on the Preferred Shares as herein provided upon a
particular contingency shall have been paid in full, but not prior thereto, the
Common Shares shall be entitled to payment of all other sums then distributable.
For the purposes of this subsection IV, a consolidation or merger of the
Corporation with or into any other corporation, or a consolidation or merger of
any other corporation with or into the Corporation shall not be deemed a
dissolution, liquidation, or sale of assets.
V. The holders of Preferred Shares shall be entitled to one vote for each
Preferred Share held by them respectively.
VI. So long as any of the Preferred Shares shall remain outstanding, no
dividend (other than dividends payable in Common Shares) shall be paid, nor
shall any distribution (by purchase, redemption, payment to any sinking fund, or
otherwise, other than stock splits) be made, on any of the Common Shares unless:
(a) all dividends on all outstanding Preferred Shares shall have been paid
and full dividends thereon for the then current quarterly dividend period shall
have been declared and a sum sufficient for the payment thereof set apart
therefor; and
(b) the Corporation shall not be in arrears in respect of any sinking fund
obligation in respect of any series of Preferred Shares.
VII. Preferred Shares acquired by the Corporation through the exercise by
the holders thereof of any conversion privilege shall not be re-issued except as
hereinafter provided. Such shares and any other Preferred Shares acquired
otherwise than through the operation of any sinking fund and not used to reduce
the amount of any sinking fund installment shall, upon compliance with such
provisions of law relating to the retirement of shares as may be applicable,
have the status of authorized and unissued Preferred Shares which are
unclassified into any series. Preferred Shares acquired by the Corporation
through the operation of any sinking fund or which have been used to reduce the
amount of any sinking fund installment shall be cancelled and not re-issued, and
the Corporation shall from time to time take appropriate corporate action to
reduce the authorized number of Preferred Shares accordingly.
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VIII. No holder of Preferred Shares of any series, as such holder, shall
have any preemptive rights in, or preemptive rights to purchase or subscribe to,
any shares of the Corporation, or any bonds, debentures, or other securities
convertible into any shares of the Corporation, other than such rights of
conversion or exchange as shall be expressly granted by the Board of Directors
prior to the initial issuance of the first shares of the series of which such
Preferred Shares shall constitute a part.
IX. There shall be a series of the Preferred Shares consisting of 1,200,000
shares and designated as "Series A Preferred Shares," which shall have, in
addition to the terms set forth elsewhere in these Articles of Incorporation,
the following preferences, limitation and relative rights:
(a)(1) The holders of Series A Preferred Shares, in preference to the
holders of Common Shares, shall be entitled to receive, when, as and if declared
by the Board of Directors out of funds legally available for the purpose,
quarterly dividends payable in cash on the first day of March, June, September
and December in each year (each such date being referred to herein as a
"Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a Series A Preferred Share or fraction
thereof, in an amount per share (rounded to the nearest cent) equal to the
greater of (i) $40.50 or (ii) subject to the provision for adjustment
hereinafter set forth, 100 times the aggregate per share amount of all cash
dividends, and 100 times the aggregate per share amount (payable in kind) of all
non-cash dividends or other distributions other than a dividend payable in
Common Shares or a subdivision of the outstanding Common Shares (by
reclassification or otherwise), declared on the Common Shares since the
immediately preceding Quarterly Dividend Payment Date or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance of any Series A
Preferred Share or fraction thereof. In the event the Corporation shall at any
time on or after December 3, 1991, declare or pay any dividend on Common Shares
payable in Common Shares, or effect a split or subdivision or combination or
consolidation of the outstanding Common Shares (by reclassification or otherwise
than by payment of a dividend in Common Shares) into a greater or lesser number
of Common Shares, then in each such case the amount to which holders of Series A
Preferred Shares were entitled immediately prior to such event under clause (ii)
of the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of Common Shares outstanding
immediately after such event and the denominator of which is the number of
Common Shares that were outstanding immediately prior to such event.
(2) The Corporation shall declare a dividend or distribution on the Series
A Preferred Shares as provided in paragraph (1) of this Subsection IX(a)
immediately after it declares a dividend or distribution on the Common Shares
(other than a dividend payable in Common Shares); provided that, in the event no
dividend or distribution shall have been declared on the Common Shares during
the period between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $40.50 per share on the Series A
Preferred Shares shall nevertheless be payable on such subsequent Quarterly
Dividend Payment Date.
(3) Dividends shall begin to accrue and be cumulative on outstanding Series
A Preferred Shares from the Quarterly Dividend Payment Date next preceding the
date of issue of such Series A Preferred Shares, unless the date of issue of
such shares is prior to the record date for the first
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Quarterly Dividend Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or unless the date of
issue is a Quarterly Dividend Payment Date, or is a date after the record date
for the determination of holders of Series A Preferred Shares entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment Date, in
either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the Series A Preferred Shares in an amount
less than the total amount of such dividends at the time accrued and payable on
such shares shall be allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board of Directors may fix a record date for
the determination of holders of Series A Preferred Shares entitled to receive
payment of a dividend or distribution declared thereon, which record date shall
be not more than 60 days prior to the date fixed for the payment thereof.
(b) The amount payable on each Series A Preferred Share upon the voluntary
or involuntary dissolution or liquidation or the voluntary or forced sale of all
or substantially all the assets of the Corporation shall be an amount equal to
the greater of (i) $6,600 or (ii) subject to the provision for adjustment
hereinafter set forth, 100 times the aggregate per share amount to be
distributed to holders of Common Shares, in either case together with an amount
equal to accumulated and unpaid dividends as specified in Subsection IV of this
Section 1. In the event the Corporation shall at any time on or after December
3, 1991, declare or pay any dividend on Common Shares payable in Common Shares,
or effect a split or subdivision or combination or consolidation of the
outstanding Common Shares (by reclassification or otherwise than by payment of a
dividend in Common Shares) into a greater or lesser number of Common Shares,
then in each such case the aggregate amount to which holders of Series A
Preferred Shares were entitled immediately prior to such event under clause (ii)
of the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of Common Shares outstanding
immediately after such event and the denominator of which is the number of
Common Shares that were outstanding immediately prior to such event.
(c) In case the Corporation shall enter into any consolidation, merger,
combination or other transaction in which the Common Shares are exchanged for or
changed into other shares or securities, cash and/or any other property, then in
any such case the Series A Preferred Shares then outstanding shall at the same
time be similarly exchanged or changed in an amount per share (subject to the
provision for adjustment hereinafter set forth) equal to 100 times the aggregate
amount of shares, securities, cash and/or any other property (payable in kind),
as the case may be, into which or for which each Common Share is changed or
exchanged. In the event the Corporation shall at any time on or after December
3, 1991, declare or pay any dividend on Common Shares payable in Common Shares,
or effect a split or subdivision or combination or consolidation of the
outstanding Common Shares (by reclassification or otherwise) into a greater or
lesser number of Common Shares, then in each such case the amount set forth in
the preceding sentence with respect to the exchange or change of Series A
Preferred Shares shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of Common Shares outstanding immediately after
such event and the denominator of which is the number of Common Shares that were
outstanding immediately prior to such event.
(d) The Series A Preferred Shares shall not be redeemable.
X. There shall be a series of the Preferred Shares consisting of 6,800,000
shares and designated as "Series B Voting Preferred Shares" (the "Series B
Preferred Shares") which shall
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have, in addition to the terms set forth elsewhere in these Articles of
Incorporation, the following preferences, limitations and relative rights:
(a) The Series B Preferred Shares shall, with respect to dividends and
rights upon liquidation, dissolution or winding up, whether voluntary or
involuntary, rank (i) senior to the Common Shares, and, subject to clause (d) of
this Subsection X, to each other class of capital shares or series of Preferred
Shares or other equity-linked security established after the date on which the
first share of Series B Preferred Shares is issued by the Corporation (the
"Original Issue Date"), the terms of which do not expressly provide that it
ranks senior to or on a parity with the Series B Preferred Shares as to
dividends and rights upon liquidation, dissolution or winding up, whether
voluntary or involuntary (collectively referred to with the Common Stock as
"Junior Securities"), and (ii) on parity only with any shares of Series A
Preferred Shares ("Parity Securities") issued by the Corporation in the future.
(b)(1) The holders of outstanding shares of Series B Preferred Shares shall
be entitled to receive, when, as and if declared by the Board of Directors, out
of the assets of the Corporation which are, by law, available for such payment,
cumulative dividends, payable in cash, at a rate per annum, for each Series B
Preferred Share, equal to 8.5% of the sum of (i) $0.01 per share (the "Original
Issue Price") and (ii) all compounded accumulated and unpaid dividends on such
Series B Preferred Share from the Original Issue Date, in each case, as adjusted
for any stock dividends, combinations or splits or similar events with respect
to such share. Such dividends shall be paid and compounded quarterly on the
first day of March, June, September and December in each year commencing with a
payment on March 1, June 1, September 1 or December 1 immediately following the
Original Issue Date of dividends accrued from the Original Issue Date. Each such
dividend shall be payable to the holders of record of Series B Preferred Shares
as they appear on the share register of the Corporation on the corresponding
Record Date. As used herein, the term "Record Date" means, with respect to the
dividend payable on March 1, June 1, September 1 and December 1, respectively of
each year, the preceding February 15, May 15, August 15 and November 15, or such
other record date, not more than 60 days or less than 10 days preceding the
payment dates thereof, as shall be fixed by the Board of Directors.
(2) The amount of dividends payable for each full dividend period for the
Series B Preferred Shares shall be computed by dividing the annual 8.5% dividend
rate by four. The amount of dividends payable for the initial dividend period,
or any other period shorter or longer than a full dividend period, on the Series
B Preferred Shares shall be computed on the basis of twelve 30-day months and a
360-day year.
(3) Dividends on the Series B Preferred Shares shall accumulate and
compound quarterly whether or not the Corporation has earnings or profits,
whether or not there are funds legally available for payment of such dividends
and whether or not dividends are declared. Dividends will accumulate and
compound quarterly to the extent they are not paid. The Corporation shall take
all actions required or permitted under the General Corporation Law of Ohio to
permit the payment of dividends on the Series B Preferred Shares and shall
declare and pay such dividends to the extent there are funds legally available
therefor.
(4) Except as described in the next succeeding sentence, unless full
cumulative dividends on all outstanding Series B Preferred Shares for all past
dividends have
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<PAGE>
contemporaneously been declared and paid in full or declared and consideration
sufficient for the payment thereof set apart for such payment on the Series B
Preferred Shares, then: (A) no dividend shall be declared or paid upon, or any
sum set apart for the payment of dividends upon, any shares of Parity
Securities; (B) no other distribution shall be declared or made upon, or any sum
set apart for the payment of any distribution upon, any shares of Parity
Securities; (C) no shares of Parity Securities shall be purchased, redeemed or
otherwise acquired or retired for value (except by conversion into or an
exchange for shares of Junior Securities) by the Corporation or any entity as to
which the Corporation owns, directly or indirectly, more than 50% of such
entity's stock (or similar voting interests) entitled to vote generally in the
election of directors (or other governing body) (a "Subsidiary"); and (D) no
monies shall be paid into or set apart or made available for a sinking or other
like fund for the purchase, redemption or other acquisition or retirement for
value of any shares of Parity Securities by the Corporation or any of its
Subsidiaries. If at any time the Corporation pays less than the total amount of
dividends then accrued with respect to the Series B Preferred Shares, such
payment shall be distributed ratably among the holders of Series B Preferred
Shares based upon the aggregate accrued but unpaid dividends on the Series B
Preferred Shares held by each holder. When dividends are not paid in full or
consideration sufficient for such payment is not set apart, as aforesaid, all
dividends declared upon any other class or series of Parity Securities shall be
declared ratably in proportion to the respective amounts of dividends
accumulated and unpaid on the Series B Preferred Shares and accumulated and
unpaid on such Parity Securities.
(5) Unless full cumulative dividends on all outstanding shares of Series B
Preferred Shares for all past dividends have been declared and paid in full or
declared and consideration sufficient for the payment thereof set apart for such
payment on the Series B Preferred Shares, then: (A) no dividend (other than a
dividend payable solely in shares of any Junior Securities) shall be declared or
paid upon, or any sum set apart for the payment of dividends upon, any shares of
Junior Securities; (B) no other distribution shall be declared or made upon, or
any sum set apart for the payment of any distribution upon, any shares of Junior
Securities; (C) no shares of Junior Securities shall be purchased, redeemed or
otherwise acquired or retired for value (excluding an exchange for shares of
other Junior Securities) by the Corporation or any of its Subsidiaries; and (D)
no monies shall be paid into or set apart or made available for a sinking or
other like fund for the purchase, redemption or other acquisition or retirement
for value of any shares of Junior Securities by the Corporation or any of its
Subsidiaries.
(c)(1) Upon any liquidation, dissolution or winding up of the Corporation,
whether voluntary or involuntary, before any distribution or payment shall be
made to the holders of any Junior Securities, the holders of Series B Preferred
Shares shall be entitled to be paid out of the remaining assets of the
Corporation legally available for distribution with respect to each Series B
Preferred Share an amount in cash equal to (A) $0.01 plus (B) any accumulated
but unpaid dividends thereon (whether or not declared and whether or not funds
of the Corporation are legally available for the payment of dividends), in each
case as adjusted for any stock dividends, combinations or splits or similar
events with respect to such share (the "Liquidation Preference").
(2) If, upon any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, the assets of the Corporation shall be
insufficient to pay the full Liquidation Preference with respect to the Series B
Preferred Shares and the full liquidation preference plus accumulated and unpaid
dividends with respect to all other Parity Securities, the holders of the
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<PAGE>
Series B Preferred Shares and the Parity Securities shall share equally and
ratably in any distribution of assets of the Corporation in proportion to the
full Liquidation Preference in the case of the Series B Preferred Shares and the
full liquidation preference plus accumulated and unpaid dividends in the case of
any Parity Securities to which each is entitled.
(d) The Corporation shall not, without the prior approval of the holders of
a majority of the outstanding Voting Preferred Shares, issue any other preferred
shares of the Corporation (other than the Series A Preferred Shares authorized
as of the date hereof) (i) of the same class as the Series B Preferred Shares,
or (ii) ranking senior to the Voting Preferred Shares.
(e)(1) Except as set forth below in this clause (e), the Series B Preferred
Shares shall not be redeemable.
(2) The Corporation shall, from time to time, at the option of the Equity
Purchaser (as defined in the Securities Purchase Agreement dated as of February
1, 2000 by and among the Corporation, DPL Capital Trust I, Dayton Ventures LLC
and Dayton Ventures, Inc. (the "Securities Purchase Agreement"), redeem such
number of Series B Preferred Shares so that at no time shall the Equity
Purchaser, together with its Affiliates (as defined in the Securities Purchase
Agreement), own Common Shares and Series B Preferred Shares representing in
excess of 4.9% of the voting power of the Corporation in the election of
directors. The redemption price shall be $0.01 per share plus accumulated and
unpaid dividends up to the date of redemption (the "Redemption Price."). The
Corporation shall pay the Redemption Price promptly, and in any event within two
(2) business days, upon receipt of a notice from the Equity Purchaser exercising
the above option (the "Redemption Notice"). The Redemption Price may be paid:
(i) in cash; (ii) by certified check made out to the Equity Purchaser or its
designee; or (iii) by wire transfer of immediately available funds to an account
designated by the Equity Purchaser in the Redemption Notice.
(3) In the event a holder of a Warrant (as defined in the Securities
Purchase Agreement) (the "Exercising Holder") wishes to exercise any Warrants
that are not Excess Warrants (as defined in the Securityholders and Registration
Rights Agreement, dated as of the date of Closing under the Securities Purchase
Agreement, by and among the Corporation, DPL Capital Trust I, Dayton Ventures
LLC and Dayton Ventures, Inc. (the "Securityholders Agreement")), the
Corporation shall redeem simultaneously with the exercise of such Warrants an
equal number of the Exercising Holders' Series B Preferred Shares for the
Redemption Price. The Redemption Price may be paid: (i) in cash; (ii) by
certified check made out to the Exercising Holder or its designee; or (iii) by
wire transfer of immediately available funds to an account designated by the
Exercising Holder.
(4) If upon any redemption as set forth in this clause (e) above, the
assets of the Corporation available for redemption are insufficient to pay the
holders of the shares subject to redemption the full amounts to which they are
entitled, all Series B Preferred Shares will be redeemable for cash upon demand.
The Series B Preferred Shares not so redeemed shall remain outstanding and be
entitled to all the powers, preferences and rights provided herein. At any time
thereafter when additional funds of the Corporation are legally available for
the redemption of Series B Preferred Shares, such funds will immediately be used
to redeem the balance of the shares which the Corporation has become obligated
to redeem in accordance with this clause (e) which it has not redeemed.
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<PAGE>
(5) The Corporation will not enter into any contract or agreement (whether
verbal or written) restricting or impairing its ability to redeem Series B
Preferred Shares in accordance with this clause (e).
(f) ISSUANCES OF ADDITIONAL SECURITIES. Prior to the declaration, issuance
or consummation of any dividend, spin-off or other distribution or similar
transaction by the Corporation of the capital stock of any of its Subsidiaries
to the shareholders of the Corporation, the Corporation shall cause (i)
additional shares of voting preferred stock of such Subsidiary with
substantially similar terms as the Series B Preferred Shares to be issued to
each holder of Series B Preferred Shares so that after giving effect to such
transaction each such holder shall have the same percentage voting interest in
the Series B Preferred Shares and in such shares of voting preferred stock in
such Subsidiary as it had in the Corporation immediately prior to such
transaction and (ii) any such Subsidiary to enter into with each such holder a
securityholders and registration rights agreement with substantially similar
terms, conditions, covenants and governance provisions as are provided for in
the Securityholders Agreement.
SECTION 2. Common Shares. The express terms and provisions of the Common
Shares are as follows:
I. The rights and preferences of the Common Shares shall be subject in all
respects to the rights and preferences of the Preferred Shares in the manner and
to the extent provided in this Article Fourth.
II. The Common Shares shall rank junior to the Preferred Shares with
respect to the payment of dividends. Out of the assets of the Corporation
available for dividends remaining after there shall have been paid or declared
and set apart for payment full dividends of the Preferred Shares, and subject to
the restrictions or limitations contained in the express terms and provisions of
any series of Preferred Shares, dividends may be declared and paid upon the
Common Shares, but only when and as determined by the Board of Directors.
III. The Common Shares shall rank junior to the Preferred Shares with
respect to payment upon dissolution, liquidation or sale of assets of the
Corporation. Upon the dissolution, liquidation or sale of all or substantially
all the assets of the Corporation, after there shall have been paid to or set
apart for holders of the Preferred Shares the full preferential amounts to which
they are entitled, the holders of Common Shares shall be entitled to receive pro
rata all of the remaining assets of the Corporation available for distribution
to its shareholders.
IV. The holders of Common Shares shall be entitled to one vote for each
Common Share held by them respectively.
V. No holder of Common Shares, as such holder, shall have any preemptive
rights in, or preemptive rights to purchase or subscribe to, any shares of the
Corporation, or any bonds, debentures, or other securities convertible into any
shares of the Corporation.
FIFTH: When authorized by the affirmative vote of the Board of Directors of
the Corporation, without the action or approval of the shareholders of the
Corporation, the Corporation may, to the extent not otherwise prohibited by law,
purchase, or contract to purchase
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at any time and from time to time, shares of any class issued by the
Corporation, voting trust certificates for shares, bonds, debentures, notes,
scrip, warrants, obligations, evidences or indebtedness or any other securities
of the Corporation, for such prices and upon and subject to such terms and
conditions as the Board of Directors may determine.
SIXTH: Unless these Articles of Incorporation or the Regulations of the
Corporation provide otherwise, the vote required for the adoption by
shareholders of the Corporation of any proposal shall be the affirmative vote of
the holders of shares entitling them to exercise two-thirds of the voting power
of the Corporation on such proposal if on the date this Article Sixth was
adopted by shareholders of the Corporation, the General Corporation Law of Ohio,
as then in effect, would have required for adoption of the particular proposal
the affirmative vote of the holders of shares entitling them to exercise
two-thirds of the voting power of the Corporation on the particular proposal.
Whenever the holders of shares of any particular class of shares of the
Corporation are entitled to vote as a class on the adoption of a proposal, the
affirmative vote of the holders of shares of the particular class required to
adopt the proposal shall be determined without regard to the preceding sentence.
These Amended Articles of Incorporation supersede the existing Articles of
Incorporation and all amendments thereto.
37
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.A
<SEQUENCE>3
<FILENAME>a2043323zex-10_a.txt
<DESCRIPTION>EXHIBIT 10(A)
<TEXT>
<PAGE>
EXHIBIT 10(a)
THE DAYTON POWER AND LIGHT COMPANY
DIRECTORS' DEFERRED STOCK COMPENSATION PLAN
(AS AMENDED THROUGH DECEMBER 31, 2000)
1. GENERAL.
The name of the plan shall be the "Directors' Deferred Stock Compensation
Plan". The Plan provides Directors of the Company who are not employees of the
Company, with deferred payments of stock compensation awards payable for
services as a Director.
2. DEFINITIONS.
When used herein, the following terms shall have the following meanings:
A. "Stock Awards" means Shares issued by DPL Inc. pursuant to this Plan.
B. "Board of Directors" means the Board of Directors of DPL Inc. in place
from time to time prior to a Change of Control as defined herein.
C. "Change of Control" means any change in control of DPL, or its principal
subsidiary, DP&L, of a nature that would be required to be reported in response
to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") as determined by the Board
of Directors in its sole discretion; provided that, without limitation, such a
Change of Control shall be deemed to have occurred if (i) any "person" (as such
term is defined in Sections 13(d) and 14(d)(2) of the Exchange Act; hereafter, a
"Person") other than DPL or DP&L or an entity then directly or indirectly
controlling, controlled by or under common control with DPL or DP&L is on the
date hereof or becomes or commences a tender offer to become the beneficial
owner, directly or indirectly, of securities of DPL or DP&L representing (A) 15%
or more of the combined voting power of the then outstanding securities of DPL
or DP&L if the acquisition of such beneficial ownership or such tender offer is
not approved by the Board of Directors prior to the acquisition or the
commencement of such tender offer or (B) 50% or more of such combined voting
power in all other cases; (ii) DPL or DP&L enters into an agreement to merge or
consolidate itself, or an agreement to consummate a "combination" or "majority
share acquisition" in which it is the "acquiring corporation" (as such terms are
defined in Ohio Rev. Code ss.1701.01 as in effect on December 31, 1990) and in
which shareholders of DPL or DP&L, as the case may be, immediately prior to
entering into such agreement, will beneficially own, immediately after the
effective time of the merger, consolidation, combination or majority share
acquisition, securities of DPL or DP&L or any surviving or new corporation, as
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<PAGE>
the case may be, having less than 50% of the "voting power" of DPL or DP&L or
any surviving or new corporation, as the case may be, including "voting power"
exercisable on a contingent or deferred basis as well as immediately exercisable
"voting power", excluding any merger of DPL into DP&L or of DP&L into DPL; (iii)
DPL or DP&L enters into an agreement to sell, lease, exchange or otherwise
transfer or dispose of all or substantially all of its assets to any Person
other than to a wholly-owned subsidiary or, in the case of DP&L, to DPL or a
wholly owned subsidiar(ies) of DPL; but not including (A) a mortgage or pledge
of assets granted in connection with a financing or (B) a spin-off or sale of
assets if DPL continues in existence and its common shares are listed on a
national securities exchange, quoted on the automated quotation system of a
national securities association or traded in the over-the-counter market; (iv)
any transaction referred to in (ii) or (iii) above is consummated; or (v) those
persons serving as directors of DPL or DP&L on February 1, 2000 (the "Original
Directors") and/or their Successors do not constitute a majority of the whole
Board of Directors of DPL or DP&L, as the case may be (the term "Successors"
shall mean those directors whose election or nomination for election by
shareholders has been approved by the vote of at least two-thirds of the
Original Directors and previously qualified Successors serving as directors of
DPL or DP&L, as the case may be, at the time of such election or nomination for
election).
D. "CEO" means the Chief Executive Officer of DPL duly installed, from time
to time, prior to a Change of Control. However, "Committee" will be substituted
for "CEO" in discussing the CEO's rights and benefits in the Plan.
E. "Committee" means the Compensation and Management Review Committee of
the Board of Directors of DPL Inc. or such other committee(s) as the Board of
Directors of DPL Inc. may designate from time to time to administer the Plan.
F. "Company" means The Dayton Power and Light Company ("DP&L"), DPL Inc.
("DPL"), and any entity which, prior to a Change of Control is controlling,
controlled by or under common control with DP&L or DPL Inc.
G. "Election Form" means the form attached hereto as Exhibit A (or such
other form as the Committee may designate from time to time) which shall be used
for electing the manner and time to receive payment of Stock Awards in
accordance with the provisions of the Plan.
H. "Participant" means any director of the Company who is not an employee
of the Company.
I. "Plan" means this Directors' Deferred Stock Compensation Plan.
J. "Share" or "Shares" means the common shares of DPL Inc.
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K. "Stock Deferral Account" means the account established by the Company in
the Participant's name to which Shares will be credited in accordance with the
Stock Deferral Provisions.
L. "Stock Deferral Provisions" means those provisions of the Plan under
which:
(1) The Committee may, in its discretion, annually determine the number
of Shares to be awarded(hereinafter "Stock Awards") for each
Participant;
(2) Consistent with Sections 3(A) and 3(B) hereof, the Company shall
contribute to one or more of the Master Trusts the number of Shares
authorized as Stock Awards, on behalf of each Participant;
(3) Each Participant's Stock Deferral Account shall be credited with the
Shares in the Stock Award;
(4) Cash dividends paid on the Shares held by the Master Trusts shall be
used by the Trustees to acquire additional Shares from the Company;
(5) Each Participant's Stock Deferral Account shall also be credited
with Shares received as stock dividends and stock splits, and warrants
and other property received with respect to Shares held in the Stock
Deferral Account; and
(6) Amounts credited to a Participant's Stock Deferral Account
(including Shares purchased by the Trustees with cash dividends received
on Shares held by the Master Trusts) shall be paid in the form of Shares
in accordance with the Participant's election in a lump sum payment or
approximately equal annual installments over a period of years
commencing on the date specified by the Participant on the Election
Form.
M. "Trustees" means, as the context may require, the trustees of a Master
Trust to the extent that benefits under the Plan are being funded under such
Master Trust.
3. MASTER TRUSTS.
A. PARTICIPANT'S ACCOUNTS. The Company has established, and may in the
future establish, one or more trusts (each such trust, as it may be amended from
time to time, is referred to herein as a "Master Trust") for the purposes, among
others, of securing the performance by the Company of its obligation to
Participants to make the distributions under the Plan and has funded one or more
of the Master Trusts in an aggregate amount of cash and/or Shares as the Company
has determined to be equal to the value of the benefits of the Participants
under the Plan. Pursuant to one or more of the Master Trusts, each Participant
has been assigned a separate account as a mechanism for measuring the potential
benefits which may be distributed in the future.
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Subsequent transfers of cash and/or Shares which the Company is required to make
to the Master Trusts pursuant to Section 3.B, 4.B or 9.C hereof or otherwise
shall be allocated among the Master Trusts as the Committee may determine from
time to time.
B. SUCCESSIVE TRANSFERS. On or before the twentieth day following the end
of each successive calendar quarter, the Company shall transfer to one or more
of the Master Trusts such additional amount of cash and/or Shares as the Company
shall determine to be necessary to fund the benefits of Participants under the
Plan.
C. TITLE TO FUNDS. DP&L shall retain beneficial ownership of all cash or
Shares transferred to the Master Trusts and such cash or Shares will be subject
to the claims of DP&L's creditors. No Participant or beneficiary has or will
have any interest in the cash or Shares held in the Master Trusts or in any
other specific asset of the Company.
4. STOCK AWARDS AND ACCOUNT DESIGNATION.
A. STOCK AWARDS. The Committee may, in its discretion, determine, from time
to time, the number of Shares to be awarded as Stock Awards for services to be
performed by each Participant. Any such Stock Award to any Participant may, in
the Committee's discretion, contain such conditions to the earning and/or
vesting of such Stock Award as may be set forth in such Stock Award. The
Committee's determinations need not be uniform. The Committee may, in its
discretion, waive any of the conditions to the earning or vesting of any Stock
Award. Notwithstanding any provision of the Plan to the contrary, in the event
of the death or disability of a Participant, then any Stock Award awarded to
such Participant which has not as yet been earned and/or vested shall
immediately become fully earned and vested and shall be paid in accordance with
Section 5. Stock Awards deferred pursuant to this Plan will not prevent a
Participant from participating in any other compensation program offered by the
Company.
B. STOCK DEFERRAL PROVISIONS. When the Committee authorizes a Stock Award
for any Participant, the Company shall contribute the authorized number of
Shares to the Master Trust(s) pursuant to which benefits under the Plan are
being funded. The Shares so contributed shall be credited to the Participant's
Stock Deferral Account but shall at all times be registered in the name of the
Trustees of the Master Trust to which such Shares were contributed. All cash or
Shares credited to a Participant's Stock Deferral Account and held in the Master
Trusts will be subject to the claims of DP&L's creditors. No Participant or
beneficiary has any property interest in deferred amounts or in any specific
assets of the Company.
The Trustees shall use cash dividends paid on the Shares held in a
Participant's Stock Deferral Account to purchase additional Shares from the
Company, except to the extent that such purchase will result in fractional
Shares. The Trustees shall credit a Participant's Stock Deferral Account with
such
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additional Shares as well as Shares from stock dividends and stock splits, and
warrants and other property received with respect to Shares held in a
Participant's Stock Deferral Account.
5. PAYMENTS UNDER THE PLAN.
A. TIME AND MANNER OF DISTRIBUTIONS. The amount credited to a Participant's
Stock Deferral Account which are earned and vested shall be distributed in a
lump sum payment or approximately equal annual installments over a period of
years with such lump sum payment being made or such installment payments
commencing, unless otherwise determined by the Committee in its discretion, on
or prior to the January 31 immediately following:
1) the date that the Participant ceases to be a Director of the Company;
2) the date the Participant reaches an age at which the Participant may
earn unlimited amounts without reduction of the benefits under the
Social Security Act and the regulations promulgated thereunder; or
3) such other date, either before or after his termination of service, as
specified by the Participant on his Election Form;
and with subsequent annual installments, if payments are to be made in annual
installments, to be paid on or prior to each January 31 thereafter until the
Participant's Stock Deferral Account has been paid in full.
Within the limitations of this Section 5(A) a Participant shall designate
on the Election Form the manner and date of payment of deferred amounts from the
Participant's Stock Deferral Account. All distributions pursuant to this Plan
shall be made in the form of Shares and a Participant shall be entitled to
receive one Share for each earned and vested Share credited to his Stock
Deferral Account.
If a Participant elects to receive distributions in installments over a
period of years, the amount of each installment shall be determined by dividing
the number of Shares credited to the Participant's Stock Deferral Account on the
date of any payment by the number of remaining installments to be made to
Participant on each such date. At the time that each installment distribution is
to be made, the Trustees shall distribute Shares to the Participant in
accordance with the preceding paragraph.
Any cash dividend credited to a Participant's Stock Deferral Account that
is not sufficient to acquire Shares shall be distributed with the last
installment distribution to such Participant.
B. FILING ELECTION FORM TO RECEIVE STOCK AWARDS. On or before December 31
of each year, each Participant will file an
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Election Form designating the manner and date of payment of the Shares to be
contributed by the Company to such Participant's Stock Deferral Account in the
immediate succeeding calendar year. Any person who becomes a Director during any
calendar year, and who was not a Director of the Company on the preceding
December 31, may file an Election Form before his term begins, indicating the
manner and date of payment of any Shares to be contributed by the Company to the
Master Trusts in such year. Each Election Form shall be delivered to the
Secretary of the Company.
C. (INTENTIONALLY LEFT BLANK.)
D. DESIGNATION OF BENEFICIARY. Each Participant shall designate one or more
beneficiaries on the Election Form to whom payments shall be made in the event
of the Participant's death. The Participant shall have the right to change the
beneficiary or beneficiaries from time to time, provided, however, no change
shall become effective until received in writing by the Secretary of the
Company. In the event the Participant has not designated a beneficiary or a
designated beneficiary is not living at the time of the Participant's death,
then payments required to be made by a Master Trust after the Participant's
death shall be made to the Participant's estate.
E. EARLY DISTRIBUTION. A Participant may in no event receive a distribution
of all or a portion of the Shares credited to his account prior to the time that
the Participant elected to receive such Shares pursuant to Section 5.
Notwithstanding the foregoing: (i) the CEO may, upon receiving a written request
from the Participant or his or her beneficiary as provided in Section 5.D.
hereof in the event of the death of a Participant, upon determining that a
distribution is in the best interest of the Company and the Participant (or his
or her beneficiary) taking into account the financial condition of each,
distribute all or a portion of the Shares credited to the Participant's account;
and (ii) upon written request by a Participant to receive all Shares or amounts
credited to his account made at any time after termination of his or her status
as a director of the Company, for any reason, after a Change of Control, the
amount credited to such Participant's account shall be paid to such Participant
in a lump sum within ten (10) days after the date of such written request,
provided that the Participant shall be entitled to only 90% of such account
balance and shall irrevocably forfeit 10% of such account balance by making the
withdrawal.
F. WITHHOLDINGS. Any taxes required to be withheld by any Federal, state or
local government will be deducted from all deferred payments and
paid for the account of the Participant.
6. LACK OF STOCK EXCHANGE LISTING.
In the event that the Shares cease to be listed on the New York Stock
Exchange, then, unless a Participant's entire Stock Deferral Account is then
immediately payable to such Participant in accordance with Section 9(B), such
Participant's Standard Deferral Account under the Company's 1991 Amended
Directors'
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Deferred Compensation Plan (the "Deferred Compensation Plan") shall be credited
with an amount equal to the Conversion Price multiplied by the number of Shares
credited to such Participant's Stock Deferral Account and thereafter payment of
the amount so credited to such Participant's Standard Deferral Account shall be
in accordance with the Deferred Compensation Plan. For this purpose, (a)
"Conversion Price" means: (i) the Fair Market Value of a Share on the date that
the Shares cease to be listed on the New York Stock Exchange or (ii) if the
Shares cease to be so listed as a result of a Change of Control, the greater of
(x) the amount determined in accordance with the foregoing clause (i), (y) the
closing sales price of a Share on the New York Stock Exchange--Composite
Transaction Tape on the date the Shares cease to be so listed or (z) the closing
sales price of a Share on the New York Stock Exchange--Composite Transaction
Tape on the date on which a Change of Control occurs and (b) "Fair Market Value"
means the average of the closing sale prices of a Share on the last trading day
of each of the four calendar months preceding the date the value of a Share is
to be determined, as reported on the New York Stock Exchange-Composite
Transaction Tape.
7. PAYMENTS IN THE EVENT OF DEATH.
In the event that a Participant dies before all payments from the
Participant's Stock Deferral Account have been distributed, the amounts credited
to the Participant's Stock Deferral Account at the time of the Participant's
death shall be paid to the beneficiary designated on the Participant's Election
Form, in a lump sum payment in the form of Shares on the first business day of
the month following the month in which the Participant dies unless the
Participant elects on the Election Form for payments to continue or commence
being paid to the Participant's beneficiary in the same method as would have
been paid to the Participant, if surviving.
8. VOTING INSTRUCTIONS.
The Trustees shall solicit instructions from each Participant regarding the
manner in which Shares (other than Shares subject to a Stock Award which is not
fully earned and vested) and any related options, conversion privileges, or
subscription rights credited to such Participant's Stock Deferral Account shall
be voted or exercised. Such solicitation shall inform the Participant of the
number of such Shares, options, conversion privileges, or subscription rights
credited to his Stock Deferral Account as of the last day preceding such notice,
describe the matters to be voted upon or exercised and solicit the Participant's
instructions regarding the voting or exercise of such Shares, options,
conversion privileges, or subscription rights. The Trustees shall take into
consideration the Participant's instructions regarding the voting of such Shares
or the exercise of such options, conversion privileges, or subscription rights
but shall retain the discretion to vote such Shares or exercise such
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<PAGE>
options, conversion privileges, or subscription rights in a manner other than as
instructed by the Participant. If a Participant fails to instruct the Trustees
regarding the manner in which such Shares shall be voted or such options,
conversion privileges, or subscription rights shall be exercised, such Shares
shall be voted or such options, conversion privileges, or subscription rights
shall be exercised by the Trustees in their discretion.
9. CHANGE OF CONTROL.
A. AUTOMATIC TRANSFER OF AUTHORITY. In the event of a Change of Control,
any and all authority and discretion which is exercisable by the Committee, or
the CEO, as heretofore or hereafter described in the Plan, shall automatically
be transferred to the Trustees of each Master Trust to the extent that benefits
under the Plan are being funded under such Master Trust.
B. CONVERSION UPON CHANGE OF CONTROL. Upon the termination of a
Participant's status as a director of the Company, for any reason, after a
Change of Control, and notwithstanding any other provision of this Plan, or of
any Stock Award, or in any installment election by the Participant, to the
contrary, the Participant's entire Stock Deferral Account shall be immediately
converted to cash based on the greater of (i) the closing sales price of a Share
on the New York Stock Exchange--Composite Transaction Tape on the date of
termination or (ii) the Conversion Price (as determined in accordance with
Section 6). As converted, if the Participant's account in the Plan is not
payable upon the Participant's termination as a director of the Company pursuant
to his or her Election Form, then such amount shall be immediately credited to
the Participant's Standard Deferral Account in the Deferred Compensation Plan
(as defined in Section 6 hereof), and thereafter payment of the amount so
credited shall be in accordance with the Deferred Compensation Plan.
C. FUNDING OF MASTER TRUSTS. Upon a Change of Control, the Company shall
immediately transfer to one or more of the Master Trusts an aggregate amount of
cash and/or Shares which, when combined with the other assets of the Master
Trusts contributed or accruing thereto under or by reason of Section 3 hereof,
is sufficient to equal the value of benefits of Participants under the Plan
accrued through the date of such Change of Control.
10. NOTICES.
Any notice, election or any request required or permitted hereunder, which
is to be mailed to or requested from the Secretary or the CEO of the Company
shall be delivered or mailed, postage prepaid, as follows:
(i) Prior to a Change of Control; to the Secretary of DP&L at:
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The Dayton Power and Light Company
MacGregor Park 1065
Woodman Drive Dayton, Ohio 45432
Attention: Corporate Secretary
(ii) After a Change of Control; to the Trustees of each Master
Trust pursuant to which benefits under the Plan are being
funded, at the notice address specified by such Trustees in
the applicable trust agreement.
The Company or Trustees may from time to time change their addresses for receipt
of notices by giving notice of such change to the Participants, but no such
change shall be deemed to be effective until notice thereof is actually received
by the Participant to whom it is directed.
11. INTERPRETATION, AMENDMENT AND TERMINATION.
Prior to a Change of Control, the Plan shall be administered by the
Committee. The decision of the Committee with respect to any questions arising
in connection with the administration or interpretation of the Plan shall be
final, conclusive and binding. The Committee reserves the right prior to a
Change of Control, to amend or modify the Plan from time to time or to terminate
the Plan; provided, however, that no amendment, modification or termination of
the Plan shall void Stock Awards already deferred pursuant to the Stock Deferral
provisions for the current calendar year or any preceding calendar year or shall
otherwise adversely affect any right or benefit earned or accrued under the Plan
by any Participant prior to any such amendment, modification or termination
without the prior written consent of such Participant. In the event of a Change
of Control, the authority and discretion which, under the Plan is exercisable by
the Committee, shall be exercised as provided in Section 9.A hereof, provided,
however, that the Trustees shall have no authority to terminate the Plan.
12. NO RIGHT TO EMPLOYMENT.
Nothing in the Plan shall confer upon any Participant the right to continue
as a Director of the Company.
13. NO RIGHTS AS SHAREHOLDERS.
Except to the extent permitted by Section 8 hereof, Participants whose
Stock Deferral Accounts are credited with Shares under the Plan shall have no
right as a shareholder of the Company as a result thereof unless and until the
Shares, if any, are distributed to such Participants in accordance with the
Plan.
14. NONASSIGNABLLITY.
Neither a Participant, nor his beneficiary, nor any other individual shall
have any right by way of anticipation or otherwise to alienate, sell, transfer,
assign, pledge, charge or
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<PAGE>
otherwise dispose of any benefits which may become payable under this Plan,
prior to the time that payment of any such benefit is made, and any attempted
anticipation, alienation, sale, transfer, assignment, pledge, charge, or other
disposition shall be null and void. Furthermore, none of the benefits payable
under this Plan shall be subject to the claim or legal process of the creditors
of any Participant or of the beneficiary, spouse or former spouse of any
Participant or of any other person or entity.
15. GOVERNING LAW.
This Plan shall be construed under and governed by the laws of the State of
Ohio.
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<PAGE>
EXHIBIT A
DPL INC.
DIRECTORS' DEFERRED STOCK COMPENSATION PLAN
ELECTION FORM
INSTRUCTIONS:
This Election Form relates to Stock Awards deferred pursuant to the Stock
Deferral Provisions of the Plan. Under the Stock Deferral Provisions, Company
shares are credited to a Participant's Stock Deferral Account in a Master Trust
or Trusts created by the Company.
STOCK DEFERRAL PROVISIONS.
1. PAYMENTS. Payments shall be made or commence from my Stock Deferral
Account by no later than the January 31 immediately following (check
one):
a. _____ a specified date, either before or after termination of
services as a director (Specify date: __________).
b. _____ at such time as I reach the age at which I can earn unlimited amounts
without reduction of benefits under the Social Security Act and the
regulations promulgated thereunder.
Such payments from my account shall be paid as follows (check one):
a. _____ lump sum payment.
b. _____ annually over a period of up to twenty years. (Specify
number of years _________)
Upon my death, payments to my beneficiary shall continue or commence in the
same method to be paid to me as elected above.
_____ Yes _____ No
Please note that all payments under the Plan will be made in the form of DPL
Inc. common shares.
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DESIGNATION OF BENEFICIARIES
All payments required to be made under the Plan to my designated
beneficiary in the event of my death shall be made to the following person:
Name of designated
beneficiary:
------------------------------
Address of designated
beneficiary:
------------------------------
------------------------------
------------------------------
If the above-designated beneficiary does not survive me, the payments will
be made to the following successor beneficiary (or to my estate upon failure to
designate otherwise):
Name of designated
beneficiary: ------------------------------
Address of designated
beneficiary: ------------------------------
------------------------------
------------------------------
-------------------------------
Signature
-------------------------------
Date
Election Form was received by the Secretary of the Company on
_________________________.
------------------------------
Secretary
49
<PAGE>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.(B)
<SEQUENCE>4
<FILENAME>a2043323zex-10_b.txt
<DESCRIPTION>EXHIBIT (B)
<TEXT>
<PAGE>
EXHIBIT 10(b)
THE DAYTON POWER AND LIGHT COMPANY
1991 AMENDED DIRECTORS' DEFERRED
COMPENSATION PLAN
(AS AMENDED THROUGH DECEMBER 31, 2000)
1. GENERAL.
The Amended Deferred Compensation Plan for Directors of the Company is
amended and restated in its entirety as set forth herein and the name of the
amended and restated plan shall be the "1991 Amended Directors Deferred
Compensation Plan" (the "Plan"). The Plan provides Directors who are not
employed by the Company the opportunity to defer payment of all or a specified
portion of Fees payable for services as a Director or otherwise in accordance
with the Standard Deferral Provisions of the Plan.
2. DEFINITIONS.
When used herein, the following terms shall have the following meanings:
A. "Board of Directors" means the Board of Directors of DPL Inc. in place
from time to time prior to a Change of Control.
B. "CEO" shall mean the Chief Executive Officer of DPL duly installed, from
time to time, prior to a Change of Control. However, "Committee" will be
substituted for "CEO" in discussing the CEO's rights and benefits in the Plan.
C. "Change of Control" means any change in control of DPL, or its principal
subsidiary, DP&L, of a nature that would be required to be reported in response
to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") as determined by the Board
of Directors in its sole discretion; provided that, without limitation, such a
Change of Control shall be deemed to have occurred if (i) any "person" (as such
term is defined in Sections 13(d) and 14(d)(2) of the Exchange Act; hereafter, a
"Person") other than DPL or DP&L or an entity then directly or indirectly
controlling, controlled by or under common control with DPL or DP&L is on the
date hereof or becomes or commences a tender offer to become the beneficial
owner, directly or indirectly, of securities of DPL or DP&L representing (A) 15%
or more of the combined voting power of the then outstanding securities of DPL
or DP&L if the acquisition of such beneficial ownership or such tender offer is
not approved by the Board of Directors prior to the acquisition or the
commencement of such tender offer or (B) 50% or more of such combined voting
power in all other cases; (ii) DPL or DP&L enters into an agreement to merge or
consolidate itself, or an agreement to consummate a "combination" or "majority
share acquisition" in which it is the "acquiring corporation" (as such terms are
defined in Ohio Rev. Code ss.1701.01 as in effect on December 31, 1990) and in
which
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shareholders of DPL or DP&L, as the case may be, immediately prior to entering
into such agreement, will beneficially own, immediately after the effective time
of the merger, consolidation, combination or majority share acquisition,
securities of DPL or DP&L or any surviving or new corporation, as the case may
be, having less than 50% of the "voting power" of DPL or DP&L or any surviving
or new corporation, as the case may be, including "voting power" exercisable on
a contingent or deferred basis as well as immediately exercisable "voting
power", excluding any merger of DPL into DP&L or of DP&L into DPL; (iii) DPL or
DP&L enters into an agreement to sell, lease, exchange or otherwise transfer or
dispose of all or substantially all of its assets to any Person other than to a
wholly owned subsidiary or, in the case of DP&L, to DPL or a wholly owned
subsidiar(ies) of DPL; but not including (A) a mortgage or pledge of assets
granted in connection with a financing or (B) a spin-off or sale of assets if
DPL continues in existence and its common shares are listed on a national
securities exchange, quoted on the automated quotation system of a national
securities association or traded in the over-the-counter market; (iv) any
transaction referred to in (ii) or (iii) above is consummated; or (v) those
persons serving as directors of DPL or DP&L on February 1, 2000 (the "Original
Directors") and/or their Successors do not constitute a majority of the whole
Board of Directors of DPL or DP&L, as the case may be (the term "Successors"
shall mean those directors whose election or nomination for election by
shareholders has been approved by the vote of at least two-thirds of the
Original Directors and previously qualified Successors serving as directors of
DPL or DP&L, as the case may be, at the time of such election or nomination for
election).
D. "Committee" means the Compensation and Management Review Committee of
the Board of Directors of DPL Inc. or such other committee(s) as the Board of
Directors of DPL Inc. may designate from time to time to administer the Plan.
E. "Company" means The Dayton Power and Light Company ("DP&L"), DPL Inc.
("DPL"), and any entity which, prior to a Change of Control, is controlling,
controlled by or under common control with DP&L or DPL Inc.
F. "Dividend Equivalent" means the expression on the Company's books of a
dividend with respect to a Stock Unit, each Dividend Equivalent being equal to
the cash dividends paid from time to time on one Share.
G. "Election Form" means the form attached hereto as Exhibit A (or such
other form as the Committee may designate from time to time) which shall be used
for deferring payment of Fees in accordance with the provisions of the Plan and
shall also include any prior forms used in connection with the Plan for the
purpose of deferring payment of Fees.
H. "Eligible Director" means any Director who is serving as a Director as
of January 1, 1996 or at any time thereafter.
I. "Fair Market Value" means the average of the closing sale prices of a
Share on the last trading day of each of the
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<PAGE>
four calendar months preceding thedate the value of a Share is to be determined,
as reported on the New York Stock Exchange-Composite Transaction Tape.
J. "Fees" means amounts payable by the Company to a Director for services
as a member of the Board of Directors or a committee of the Board of Directors
and any other amounts (including, without limitation, consulting fees and the
like) payable by the Company to a Director who is not employed by the Company
for services rendered to the Company in any capacity.
K. "Other Director" means any Director who has ceased to serve as a
Director prior to January 1, 1996.
L. "Share" or "Shares" means the Common Shares of DPL Inc.
M. "Standard Deferral Account" means the account established by the Company
in the Director's name to which deferrals made in accordance with the Standard
Deferral Provisions of the Plan are credited.
N. "Standard Deferral Provisions" means generally those provisions of the
Plan under which:
(1) a Director may elect annually to defer payment of Fees;
(2) the deferred amounts are credited to the Standard Deferral Account;
(3) earnings are credited to the Standard Deferral Account in accordance
with Section 3(D), Section 3(E) or Section 3(F); and
(4) amounts credited to the Director's Standard Deferral Account together
with accumulated earnings are paid in accordance with the Director's
application requesting that the Director be paid the amounts credited
to his/her Standard Deferral Account and specifying which date the
requested amounts should be paid; provided the CEO of the Company
consents to such payment.
O. "Stock Unit" means the expression on the Company's books of a unit which
is equivalent to one Share.
P. "Unreimbursed Amount" means, at any time as to any Eligible Director
who, either directly or through any affiliate, including through a trust
established by such Eligible Director, has entered into a split-dollar life
insurance arrangement with the Company, the amount of such Eligible Director's
or affiliate's then obligation to reimburse the Company under such split-dollar
arrangement for life insurance premiums paid by the Company; provided, however,
that, for purposes of the Plan, the Unreimbursed Amount of any Eligible Director
shall be reduced to the extent that such Unreimbursed Amount is being taken into
account for purposes of calculating such Eligible Director's
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<PAGE>
benefits under the Company's Key Employees Deferred Compensation Plan.
3. ELECTION TO DEFER AND ACCOUNT DESIGNATION.
A. ELECTION TO DEFER. A Director may elect, on or before December 31 of any
year, to defer payment of all or a specified part of the Director's Fees during
the succeeding calendar years until the Director ceases to be a Director of the
Company. Any person who shall become a Director during any calendar year, and
who was not a Director of the Company on the preceding December 31, may elect,
before the Director's term begins, to defer payment of all or a specified part
of the Director's Fees for the remainder of such calendar year and for
succeeding calendar years. Any such elections shall be made by delivering an
Election Form to the Secretary of the Company.
Prior to January 31, 2000, Supplementary Deferral Accounts had been
established under the Plan for certain Directors. Effective as of January 31,
2000, the present value, as determined by the Committee, of a Director's
Supplementary Deferral Account was credited to the Standard Deferral Account of
such Director. Accordingly, effective as of January 31, 2000, the Supplementary
Deferral Accounts were terminated and no amounts are credited thereto.
Moreover, as provided in Sections 6 and 9.B. of The Dayton Power and Light
Company Directors' Deferred Stock Compensation Plan, upon the Shares ceasing to
be listed on the New York Stock Exchange, or upon termination of a Participant's
status as a director of the Company after a Change of Control, additional
amounts may be credited to a Participant's Standard Deferral Account from such
plan.
B. STANDARD DEFERRAL ACCOUNT. All deferred amounts shall be credited to
each Director's Standard Deferral Account. The Directors' Standard Deferral
Accounts are established only as a mechanism for measuring the potential amount
of cash or Shares which may be distributed under the Plan. The Company shall
retain title to, and beneficial ownership of, all amounts credited to Directors'
Standard Deferral Accounts and such deferred amounts will be subject to the
claims of the Company's creditors. No Director or beneficiary has any property
interest in deferred amounts or in any specific assets of the Company.
C. (INTENTIONALLY LEFT BLANK.)
D. INTEREST ON STANDARD DEFERRAL ACCOUNTS. Other than with respect to
amounts credited to a Directors' Standard Deferral Account which were deemed
invested in Shares pursuant to Section 3(E), for periods prior to January 1,
2001, the Company credited interest to the Standard Deferral Account of each
Other Director, on a quarterly basis, calculated by multiplying the balance in
such account (including interest) on the first day of each month of the
preceding quarter by one-twelfth of the simple average yield of the annualized
AA utility bond averages as published monthly in Moody's Bond Survey for the
preceding quarter. With respect to all amounts credited to an Other Directors'
Standard Deferral Account as of January 1, 2001 or at any time thereafter, such
Standard
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Deferral Account shall be deemed invested in the Vanguard Total Bond
Index Fund, or a comparable fund designated by the Committee in its sole
discretion (the "Bond Fund"), and all dividends, interest, distributions and
other amounts paid with respect to the Bond Fund shall be credited to the
Standard Deferral Account of each Other Director and shall be deemed reinvested
in the Bond Fund.
E. STOCK UNITS. Each Eligible Director shall have the option to elect to
have any portion of his/her "Investment Amount" (as hereinafter defined) deemed
invested in Shares as of each such date (on or after January 1, 1996) as the
Committee may specify from time to time for such purpose, by delivering to the
Secretary of the Company a Stock Unit Investment Election Form in the form
attached hereto as Exhibit B (or such other form as the Committee may designate
from time to time). In such event, the Company shall credit to such Eligible
Directors' Standard Deferral Account a number of Stock Units equal to the amount
which is deemed invested in Shares pursuant to this Section 3(E) divided by the
Fair Market Value of a Share as of the date of such deemed investment and shall
thereafter credit to such Eligible Directors' Standard Deferral Account, on each
dividend payment date with respect to the Shares, a Dividend Equivalent for each
Stock Unit then credited to such Standard Deferral Account. On any such dividend
payment date, to the extent that the value of the accumulated Dividend
Equivalents credited to such Eligible Director's Standard Deferral Account
equals the Fair Market Value of one or more full Shares on such date, such
Dividend Equivalents shall be converted into, and credited to such Standard
Deferral Account as, additional Stock Units.
Once an Eligible Director has elected to have any amount of such Eligible
Director's Standard Deferral Account deemed invested in Shares pursuant to this
Section 3(E), such Eligible Director may not revoke or otherwise change such
election with respect to such amount without the prior approval of the
Committee.
The Company shall not be required to purchase, hold or dispose of any
Shares for purposes of funding benefits which may be payable as a result of this
Section 3(E). To the extent that the Company does, in its discretion, purchase
or hold any Shares for purposes of funding such benefits or otherwise, the same
shall remain the sole and exclusive property of the Company, subject to the
claims of its general creditors, and shall not be deemed to form a part of any
Eligible Director's Standard Deferral Account, and no Eligible Director shall
have any claim in, or right to, any such Shares (or any Stock Units or Dividend
Equivalents).
In the event of a change in the outstanding Shares by reason of a Share
dividend, recapitalization, merger, consolidation, split-up, combination or
exchange of shares, or the like, the number of Stock Units credited to an
Eligible Director's Standard Deferral Account shall be adjusted by the Committee
(whose determination in each case shall be conclusive) to give effect as
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may be appropriate to any increase or decrease in the number of issued and
outstanding Shares as a result thereof.
In the event that the Shares cease to be listed on the New York Stock
Exchange for any reason, the Standard Deferral Account of each Eligible Director
shall be credited with a cash amount equal to the number of Stock Units then
credited to such Eligible Director's Standard Deferral Account multiplied by the
greater of (i) the Fair Market Value of a Share as of the date the Shares cease
to be so listed or (ii) the closing sales price of a Share on the New York Stock
Exchange-Composite Transaction Tape on the date the Shares cease to be so listed
and the cash amount so credited shall thereafter be deemed to be part of such
Eligible Director's "Investment Amount" for all purposes of the Plan. After the
Shares cease to be so listed on the New York Stock Exchange, no Eligible
Director shall have the option to have any amounts credited to his/her Standard
Deferral Account deemed invested in Shares pursuant to this Section 3(E).
F. EARNINGS ON STANDARD DEFERRAL ACCOUNTS OF ELIGIBLE DIRECTORS. For
purposes of measuring the amounts which may be distributed under the Plan to
Eligible Directors, each Eligible Director's "Investment Amount" shall be deemed
invested, on and after January 1, 1997, in such "Eligible Investment Options" as
such Eligible Director may designate from time to time as provided herein. For
purposes of the Plan, "Investment Amount" means, at any time on and after
January 1, 1997 with respect to each Eligible Director, the amount then credited
to such Eligible Director's Standard Deferral Account (including any dividends,
interest, distributions or other amounts credited to such Standard Deferral
Account pursuant to this Section 3(F)) less the amount then credited to such
Standard Deferral Account which is deemed invested in Shares pursuant to Section
3(E), and "Eligible Investment Options" means those securities, mutual funds or
other investment vehicles set forth on Schedule I hereto, as such Schedule I may
be modified from time to time by the Committee upon at least 30 days' prior
written notice to the Eligible Directors.
Subject to Section 3(G) hereof, each Eligible Director shall have the
option, by delivering to the Secretary of Company a completed Investment Option
Election Form in the form attached hereto as Exhibit C (or such other form as
the Committee may designate from time to time) on or prior to each such date (on
or after December 31, 1996) as the Committee may specify from time to time for
such purpose (each such date, an "Election Date") to designate or change, in a
percentage equal to at least 10%, the portions of his/her Investment Amount
which shall be deemed invested in each Eligible Investment Option as of such
Election Date. Any such designation by an Eligible Director shall remain in
effect until changed in accordance with the preceding sentence or as provided in
Section 3(G) hereof. Subject to Section 3(G) hereof, any increase in the
percentage of an Eligible Director's Investment Amount deemed invested in an
Eligible Investment Option effected on any
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Election Date shall be deemed to be a purchase of such Eligible Investment
Option and any decrease in the percentage of an Eligible Director's Investment
Amount deemed invested in an Eligible Investment Option effected on any Election
Date shall be deemed to be a sale of such Eligible Investment Option, and any
such purchase or sale shall be deemed to have occurred as of the last business
day immediately prior to such Election Date at the closing price of such
Eligible Investment Option on such date. In the absence of any such designation
by an Eligible Director with respect to all or any portion of his/her Investment
Amount, the Standard Deferral Account of such Eligible Director shall be deemed
invested in the Bond Fund (as defined in Section 3(D) above), and the Bond Fund
shall be an Eligible Investment Option for such Eligible Director. All
dividends, interest, distributions and other amounts paid or distributed from
time to time with respect to any Eligible Investment Option in which all or any
portion of an Eligible Director's Investment Amount is deemed invested shall be
credited to such Eligible Director's Standard Deferral Account and shall be
deemed reinvested in such Eligible Investment Option.
The Company shall not be required to purchase, hold or dispose of any
Eligible Investment Options designated by Eligible Directors. To the extent that
the Company does, in its discretion, purchase or hold any of the Eligible
Investment Options designated by Eligible Directors, the same shall remain the
sole property of the Company, subject to the claims of its general creditors,
and shall not be deemed to form a part of any Eligible Director's Standard
Deferral Account, and no Eligible Director shall have any property interest
therein or claim thereto.
G. INVESTMENT IN PRIVATE EQUITY INVESTMENTS. In its sole discretion the
Committee may designate one or more Eligible Investment Options which, if
purchased, may not be immediately saleable; such Eligible Investment Options may
include interests in partnerships or other entities which are not readily
tradable on an established securities market including, for purposes of
illustration, interests in partnerships investing in private equity investments
(collectively referred to herein as "Private Equity Investments"). The Committee
may, in its sole discretion, establish procedures to regulate the ability of an
Eligible Director's designation of an Private Equity Investment as one of his or
her Eligible Investment Options pursuant to Section 3(F) hereof. Without
limitation, these procedures may include the following:
(i) Limiting the right of an Eligible Director to designate an Private
Equity Investment to those Eligible Directors (a) who have a Standard
Deferral Account balance greater than a specified minimum amount, and (b)
whose payment dates, as specified in their Election Form, in the sole and
unrestricted discretion of the Committee, are sufficiently deferred to
allow for any Private Equity Investment to fully mature prior to payment of
such Eligible Director's Standard Deferral Account in the event the Company
does choose to purchase such Eligible Investment Option;
(ii) Requiring a minimum dollar allocation to any Private Equity
Investment;
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(iii) Restricting or eliminating an Eligible Director's right to
reallocate that portion of his Standard Deferral Account allocated to such
Private Equity Investment until it has fully matured;
(iv) Reallocation, by the Committee, to an Private Equity Investment
previously designated by the Eligible Director, of all or a portion of an
Eligible Director's Standard Deferral Account not so invested to the extent
necessary to fully cover any capital calls made with respect to such
Private Equity Investment (which reallocation shall proportionately reduce
the amount which is deemed invested in each of the Eligible Director's
other Eligible Investment Options);
(v) Establishing the date on which an Eligible Director's Standard
Deferral Account is deemed invested in an Private Equity Investment
following such designation by the Eligible Director.
In addition, notwithstanding anything in Section 4 hereof to the contrary,
and notwithstanding any payment election specified in such Eligible Director's
Election Form, the Committee may, in its sole discretion, defer payment of any
amounts credited to an Eligible Director's Standard Deferral Account which have
been deemed invested in a Private Equity Investment until any such Private
Equity Investment has fully matured, and, in the case of partial distributions
from an Eligible Director's Standard Deferral Account, the Committee may reduce
the amount which is deemed invested in each Eligible Investment Option other
than such Private Equity Investment.
H. UNREIMBURSED AMOUNTS. Notwithstanding any other provision of the Plan,
in the event that there exists an Unreimbursed Amount as to any Eligible
Director, the Unreimbursed Amount of such Eligible Director in effect from time
to time shall reduce the amount of such Eligible Director's Standard Deferral
Account which would otherwise be deemed invested in Eligible Investment Options
pursuant to Section 3(F) in the manner designated by such Eligible Director in
the Investment Option Form most recently delivered to the Secretary of the
Company or, failing such designation, shall proportionately reduce the amount
which would otherwise be deemed invested in each Eligible Investment Option
pursuant to Section 3(F).
4. PAYMENTS UNDER THE PLAN.
A. STANDARD DEFERRAL ACCOUNT. Subject to Section 3(G) hereof, amounts
credited to a Director's Standard Deferral Account, together with accumulated
earnings, shall be distributed in a lump sum payment or over a period of years,
up to twenty, in such installments as specified in the Election Form, with such
lump sum payment being made or such installment payments commencing, unless
otherwise determined by the Committee in its discretion, on or prior to the
January 31 immediately following:
(1) the date the Director ceases to be a Director;
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(2) the date the Director reaches an age at which the
Director may earn unlimited amounts without reduction
of the benefits under the Social Security Act and the
regulations promulgated thereunder; or
(3) such other date, either before or after his
termination of service, as specified by the
Director on his Election Form;
and with subsequent annual installments, if payments are to be made in annual
installments, to be paid on or prior to each January 31 thereafter until all
amounts credited to the Director's Standard Deferral Account have been paid in
full.
For purposes of any distribution pursuant to this Section 4, the amount
credited to an Eligible Director's Standard Deferral Account on any date shall
be equal to (i) in the case of any Stock Units credited to such Eligible
Director's Standard Deferral Account, the aggregate Fair Market Value as of such
date of a number of Shares equal to the number of Stock Units then credited to
such Standard Deferral Account and (ii) in the case of any Eligible Investment
Options in which such Eligible Director's Standard Deferral Account is deemed
invested, the value (determined on the basis of the closing prices on the last
business day immediately preceding such date) of all Eligible Investment Options
in which such Eligible Director's Standard Deferral Account is deemed to be
invested on such date pursuant to Section 3(F) and, in the case of a partial
distribution from an Eligible Director's Standard Deferral Account, the amount
of such distribution shall proportionately reduce the amount which is deemed
invested in Shares pursuant to Section 3(E) and invested in each Eligible
Investment Option pursuant to Section 3(F).
Notwithstanding any other provision of the Plan, all payments under the
Plan with respect to Stock Units credited to an Eligible Director's Standard
Deferral Account shall be made in the form of Shares and an Eligible Director
shall be entitled to receive one Share for each Stock Unit credited to his
Standard Deferral Account (with a cash payment being made for any fractional
shares).
B. ELECTION TO BE PAID IN SHARES. At least thirty days before the first
installment (or lump sum payment, if the Director so elects) is to be paid
pursuant to the Standard Deferral Provisions, the Director or the Director's
beneficiary shall elect whether the amounts credited to such Director's Standard
Deferral Account (other than the Stock Units credited to such Director's
Standard Deferral Account which, in accordance with the last paragraph of
Section 4(A) shall be paid in the form of Shares) shall be paid in cash or in
Shares. At least thirty days before any subsequent installment is to be paid,
the Director or the Director's beneficiary may change such election. In the case
of payment in Shares, such Shares shall be valued at their Fair Market Value as
of the date a cash payment would otherwise have been paid. As soon as practical
thereafter, the
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Company shall cause to be issued and delivered that number of Shares (which may
be either authorized and unissued shares or treasury shares or both) which is
equal to the amount of the payment divided by the determined price, provided
however, that the Company shall not be obligated to issue and deliver fractional
Shares and in lieu thereof, the Director shall be paid in cash.
C. DESIGNATION OF BENEFICIARY. Each Director participating in the Plan
shall designate on the Election Form one or more beneficiaries to whom payments
shall be made in the event of the Director's death. The Director shall have the
right to change the beneficiary or beneficiaries from time to time, provided,
however, no change shall become effective until received in writing by the
Committee (or its delegate). In the event the Director has not designated a
beneficiary or a designated beneficiary is not living at the time of the
Director's death, then payments required to be made by the Company after the
Director's death to the designated beneficiary shall be made to the Director's
estate.
D. EARLY DISTRIBUTION. A Director may in no event receive a distribution of
all or a portion of amounts of cash or Shares credited to his Standard Deferral
Account prior to the time that the Director elected to receive such amounts
pursuant to the Plan. Notwithstanding the foregoing: (i) the CEO may, upon
receiving a written request from the Director or his or her beneficiary as
provided in Section 4.C. hereof in the event of the death of the Director, upon
determining that a distribution is in the best interest of the Company and the
Director (or his or her beneficiary) taking into account the financial condition
of each, distribute all or a portion of the amounts credited to the Director's
Standard Deferral Account and (ii) upon written request by a Participant to
receive his entire Standard Deferral Account made at any time after termination
of his or her status as a director of the Company, for any reason, after a
Change of Control, the amount credited to such Participant's account shall be
paid to such Director in a lump sum within ten (10) days after the date of such
written request, provided that the Director shall be entitled to only 90% of
such account balance and shall irrevocably forfeit 10% of such account balance
by making the withdrawal.
E. WITHHOLDINGS. Any taxes required to be withheld by any Federal, state,
or local government will be deducted from all deferred payments and paid for the
account of the Director.
F. PAYMENTS IN KIND. Notwithstanding any other provision of the Plan, after
a Change of Control, any portion of a distribution to be made from an Eligible
Director's Standard Deferral Account may, at the request of such Eligible
Director at least 30 days prior to the scheduled date of such distribution, be
made by the Trustees of the Master Trust(s) pursuant to which benefits under the
Plan are being funded, in the sole and absolute discretion of such Trustees, in
the form of any Eligible Investment Options actually held by such Master
Trust(s) for purposes of funding such distribution to such Eligible Director
under the Plan. For purposes of making any such distribution,
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any Eligible Investment Option so distributed shall be valued at its closing
price on the last business day immediately preceding the date of such
distribution and such distribution shall be net of any applicable federal, state
or local withholding taxes unless the Eligible Director makes a cash payment,
concurrently with such distribution, to the Master Trust(s) making such
distribution for the purpose of paying such withholding taxes. Nothing contained
in this Section 4(F) shall require the Company (or any of the Master Trusts) to
purchase, hold or dispose of any Eligible Investment Options designated by
Eligible Directors. To the extent that any Master Trust holds any Eligible
Investment Options, the same shall remain the sole property of the Company,
subject to the claims of its general creditors, and shall not be deemed to form
a part of any Eligible Director's Standard Deferral Account and no Director
shall have any property interest therein or claim thereto.
G. UNREIMBURSED AMOUNTS. Notwithstanding any other provision of the Plan,
in the event that there exists an Unreimbursed Amount as to any Eligible
Director, then (a) no distribution of the amount credited to such Eligible
Director's Standard Deferral Account shall be made pursuant to Section 4(A) or
otherwise to the extent that, after giving effect to any such proposed
distribution, the amount then credited to such Eligible Director's Standard
Deferral Account would be less than the Unreimbursed Amount of such Eligible
Director and (b) any amounts which are not distributed from such Eligible
Director's Standard Deferral Account by reason of the foregoing clause (a) shall
be paid to such Eligible Director promptly after the date of, and only to the
extent of, any reimbursement of such Unreimbursed Amount.
5. PAYMENTS IN THE EVENT OF DEATH.
A. STANDARD DEFERRAL ACCOUNT. In the event a Director shall die either
before payments from the Director's Standard Deferral Account have commenced or
after such payments have commenced, all amounts credited to the Director's
Standard Deferral Account at the time of the Director's death shall be paid to
the beneficiary designated by the Director on the Director's Election Form, in a
lump sum payment on the first business day of the month following the month in
which the Director died unless the Director has elected on the Election Form
that payments continue or commence to the Director's beneficiary in the same
method to be paid to the Director pursuant to Section 4(A).
6. TERMINATION OF ELECTION.
In any year, a Director may terminate or modify, for that year, his/her
deferred election by written notice delivered to the Secretary of the Company.
Any such notice will become effective on the last day of the month it is given
and will apply only to Fees payable after such effective date. Amounts credited
to a Director's accounts prior to the effective date of any termination or
modification will not be affected and will be paid in accordance with the
provisions of the Plan.
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7. MASTER TRUSTS.
A. DIRECTOR'S ACCOUNTS. The Company has established, and may in the future
establish, one or more trusts (each such trust, as it may be amended from time
to time, is referred to herein as a "Master Trust") for the purpose, among
others, of securing the performance by the Company of its obligation to
Directors to make the distributions under the Plan and has funded one or more of
the Master Trusts in an aggregate amount of cash and/or Shares as the Company
has determined to be equal to the value of all currently vested or earned
benefits of the Directors under the Plan. Pursuant to one or more of the Master
Trusts, each Director has been assigned a separate account as a mechanism for
measuring the potential benefits which may be distributed in the future.
Subsequent transfers of cash and/or Shares which the Company is required to make
to the Master Trusts pursuant to Section 5.B, 7.B or 8.C hereof or otherwise
shall be allocated among the Master Trusts as the Committee may determine from
time to time.
B. SUCCESSIVE TRANSFERS. On or before the twentieth day following the end
of each successive calendar quarter, the Company shall transfer to one or more
of the Master Trusts an aggregate amount of cash and/or Shares as it shall
determine to be equal to the value of benefits of Directors under the Plan which
benefits have vested or have been earned during such calendar quarter.
C. TITLE TO FUNDS. DP&L shall retain beneficial ownership of all cash or
shares transferred to the Master Trusts and such cash or shares will be subject
to the claims of the DP&L's creditors. No Director or beneficiary has or will
have any property interest in the cash or shares held in the Master Trusts or in
any other specific asset of the Company.
8. CHANGE OF CONTROL.
A. AUTOMATIC TRANSFER OF AUTHORITY. In the event of a Change of Control,
any and all authority and discretion which is exercisable by the Committee, or
the CEO, as heretofore or hereafter described in the Plan, including, without
limitation, the authority to change the Eligible Investment Options as provided
in Section 3.F. hereof, shall automatically be transferred to the Trustees of
each Master Trust to the extent benefits under the Plan are being funded under
such Master Trust.
B. (INTENTIONALLY LEFT BLANK.)
C. FUNDING OF MASTER TRUSTS. Upon a Change of Control, the Company shall
immediately transfer to one or more of the Master Trusts an aggregate amount of
cash which, when combined with the other assets of the Master Trusts contributed
or accruing thereto under or by reason of Section 7 hereof, is equal to all
amounts credited to the Directors' Standard Deferral Account, including
accumulated earnings.
9. NOTICES.
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Any notice, election or any request required or permitted hereunder, which
is to be mailed to or requested from the Secretary or the CEO of the Company,
shall be delivered or mailed, postage prepaid, as follows:
(i) Prior to a Change of Control; to the Secretary of DP&L at:
The Dayton Power and Light Company
MacGregor Park
1065 Woodman Drive
Dayton, Ohio 45432
Attention: Corporate Secretary
(ii) After a Change of Control; to the Trustees of each Master Trust
pursuant to which benefits under the Plan are being funded, at the notice
address specified by such Trustees in the applicable trust agreement.
The Company or Trustees may from time to time change their addresses for
receipt of notices by giving notice of such change to the Directors, but no such
change shall be deemed to be effective until notice thereof is actually received
by the Director to whom it is directed.
10. NONASSIGNABILITY.
Neither a Director, nor his beneficiary, nor any other individual shall
have any right by way of anticipation or otherwise to alienate, sell, transfer,
assign, pledge, charge or otherwise dispose of any benefits which may become
payable under this Plan, prior to the time that payment of any such benefit is
made, and any attempted anticipation, alienation, sale, transfer, assignment,
pledge, charge, or other disposition shall be null and void. Furthermore, none
of the benefits payable under this Plan shall be subject to the claim or legal
process of the creditors of any Director or of the beneficiary, spouse or former
spouse of any Director or of any other person or entity.
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11. INTERPRETATION AND AMENDMENT.
The Plan shall be administered by the Committee. The decision of the
Committee with respect to any questions arising in connection with the
administration or interpretation of the Plan, shall be final, conclusive and
binding. The Committee reserves the right to amend or modify the Plan from time
to time or to terminate the Plan, provided, however, that no amendment,
modification or termination of the Plan shall void an election to defer payments
already in effect for the current calendar year or any preceding calendar year
or shall otherwise adversely affect any right or benefit earned or accrued under
the Plan by any Director prior to any such amendment, modification or
termination without the prior written consent of such Director. In the event of
a Change of Control, the authority and discretion given the Committee under this
Section 11 shall be exercised as provided in Section 8.A hereof; provided,
however, that the Trustee shall have no authority to terminate the Plan.
12. GENDER AND NUMBER.
Except when indicated by the context, any masculine terminology used herein
shall also include the feminine, and the use of any term herein in the singular
may also include the plural.
13. NO RIGHTS AS SHAREHOLDERS.
Directors whose accounts are credited with amounts under the Plan shall
have no rights as shareholders of the Company as a result thereof unless and
until the Shares, if any, are distributed to the respective Directors.
14. NO RIGHT TO EMPLOYMENT.
Nothing in the Plan shall confer upon any Director the right to a continued
Directorship with the Company.
15. GOVERNING LAW.
This Plan shall be construed, rendered and governed by the laws of the
State of Ohio.
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EXHIBIT A
THE DAYTON POWER AND LIGHT COMPANY
1991 AMENDED DIRECTORS' DEFERRED COMPENSATION PLAN
ELECTION FORM
INSTRUCTIONS:
This Election Form relates to fees deferred pursuant to the 1991 Amended
Directors' Deferred Compensation Plan (the "Plan"). Under the Plan, deferred
fees are credited to a Participant's Standard Account in a Master Trust or
Trusts created by DP&L.
STANDARD DEFERRAL PROVISIONS.
1. ELECTION TO PARTICIPATE. I elect to defer _____________ of my [insert
date] fees pursuant to ________________________ the Standard Deferral
Provisions of the Plan.
2. PAYMENTS. Payments shall be made or commence from my Standard Deferral
Account by no later than the January 31 immediately following
(check one):
a. ___ the date I cease to serve as a director;
b. ___ a specified date, either before or after termination of
services as a director (Specify date: ___________); or
c. ___ at such date as I reach the age at which I can earn unlimited
amounts without reduction of benefits under the Social Security
Act and the regulations promulgated thereunder.
Such payments from my account shall be paid as follows (check one):
a. ___ lump sum payment.
b. ___ annually over a period of up to twenty years. (Specify number
of years __________).
I request that such payments shall be made in the form of DPL Inc. shares,
rather than cash.
____ Yes ____ No
(Please note that amounts deemed invested in DPL Inc. common shares pursuant to
Section 3(E) of the Plan will be paid in the form of DPL Inc. common shares,
rather than cash.)
Upon my death (check one):
____ payments to my beneficiary shall continue or commence in the same
method to be paid to me as elected above.
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____ payments are to be made to my beneficiary in a lump sum.
DESIGNATION OF BENEFICIARIES
All payments required to be made under the Plan to my designated
beneficiary in the event of my death shall be made to the following person:
Name of designated
beneficiary: _______________________________________
Address of designated
beneficiary: _______________________________________
_______________________________________
_______________________________________
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If the above-designated beneficiary does not survive me, the payments will
be made to the following successor beneficiary (or to my estate upon failure to
designate otherwise):
Name of designated
beneficiary: _______________________________________
Address of designated
beneficiary: _______________________________________
_______________________________________
_______________________________________
_______________________________________
Signature
_______________________________________
Date
This Election Form was received by the Secretary of DPL on
__________________.
_______________________________________
Secretary
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EXHIBIT B
THE DAYTON POWER AND LIGHT COMPANY
1991 AMENDED DIRECTORS' DEFERRED COMPENSATION PLAN
STOCK UNIT INVESTMENT ELECTION FORM
I hereby irrevocably elect to have $__________ of the amount credited to my
Standard Deferral Account under the Plan to be deemed invested, effective as of
[insert date], in Shares in accordance with Section 3(E) of the Plan. Amounts
which are deemed invested in Shares under the Plan will be paid in the form of
Shares, rather than cash.
_______________________________________
Signature of Director
_______________________________________
Date
This Stock Unit Option Election was received by the Secretary of the
Company on ________________.
_______________________________________
Secretary
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EXHIBIT C
THE DAYTON POWER AND LIGHT COMPANY
1991 AMENDED DIRECTORS' DEFERRED COMPENSATION PLAN
INVESTMENT OPTION ELECTION FORM
I elect to have amounts credited to my Investment Amount under the Plan to
be deemed invested, effective [insert date], in the following Eligible
Investment Options, as provided in Section 3(F) of the Plan:
Percentage of Investment
Amount Invested (whole
percentage, not less than
ELIGIBLE INVESTMENT OPTION 10%
- -------------------------- -------------------------
Vanguard Index Trust - 500 Portfolio _____%
Vanguard Index Trust - Small Cap Stock _____%
Portfolio
Vanguard Index Trust - Total International _____%
Portfolio
Vanguard Index Trust - Total Bonds _____%
(Note: In the absence of any designation with respect to all or any portion of
your Investment Amount, your Investment Amount (or such portion) will be deemed
invested in the Vanguard Index Trust - Total Bonds as provided in Section 3(F)
of the Plan.)
If the Company and I have entered into a split-dollar life insurance
arrangement, then the Unreimbursed Amount (as defined in the Plan) shall reduce
the amount which would otherwise be deemed invested in Eligible Investment
Options pursuant to Section 3(F) of Plan in the following percentages of the
Unreimbursed Amount:
PERCENTAGE OF UNREIMBURSED
AMOUNT
----------------------------
Vanguard Index Trust - 500 Portfolio _____%
Vanguard Index Trust - Small Cap Stock _____%
Portfolio
Vanguard Index Trust - Total International _____%
Portfolio
Vanguard Index Trust - Total Bonds _____%
____________________________
Signature of Director
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____________________________
Date
This Investment Option Election was received by the Secretary of the
Company on ________________.
____________________________
Secretary
SCHEDULE I
ELIGIBLE INVESTMENT OPTIONS
Vanguard Index Trust - 500 Portfolio
Vanguard Index Trust - Small Cap Stock Portfolio
Vanguard Index Trust - Total International Portfolio
Vanguard Index Trust - Total Bonds
69
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.(C)
<SEQUENCE>5
<FILENAME>a2043323zex-10_c.txt
<DESCRIPTION>EXHIBIT 10(C)
<TEXT>
<PAGE>
EXHIBIT 10(c)
THE DAYTON POWER AND LIGHT COMPANY
MANAGEMENT STOCK INCENTIVE PLAN
(AS AMENDED THROUGH DECEMBER 31, 2000)
SECTION 1. PURPOSES.
The purposes of the Plan are (i) to attract and retain in the employment of
the Company executives of experience and ability by providing incentives to
those who contribute to the successful operation of the business and affairs of
the Company, (ii) to increase the identity of interests of such key employees
with those of the Company's shareholders, (iii) to encourage achievement of the
Company's long term goals and objectives, and (iv) to prevent frustration of the
goals of this Plan in the event of a Change of Control.
SECTION 2. DEFINITIONS.
The following terms as used herein shall have the following meanings:
(a) "BOARD OF DIRECTORS" means the Board of Directors of DPL Inc. in place
from time to time prior to a Change of Control.
(b) "CHANGE OF CONTROL" means any change in control of DPL, or its
principal subsidiary, DP&L, of a nature that would be required to be reported in
response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act") as determined
by the Board of Directors in its sole discretion; provided that, without
limitation, such a Change of Control shall be deemed to have occurred if (i) any
"person" (as such term is defined in Sections 13(d) and 14(d)(2) of the Exchange
Act; hereafter, a "Person") other than DPL or DP&L or an entity then directly or
indirectly controlling, controlled by or under common control with DPL or DP&L
is on the date hereof or becomes or commences a tender offer to become the
beneficial owner, directly or indirectly, of securities of DPL or DP&L
representing (A) 15% or more of the combined voting power of the then
outstanding securities of DPL or DP&L if the acquisition of such beneficial
ownership or such tender offer is not approved by the Board of Directors prior
to the acquisition or the commencement of such tender offer or (B) 50% or more
of such combined voting power in all other cases; (ii) DPL or DP&L enters into
an agreement to merge or consolidate itself, or an agreement to consummate a
"combination" or "majority share acquisition" in which it is the "acquiring
corporation" (as such terms are defined in Ohio Rev. Code ss.1701.01 as in
effect on December 31, 1990) and in which shareholders of DPL or DP&L, as the
case may be, immediately prior to entering into such agreement, will
beneficially own, immediately after the effective time of the merger,
consolidation, combination or majority share acquisition,
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securities of DPL or DP&L or any surviving or new corporation, as the case may
be, having less than 50% of the "voting power" of DPL or DP&L or any surviving
or new corporation, as the case may be, including "voting power" exercisable on
a contingent or deferred basis as well as immediately exercisable "voting
power", excluding any merger of DPL into DP&L or of DP&L into DPL; (iii) DPL or
DP&L enters into an agreement to sell, lease, exchange or otherwise transfer or
dispose of all or substantially all of its assets to any Person other than to a
wholly owned subsidiary or, in the case of DP&L, to DPL or a wholly owned
subsidiar(ies) of DPL; but not including (A) a mortgage or pledge of assets
granted in connection with a financing or (B) a spin-off or sale of assets if
DPL continues in existence and its common shares are listed on a national
securities exchange, quoted on the automated quotation system of a national
securities association or traded in the over-the-counter market; (iv) any
transaction referred to in (ii) or (iii) above is consummated; or (v) those
persons serving as directors of DPL or DP&L on February 1, 2000 (the "Original
Directors") and/or their Successors do not constitute a majority of the whole
Board of Directors of DPL or DP&L, as the case may be (the term "Successors"
shall mean those directors whose election or nomination for election by
shareholders has been approved by the vote of at least two-thirds of the
Original Directors and previously qualified Successors serving as directors of
DPL or DP&L, as the case may be, at the time of such election or nomination for
election).
(c) "CEO" means the Chief Executive Officer of DPL, duly installed, from
time to time, prior to a Change of Control. However, "Committee" will be
substituted for "CEO" in discussing the CEO's rights and benefits under the
Plan.
(d) "COMMITTEE" means the Management Review and Compensation Committee of
the Board of Directors of DPL Inc. or such other committee(s) as may be
designated by the Board of Directors of DPL Inc. from time to time to administer
the Plan.
(e) "COMPANY" means The Dayton Power and Light Company ("DP&L"), DPL Inc.
("DPL") and any entity which, prior to a Change of Control, is controlling,
controlled by or under common control with DP&L or DPL Inc.
(f) "DEFERRED COMPENSATION PLAN" means the Company's Key Employees Deferred
Compensation Plan, as the same may be amended, modified or supplemented from
time to time.
(g) "DIVIDEND EQUIVALENT" means the expression on the Company's books of a
dividend with respect to a Stock Incentive Unit; each Dividend Equivalent being
equal to the cash dividends paid from time to time on one Share.
(h) "EARNED STOCK INCENTIVE UNITS" means Stock Incentive Units which have
been awarded and have been earned in accordance with Section 6, together with
all Dividend Equivalents with respect to such Earned Stock Incentive Units in
accordance with Section 6 (including any Stock Incentive Units credited to the
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Participant's account as the result of the conversion of such Dividend
Equivalents into Stock Incentive Units).
(i) "FAIR MARKET VALUE" means the average of the closing sale price of a
Share on the last trading day of each of the four calendar months preceding the
date the value of a Share is to be determined, as reported on the New York Stock
Exchange--Composite Transactions Tape.
(j) "INCENTIVE PERIOD" means the period established by the Committee with
respect to each Stock Incentive Award, over which period the Stock Incentive
Units included in such award are to be earned as provided in Section 6(d) of the
Plan. The Incentive Period shall be specified by the Committee in and with
respect to each Stock Incentive Award made. If the Incentive Period is not so
specified then it shall be the calendar plan year to which the Stock Incentive
Award relates.
(k) "PLAN" means this Management Stock Incentive Plan.
(l) "SHARE" means a Common Share of DPL Inc.
(m) "STOCK INCENTIVE AWARD" means an award made under the Plan with respect
to a specified Incentive Period.
(n) "STOCK INCENTIVE UNIT" means the expression on the Company's books of a
unit which is equivalent to one Share.
(o) "TERMINATION OF EMPLOYMENT" means, when used with respect to the
payments to be made to a Participant pursuant to Section 8 of the Plan, (i) the
date such Participant's employment with the Company terminates, if such
termination occurs on or after such Participant's 55th birthday or (ii) if such
Participant's employment with the Company terminates prior to such Participant's
55th birthday, the date of such Participant's 55th birthday.
SECTION 3. ADMINISTRATION.
(a) COMMITTEE. The Plan shall be administered by the Committee. No director
shall serve as a voting member of the Committee if he is then, or was at any
time within one year prior to his appointment, eligible to participate in the
Plan or eligible for selection as a person to whom Shares may be allocated or to
whom stock options may be granted pursuant to any other plan of the Company or
any of its affiliates, other than the DP&L Directors' Deferred Stock
Compensation Plan and the Directors' Deferred Compensation Plan, entitling the
participants therein to acquire Shares, options or stock appreciation rights of
the Company or any of its affiliates.
(b) AUTHORITY AND DISCRETION. Prior to a Change of Control, the Committee
shall have the power to interpret the Plan and, subject to the provisions herein
set forth, to prescribe, amend and rescind rules and regulations and make all
other determinations necessary or desirable for the administration of the Plan.
The decision of the Committee on any questions
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concerning or involved in the interpretation or administration of the Plan shall
be final and conclusive, and nothing in the Plan shall be deemed to give any
officer or employee, his legal representatives or assigns, any right to
participate in the Plan except to such extent, if any, as the Committee may have
determined or approved pursuant to the provisions of the Plan.
SECTION 4. ELIGIBILITY.
Employees eligible to participate in the Plan shall be those full-time
salaried employees of the Company or any entity comprising the Company who, in
the opinion of the Committee, serve in key executive, administrative,
professional or technical capacities with the Company or any entity comprising
the Company and have made a significant contribution to the successful operation
of the Company or any entity comprising the Company.
SECTION 5. PARTICIPANTS.
From the employees eligible to participate in the Plan, the Committee may
annually choose those who shall actually participate for that year in the Plan
(the "Participants"), and shall determine the number of Stock Incentive Units to
comprise each Participant's Stock Incentive Award. In choosing the Participants
and in determining the number of Stock Incentive Units comprising a Stock
Incentive Award, the Committee shall consider, after consulting with the CEO
concerning his recommendations on these matters, the positions and
responsibilities of the eligible employees, their accomplishments during recent
periods, the corporate and individual objectives jointly established with the
CEO, the value of such accomplishments to the Company, and such other factors as
the Committee deems pertinent. The Company may determine in any year during the
term of the Plan not to make any Stock Incentive Awards with respect to such
year.
SECTION 6. OPERATION OF THE PLAN.
(a) STOCK INCENTIVE AWARDS. Stock Incentive Awards shall be made by the
Committee at such time or times as it may determine; however, Stock Incentive
Awards shall generally be made in the year preceding commencement of the next
plan year. At the time the Committee makes a Stock Incentive Award, it shall
determine the aggregate number of Stock Incentive Units which may be earned by
each Participant over the Incentive Period. Except as expressly provided in a
Stock Incentive Award, the terms and conditions of the Plan shall be deemed to
be incorporated in and shall control all Stock Incentive Awards. However, to the
extent inconsistent with any provision of this Plan (including, without
limitation, Section 10), the terms of a Stock Incentive Award (other than a
Stock Incentive Award applicable to Previously Earned Units) shall control this
Plan.
(b) PREVIOUSLY AWARDED STOCK INCENTIVE UNITS. Previously awarded Stock
Incentive Units shall be deemed to have been earned or, in the future, will be
earned to the extent to which they would have been earned if Section 6(d) had
been in effect at the
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time they previously were awarded and based on the Incentive Period applicable
to the related Stock Incentive Award previously awarded.
(c) CREDITING OF STOCK INCENTIVE UNITS AND DIVIDEND EQUIVALENTS. Earned
Stock Incentive Units for each year following the effective date of the Plan
accrue and shall be credited to a Participant's separate account under the Plan
on the first day of the month following the date on which they are earned. On
each dividend payment date a Dividend Equivalent shall be credited to such
account for each Earned Stock Incentive Unit (or, if and to the extent that the
related Stock Incentive Award otherwise provides, for Stock Incentive Units
awarded, whether or not such units are Earned Stock Incentive Units) credited to
the Participant's account. On any dividend payment date when the value of
accumulated Dividend Equivalents on Stock Incentive Units as provided above in a
Participant's account equals the Fair Market Value of a full Share on such date,
such Dividend Equivalents shall, subject to the terms of the Stock Incentive
Award, the terms of which shall control this Plan to the extent inconsistent
herewith, be credited to the Participant's account as an Earned Stock Incentive
Unit. Such separate accounts are established only as a mechanism for measuring
the potential number of Shares which may be distributed under the Plan. The
Company shall retain beneficial ownership of all Stock Incentive Units and
Dividend Equivalents credited to the accounts and such Stock Incentive Units and
Dividend Equivalents will be subject to the claims of DP&L's creditors. No
Participant or beneficiary has or will have any property interest in any Stock
Incentive Units or Dividend Equivalents credited to such Participant's account
or in any specific assets of the Company.
(d) EARNING OF STOCK INCENTIVE UNITS. Awarded Stock Incentive Units shall
be earned as specified in the related Stock Incentive Award or as otherwise
determined by the Committee. Subject to such Stock Incentive Award and any
determinations by the Committee, the terms of which shall control this Plan to
the extent inconsistent herewith, the maximum number of Stock Incentive Units
which may be earned in any one year shall be equal to the product obtained by
multiplying the total number of Stock Incentive Units included in a Stock
Incentive Award by a fraction, the numerator of which is one and the denominator
of which is the number of calendar years in the Incentive Period. For example,
in the case of a Stock Incentive Award for which a one-year Incentive Period
applies, all of the Stock Incentive Units may be earned in the calendar year to
which the Stock Incentive Award relates, and in the case of a Stock Incentive
Award for which a three year Incentive Period has been fixed by the Committee,
up to one-third of the Stock Incentive Units included in the Stock Incentive
Award may be earned each year. Unless the related Stock Incentive Award
otherwise provides, by its terms or by implication, prior to or as soon as
practicable after the end of each calendar year the Committee will review with
each Participant his or her achievement of the related performance goals and
will specify the number of Stock Incentive Units which have been earned for that
year by the Participant.
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SECTION 7. PAYMENTS UNDER THE PLAN.
(a) RIGHT TO PAYMENT OF EARNED STOCK INCENTIVE UNITS. A Participant shall
be entitled to receive payment for an awarded Stock Incentive Unit in a given
year of the Incentive Period only if such Stock Incentive Unit shall have been
earned under the provisions of Section 6(d) and, except as provided under
Section 10 and Section 7(d) hereof, or in the Stock Incentive Award, a Stock
Incentive Unit, though earned, only becomes vested (and, thus, ultimately
payable in accordance with Section 8) if the Participant is employed by the
Company on the last day of the year of the Incentive Period in which the
Participant could earn a portion of the particular Stock Incentive Units
awarded. All Stock Incentive Units which do not become so vested shall be
forfeited. The CEO or the Committee may, however, accelerate the earning and
vesting of any Stock Incentive Units awarded whether or not earned or vested, if
he or it determines in his or its sole opinion that such action is warranted.
Notwithstanding any provision of the Plan to the contrary, in the event of
the death of a Participant, then all of such Participant's awarded Stock
Incentive Units (other than to the extent related to a completed Incentive
Period for which the determination of the number of Earned Stock Incentive Units
has already been made; and not to exceed the number of Stock Incentive Units
comprising the target award under the applicable Stock Incentive Award
regardless of the potential to earn more than such target award if and as
provided in such Stock Incentive Award) shall be deemed to be Earned Stock
Incentive Units and shall immediately become fully vested and shall be paid in
accordance with the provisions of Section 8.
(b) TIME OF PAYMENT OF EARNED STOCK INCENTIVE UNITS. Payment for Earned
Stock Incentive Units which have been vested under Section 7(a) and Section 7(d)
shall be made in accordance with the provisions of Section 8 hereof.
(c) WITHHOLDINGS. There shall be deducted from all payments any taxes
required by an Federal, state, or local government to be withheld and paid over
to the government for the account of the Participant.
(d) SPECIAL PROVISION FOR VESTING OF CERTAIN EARNED STOCK INCENTIVE UNITS.
All Earned Stock Incentive Units comprising the 1997 award (which covers the
period 1998-2000) and the 1998 award (which covers the period 1999-2001)
("Previously Earned Units") will vest in three equal annual installments
commencing on December 31, 2000 and December 31 of each year thereafter. The
Participant must be employed by the Company on the date of an installment in
order to become vested in and be entitled to payment with respect to the
Previously Earned Units vesting on that date. Notwithstanding the above
sentence, in the event a Participant is entitled to benefits pursuant to
paragraph 3 (or successor provision) of the Participant's severance letter
agreement with the Company (or, if the Participant is not then a
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party to a severance letter agreement, pursuant to paragraph 3 (or successor
provision) of the most restrictive severance letter agreement between the
Company and any employee [in terms of triggering the Company's obligation to pay
benefits to the employee]), then all Previously Earned Units which have not yet
vested shall immediately become fully vested and shall be paid in accordance
with the provisions of Section 10 of the Plan.
SECTION 8. DEFERRAL PROVISIONS.
(a) FILING OF ELECTION FORM. Under the Plan, a Participant must elect to
defer payment of any amounts payable under the Plan by providing the Company
with a written Election Form, in the form attached hereto as Exhibit A or such
other form as the Committee may designate from time to time (the "Deferral
Election Form"), prior to the commencement of the Incentive Period which the
Committee uses as a basis for determining what portion of the particular annual
installment of his Stock Incentive Award may be earned. For example, if a
Participant were to elect to defer payment of Stock Incentive Units which would
be deemed to be earned on December 31, 2000, the Election Form must be received
by the Company prior to January 1, 2000.
(b) PAYMENT OF AMOUNTS DEFERRED UNDER THE PLAN. Payment of a Participant's
deferred Stock Incentive Units which become earned and vested shall be made in
the form of Shares in a lump sum or in annual installments over a period of up
to twenty years, as the Participant may elect in his Deferral Election Form, and
shall be made, or commence, unless otherwise determined by the Committee in its
discretion, on or prior to the January 31 immediately following the date
specified by the Participant in his Deferral Election Form, provided such date
is after his termination of employment, and with subsequent annual installments,
if payments are to be made in annual installments, to be paid on or prior to
each January 31 thereafter. All payments under the Plan with respect to earned
and vested Stock Incentive Units shall be in the form of Shares and a
Participant shall be entitled to receive one Share for each earned and vested
Stock Incentive Unit credited to his account (with a cash payment being made for
any fractional shares). After termination of a Participant's employment, such
Participant's account shall continue to be credited with Dividend Equivalents as
provided in Section 6(c) with respect to any unpaid earned and vested Stock
Incentive Units.
Notwithstanding any other provision of the Plan (other than Sections 8(d)
and 10(b)) or any election made by a Participant under the Plan or in any
Deferral Election Form, no Participant who has been granted stock options under
the DPL Inc. Stock Option Plan (the "Stock Option Plan") shall be entitled to
receive any payment under the Plan prior to January 1, 2005 with respect to that
number of earned and vested Stock Incentive Units which is equal to 1/3 of the
aggregate number of stock options which have been granted to such Participant
under the Stock Option Plan. Notwithstanding the foregoing, any Participant may
receive
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payment of his earned and vested Stock Incentive Units in accordance with
Sections 8(d) and 10(b).
(c) EARNED STOCK INCENTIVE UNITS CREDITED AS CASH. Prior to December 31,
1999, certain Participants (the "Electing Participants") elected to convert a
portion of their Earned Stock Incentive Units to cash. The amount each Electing
Participant so elected to convert to cash was credited to the Standard Deferral
Account of such Electing Participant under the Deferred Compensation Plan. Since
February 2, 1999, no further conversion of any Earned Stock Incentive Units into
cash has been permitted under the Plan and payment of the Earned Stock Incentive
Units previously converted into cash shall be in accordance with the Deferred
Compensation Plan.
(d) EARLY PAYMENT. A Participant may in no event receive a distribution of
all or a portion of the Stock Incentive Units which are earned and vested and
credited to his account prior to the time that the Participant elected to
receive such distribution pursuant to Section 8(a). Notwithstanding the
foregoing: (i) the Committee may, upon receiving a written request from the
Participant, or his or her beneficiary in the event of the death of a
Participant, upon determining that a distribution is in the best interest of the
Company and the Participant (or his or her beneficiary) taking into account the
financial condition of each, distribute all or a portion of the Participant's
account; and (ii) upon written request by a Participant to receive his entire
account balance in the Plan made at any time after termination of his or her
employment (or consultation arrangement) with DP&L or DPL Inc., for any reason,
after a Change of Control, the amount credited to such Participant's account
shall be paid to such Participant in a lump sum within ten (10) days after the
date of such written request, provided that the Participant shall be entitled to
only 90% of such account balance and shall irrevocably forfeit 10% of such
account balance by making the withdrawal.
(e) LACK OF STOCK EXCHANGE LISTING. In the event that the Shares cease to
be listed on the New York Stock Exchange, then, unless a Participant's Earned
Stock Incentive Units are then immediately payable to such Participant in
accordance with Section 10(b), such Participant's Standard Deferral Account
under the Deferred Compensation Plan shall be credited with an amount equal to
the Conversion Price multiplied by the number of Earned Stock Incentive Units
credited to his account (or if the Participant does not have a Standard Deferral
Account the Company shall establish such an account for him), and thereafter
payment of the amount so credited to such Participant's Standard Deferral
Account shall be in accordance with the Deferred Compensation Plan. For this
purpose, "Conversion Price" means: (i) the Fair Market Value of a Share on the
date that the Shares cease to be listed on the New York Stock Exchange or (ii)
if the Shares cease to be so listed as a result of a Change of Control, the
greater of (x) the amount determined in accordance with the foregoing clause
(i), (y) the closing sales price of a Share on the New York Stock
Exchange--Composite Transaction Tape on the date the Shares cease to be so
listed or (z) the closing sales price of a
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Share on the New York Stock Exchange--Composite Transaction Tape on the date on
which a Change of Control occurs.
SECTION 9. MASTER TRUSTS.
(a) PARTICIPANT'S ACCOUNT. The Company has established, and may in the
future establish, one or more trusts (each such trust, as it may be amended from
time to time, is referred to herein as a "Master Trust") for the purpose, among
others, of securing the performance by the Company of its obligations to
Participants under the Plan and has funded one or more of the Master Trusts in
an aggregate amount of Shares and/or cash as the Company has determined to be
equal to the value of all Earned Stock Incentive Units and other currently
vested or earned benefits of the Participants under the Plan. Pursuant to one or
more of the Master Trusts, each Participant has been assigned a separate account
as a mechanism for measuring the potential benefits which may be distributed in
the future. Subsequent transfers of Shares and/or cash which the Company is
required to make to the Master Trusts pursuant to Section 9(b) or 10(d) hereof
or otherwise shall be allocated among the Master Trusts as the Committee may
determine from time to time.
(b) SUCCESSIVE TRANSFERS. On or before the twentieth day following the end
of each successive calendar quarter, the Company shall transfer to one or more
of the Master Trusts an aggregate amount of Shares and/or cash as it shall
determine to be equal to the value of benefits of Participants under the Plan
which benefits have vested or have been earned (I.E., all Earned Stock Incentive
Units) during such calendar quarter.
(c) TITLE TO FUNDS. DP&L shall retain beneficial ownership of all assets
transferred to the Master Trusts and such assets will be subject to the claims
of DP&L's creditors. No Participant or beneficiary has or will have any property
interest in the assets held in the Master Trusts or in any other specific asset
of the Company.
SECTION 10. CHANGE OF CONTROL.
(a) AUTOMATIC TRANSFER OF AUTHORITY. In the event of a Change of Control,
any and all authority and discretion which is exercisable by the Committee, or
the CEO, as heretofore or hereafter described in the Plan, shall automatically
be transferred to the Trustees of each Master Trust to the extent that benefits
under the Plan are being funded under such Master Trust.
(b) ACCELERATION UPON CHANGE OF CONTROL. In the event any Participant who
is a party to a Severance Contract (as defined in the Master Trust or as
otherwise determined by the Committee) is entitled to benefits pursuant to
paragraph 3 (or successor provision) of such Severance Contract, any and all of
his awarded Stock Incentive Units (other than to the extent related to a
completed Incentive Period for which the determination of the number of Earned
Stock Incentive Units has already been made; and not to exceed the number of
Stock Incentive Units comprising the
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target award under the applicable Stock Incentive Award regardless of the
potential to earn more than such target award if and as provided in such Stock
Incentive Award) shall be deemed to be Earned Stock Incentive Units which are
vested and, notwithstanding the second paragraph of Section 8(b) hereof, all
such Earned Stock Incentive Units (including, without limitation, Previously
Earned Units), shall be payable to such Participant as the Participant has
elected on his Deferral Election Form. For purposes of any payment to a
Participant pursuant to the foregoing sentence, all Earned Stock Incentive Units
shall be valued as at the date of termination of employment at an amount equal
to the greater of (i) an amount based on the higher of the closing sales price
on the New York Stock Exchange--Composite Transaction Tape on the date of
termination or the date on which a Change of Control occurs, whichever is
greater, of Common Shares of DPL Inc. or (ii) the Conversion Price (as
determined in accordance with Section 8(e)). If such Earned Stock Incentive
Units are not payable in a lump sum upon termination of employment in accordance
with the Participant's Deferral Election Form, the value of such Earned Stock
Incentive Units shall be immediately credited to the Standard Deferral Account
of such Participant under the Deferred Compensation Plan (or if the Participant
does not have such an account, the Company shall establish such an account for
him or her), and thereafter payment of the amount so credited shall be in
accordance with the Deferred Compensation Plan.
(c) (Intentionally left blank.)
(d) FUNDING OF MASTER TRUSTS. Upon a Change of Control, the Company shall
immediately transfer to one more of the Master Trusts an aggregate amount of
Shares and/or cash which, when combined with the other assets of the Master
Trusts contributed or accruing thereto under or by reason of Section 9 hereof,
is equal to the value of benefits of Participants under the Plan (I.E., the
value of all Earned Stock Incentive Units) accrued through the date of
occurrence of the Change of Control event, determined after application of
Section 10(b).
SECTION 11. NOTICES.
Any notice, election or any request required or permitted hereunder, which
is to be mailed or requested from the Secretary or the CEO of the Company, shall
be delivered or mailed, postage prepaid, as follows:
(a) Prior to a Change of Control, to the Corporate Secretary of
the Company at:
The Dayton Power and Light Company
MacGregor Park
1065 Woodman Drive, P.O. Box 1247
Dayton, Ohio 45432
Attention: Corporate Secretary
(b) After a Change of Control, to the Trustees of each Master
Trust pursuant to which benefits under the Plan
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are being funded, at the notice address specified by such Trustees in the
applicable trust agreement.
The Company or Trustees may from time to time change their addresses for
receipt of notices by giving notice of such change to the Participants, but no
such change shall be deemed to be effective until notice thereof is actually
received by the Participant to whom it is directed.
SECTION 12. CONDITIONS UPON AWARDS AND PAYMENTS.
No provision of the Plan or any Stock Incentive Award shall be binding upon
the Company or enforceable against the Company to the extent that it would cause
the Company not to comply with all relevant provisions of state and federal law.
SECTION 13. NO RIGHT TO EMPLOYMENT.
Nothing in the Plan shall confer upon any Participant or other eligible
employee the right to continue in the employment of the Company or affect any
right the Company may have to terminate the employment of any Participant or
other eligible employee.
SECTION 14. NO RIGHTS AS SHAREHOLDERS.
No Participant who receives a Stock Incentive Award under the Plan shall
have any rights as a shareholder of the Company as a result thereof unless and
until Shares are issued to such Participant in accordance with the Plan.
SECTION 15. NON-UNIFORM DETERMINATIONS.
The Committee's determination under the Plan (including, without
limitation, its selection of Participants to receive Stock Incentive Awards, the
length of Incentive Periods, and the amount of timing of awards) need not be
uniform, and may be made by it selectively among persons who receive, or are
eligible to receive Stock Incentive Awards under the Plan, whether or not such
persons are similarly situated.
SECTION 16. NON-TRANSFERABILITY.
Neither a Participant, nor his beneficiary, nor any other individual shall
have any right by way of anticipation or otherwise to alienate, sell, transfer,
assign, pledge, charge or otherwise dispose of any benefits which may become
payable under this Plan, prior to the time that payment of any such benefit is
made, and any attempted anticipation, alienation, sale, transfer, assignment,
pledge, charge, or other disposition shall be null and void. Furthermore, none
of the benefits payable under this Plan shall be subject to the claim or legal
process of the creditors of any Participant or of the beneficiary, spouse or
former spouse of any Participant or of any other person or entity.
SECTION 17. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.
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In the event of a share dividend, a stock split, recapitalization, merger,
consolidation, reorganization, split-up, combination or exchange of shares,
spin-off, extraordinary dividend in property or in kind, or other similar
corporate changes (each of the foregoing, an "Extraordinary Transaction") the
number and/or kind of Stock Incentive Units allocated to a Participant's account
shall be appropriately adjusted by the Committee (whose determination in each
case shall be conclusive) as the Committee may determine to be necessary to
ensure equitable treatment to each Participant as a result of the consummation
of any Extraordinary Transaction.
SECTION 18. INTERPRETATION AND AMENDMENT.
This Plan will be administered by the Committee. The decision of the
Committee with respect to the administration or interpretation of the Plan will
be final and binding. The Committee reserves the right, prior to a Change in
Control, to amend, modify or terminate the Plan; provided, however that (i) no
amendment, modification or termination of the Plan shall affect an election to
defer payments already in effect for the current calendar year or any preceding
calendar year or shall otherwise adversely affect any right or benefit earned or
accrued under the Plan by any Participant prior to any such amendment,
modification or termination without the prior written consent of such
Participant, and (ii) following a Change of Control the Committee's discretion
will be exercised as provided in Section 10(a) hereof; provided further that the
Trustees shall have no authority to terminate the Plan.
SECTION 19. GENDER AND NUMBER.
Except when indicated by the context, any masculine terminology used herein
shall also include the feminine, and the use of any term herein in the singular
may also include the plural.
SECTION 20. CHOICE OF LAW.
This Plan shall be construed, rendered and governed by the laws of the
State of Ohio.
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EXHIBIT A
THE DAYTON POWER AND LIGHT COMPANY
MANAGEMENT STOCK INCENTIVE PLAN
DEFERRAL ELECTION FORM
INSTRUCTIONS:
This Election Form relates to Stock Incentive Units deferred pursuant to
the Management Stock Incentive Plan (the "Plan"). Under the Plan, deferred Stock
Incentive Units are credited to a Participant's Account in a Master Trust or
Trusts created by DP&L.
PAYMENTS. Payments shall be made from the Plan in the form of DPL Inc.
common shares after termination -------- of employment (check one):
a. ___ in a lump sum payment;
b. ___ annually over a period of up to twenty years. (Specify number of
years _____.)
Such payment(s) shall be made or commence by no later than the January 31
immediately following: __________________ (specify date).
Upon my death (check one):
___ payments to my beneficiary shall continue or commence in the same
method to be paid to me as elected above.
___ payments are to be made to my beneficiary in a lump sum.
DESIGNATION OF BENEFICIARY
In the event of my death all payments required to be made under the Plan
shall be made to the following person:
Name of designated
beneficiary: ___________________________________
Address of designated
beneficiary: ___________________________________
___________________________________
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___________________________________
If the above-designated beneficiary does not survive me, payments will be
made to the following successor beneficiary (or to my estate on failure to
designate otherwise):
Name of designated
beneficiary: ___________________________________
Address of designated
beneficiary: ___________________________________
___________________________________
___________________________________
___________________________________
Signature
___________________________________
Date
This Election Form was received by the Secretary of the Company on
______________________.
___________________________________
Secretary
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.(D)
<SEQUENCE>6
<FILENAME>a2043323zex-10_d.txt
<DESCRIPTION>EXHIBIT 10(D)
<TEXT>
<PAGE>
EXHIBIT 10(d)
THE DAYTON POWER AND LIGHT COMPANY
KEY EMPLOYEES DEFERRED
COMPENSATION PLAN
(As Amended Through December 31, 2000)
1. GENERAL.
Effective January 1, 1991, this document ("Plan"), which supersedes the
Deferred Compensation Plan for Key Employees of The Dayton Power and Light
Company as in effect on September 1, 1985, as amended effective January 1, 1989
(the "Prior Plan"), continues a program established for the purpose of providing
deferred compensation for a select group of management employees.
2. DEFINITIONS.
A. "Board of Directors" means The Board of Directors of DPL Inc. in place
from time to time prior to a Change of Control.
B. "CEO" means the Chief Executive Officer of DPL duly installed, from time
to time, prior to a Change of Control. However, "Committee" will be substituted
for "CEO" in discussing the CEO's rights and benefits in the Plan.
C. "Change of Control" means any change in control of DPL, or its principal
subsidiary, DP&L, of a nature that would be required to be reported in response
to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") as determined by the Board
of Directors in its sole discretion; provided that, without limitation, such a
Change of Control shall be deemed to have occurred if (i) any "person" (as such
term is defined in Sections 13(d) and 14(d)(2) of the Exchange Act; hereafter, a
"Person") other than DPL or DP&L or an entity then directly or indirectly
controlling, controlled by or under common control with DPL or DP&L is on the
date hereof or becomes or commences a tender offer to become the beneficial
owner, directly or indirectly, of securities of DPL or DP&L representing (A) 15%
or more of the combined voting power of the then outstanding securities of DPL
or DP&L if the acquisition of such beneficial ownership or such tender offer is
not approved by the Board of Directors prior to the acquisition or the
commencement of such tender offer or (B) 50% or more of such combined voting
power in all other cases; (ii) DPL or DP&L enters into an agreement to merge or
consolidate itself, or an agreement to consummate a "combination" or "majority
share acquisition" in which it is the "acquiring corporation" (as such terms are
defined in Ohio Rev. Code ss.1701.01 as in effect on December 31, 1990) and in
which shareholders of DPL or DP&L, as the case may be, immediately prior to
entering into such agreement, will beneficially own, immediately after the
effective time of the merger,
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consolidation, combination or majority share acquisition, securities of DPL or
DP&L or any surviving or new corporation, as the case may be, having less than
50% of the "voting power" of DPL or DP&L or any surviving or new corporation, as
the case may be, including "voting power" exercisable on a contingent or
deferred basis as well as immediately exercisable "voting power", excluding any
merger of DPL into DP&L or of DP&L into DPL; (iii) DPL or DP&L enters into an
agreement to sell, lease, exchange or otherwise transfer or dispose of all or
substantially all of its assets to any Person other than to a wholly owned
subsidiary or, in the case of DP&L, to DPL or a wholly owned subsidiar(ies) of
DPL; but not including (A) a mortgage or pledge of assets granted in connection
with a financing or (B) a spin-off or sale of assets if DPL continues in
existence and its common shares are listed on a national securities exchange,
quoted on the automated quotation system of a national securities association or
traded in the over-the-counter market; (iv) any transaction referred to in (ii)
or (iii) above is consummated; or (v) those persons serving as directors of DPL
or DP&L on February 1, 2000 (the "Original Directors") and/or their Successors
do not constitute a majority of the whole Board of Directors of DPL or DP&L, as
the case may be (the term "Successors" shall mean those directors whose election
or nomination for election by shareholders has been approved by the vote of at
least two-thirds of the Original Directors and previously qualified Successors
serving as directors of DPL or DP&L, as the case may be, at the time of such
election or nomination for election).
D. "Committee" means the Compensation and Management Review Committee of
the Board of Directors of DPL Inc. or such other committee(s) as the Board of
Directors of DPL Inc. may designate from time to time to administer the Plan.
E. "Company" means The Dayton Power and Light Company ("DP&L"), DPL Inc.
("DPL") and any entity which, prior to a Change of Control, is controlling,
controlled by or under common control with DP&L or DPL Inc.
F. "Compensation" means amounts payable by the Company to a Participant in
the form of salary and/or incentive awards.
G. "Deferral Form" means the form attached hereto as Exhibit A (or such
other form as the Committee may designate from time to time) or any forms filed
under the Prior Plan pursuant to which a Participant (hereinafter defined) may
elect to defer his/her Compensation.
H. "Election Form" means the form attached hereto as Exhibit A (or such
other form as the Committee may designate from time to time) pursuant to which a
Participant may elect the form and timing of payments under this Plan.
I. "Eligible Participant" means any Participant who is employed by the
Company as of October 1, 1996 or at any time thereafter.
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J. "Other Participant" means any Participant whose employment with the
Company terminated (by reason of retirement or otherwise) prior to October 1,
1996.
K. "Participant" means any officer or management key employee of the
Company designated by the CEO prior to a Change of Control.
L. "Unreimbursed Amount" means, at any time as to any Eligible Participant
who, either directly or through any affiliate, including through a trust
established by such Eligible Participant, has entered into a split-dollar life
insurance arrangement with the Company, the amount of such Eligible
Participant's or affiliate's then obligation to reimburse the Company under such
split-dollar arrangement for life insurance premiums paid by the Company.
3. ELECTION TO DEFER AND ACCOUNT DESIGNATION.
A. ELECTION TO DEFER. The Company has established a Standard Deferral
Account for each Participant to which (i) deferred Compensation has been or will
be credited from time to time pursuant to Section 3(B) hereof and (ii) in the
case of certain of the Participants, amounts have been credited pursuant to the
second, third and fourth paragraphs of this Section 3(A). By delivering a
Deferral Form to the Secretary of the Company on or before December 31 preceding
the calendar year such election is to be effective, a Participant may elect to
defer Compensation relating to all future services, until such election is
terminated in accordance with Section 6.
Prior to December 31, 1999, Supplementary Deferral Accounts had been
established under the Plan for certain Participants. Effective as of
December 31, 1999, the present value, as determined by the Committee, of a
Participant's Supplementary Deferral Account was credited to the Standard
Deferral Account of such Participant. Accordingly, effective as of December 31,
1999, the Supplementary Deferral Accounts were terminated and no amounts are
credited thereto.
In addition, effective as of January 1, 2000, the participation in the
Company's Supplemental Executive Retirement Plan (the "SERP") by certain of the
Participants (the "Former SERP Participants") was terminated and, in connection
therewith, the present value, as determined by the Committee, of a Former SERP
Participant's accrued benefits under the SERP was credited to the Standard
Deferral Account of such Former SERP Participant (the amount so credited to the
Standard Deferral Account of a Former SERP Participant is hereinafter referred
to as the "SERP Amount").
Moreover, prior to December 31, 1999, certain participants (the "Electing
Participants") in the Company's Management Stock Incentive Plan (the "MSIP")
elected, as permitted by the MSIP, to convert a portion of their Earned Stock
Incentive Units under the MSIP into cash and the amount each Electing
Participant so elected to convert to cash was credited to the Standard Deferral
Account of such Electing Participant
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under the Plan; further, as provided in Sections 8(e) and 10(b) of the MSIP, in
the event the common shares of DPL Inc. cease to be listed on the New York Stock
Exchange, or upon termination of a Participant's employment after a Change of
Control, additional amounts may be credited to a Participant's Standard Deferral
Account from the MSIP.
B. STANDARD DEFERRAL ACCOUNT. All deferred amounts will be credited to each
Participant's Standard Deferral Account. The Participants' Standard Deferral
Accounts are established only as a mechanism for measuring the potential amount
of cash or shares of DPL Inc. common stock which may be distributed under the
Plan. DP&L shall retain beneficial ownership of all amounts credited to
Participants' Standard Deferral Accounts and such deferred amounts will be
subject to the claims of DP&L's creditors. No Participant or beneficiary has any
property interest in deferred amounts or in any specific assets of the Company.
C. INTEREST ON STANDARD DEFERRAL ACCOUNTS. For purposes of measuring the
amounts which may be distributed under the Plan to the Participants, for periods
prior to January 1, 2001, the Company credited interest to the Standard Deferral
Account of each Other Participant on a quarterly basis, calculated by
multiplying the balance in such account (including interest) on the first day of
each month of the preceding quarter by one-twelfth of the simple average yield
of the annualized AA utility bond averages as published monthly in Moody's Bond
Survey for the preceding quarter. With respect to all amounts credited to the
Standard Deferral Account of each Other Participant as of January 1, 2001 or at
any time thereafter, such Standard Deferral Account shall be deemed invested in
the Vanguard Total Bond Index Fund, or a comparable fund designated by the
Committee in its sole discretion (the "Bond Fund"), and all dividends, interest,
distributions and other amounts paid with respect to the Bond Fund shall be
credited to the Standard Deferral Account of each Other Participant and shall be
deemed reinvested in the Bond Fund.
D. EARNINGS ON STANDARD DEFERRAL ACCOUNTS OF ELIGIBLE PARTICIPANTS. For
purposes of measuring the amounts which may be distributed under the Plan to
Eligible Participants, all amounts credited to the Standard Deferral Account of
an Eligible Participant as of January 1, 1997 and all amounts thereafter
credited to the Standard Deferral Account of an Eligible Participant pursuant to
Section 3(A), together with the amount of any dividends, interest, distributions
or other amounts credited to such Standard Deferral Account pursuant to this
Section 3(D), shall be deemed invested in such "Eligible Investment Options" as
such Eligible Participant may designate from time to time as provided herein.
For purposes of the Plan, "Eligible Investment Options" means those securities,
mutual funds or other investment vehicles set forth on Schedule I hereto, as
such Schedule I may be modified from time to time by the Committee upon at least
30 days' prior written notice to the Eligible Participants.
Subject to Section 3(E) hereof, each Eligible Participant shall have the
option, by delivering to the Secretary
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of Company a completed Investment Option Election Form in the form attached
hereto as Exhibit B (or such other form as the Committee may designate from time
to time) on or prior to each such date as the Committee may specify from time to
time for such purpose (each such date, an "Election Date"), to designate or
change, in a percentage equal to at least 10%, the portions of such Eligible
Participant's Standard Deferral Account which shall be deemed invested in each
Eligible Investment Option as of such Election Date. Any such designation by an
Eligible Participant shall remain in effect until changed in accordance with the
preceding sentence or as provided in Section 3(E) hereof. Subject to Section
3(E) hereof, any increase in the percentage of an Eligible Participant's
Standard Deferral Account deemed invested in an Eligible Investment Option
effected on any Election Date shall be deemed to be a purchase of such Eligible
Investment Option and any decrease in the percentage of an Eligible
Participant's Standard Deferral Account deemed invested in an Eligible
Investment Option effected on any Election Date shall be deemed to be a sale of
such Eligible Investment Option, and any such purchase or sale shall be deemed
to have occurred as of the last business day immediately prior to such Election
Date at the closing price of such Eligible Investment Option on such date. In
the absence of any such designation by an Eligible Participant with respect to
all or any portion of his Standard Deferral Account, such Standard Deferral
Account (or such portion) shall be deemed invested in the Bond Fund (as defined
in Section 3(C) above), and the Bond Fund shall be an Eligible Investment Option
for such Eligible Participant. All dividends, interest, distributions and other
amounts paid or distributed from time to time with respect to any Eligible
Investment Option in which all or any portion of an Eligible Participant's
Standard Deferral Account is deemed invested shall be credited to such Eligible
Participant's Standard Deferral Account and shall be deemed reinvested in such
Eligible Investment Option.
The Company shall not be required to purchase, hold or dispose of any
Eligible Investment Options designated by Eligible Participants. To the extent
that the Company does, in its discretion, purchase or hold any of the Eligible
Investment Options designated by Eligible Participants, the same shall remain
the sole property of the Company, subject to the claims of its general
creditors, and shall not be deemed to form a part of any Eligible Participant's
Standard Deferral Account, and no Participant shall have any property interest
therein or claim thereto.
E. INVESTMENT IN PRIVATE EQUITY INVESTMENTS. In its sole discretion the
Committee may designate one or more Eligible Investment Options which, if
purchased, may not be immediately saleable; such Eligible Investment Options may
include interests in partnerships or other entities which are not readily
tradable on an established securities market including, for purposes of
illustration, interests in partnerships investing in private equity investments
(collectively referred to herein as "Private Equity Investments"). The Committee
may, in its sole discretion, establish procedures to regulate the ability of an
Eligible Participant's designation of an Private Equity Investments as one of
his or her Eligible Investment Options pursuant to Section
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3(D) hereof. Without limitation, these procedures may include the following:
(i) Limiting the right of an Eligible Participant to designate a Private
Equity Investment to those Eligible Participants (a) who have a
Standard Deferral Account balance greater than a specified minimum
amount, and (b) whose payment dates, as specified in their Election
Form, in the sole and unrestricted discretion of the Committee, are
sufficiently deferred to allow for any Private Equity Investment to
fully mature prior to payment of such Eligible Participant's Standard
Deferral Account in the event the Company does choose to purchase such
Eligible Investment Option;
(ii) Requiring a minimum dollar allocation to any Private Equity
Investment;
(iii) Restricting or eliminating an Eligible Participant's right to
reallocate that portion of his Standard Deferral Account allocated to
such Private Equity Investment until it has fully matured;
(iv) Reallocation, by the Committee, to an Private Equity Investment
previously designated by the Eligible Participant, of all or a portion
of an Eligible Participant's Standard Deferral Account not so invested
to the extent necessary to fully cover any capital calls made with
respect to such Private Equity Investment (which reallocation shall
proportionately reduce the amount which is deemed invested in each of
the Eligible Participant's other Eligible Investment Options);
(v) Establishing the date on which an Eligible Participant's Standard
Deferral Account is deemed invested in a Private Equity Investment
following such designation by the Eligible Participant.
In addition, notwithstanding anything in Section 4 hereof to the contrary,
and notwithstanding any payment election specified in such Eligible
Participant's Election Form, the Committee may, in its sole discretion, defer
payment of any amounts credited to an Eligible Participant's Standard Deferral
Account which have been deemed invested in a Private Equity Investment until any
such Private Equity Investment has fully matured, and, in the case of partial
distributions from an Eligible Participant's Standard Deferral Account, the
Committee may reduce the amount which is deemed invested in each Eligible
Investment Option other than such Private Equity Investment.
F. UNREIMBURSED AMOUNTS. Notwithstanding any other provision of the Plan,
in the event that there exists an Unreimbursed Amount as to an Eligible
Participant, the Unreimbursed Amount of such Eligible Participant in effect from
time to time shall reduce the amount of such Eligible Participant's Standard
Deferral Account which would otherwise be deemed invested in Eligible Investment
Options pursuant to
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Section 3(D) in the manner designated by such Eligible Participant in the
Investment Election Form most recently delivered to the Secretary of the Company
or, failing such designation, shall proportionately reduce the amount which
would otherwise be deemed invested in each Eligible Investment Option pursuant
to Section 3(D).
4. PAYMENTS UNDER THE PLAN.
A. STANDARD DEFERRAL ACCOUNT. Subject to Section 3(E) hereof, amounts
credited to a Participant's Standard Deferral Account, together with accumulated
earnings, will be distributed in a lump sum or over a period of years, up to
twenty, in such installments as specified in the Election Form, with such lump
sum payment being made or such installment payments commencing, unless otherwise
determined by the Committee in its discretion, on or prior to the January 31
immediately following:
(i) The date, either before or after the termination of the
Participant's employment, specified by the Participant in the Election
Form; or
(ii) Notwithstanding any provision to the contrary, no later than the
date a Participant reaches an age at which the Participant may earn
unlimited amounts without reduction of benefits under the Social Security
Act and the regulations promulgated thereunder;
and with subsequent annual installments, if payments are to be made in annual
installments, to be paid on or prior to each January 31 thereafter until all
amounts credited to the Participant's Standard Deferral Account have been paid
in full.
For purposes of any distribution pursuant to this Section 4(A), the amount
credited to an Eligible Participant's Standard Deferral Account on any date
shall be equal to the value (determined on the basis of the closing prices on
the last business day immediately preceding such date) of all Eligible
Investment Options in which such Eligible Participants' Standard Deferral
Account is deemed to be invested on such date pursuant to Section 3(D) and, in
the case of a partial distribution from an Eligible Participant's Standard
Deferral Account, the amount of such distribution shall proportionately reduce
the amount which is deemed invested in each Eligible Investment Option pursuant
to Section 3(D).
Notwithstanding any other provision of the Plan (other than Section 4(C))
or any election made by a Former SERP Participant under the Plan or in any
Election Form, no Former SERP Participant shall in any event be entitled to
receive any payment under the Plan with respect to such Former SERP
Participant's SERP Amount (or any earnings thereon) if, at the time of any such
payment, and after giving effect thereto, the aggregate amount paid to such
Former SERP Participant under the Plan with respect to such SERP Amount (and
earnings) would exceed the aggregate amount which would have been paid to such
Former
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SERP Participant if such SERP Amount had been paid to such Former SERP
Participant in three equal annual installments commencing on January 1, 2001.
Notwithstanding the foregoing, any Former SERP Participant may receive payment
of his SERP Amount (and earnings thereon) in accordance with Section 4(C).
B. PAYMENT IN CASH OR STOCK. All distributions from a Participant's
Standard Deferral Account will be paid in cash unless, within 30 days before
each scheduled date for distribution of benefits, such Participant files an
election with the Secretary of the Company to have benefits payable in the form
of shares of DPL Inc.'s common stock.
Subsequent installments, if any, will be paid annually or quarterly, as
elected by the Participant, as specified in the Election Form, until the entire
amount credited to his/her accounts are paid. Shares of DPL Inc.'s common stock
will be valued at their closing sales price on the New York Stock Exchange
Composite Transaction Tape on the date a cash payment would otherwise have been
paid. (If no sale occurs on such date, the common shares shall be valued on the
next preceding date on which a sale occurs). As soon as practical thereafter,
DPL Inc. will issue and deliver that number of shares of DPL Inc.'s common stock
equal in value to the amount of the payment, divided by the determined price of
such common shares; provided, however, that DPL Inc. will not be obligated to
issue and deliver fractional shares and, in lieu thereof, the Participant shall
receive cash.
C. EARLY DISTRIBUTION. A Participant may in no event receive a distribution
of all or a portion of amounts credited to his Standard Deferral Account prior
to the time that the Participant elected to receive such amounts pursuant to the
Plan. Notwithstanding the foregoing: (i) the CEO may, upon receiving a written
request from the Participant or his or her beneficiary as provided in Section 5
hereof in the event of the death of a Participant, upon determining that a
distribution is in the best interest of the Company and the Participant (or his
or her beneficiary) taking into account the financial condition of each,
distribute all or a portion of the amount credited to the Participant's Standard
Deferral Account; and (ii) upon written request by a Participant to receive his
entire account balance in the Plan made at any time after termination of his or
her employment (or consultation arrangement) with DP&L or DPL Inc., for any
reason, after a Change of Control, the amount credited to such Participant's
Standard Deferral Account shall be paid to such Participant in a lump sum within
ten (10) days after the date of such written request, provided that the
Participant shall be entitled to only 90% of such account balance and shall
irrevocably forfeit 10% of such account balance by making the withdrawal.
D. WITHHOLDINGS. Any taxes required to be withheld by any Federal, state,
or local government will be deducted from all deferred payments and paid for the
account of the Participant.
E. PAYMENTS IN KIND. Notwithstanding any other provision of the Plan, after
a Change of Control, any portion of a distribution to be made from an Eligible
Participant's Standard
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Deferral Account may, at the request of such Eligible Participant at least 30
days prior to the scheduled date of such distribution, be made by the Trustees
of the Master Trust(s) pursuant to which benefits under the Plan are being
funded, in the sole and absolute discretion of such Trustees, in the form of any
Eligible Investment Options actually held by such Master Trust(s) for purposes
of funding such distribution to such Eligible Participant under the Plan. For
purposes of making any such distribution, any Eligible Investment Option so
distributed shall be valued at its closing price on the last business day
immediately preceding the date of such distribution and such distribution shall
be net of any applicable federal, state or local withholding taxes unless the
Eligible Participant makes a cash payment, concurrently with such distribution,
to the Master Trust(s) making such distribution for the purpose of paying such
withholding taxes. Nothing contained in this Section 4(F) shall require the
Company (or any of the Master Trusts) to purchase, hold or dispose of any
Eligible Investment Options designated by Eligible Participants. To the extent
that any Master Trust holds any Eligible Investment Options, the same shall
remain the sole property of the Company, subject to the claims of its general
creditors and shall not be deemed to form a part of any Eligible Participant's
Standard Deferral Account and no Participant shall have any property interest
therein or claim thereto.
F. UNREIMBURSED AMOUNTS. Notwithstanding any other provision of the Plan,
in the event that there exists an Unreimbursed Amount as to an Eligible
Participant, then (a) no distribution of the amount credited to such Eligible
Participant's Standard Deferral Account shall be made pursuant to Section 4(A)
or otherwise to the extent that, after giving effect to any such proposed
distribution, the amount then credited to such Eligible Participant's Standard
Deferral Account would be less than the Unreimbursed Amount of such Eligible
Participant and (b) any amounts which are not distributed from such Eligible
Participant's Standard Deferral Account by reason of the foregoing clause (a)
shall be paid to such Eligible Participant promptly after the date of, and only
to extent of, any reimbursement of such Unreimbursed Amount.
G. LUMP SUM DISTRIBUTION IN CERTAIN CIRCUMSTANCES. Notwithstanding any
other provision of the Plan or any election made by a Participant in an Election
Form, in the event that, at the time of the termination of a Participant's
employment or at any time thereafter, the amount then credited to such
Participant's Standard Deferral Account is less than $100,000, then the Company
may, at its option, distribute to such Participant in a single lump sum payment
the entire amount then credited to such Participant's Standard Deferral Account.
5. PAYMENTS IN THE EVENT OF DEATH.
A. DESIGNATION OF BENEFICIARY. On his/her Election Form, each Participant
will designate one or more beneficiaries to whom payments will be made in the
event of his/her death. The Participant may change the beneficiary without the
beneficiary's consent; however, no change will be effective until received in
writing by the Committee (or its delegate) or, in the event of a
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Change of Control, by the Trustees of the Master Trust(s) pursuant to which
benefits under the Plan are being funded. If a beneficiary survives the
Participant, all amounts credited to such Participant's account will be paid to
the designated beneficiary or his estate as provided below. If a Participant has
not designated a beneficiary, or the designated beneficiary does not survive the
Participant, then the unpaid deferred amounts will be paid to the Participant's
estate.
B. PAYMENT TO DESIGNATED BENEFICIARY. If a Participant dies before payment
of all deferred amounts credited to his/her Standard Deferral Account, amounts
so credited will be paid as directed by the Participant on his/her Election
Form.
6. TERMINATION OR MODIFICATION OF ELECTION.
In any year, a Participant may terminate or modify, for that year, his/her
deferred election by written notice delivered to the Secretary of the Company.
Any such notice will become effective on the last day of the month it is given
and will apply only to compensation payable after such effective date. Amounts
credited to a Participant's accounts prior to the effective date of any
termination or modification will not be affected and will be paid in accordance
with Sections 4 and 5.
7. MASTER TRUSTS.
A. PARTICIPANT'S ACCOUNTS. The Company has established, and may in the
future establish, one or more trusts (each such trust, as it may be amended from
time to time, is referred to herein as a "Master Trust") for the purpose, among
others, of securing the performance by the Company of its obligation to
Participants to make the distributions under the Plan and has funded one or more
of the Master Trusts in an aggregate amount of cash and/or DPL Inc.'s common
shares as the Company has determined to be equal to the value of all currently
vested or earned benefits of the Participants under the Plan. Pursuant to one or
more of the Master Trusts, each Participant has been assigned a separate account
as a mechanism for measuring the potential benefits which may be distributed in
the future. Subsequent transfers of cash and/or DPL Inc.'s common shares which
the Company is required to make to the Master Trusts pursuant to Section 7.B or
8.C hereof or otherwise shall be allocated among the Master Trusts as the
Committee may determine from time to time.
B. SUCCESSIVE TRANSFERS. On or before the twentieth day following the end
of each successive calendar quarter, the Company shall transfer to one or more
of the Master Trusts an aggregate amount of cash and/or shares of DPL Inc.'s
common stock as it shall determine to be equal to the value of benefits of
Participants under the Plan which benefits have vested or have been earned
during such calendar quarter.
C. TITLE TO FUNDS. DP&L shall retain beneficial ownership of all cash or
shares transferred to the Master Trusts and such cash or shares will be subject
to the claims of DP&L's creditors. No Participant or beneficiary has or will
have any
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property interest in the cash or shares held in the Master Trusts or in any
other specific asset of the Company.
8. CHANGE OF CONTROL.
A. AUTOMATIC TRANSFER OF AUTHORITY. In the event of a Change of Control,
any and all authority and discretion which is exercisable by the Committee, or
the CEO, as heretofore or hereafter described in the Plan, including, without
limitation, the authority to change the Eligible Investment Options as provided
in Section 3.D. hereof, shall automatically be transferred to the Trustees of
each Master Trust to the extent that benefits under the Plan are being funded
under such Master Trust.
B. (Intentionally left blank.)
C. FUNDING OF MASTER TRUSTS. Upon a Change of Control, the Company shall
immediately transfer to one or more of the Master Trusts an aggregate amount of
cash which, when combined with the other assets of the Master Trusts contributed
or accruing thereto under or by reason of Section 7 hereof, is equal to all
amounts credited to the Participants' Standard Deferral Accounts, including
accumulated earnings.
9. NOTICES.
Any notice, election or any request required or permitted hereunder, which
is to be mailed or requested from the Secretary or the CEO of the Company shall
be delivered or mailed, postage prepaid, as follows:
(i) Prior to a Change of Control; to the Secretary of DP&L at:
The Dayton Power and Light Company
MacGregor Park
1065 Woodman Drive
Dayton, Ohio 45432
Attention: Corporate Secretary
(ii) After a Change of Control; to the Trustees of each Master Trust
pursuant to which the benefits under the Plan are being funded, at the
notice address specified by such Trustees in the applicable trust
agreement.
The Company or Trustees may from time to time change their addresses for
receipt of notices by giving notice of such change to the Participants, but no
such change shall be deemed to be effective until notice thereof is actually
received by the Participant to whom it is directed.
10. NONASSIGNABILITY.
Neither a Participant, nor his beneficiary, nor any other individual shall
have any right by way of anticipation or otherwise to alienate, sell, transfer,
assign, pledge, charge
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or otherwise dispose of any benefits which may become payable under this Plan,
prior to the time that payment of any such benefit is made, and any attempted
anticipation, alienation, sale, transfer, assignment, pledge, charge, or other
disposition shall be null and void. Furthermore, none of the benefits payable
under this Plan shall be subject to the claim or legal process of the creditors
of any Participant or of the beneficiary, spouse or former spouse of any
Participant or of any other person or entity.
11. INTERPRETATION AND AMENDMENT.
This Plan will be administered by the Committee. The decision of the
Committee with respect to the administration or interpretation of the Plan will
be final and binding. The Committee reserves the right, prior to a Change in
Control, to amend, modify or terminate the Plan; provided, however, that (i) no
amendment, modification or termination of the Plan shall affect an election to
defer payments already in effect for the current calendar year or any preceding
calendar year or shall otherwise adversely affect any right or benefit earned or
accrued under the Plan by any Participant prior to any such amendment,
modification or termination without the prior written consent of such
Participant, and (ii) following a Change of Control the Committee's discretion
will be exercised as provided in Section 8.A hereof; provided further that the
Trustees shall have no authority to terminate the Plan.
12. GENDER AND NUMBER.
Except when indicated by the context, any masculine terminology used herein
shall also include the feminine, and the use of any term herein in the singular
may also include the plural.
13. NO RIGHTS AS SHAREHOLDERS.
Participants whose accounts are credited with amounts under the Plan shall
have no rights as shareholders of the Company as a result thereof unless and
until the shares of DPL Inc. common stock, if any, are distributed to the
respective Participants.
14. NO RIGHT TO EMPLOYMENT.
Nothing in the Plan shall confer upon any Participant the right to
continued employment with the Company, nor shall it interfere with the
rights of the Company to discharge any person and/or to treat him without
regard to the effect which such treatment might have upon him as a person
covered by this Plan.
15. GOVERNING LAW.
This Plan shall be construed, rendered and governed by the laws of the
State of Ohio.
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EXHIBIT A
THE DAYTON POWER AND LIGHT COMPANY
KEY EMPLOYEES DEFERRED COMPENSATION
DEFERRAL AND ELECTION FORM
DEFERRAL INSTRUCTIONS:
A key employee may defer compensation pursuant to the provisions of the Key
Employees Deferred Compensation Plan (the "Plan"). Amounts deferred under the
Plan will be paid in accordance with the Participant's Election as provided
below to the extent that it is consistent with the terms and conditions of the
Plan.
STANDARD DEFERRAL ACCOUNT
ELECTION TO PARTICIPATE:
I elect to defer the following percentage or dollar amount of my [insert
date] compensation pursuant to the Standard Deferral Provisions of the Plan.
Base Salary $_____________ or ______________%
Incentive Compensation $_____________ or ______________%
ELECTION (PAYMENT) INSTRUCTIONS:
STANDARD DEFERRAL ACCOUNT
1. PAYMENTS. Payments shall be made or commence from my Standard Deferral
Account by no later than the January 31 immediately following (check
one):
a. ___ a specified date either before or after termination of
employment (Specify Date: ___________); or
b. ___ at such date as I reach the age at which I can earn unlimited
amounts without reduction of benefits under the Social
Security Act and the regulations promulgated thereunder.
Such payments from my account shall be paid as follows (check one):
a. ___ lump sum payment; or
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b. ___ annually over a period of up to twenty years. (Specify number
of years ___________).
I request that such payments be made in the form of DPL Inc. shares, rather
than cash.
___ Yes ___ No
Upon my death (check one):
____ payments to my beneficiary shall continue or commence in the
same method to be paid to me as elected above.
____ payments are to be made to my beneficiary in a lump sum
DESIGNATION OF BENEFICIARIES
All payments required to be made under the Plan to my designated
beneficiary in the event of my death shall be made to the following person:
Name of designated
beneficiary: ______________________________
Address of designated
beneficiary: ______________________________
______________________________
______________________________
If the above-designated beneficiary does not survive me, the payments will
be made to the following successor beneficiary (or to my estate on failure to
designate otherwise):
Name of designated
beneficiary: ______________________________
Address of designated
beneficiary: ______________________________
______________________________
______________________________
______________________________
Signature of Executive
______________________________
Date
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<PAGE>
This Deferral and Election Form was received by the Secretary of the
Company on _______________________.
______________________________
Secretary
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<PAGE>
EXHIBIT B
THE DAYTON POWER AND LIGHT COMPANY
KEY EMPLOYEES DEFERRED COMPENSATION PLAN
INVESTMENT OPTION ELECTION FORM
I elect to have amounts credited to my Standard Deferral Account under the
Plan to be deemed invested, effective [insert date], in the following Eligible
Investment Options, as provided in Section 3(D) of the Plan:
Percentage of Standard
Deferral Account Invested
(whole percentages, not
ELIGIBLE INVESTMENT OPTION less than 10%)
- -------------------------- ------------------------------------
Vanguard Index Trust - 500 Portfolio _____%
Vanguard Index Trust - Small Cap Stock _____%
Portfolio
Vanguard Index Trust - Total International _____%
Portfolio
Vanguard Index Trust - Total Bonds _____%
(Note: In the absence of any designation with respect to all or any portion of
your Standard Deferral Account, your Standard Deferral Account (or such portion)
will be deemed invested in the Vanguard Index Trust - Total Bonds as provided in
Section 3(D) of the Plan).
If the Company and I have entered into a split-dollar life insurance
arrangement, then the Unreimbursed Amount (as defined in the Plan) shall reduce
the amount which would otherwise be deemed invested in the following Eligible
Investment Options in the following percentages of the Unreimbursed Amount:
Percentage of
Unreimbursed
Eligible Investment Option Amount
- -------------------------- -------------
Vanguard Index Trust - 500 Portfolio _____%
Vanguard Index Trust - Small Cap Stock _____%
Portfolio
Vanguard Index Trust - Total International _____%
Portfolio
Vanguard Index Trust - Total Bonds _____%
99
<PAGE>
______________________________
Signature of Executive
______________________________
Date
This Investment Option Election was received by the Secretary of the
Company on ________________.
______________________________
Secretary
100
<PAGE>
154
SCHEDULE I
ELIGIBLE INVESTMENT OPTIONS
Vanguard Index Trust -- 500 Portfolio
Vanguard Index Trust -- Small Cap Stock Portfolio
Vanguard Index Trust -- Total International Portfolio
Vanguard Index Trust -- Total Bonds
101
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.(E)
<SEQUENCE>7
<FILENAME>a2043323zex-10_e.txt
<DESCRIPTION>EXHIBIT 10(E)
<TEXT>
<PAGE>
EXHIBIT 10(e)
FORM OF CHANGE OF CONTROL AGREEMENT
[Date:____________________________]
[Name: __________________]
[Title: _________________]
The Dayton Power and Light Company
MacGregor Park
1065 Woodman Park
Dayton, OH 45432
Dear_____________________:
DPL Inc. ("DPL") and its subsidiary, The Dayton Power and Light Company
("DP&L") hereinafter collectively referred to as the "Company", considers the
establishment and maintenance of a sound and vital management to be essential to
protecting and enhancing the best interests of the Company and its shareholders.
In this connection, the Company recognizes that, as is the case with many
publicly held corporations, the possibility of a Change of Control (as defined
in paragraph 2) can raise distracting and disrupting uncertainties and questions
among management personnel, can interfere with their whole-hearted attention and
devotion to the performance of their duties, and can even lead to their
departure, all to the detriment of the best interests of the Company and its
shareholders. Accordingly, the Board of Directors of DPL (the "Board of
Directors") and the Board of Directors of DP&L have determined that the best
interests of the Company and its shareholders would be served by assuring to
certain executives of the Company, including yourself, the protection provided
by an agreement which defines the respective rights and obligations of the
Company and the executive in the event of a Change of Control.
In order to effect the foregoing, this letter agreement sets forth the
Company's agreement to extend to you the benefits of its 1986 medical plan and
certain other benefits upon a termination of employment whenever occurring and
to set forth the benefits which the Company agrees will be provided to you in
the event of a Change of Control as described in paragraph 3 below.
1. OPERATION AND TERM OF AGREEMENT.
This agreement, which amends and restates in its entirety the existing
letter agreement between the Company and you dated [__________], as amended by
letter agreement dated [__________], shall become effective immediately upon the
execution hereof. This agreement shall continue until May 1, 2002, and shall
automatically renew for each consecutive twelve month period thereafter (I.E.,
May 1st to April 30th), unless either the Company provides you or you provide
the Company a one (1) year prior written notice of its or your intention not to
renew this agreement. Notwithstanding the foregoing, the term of this agreement
shall continue in effect for a period of not less than thirty-six (36) months
after each Change of Control occurring
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during the term of this agreement; and any benefit that accrues to you pursuant
to the terms of this agreement shall continue to be an obligation of the Company
and enforceable by you until paid in full, notwithstanding the subsequent
termination of this agreement; provided however that if the event constituting a
Change of Control is either the commencement of a tender offer, or the entering
into of an agreement referred to in item (ii) or (iii) of paragraph 2, and such
tender offer is still pending or such agreement has not been consummated at the
end of the thirty-six month period applicable to such Change of Control, then
without limitation of the other provisions of this paragraph, such thirty-six
month period shall be extended through the date on which the tender offer or
agreement is either (a) terminated or abandoned or (b) consummated, whichever
occurs first, and the thirty-six month period provided for in paragraph 3.B.
shall also be so extended. If more than one Change of Control occurs during the
term of this agreement, the provisions of this agreement shall be applicable to
each such Change of Control.
1.A. TERMINATION FOR ANY REASON.
Notwithstanding any other provisions of this agreement to the contrary,
upon termination of employment for any reason at any time, the following shall
be paid or made available to you in compensation for services previously
rendered:
(i) Benefits under, or benefits substantially equivalent to benefits
under, the standard medical plan which was available to management and
professional employees of the Company in 1986 will be provided to you
and your spouse for life, and to your dependents for as long as, and
to the extent that, your dependents would otherwise be covered under
such plan.
(ii) The Company shall pay to you in a lump sum in cash not later than the
fifteenth day following the Date of Termination (as defined in
paragraph 4) your full base salary through the Date of Termination at
the rate in effect at the Date of Termination; and also the amount of
the award or awards, if any, with respect to any completed period or
periods which, pursuant to the Management Incentive Compensation
Program or any other Company incentive compensation plan in which you
are then participating (other than any deferred compensation plan in
which a contrary installment payment election has been made), has been
determined to have been earned by you but which has not yet been paid
to you.
(iii) The Company shall pay or make available to you all other accrued
benefits of any kind to which you are, or would otherwise have been,
entitled through the Date of Termination.
2. CHANGE OF CONTROL.
Except as provided in paragraph 1.A. above, no benefits shall be payable
hereunder unless there shall have been a Change of Control, as defined below,
and you are eligible for benefits under paragraph 3 below. For purposes of this
agreement, a `Change of Control' means any change in control of DPL, or its
principal subsidiary, DP&L, of a nature that would be required to be reported in
response to Item 6 (e) of Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended (the `Exchange Act') as determined
by the Board of Directors of DPL in its sole discretion; provided that, without
limitation, such a Change of Control shall be deemed to have occurred if (i) any
'person' (as such term is defined
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in Sections 13 (d) and 14 (d) (2) of the Exchange Act; hereafter, a `Person')
other than DPL or DP&L or an entity then directly or indirectly controlling,
controlled by or under common control with DPL or DP&L is on the date hereof or
becomes or commences a tender offer to become the beneficial owner, directly or
indirectly, of securities of DPL or DP&L representing (A) 15% or more of the
combined voting power of the then outstanding securities of DPL or DP&L if the
acquisition of such beneficial ownership or such tender offer is not approved by
the Board of Directors of DPL prior to the acquisition or the commencement of
such tender offer or (B) 50% or more of such combined voting power in all other
cases; (ii) DPL or DP&L enters into an agreement to merge or consolidate itself,
or an agreement to consummate a `combination' or `majority share acquisition' in
which it is the `acquiring corporation' (as such terms are defined in Ohio Rev.
Code ss. 1701.01 as in effect on December 31, 1990) and in which shareholders of
DPL or DP&L, as the case may be, immediately prior to entering into such
agreement, will beneficially own, immediately after the effective time of the
merger, consolidation, combination or majority share acquisition, securities of
DPL or DP&L or any surviving or new corporation, as the case may be, having less
than 50% of the `voting power' of DPL or DP&L or any surviving or new
corporation, as the case may be, including `voting power' exercisable on a
contingent or deferred basis as well as immediately exercisable `voting power',
excluding any merger of DPL into DP&L or of DP&L into DPL; (iii) DPL or DP&L
enters into an agreement to sell, lease, exchange or otherwise transfer or
dispose of all or substantially all of its assets to any Person other than to a
wholly owned subsidiary or, in the case of DP&L, to DPL or a wholly owned
subsidiary(ies) of DPL; but not including (A) a mortgage or pledge of assets
granted in connection with a financing or (B) a spin-off or sale of assets if
DPL continues in existence and its common shares are listed on a national
securities exchange, quoted on the automated quotation system of a national
securities association or traded in the over-the-counter market; (iv) any
transaction referred to in (ii) or (iii) above is consummated; or (v) those
persons serving as directors of DPL or DP&L on February 1, 2000 (the `Original
Directors') and/or their Successors do not constitute a majority of the whole
Board of Directors of DPL or DP&L, as the case may be (the term `Successors'
shall mean those directors whose election or nomination for election by
shareholders has been approved by the vote of at least two-thirds of the
Original Directors and previously qualified Successors serving as directors of
DPL or DP&L, as the case may be, at the time of such election or nomination for
election).
3. ENTITLEMENT TO BENEFITS FOLLOWING CHANGE OF CONTROL.
A. Upon a Change of Control (other than a Change of Control consisting only
of the commencement of a tender offer or the entering into of an agreement
referred to in item (ii) or (iii) of paragraph 2 above), if immediately prior
thereto, you were employed by the Company, you shall be entitled to the benefits
set forth in paragraph 5.A.
B. Upon a Change of Control consisting only of the commencement of a tender
offer or the entering into of an agreement referred to in item (ii) or (iii) of
paragraph 2 above, then upon any subsequent termination of your employment at
any time within thirty-six months following the occurrence of any such event and
prior to a Change of Control referred to in item (iv) or (v) or the consummation
of a tender offer referred to in item (i) of paragraph 2 above, you shall be
entitled to the benefits set forth in paragraph 5.B., unless such termination is
(i) by the Company because of your Disability or for Cause;
(ii) by you; or
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<PAGE>
(iii) because of your death.
Notwithstanding the foregoing sentence and any other provision herein to the
contrary, if (a) the event constituting the Change of Control is only the
commencement of a tender offer or the entering into of an agreement referred to
in item (ii) or (iii) of paragraph 2 above, (b) the tender offer or agreement is
abandoned or terminated, and (c) a majority of the Original Directors and/or
their Successors (as defined in paragraph 2 above) of DPL Inc. determine that
the tender offer or agreement will not effectuate or otherwise result in a
subsequent Change of Control and gives you written notice of such determination,
then, as to that particular event only, a subsequent termination of your
employment will not entitle you to the benefits set forth in paragraph 5.
For purposes of this agreement, termination of your employment shall be
deemed to have occurred within thirty-six months following the occurrence of a
Change of Control if a Notice of Termination (as defined in paragraph 4) with
respect thereto is given within such three year period.
C. As used in this agreement, the terms "Disability", "Cause" and
"Entitlement Date" shall have the meaning set forth below:
(i) DISABILITY. "Disability" shall mean, for the purposes of this
agreement, your inability to perform the duties required of you
on a full-time basis for a period of six consecutive months
because of physical or mental illness or other physical or mental
disability or incapacity, followed by the Company giving you
thirty days' written notice of its intention to terminate your
employment by reason thereof, and your failure because of
physical or mental illness or other physical or mental disability
or incapacity to resume the full-time performance of your duties
within such period of thirty days and thereafter perform the same
for a period of two consecutive months.
(ii) CAUSE. "Cause" shall mean (a) commission of a felony, (b)
embezzlement, (c) the illegal use of drugs, or (d) the failure by
you to substantially perform your duties with the Company (other
than any such failure resulting from your physical or mental
illness or other physical or mental incapacity) as determined by
the Board of Directors. Notwithstanding the foregoing, Cause
shall not be deemed to exist unless and until there shall have
been delivered to you a copy of a resolution duly adopted by
written consent of not less than three-fourths of the number of
directors then in office (after reasonable notice to you and an
opportunity for you, together with your counsel, to be heard at a
meeting of the Board of Directors called and held for that
purpose), finding that in the good faith opinion of the Board of
Directors you were guilty of conduct set forth above in clauses
(a), (b), (c) or (d) of the first sentence of this subparagraph
and specifying the particulars thereof in detail.
(iii) ENTITLEMENT DATE. "Entitlement Date" shall mean the date of the
Change of Control entitling you to benefits under paragraph 3.A.
above (except that if you are entitled to benefits under
paragraph 3.B. above, the
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<PAGE>
"Entitlement Date" shall mean the "Date of Termination" as
defined in paragraph 4 below).
4. NOTICE UPON TERMINATION.
A. Any termination of your employment by the Company subsequent to a Change
of Control shall be consummated by written Notice of Termination given to you.
For purposes of this agreement, "Notice of Termination" shall mean a notice
given by the Company, which indicates the specific termination provision or
provisions in this agreement relied upon, if any, and sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
your employment.
B. "Date of Termination" shall mean
(i) if your employment is terminated by the Company for Cause, the
date specified in the Notice of Termination;
(ii) if your employment is terminated for any other reason, the date
of such termination.
5. COMPENSATION FOLLOWING CHANGE OF CONTROL.
A. If you are entitled to benefits under paragraph 3.A., then the Company
shall pay to you in a lump sum in cash not later than the fifteenth day
following the Entitlement Date (or in the case of payments under (ii), if, and
to the extent the amount of such payments are not known or calculable as of such
due date, as soon as the amount is known and calculable), the amounts determined
as provided below:
(i) An amount (the "Additional Compensation Payment") equal to 300%
of the sum of (1) your annual base salary (which base salary is
computed before deduction for any deferred compensation or other
employee deferrals) at the rate in effect as of the Entitlement
Date plus (2) the average of the last three annual award payments
made to you under the Company's Management Incentive Compensation
Plan prior to the Entitlement Date (or for the years you have
participated in the Plan if less than three), including any
portion of any such payments which you elected to defer to your
Standard Deferral Account in the Company's Key Employees Deferred
Compensation Plan. Notwithstanding the above, you may elect to
defer payment of all or a portion of the Additional Compensation
Payment by executing and delivering to the Company prior to
December 31, 2000 a Deferral Election Form in the form attached
as Exhibit A, in which event the portion of the Additional
Compensation Payment so deferred shall be credited to your
Standard Deferral Account in the Company's Key Employees Deferred
Compensation Plan.
(ii) Any amount payable under paragraph 9 hereof.
In addition, upon any subsequent termination of your employment within 12
months after the Entitlement Date, you shall be entitled to the benefits set
forth in items (i) through (iv)
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of paragraph 5.B. unless such termination is under any of the circumstances set
forth in items (i) through (iii) of paragraph 3.B.
B. If you are entitled to benefits under paragraph 3.B., then the Company
shall pay you the amounts specified under paragraph 5.A. above plus the
following:
(i) In the event the Date of Termination precedes the completion of a
period in which, pursuant to the Management Incentive
Compensation Plan or any other Company incentive compensation
plan in which you are then participating or have participated
(except for the MSIP), you could have earned compensation
thereunder had your employment not been terminated prior to the
completion of such period, or in the event the Date of
Termination precedes the determination of compensation that you
have earned for a completed period under the Management Incentive
Compensation Plan or other incentive plan (except for the MSIP),
then, with respect to each such period, you shall be entitled to
an amount equal to the average of the last three annual award
payments made to you under the Management Incentive Compensation
Plan or other incentive plan (except for the MSIP) prior to the
Date of Termination (or for the years you have participated in
the Plan if less than three), including any portion of any such
payments which you elected to defer to your Standard Deferral
Account in the Company's Key Employees Deferred Compensation
Plan. Any amount due under this subparagraph (i) shall be paid in
a lump sum not later than the fifteenth day following the Date of
Termination, subject however to any contrary deferral election
you may have made with respect thereto.
(ii) Anything in the Management Incentive Compensation Plan or any
action taken by the Board of Directors or any committee of the
Board of Directors pursuant thereto to the contrary
notwithstanding, any awards, whether in cash or Company shares,
made under such plan prior to the Date of Termination which have
been credited to your account but the payment of which has been
deferred (except that any deferral election that you have made
with respect thereto shall remain in force).
(iii) The Company shall, at its expense, maintain in full force and
effect for your continued benefit all life insurance, health and
accident, and disability plans, programs and arrangements in
which you were entitled to participate immediately prior to the
Date of Termination, or, if more favorable to you, on the date of
a prior Change of Control, provided that your continued
participation is possible under the terms of such plans, programs
and arrangements. In the event that the terms of any such plan,
program or arrangement do not permit your continued participation
or that any such plan, program or arrangement is discontinued or
the benefits thereunder materially reduced, the Company shall
arrange to provide, at its expense, benefits to you which are
substantially similar to those which you were entitled to receive
under such plan, program or arrangement immediately prior to the
Date of Termination. The Company's obligation
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under this subparagraph (iii) shall terminate on the earliest of
the following dates:
(a) the third anniversary date of the Date of Termination
(except for medical coverage); or
(b) the date an essentially equivalent and no less favorable
benefit is made available to you at no cost by a subsequent
employer.
At the end of the applicable period of coverage set forth above,
you shall have the option to have assigned to you, at no cost and
with no apportionment of prepaid premiums, any assignable
insurance owned by the Company and relating specifically to you.
(iv) In the event that because of their relationship to you, members
of your family or other individuals are covered by a plan,
program, or arrangement described in subparagraph (iii) above
immediately prior to the Date of Termination, the provisions set
forth in the above subparagraph shall apply equally to require
the continued coverage of such persons; provided, however, that
if under the terms of any such plan, program or arrangement, any
such person would have ceased to be eligible for coverage during
the period in which the Company is obligated to continue coverage
for you, nothing set forth herein shall obligate the Company to
continue to provide coverage which would have ceased even if you
had remained an employee of the Company during such period.
C. In the event of termination of your employment for any reason after a
Change of Control, the Company shall enable you to purchase the automobile, if
any, which the Company was providing for your use at the Date of Termination at
the wholesale value of such automobile at such time, or to assume the lease
obligation on any such Company automobile leased by the Company.
D. All Earned Stock Incentive Units (as defined in the Management Stock
Incentive Plan; herein "MSIP") which you earned during the period from the
inception of the MSIP in 1984 through 1991 have accrued to your plan account and
vested in four equal annual installments beginning in 1991. Upon a Change of
Control except for a Change of Control consisting only of the commencement of a
tender offer or the entering into of an agreement referred to in items (ii) or
(iii) of paragraph 2 above, any and all awarded Stock Incentive Units (other
than to the extent related to a completed Incentive Period for which the
determination of the number of Earned Stock Incentive Units has already been
made; and not to exceed the number of Stock Incentive Units comprising the
target award under the applicable Stock Incentive Award regardless of the
potential to earn more than such target award if and as provided in such Stock
Incentive Award), shall be deemed to be Earned Stock Incentive Units which are
vested, and all such Earned Stock Incentive Units including, without limitation,
the 1997 award (which covers the period 1998-2000) and the 1998 award (which
covers the period 1999-2001) shall be payable to you as provided in Section
10(b) (or successor provision) of the MSIP. All capitalized terms in this
paragraph D shall have the same meaning as in the MSIP.
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E. The benefits provided under this agreement shall not be treated as
damages, but rather shall be treated as severance or other compensation to which
you are entitled under the terms and conditions provided herein. You shall not
be required to mitigate the amount of any benefit provided under this agreement
by seeking other employment or otherwise.
6. RIGHTS AS FORMER EMPLOYER.
Nothing contained in this agreement shall be construed as preventing you,
and shall not prevent you, following any termination of your employment whether
pursuant to this agreement or otherwise, from thereafter participating in any
benefit or insurance plans, programs or arrangements (including, without
limitation thereto, any retirement plans or programs) in the same manner and to
the same extent that you, as a former employee of the Company, would have been
entitled to participate had this agreement not have been entered into.
7. SUCCESSORS.
The Company shall require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company, by agreement to expressly and
unconditionally assume and agree to perform this agreement in the same manner
and to the same extent that the Company would be required to perform it if no
such succession had taken place. Failure of the Company to obtain such agreement
prior to the effectiveness of such succession shall be a breach of this
agreement and shall entitle you to compensation from the Company in the same
amount and on the same terms as you would be entitled to under paragraph 3.A.
above as if a Change of Control had taken place, except that for purposes of
implementing the foregoing, the date on which any such succession becomes
effective shall be deemed the Entitlement Date.
The above provisions of this paragraph 7 shall not apply to a) a spin-off
or sale of assets, or b) a transaction described in item (ii) of paragraph 2
above involving only DP&L if in each case DPL continues in existence and its
common shares are listed on a national securities exchange, quoted on the
automated quotation system of a national securities association or traded in the
over-the-counter market.
This agreement shall inure to the benefit of and be enforceable by your
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If you should die while any amounts would
still be payable to you hereunder if you had continued to live, all such
amounts, unless otherwise provided herein, shall be paid to such beneficiary or
beneficiaries as you shall have designated by written notice delivered to the
Company prior to your death or, failing written notice, to your estate.
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8. LEGAL FEES.
The Company shall reimburse you in full for all legal fees and expenses
reasonably incurred by you in connection with this agreement (including, without
limitation, all such fees and expenses, if any, incurred in contesting or
disputing any termination of your employment subsequent to a Change of Control
or in seeking to obtain or enforce any right or benefit provided by this
agreement, regardless of the outcome, unless, in the case of a legal action
brought by you or in your name, a court finally determines that such action was
not brought in good faith by you).
9. GROSS-UP PAYMENT.
In the event that any payment pursuant to this agreement or any other
agreement will be subject to the tax (the "Excise Tax") imposed by Section 4999
of the Internal Revenue Code of 1986 ("Code") or any successor or similar
provision, the Company shall pay you an additional amount (the "Gross-Up
Payment") such that the net amount retained by you after deduction of any Excise
Tax on such payments (excluding payments pursuant to this paragraph 9), and
after deduction for any federal, state and local income tax and Excise Tax upon
the payment provided for by this paragraph, shall be equal to the amount of such
payments (excluding payments pursuant to this paragraph 9) before payment of any
Excise Tax (hereinafter the "Excise Tax Compensation Net Payment"). For purposes
of determining whether any of such payments will be subject to the Excise Tax
and the amount of such Excise Tax, any payments or benefits received or to be
received by you in connection with a Change of Control or your termination of
employment shall be treated as "parachute payments" within the meaning of
Section 280G of the Code, and all "excess parachute payments" within the meaning
of Section 280G of the Code shall be treated as subject to the Excise Tax,
unless in the opinion of tax counsel selected by the Company's independent
auditors and acceptable to you such payments or benefits do not constitute
parachute payments or excess parachute payments. For purposes of determining the
amount of the Gross-Up Payment, you shall be deemed to pay all federal income
taxes at the highest marginal rate of federal income taxation in the calendar
year in which the Gross-Up Payment is to be made and state and local income
taxes at the highest marginal rates of taxation in the state and locality of
your residence on the Entitlement Date, net of the maximum reduction in federal
income taxes which could be obtained from deduction of such state and local
taxes. In the event that the Excise Tax is subsequently determined to be less
than the amount taken into account hereunder at the Entitlement Date, you shall
repay to the Company, at the time that the amount of such reduction in Excise
Tax is finally determined, an amount necessary so that the total payments
hereunder equal the Excise Tax Compensation Net Payment, plus interest on the
amount of such repayment at a rate equivalent to the rate described in Section
280G (d) (4) of the Code. In the event that the Excise Tax is determined to
exceed the amount taken into account hereunder at the Entitlement Date, the
Company shall make an additional Gross-Up Payment in respect of such excess
(plus any interest payable with respect to such excess) at the time that the
amount of such excess is finally determined.
The Gross-Up Payment shall be paid not later than the fifteenth day
following the Entitlement Date, or, if and to the extent such payment is not
known or calculable as of such date, as soon as the amount is known and
calculable.
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10. AGREEMENT TO PROVIDE SERVICES.
In the event that (i) a Person commences a tender offer to become the
beneficial owner, directly or indirectly, of securities of DPL or DP&L
representing fifteen percent (15%) or more of the combined voting power of the
then outstanding securities of DPL or DP&L, as the case may be, or (ii) a Change
of Control occurs consisting of the entering into of an agreement referred to in
item (ii) or (iii) of paragraph 2 above, you agree that you will perform
services for the Company and that you will not voluntarily terminate your
employment with the Company until the first to occur of the following:
(i) the abandonment or termination of such tender offer or the transaction
that is the subject of the agreement; or
(ii) the occurrence of a Change of Control (other than the commencement of
the tender offer or the entering into of an agreement referred to in
item (ii) or (iii) of paragraph 2 above).
11. FUNDING OF MASTER TRUST.
Upon a Change of Control, the Company shall immediately transfer to the
Amended and Restated Master Trust dated February 1, 1995, as amended (or to an
Other Trust as defined in such Trust) previously established to secure the
Company's obligations to participants under various Company deferred and
incentive compensation plans, cash in an amount sufficient to fund all payments
which would be made to you hereunder if your employment was terminated on the
date of the Change of Control under circumstances in which payments under
paragraph 5.B. hereof would become due and payable to you, including, without
limitation, cash in an amount sufficient to fund payments of all future medical,
life insurance, accident and disability plans as provided in paragraphs 1.A(i),
5.B. (iii) and (iv) hereof, and the Gross-Up Payment as defined in paragraph 9
above, in each case based on reasonable estimates.
12. NOTICES.
All notices required or permitted to be given under this agreement shall be
in writing and shall be mailed (postage prepaid by either registered or
certified mail) or delivered, if to the Company, addressed to
(a) Prior to a Change of Control, to the Corporate Secretary of the Company
at:
The Dayton Power and Light Company
MacGregor Park
1065 Woodman Drive
Dayton, Ohio 45432
Attention: Corporate Secretary
(b) After a Change of Control, to the Trustees at:
Trust Department
Bank One, Dayton, National Association
Kettering Tower
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Dayton, Ohio 45401
and
Chernesky, Heyman & Kress P.L.L.
Suite 1100
10 Courthouse Plaza, S.W.
Dayton, Ohio 45402
Attn: Richard J. Chernesky, Esq.
Richard A. Broock, Esq.
Frederick J. Caspar, Esq.
and if to you, addressed to
[Name:_____________________________________]
[Home Address:_____________________________]
[__________________________________________]
Any party may change the address to which notices to such party are to be
directed by giving written notice of such change to the other parties in the
manner specified in this paragraph.
13. MISCELLANEOUS.
No provision of this agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in writing, signed by you
and such officer of the Company as may be specifically designated by the Board
of Directors. No waiver by any party hereto at any time of any breach by any
other party hereto of, or of compliance by such other party with, any condition
or provision of this agreement to be performed by such other party shall be
deemed a waiver of similar or dissimilar provisions or conditions at the same or
at any prior or subsequent time. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof have
been made by either party which are not set forth expressly in this agreement.
14. GOVERNING LAW.
The validity, interpretation, construction and performance of this
agreement shall be governed by the laws of the State of Ohio, without giving
effect to the principles of conflicts of law thereof.
15. VALIDITY.
The provisions of this agreement are divisible; if any provision of this
agreement is ruled invalid or unenforceable by any court, such invalidity or
enforceability, shall not affect the validity or enforceability of any other
provision, which shall remain in full force and effect; and such provision shall
be modified by such court consistent with the intent of the parties to the
extent necessary to render it valid and enforceable, if possible.
16. NO RIGHT TO EMPLOYMENT.
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Nothing in this agreement shall confer upon you the right to continue
employment with the Company, or obligate you to continue employment with the
Company (except as provided in paragraph 10); nor shall it interfere with the
rights of the Company to discharge you or take other action with respect to you,
subject to the Company's providing the benefits specified herein in accordance
with the terms hereof.
If this letter correctly sets forth our agreement on the subject matter
hereof, please so confirm by signing and returning the enclosed copy.
Very truly yours,
DPL INC.
By: ___________________________________
Its: ___________________________________
THE DAYTON POWER AND LIGHT COMPANY
By: ___________________________________
Its: ___________________________________
Confirmed and agreed to:
________________________________
Date: _________________________
113
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.(F)
<SEQUENCE>8
<FILENAME>a2043323zex-10_f.txt
<DESCRIPTION>EXHIBIT 10(F)
<TEXT>
<PAGE>
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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<PAGE>
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.
121
<PAGE>
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.
122
<PAGE>
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.
123
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-13
<SEQUENCE>9
<FILENAME>a2043323zex-13.txt
<DESCRIPTION>EXHIBIT 13
<TEXT>
<PAGE>
EXHIBIT 13
FINANCIAL & OPERATING HIGHLIGHTS
<TABLE>
<CAPTION>
2000 1999 % change
---- ---- --------
<S> <C> <C> <C>
Financial Performance:
Earnings per share of common stock
before non-recurring and extraordinary items
Basic $ 1.56 1.35 16
Diluted $ 1.50 1.35 11
Cash provided by operating activities (millions) $ 214.7 397.2 (46)
Market value per share at December 31 $ 33.19 17.31 92
Financial assets (millions) $ 1,308.0 1,094.4 20
Investment income (millions) $ 88.8 50.8 75
Unrealized gains before tax (millions) $ 165.4 168.9 (2)
Return on shareholders' equity (Basic) % 20.8 14.7
Return on total capital (Basic) % 13.5 11.8
Dividends paid per share $ 0.94 0.94 --
Book value per share at December 31 $ 7.43 9.65 (23)
Total electric and natural gas utility
revenues (millions) $ 1,273.5 1,271.0 --
Taxes per share $ 2.24 1.75 28
Average number of common shares
outstanding (millions)
Basic 127.7 151.4 (16)
Diluted 132.9 151.4 (12)
Operating Performance:
Construction additions (millions) $ 343.9 166.5 107
Construction expenditures paid from internal
funds % 62 100
Electric --
Average price per kWh-retail and wholesale
customers (calendar year) (cent) 6.25 6.19 1
Fuel efficiency --
Heat rate-- Btu per kWh 9,918 9,969 (1)
Industry average 10,242 10,316 (1)
System peak load- MW (calendar year) 2,866 3,130 (8)
</TABLE>
124
<PAGE>
OVERVIEW
DPL Inc. reported record earnings per share for 2000 of $1.56 per share before
non-recurring and extraordinary items, an increase of 16% over 1999 earnings per
share of $1.35. This growth came primarily from increased wholesale sales and
sales of capacity from DPL Inc.'s merchant peaking generation capacity that was
added in the summer of 2000 and increased earnings from the financial asset
portfolio. 1999 earnings per share increased 9% over 1998 earnings per share of
$1.24 due to strong cost control efforts and increased earnings from the
financial asset portfolio.
Several events occurred in 2000 for DPL Inc. as it prepared for the deregulation
of the energy markets. In the first quarter, DPL Inc. completed its leveraged
recapitalization and realigned its compensation programs more fully with
shareholders' interests. In the third quarter, DP&L received an order from the
Public Utilities Commission of Ohio ("PUCO") approving its deregulation
transition plan, which resulted in the elimination of regulatory accounting for
the generation business. In the fourth quarter, DPL Inc. completed the sale of
its natural gas retail distribution operations. Each of these non-recurring
events affected 2000 financial results as outlined below:
<TABLE>
<CAPTION>
2000 1999 1998
-------------- --------------- -----------------
<S> <C> <C> <C>
Earnings per Share -- Basic, after non-recurring and
extraordinary items $1.91 $1.35 $1.24
Recapitalization 0.26
Compensation program 0.02
Deregulation order 0.32
Gas operations -- gain on sale (0.95)
-------------- --------------- -----------------
Earnings per Share -- Basic, before non-recurring and extraordinary
items $1.56 $1.35 $1.24
</TABLE>
INCOME STATEMENT HIGHLIGHTS
<TABLE>
<CAPTION>
$ in millions 2000 1999 1998
- --------------------------------------------------------------------- -------------- --------------- -----------------
<S> <C> <C> <C>
ELECTRIC:
Revenues (a) $1,108.0 $1,056.0 $1,070.7
Fuel and purchased power 268.2 263.2 257.0
-------------- --------------- -----------------
Net revenues 839.8 792.8 813.7
GAS UTILITY (b):
Revenues 183.8 215.0 211.2
Gas purchased for resale (c) 116.9 129.9 127.8
-------------- --------------- -----------------
Net revenues 66.9 85.1 83.4
Other revenues, net 13.9 13.6 11.7
</TABLE>
(a) INCLUDES ELECTRIC PEAKING GENERATION CAPACITY SALES.
(b) THE NATURAL GAS RETAIL DISTRIBUTION OPERATIONS WERE SOLD IN OCTOBER 2000.
(c) EXCLUDES GAS PURCHASES BY A NON-UTILITY SUBSIDIARY OF $131.2, $54.3, AND
$58.6 MILLION IN 2000, 1999, AND 1998, RESPECTIVELY.
125
<PAGE>
In 2000, net electric revenues increased $47.0 million or 6% due to higher
wholesale and retail sales, and the addition of capacity sales from the merchant
peaking generation capacity. Wholesale revenues increased due to increased
volume and higher average prices. Colder than normal temperatures in the fourth
quarter contributed to the increased retail sales despite unusually mild
temperatures throughout the summer. The effect of these increased sales on fuel
and purchased power costs were offset by lower fuel expense used in generation
(cents per net kilowatt-hour generated decreased 6%). In 1999, net electric
revenues decreased 3% due to lower wholesale sales and increased purchased power
costs.
Net gas utility revenues decreased $18.2 million or 21% in 2000 compared to 1999
due to the sale of the natural gas retail distribution operations, which was
completed on October 31, 2000. Net gas utility revenues increased 2% in 1999 due
to higher sales to business customers.
Other revenues, net which primarily consist of revenues from DPL Inc.'s natural
gas supply management subsidiary, were essentially flat in 2000. The 16%
increase in 1999 was primarily due to lower gas costs.
Operation and maintenance expense increased 3% in 2000 as a result of higher
costs for insurance, claims, uncollectibles, power production and a loss from
natural gas supply management contracts. These increases were partially offset
by lower benefits costs and gas retail distribution system expense. Operation
and maintenance expense decreased 18% in 1999 due to lower costs for insurance,
claims, labor, benefits, and line clearance. Year to year variances in insurance
and claims costs result primarily from adjustments to actuarially-determined
reserve requirements for risks insured through a wholly-owned captive insurance
company.
Depreciation and amortization expense decreased 1% in 2000 as a result of the
sale of the natural gas retail distribution operations, partially offset by the
effect of increased electric production assets. Depreciation and amortization
expense increased 7% in 1999 primarily as a result of increased depreciable
assets.
Investment income increased 75% in 2000 and more than doubled in 1999 as a
result of increased realized gains.
Interest expense increased 27% in 2000 primarily due to increased long-term debt
and higher long-term debt interest rates. Interest expense increased 20% in 1999
primarily due to increased long-term debt.
Other income (deductions) in 2000 includes the $182.5 million gain on the sale
of the natural gas retail distribution operations, partially offset by the
elimination of certain compensation programs, property donations, stock
compensation expense and investment management fees. Pursuant to deregulation
legislation enacted in Ohio and the Order issued in September 2000 by the PUCO,
DP&L discontinued the use of its regulatory accounting model for its generation
operations. As a result, a $63.7 million before tax benefits ($41.4 million net
of taxes) reduction of generation-related regulatory assets was recorded in the
third quarter of 2000 as an extraordinary item in accordance with FASB Statement
of Accounting Standards No. 101, "Regulated Enterprises-Accounting for the
Discontinuation of Application of FASB Statement No. 71." (See Note 4 to the
Consolidated Financial Statements.)
126
<PAGE>
CONSTRUCTION PROGRAM AND FINANCING
Construction additions were $344 million in 2000. The capital program for 2001
consists of construction costs of approximately $397 million. The major
components of the capital program include the development of natural gas-fired
combustion turbine generation peaking units at $223 million and environmental
compliance at $64 million. The first phase of the peaking capacity expansion was
completed in December 1998, with DP&L investing $75 million in three units
adding 250 megawatts ("MW") of capacity. Phase Two was completed in June 2000
and added four units totaling 224 MW of capacity at an investment of $80
million. Phases Three and Four include four units totaling 320 MW at an
investment of $110 million and are expected to be online during the second half
of 2001. Phase Five, which was announced in January 2001, includes four units
totaling 224 MW at an investment of $80 million and is expected to be online for
the summer of 2001. Under its merchant generation expansion program, DPL Inc.
plans to have a total of approximately 5,000 MW of generation capacity online by
the summer of 2003.
During 2000, total cash provided by operating activities was $215 million. At
year-end, cash and temporary cash investments were $137 million. Financial
assets, a highly diversified portfolio of public and private debt and equity
securities, were $1,308 million at December 31, 2000. Publicly traded securities
comprise approximately 20% of the financial assets. This portfolio is broadly
diversified, both in industry and geographic coverage, and is available to be
invested in the energy sector when that market has favorable investment
conditions.
In February 2000, DPL Inc. entered into a series of recapitalization
transactions including the issuance of $550 million of a combination of voting
preferred and trust preferred securities and warrants to an affiliate of
investment company Kohlberg Kravis Roberts & Co. ("KKR"). The trust preferred
securities sold to KKR have an aggregate face amount of $550 million, were
issued at an initial discounted aggregate price of $500 million, have a maturity
of 30 years (subject to acceleration to six months after the exercise of the
warrants) and pay distributions at a rate of 8.5% of the aggregate face amount
per year. The 6.8 million shares of mandatorily redeemable voting preferred
securities, par value of $0.01 per share, were issued at an aggregate purchase
price of $68,000 and carry voting rights for up to 4.9% of DPL Inc.'s total
voting rights and the nomination of one Board seat. The 31.6 million warrants,
representing approximately 25% of DPL Inc.'s shares currently outstanding, have
a term of 12 years, an exercise price of $21 per share and were sold for an
aggregate purchase price of $50 million. DPL Inc. recognized the entire trust
preferred securities original issue discount of $50 million in 2000.
The proceeds from this recapitalization, combined with the March 2000 issuance
of $425 million of 8.25% Senior Notes due 2007, were used to finance the
regional merchant generation expansion, repurchase 30.0 million shares of DPL
Inc.'s common shares, and reduce outstanding short-term debt.
In March 2000, DPL Inc. purchased, through a tender offer, 25 million common
shares at a price of $23 per share. An additional 5.0 million shares have been
repurchased at a cost of $121.4 million under an authorized share repurchase
program of up to 6.6 million shares. In 1999, DPL Inc. purchased 3.5 million
shares at a cost of $61 million.
127
<PAGE>
Issuance of additional amounts of first mortgage bonds by DP&L is limited by
provisions of its mortgage. The amounts and timing of future financings will
depend upon market and other conditions, rate increases, levels of sales and
construction plans. DP&L currently has sufficient capacity to issue first
mortgage bonds to satisfy its requirements in connection with the financing of
its construction and refinancing programs during the five-year period 2001-2005.
At year-end 2000, DPL Inc.'s and DP&L's senior debt credit ratings were as
follows:
DPL INC. DP&L
<TABLE>
<CAPTION>
-------- ----
<S> <C> <C>
Fitch A- AA
Standard & Poor's Corp. BBB BBB+
Moody's Investors Service Baa1 A2
</TABLE>
The credit ratings for DPL Inc. and DP&L are investment grade. As a result of
DPL Inc.'s December 2000 press release regarding its exploration of strategic
alternatives (see Issues and Financial Risks - Other Matters), Standard & Poor's
placed DPL Inc. and DP&L on credit watch with developing implications in January
2001. Developing implications indicate that ratings could be raised, lowered, or
affirmed. Also in January, Moody's placed the ratings of DPL Inc. and its
affiliates under review. The direction of the review is uncertain at this time,
and will be refined as additional information becomes available.
MARKET RISK
The carrying value of DPL Inc.'s debt was $1,766 million at December 31, 2000,
consisting of DP&L's first mortgage bonds, guaranteed air quality development
obligations, and notes. The fair value of this debt was $1,795 million, based on
current market prices or discounted cash flows using current rates for similar
issues with similar terms and remaining maturities. The following table presents
the principal cash repayments and related weighted average interest rates by
maturity date for long-term, fixed-rate debt at December 31, 2000.
<TABLE>
<CAPTION>
Long-term Debt
-------------------------------
Expected Maturity Amount
Date ($ in millions) Average Rate
- ------------------------------- ---------------- -------------
<S> <C> <C> <C>
2001 $ 7 7.8%
2002 8 7.8%
2003 9 7.8%
2004 511 6.7%
2005 13 7.8%
Thereafter 1,218 7.6%
-----
Total $1,766 7.4%
=====
Fair Value $1,795
</TABLE>
At December 31, 2000, DPL Inc. had no short-term debt outstanding, and
therefore, no exposure to short-term interest rate risk.
128
<PAGE>
The fair value of available-for-sale securities was $1,337 million at December
31, 2000. The equity price risk related to these securities was estimated as the
potential increase/decrease in fair value of $134 million at December 31, 2000,
resulting from a hypothetical 10% increase/decrease in the value of the
underlying securities.
ISSUES AND FINANCIAL RISKS
This report contains certain forward-looking statements regarding plans and
expectations for the future. Investors are cautioned that actual outcomes and
results may vary materially from those projected due to various factors beyond
DPL Inc.'s control, including abnormal weather, unusual maintenance or repair
requirements, changes in fuel costs, increased competition, regulatory changes
and decisions, changes in accounting rules and adverse economic conditions.
ELECTRIC RESTRUCTURING LEGISLATION
In October 1999, legislation became effective in Ohio that gave electric utility
customers a choice of energy providers starting January 1, 2001. Under the
legislation, electric generation, aggregation, power marketing and power
brokerage services supplied to retail customers in Ohio are deemed competitive
and are not subject to supervision and regulation by the PUCO. As required by
the legislation, DP&L filed its transition plan at the PUCO on December 20,
1999. DP&L received PUCO approval of its plan on September 21, 2000.
The transition plan provides for a three year transition period, which began on
January 1, 2001 and ends on December 31, 2003, at which time DP&L's generation
assets will be fully merchant. The plan also provides for a 5% residential rate
reduction on the generation component of the rates, which reduces revenue by
approximately $13-14 million per year; rate certainty for the three year period
for customers that continue to purchase power from DP&L; guaranteed rates for a
six year period for transmission and delivery services; and recovery of
transition costs of approximately $600 million. Under the plan, DPL Inc. has the
organizational and financial flexibility to continue its corporate realignment
initiatives without regulatory restrictions.
In 1996 and 1997, the Federal Energy Regulatory Commission ("FERC") issued
orders requiring all electric utilities to file open-access transmission service
tariffs. DP&L's resulting tariff case proceedings with FERC staff and
intervenors in 1997 and 1998 culminated in 1999 with the FERC issuing an Order
approving DP&L's settlement with no material adverse effect to DP&L. On October
16, 2000 DP&L filed with the FERC to join the Alliance Regional Transmission
Organization. DP&L expects to transfer operational control of its transmission
assets to the Alliance when it is complete.
BUSINESS UNIT EVALUATION
Responding to the new Ohio Legislation, DP&L is functionally separating its
various business units and is evaluating each unit on a stand-alone basis.
Business units not complementing DPL Inc.'s going-forward strategy may be
divested.
129
<PAGE>
In October 2000, DP&L completed the sale of its natural gas retail distribution
assets and certain liabilities for $468 million in cash. The transaction was
valued pursuant to an arms-length negotiation and resulted in a pre-tax gain of
$183 million ($121 million net of tax), which is reflected in "other income
(deductions)" on the Consolidated Statement of Results of Operations. Proceeds
from the sale were used to finance the regional merchant generation expansion
and reduce outstanding short-term debt.
ENVIRONMENTAL
In November 1999, the United States Environmental Protection Agency ("US EPA")
filed civil complaints and Notices of Violations ("NOV's") against operators and
owners of certain generation facilities for alleged violations of the Clean Air
Act ("CAA"). Generation units operated by partners Cincinnati Gas & Electric
Company (Beckjord 6) and Columbus Southern Power Company (Conesville 4) and
co-owned by DP&L were referenced in these actions. Numerous northeast states
have filed complaints or have indicated that they will be joining the US EPA's
action against the partners. DP&L was not identified in the NOV's, civil
complaints or state actions. In December 2000, Cincinnati Gas & Electric Company
announced that it had reached an Agreement in Principle with the US EPA and
other plaintiffs in an effort to settle the claims. Discussions on the final
terms of the settlement are ongoing. Therefore, it is not possible to determine
the outcome of these claims or the impact, if any, on DP&L. In June 2000, the US
EPA issued a NOV to J.M. Stuart Station (co-owned by DP&L, Cincinnati Gas &
Electric Company, and Columbus Southern Power Company) for alleged violations of
the CAA. The NOV contained allegations consistent with NOV's and complaints that
the US EPA has recently brought against numerous other coal-fired utilities in
the Midwest. DP&L will vigorously challenge the NOV. At this time, it is not
possible to determine the outcome of these claims or the impact, if any, on
DP&L.
The United States and Ohio EPA's have notified numerous parties, including DP&L,
that they are considered Potentially Responsible Parties ("PRP's") for clean up
of two hazardous waste sites in Ohio. The US EPA has estimated total costs of
under $10 million for its preferred clean-up plans at one of these sites. DP&L's
settlements with the US EPA and the PRP group are pending for the site. The Ohio
EPA has not provided an estimated cost for the second site. In October 2000, the
PRP group at the second site brought an action against DP&L and numerous other
parties to recover a portion of the clean-up costs. DP&L will vigorously
challenge this action. During 1998, DP&L settled its potential liability for two
other sites at a minimal cost. The final resolution of the remaining
investigations is not expected to have a material effect on DP&L's financial
position, earnings or cash flow.
In September 1998, the US EPA issued a final rule requiring states to modify
their State Implementation Plans ("SIP's") under the CAA. The modified SIP's are
likely to result in further Nitrogen Oxide ("NOx") reduction requirements placed
on coal-fired generating units by 2003. In order to meet these NOx requirements,
DP&L's total capital expenditures are estimated to be approximately $175 million
over the next three years. Industry groups and others appealed the rules in the
United States District Court. The requirement for states to submit revised
implementation plans has been stayed until the outcome of the litigation. In
March 2000, the United States District Court upheld the rule. Industry groups
and others have appealed this decision. As a result of the litigation, the Court
extended the compliance date of the rules an additional year, until May 31,
2004. In December 1999, the US EPA issued final rules granting various CAA
Section 126 petitions filed by northeast states. DP&L's facilities were
identified, among many others, in the rulemaking. DP&L's current NOx reduction
strategy to meet the SIP call is expected to satisfy the rulemaking reduction
requirements.
On December 14, 2000, the US EPA issued a determination that coal- and oil-fired
electric generating units should be regulated for emissions of mercury and
hazardous air pollutants. The US EPA will issue proposed rules by December 2003
and final rules by December 2004. The impact of the regulatory determination
cannot be determined at this time.
OTHER MATTERS
On December 29, 2000, DPL Inc. announced that it had retained the investment
banking firm of Morgan Stanley & Co. Incorporated to explore a range of
strategic options to maximize shareholder value, including the possible sale of
all or part of the company. On February 15, 2001, DPL Inc. announced that with
the current volatile electric market environment and renewed emphasis on
generation capacity and reliability, DPL Inc. would pursue its growth strategy
as an independent company based on its merchant generation expansion plan. DPL
Inc. will continue to monitor the market for the strategic deployment and/or
purchase of assets that provide the most value to shareholders.
130
<PAGE>
On January 1, 2001, DPL Inc. adopted the provisions of FASB Statement No. 133,
"Accounting for Derivative Instruments and Hedging Activities," as amended
("SFAS No. 133"). The impact of adopting SFAS No. 133 was not material to DPL
Inc.'s financial position or results of operations. The FASB's Derivative
Implementation Group is currently evaluating the application of SFAS No. 133 to
certain electricity contracts. On January 1, 2001, DPL Inc. was party to such
contracts of which the fair value on that date was not material. Conclusions
ultimately reached by the FASB could, however, result in future earnings
volatility which may be material.
131
<PAGE>
Consolidated Statement of Results of Operations DPL Inc.
<TABLE>
<CAPTION>
For the years ended December 31,
$ in millions except per share amounts 2000 1999 1998
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
REVENUES
Utility service revenues --
Electric $ 1,089.7 $ 1,056.0 $ 1,070.7
Gas (Note 3) 183.8 215.0 211.2
Other revenues 163.4 67.9 70.3
--------- --------- ---------
Total revenues 1,436.9 1,338.9 1,352.2
--------- --------- ---------
EXPENSES
Fuel and purchased power 268.2 263.2 257.0
Gas purchased for resale (Note 3) 248.1 184.2 186.4
Operation and maintenance 194.8 188.4 229.8
Depreciation and amortization (Note 1) 135.6 136.5 127.1
Amortization of regulatory assets, net (Note 4) 16.3 24.9 33.4
General taxes 129.2 136.6 136.5
--------- --------- ---------
Total expenses 992.2 933.8 970.2
--------- --------- ---------
OPERATING INCOME 444.7 405.1 382.0
Investment income 88.8 50.8 21.3
Interest expense (140.3) (110.5) (92.4)
Other income (deductions) (Note 3) 135.6 (13.2) (1.4)
Trust preferred distributions by subsidiary (Note 8) (87.3) -- --
--------- --------- ---------
INCOME BEFORE INCOME TAXES AND EXTRAORDINARY ITEM 441.5 332.2 309.5
Income taxes (Notes 1 and 5) 156.6 128.0 120.4
--------- --------- ---------
INCOME BEFORE EXTRAORDINARY ITEM 284.9 204.2 189.1
Extraordinary item, net of tax (Note 4) (41.4) -- --
--------- --------- ---------
NET INCOME $ 243.5 $ 204.2 $ 189.1
========= ========= =========
Average Number of Common Shares
Outstanding (millions)
Basic 127.7 151.4 152.8
Diluted 132.9 151.4 152.8
Earnings Per Share of Common Stock -- Basic
Income before extraordinary item $ 2.23 $ 1.35 $ 1.24
Extraordinary item (0.32) -- --
--------- --------- ---------
Net income $ 1.91 $ 1.35 $ 1.24
========= ========= =========
Earnings Per Share of Common Stock -- Diluted
Income before extraordinary item $ 2.14 $ 1.35 $ 1.24
Extraordinary item (0.31) -- --
--------- --------- ---------
Net income $ 1.83 $ 1.35 $ 1.24
========= ========= =========
Dividends Paid Per Share of Common Stock $ 0.94 $ 0.94 $ 0.94
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
132
<PAGE>
CONSOLIDATED STATEMENT OF CASH FLOWS DPL INC.
<TABLE>
<CAPTION>
For the years ended December 31,
$ in millions 2000 1999 1998
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Cash received from utility customers $1,295.3 $1,277.8 $1,255.7
Other operating cash receipts 188.1 98.3 88.3
Cash paid for:
Fuel and purchased power (252.3) (263.8) (266.5)
Purchased gas (Note 3) (287.6) (190.1) (197.2)
Operation and maintenance labor (83.8) (75.1) (85.4)
Nonlabor operating expenditures (196.0) (106.5) (136.5)
Interest (160.1) (97.4) (89.6)
Income taxes (149.0) (109.0) (135.5)
General taxes (139.9) (137.0) (131.3)
-------- -------- --------
Net cash provided by operating activities (Note 14) 214.7 397.2 302.0
-------- -------- --------
INVESTING ACTIVITIES
Capital expenditures (329.3) (170.6) (106.7)
Purchases of available-for-sale financial assets (344.6) (479.8) (359.5)
Sales of available-for-sale financial assets 188.5 200.3 101.4
Proceeds from sale of natural gas retail distribution operations 468.2 -- --
-------- -------- --------
Net cash used for investing activities (17.2) (450.1) (364.8)
-------- -------- --------
FINANCING ACTIVITIES
Issuance of long-term debt 421.0 497.4 98.5
Issuance (retirement) of short-term debt, net (294.1) 99.2 79.2
Retirement of long-term debt (5.4) (241.6) (3.4)
Dividends paid on common stock (121.3) (142.5) (143.6)
Purchase of treasury stock (698.9) (61.4) --
Issuance of common stock -- -- 19.7
Issuance of trust preferred securities by subsidiary 478.8 -- --
Issuance of warrants 47.6 -- --
-------- -------- --------
Net cash provided by (used for) financing activities (172.3) 151.1 50.4
-------- -------- --------
CASH AND TEMPORARY CASH INVESTMENTS --
Net change 25.2 98.2 (12.4)
Balance at beginning of year 111.9 13.7 26.1
-------- -------- --------
Balance at end of year $ 137.1 $ 111.9 $ 13.7
======== ======== ========
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
133
<PAGE>
Consolidated Balance Sheet DPL Inc.
<TABLE>
<CAPTION>
At December 31,
$ in millions 2000 1999
- ---------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
PROPERTY
Electric property $3,522.6 $3,438.6
Gas property (Note 3) -- 332.9
Other property 330.8 128.8
-------- --------
Total property 3,853.4 3,900.3
Accumulated depreciation and amortization (1,586.4) (1,633.5)
-------- --------
Net property 2,267.0 2,266.8
-------- --------
CURRENT ASSETS
Cash and temporary cash investments 137.1 111.9
Accounts receivable, less provision for uncollectible accounts
of $6.8 and $4.3, respectively 241.6 218.1
Inventories, at average cost 46.0 93.1
Prepaid taxes 65.4 94.6
Other 45.5 71.7
-------- --------
Total current assets 535.6 589.4
-------- --------
OTHER ASSETS
Financial assets . 1,308.0 1,094.4
Income taxes recoverable through future revenues (Notes 1 and 4) 19.8 168.5
Other regulatory assets (Note 4) 146.4 53.3
Other 159.2 168.0
-------- --------
Total other assets 1,633.4 1,484.2
-------- --------
TOTAL ASSETS $4,436.0 $4,340.4
======== ========
CAPITALIZATION AND LIABILITIES
CAPITALIZATION
Common shareholders' equity (Note 7)
Common stock $ 1.3 $ 1.6
Other paid-in capital, net of treasury stock 19.5 739.0
Warrants 50.0 --
Common stock held by employee plans (100.0) (90.7)
Accumulated other comprehensive income 107.5 109.8
Earnings reinvested in the business 814.1 691.9
-------- --------
Total common shareholders' equity 892.4 1,451.6
Preferred stock (Note 8) 22.9 22.9
Preferred stock subject to mandatory redemption (Note 8) 0.1 --
Company obligated mandatorily redeemable trust preferred
securities of subsidiary holding 550.0 --
solely parent debentures (Note 8)
Long-term debt (Note 9) 1,758.5 1,336.6
-------- --------
Total capitalization 3,223.9 2,811.1
-------- --------
CURRENT LIABILITIES
Short-term debt (Note 10) -- 294.1
Accounts payable 140.2 130.4
Accrued taxes 223.6 170.6
Accrued interest 42.4 33.1
Other 22.9 66.6
-------- --------
Total current liabilities 429.1 694.8
-------- --------
DEFERRED CREDITS AND OTHER
Deferred taxes (Note 5) 414.8 471.9
Unamortized investment tax credit 60.3 66.4
Insurance and claims costs 130.9 140.0
Other 177.0 156.2
-------- --------
Total deferred credits and other 783.0 834.5
-------- --------
TOTAL CAPITALIZATION AND LIABILITIES $4,436.0 $4,340.4
======== ========
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
134
<PAGE>
Consolidated Statement of Shareholders' Equity DPL Inc.
<TABLE>
<CAPTION>
Common
Common Stock (a) Stock Accumulated Earnings
--------------------- Other Held by Other Reinvested
Outstanding Paid-in Employee Comprehensive in the
$ in millions Shares Amount Capital Warrants Plans Income Business Total
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1998:
Beginning balance 160,202,949 $1.6 $777.3 $-- $(98.0) $19.9 $585.2 $1,286.0
Comprehensive income:
Net income 189.1
Unrealized gains on
financial assets,
net of reclassification 27.3
adjustments, after tax (b)
Total comprehensive income 216.4
Common stock dividends (143.6) (143.6)
Dividend reinvestment plan 1,070,430 19.8 19.8
Employee stock plans 1.9 3.6 5.5
Other (8,775) (0.4) (0.4)
----------- ---- ----- ---- ----- ----- ------- -------
Ending balance 161,264,604 1.6 799.0 -- (94.4) 47.2 630.3 1,383.7
1999:
Comprehensive income:
Net income 204.2
Unrealized gains on
financial assets,
net of reclassification 62.6
adjustments, after tax (b)
Total comprehensive income 266.8
Common stock dividends (142.5) (142.5)
Treasury stock (c) (3,463,200) (61.4) (61.4)
Employee stock plans 1.3 3.7 5.0
Other 0.1 (0.1) --
----------- ---- ----- ---- ----- ----- ------- -------
Ending balance 157,801,404 1.6 739.0 -- (90.7) 109.8 691.9 1,451.6
2000:
Comprehensive income:
Net income 243.5
Unrealized losses on
financial assets,
net of
reclassification (2.3)
adjustments, after tax (b)
Total comprehensive income 241.2
Common stock dividends (121.3) (121.3)
Issuance of securities (23.6) 50.0 26.4
Treasury stock (c) (30,027,000) (0.3) (698.6) (698.9)
Employee stock plans 2.6 (9.3) (6.7)
Other 0.1 0.1
----------- ---- ----- ----- -------- ------ ------ ------
Ending balance 127,774,404 $1.3 $19.5 $50.0 $(100.0) $107.5 $814.1 $892.4
=========== ==== ===== ===== ======== ====== ====== ======
</TABLE>
(a) $0.01 PAR VALUE, 250,000,000 SHARES AUTHORIZED.
(b) NET OF TAXES OF $14.7, $33.7, AND $(1.2) MILLION IN 1998, 1999 AND 2000,
RESPECTIVELY.
(c) TREASURY STOCK IS RECORDED AT COST WITH THE EXCESS OVER PAR VALUE SHOWN AS
A REDUCTION TO OTHER PAID-IN CAPITAL. THE TOTAL SHARES HELD IN TREASURY AT
DECEMBER 31, 2000 WERE 35,949,807.
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
135
<PAGE>
Notes to Consolidated Financial Statements DPL Inc.
- --------------------------------------------------------------------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounts of DPL Inc. and its wholly-owned subsidiaries are included in the
accompanying consolidated financial statements. The Dayton Power and Light
Company ("DP&L") is the principal subsidiary. These statements are presented in
accordance with accounting principles generally accepted in the United States,
which require management to make estimates and assumptions related to future
events. Reclassifications have been made in certain prior years' amounts to
conform to the current reporting presentation.
REVENUES AND FUEL
Revenues include amounts charged to customers through fuel and gas recovery
clauses, which were adjusted periodically for changes in such costs. Related
costs that were recoverable or refundable in future periods were deferred along
with the related income tax effects. As of February 2000, DP&L's Electric Fuel
Component ("EFC") was fixed at 1.30(cent) per kilowatt-hour through the end of
the year and the deferral of over/under-recovered fuel costs was no longer
permitted. All remaining deferred fuel balances were amortized to expense in
2000. All gas deferred amounts were included in the sale of the natural gas
retail distribution operations (see Note 3). Beginning January 1, 2001, the EFC
rate of 1.30(cent) will become part of the base generation rate. Also included
in revenues are amounts charged to customers through a surcharge for recovery of
arrearages from certain eligible low-income households.
DP&L records revenue for services provided but not yet billed to more closely
match revenues with expenses. Accounts receivable on the Consolidated Balance
Sheet includes unbilled revenue of $53.5 million in 2000 and $76.2 million in
1999.
Other revenues include sales by DPL Inc.'s natural gas supply management
subsidiary. These revenues are recorded in the period when the gas is delivered.
Effective with the year 2000, other revenues also include sales by DPL Inc.'s
wholesale merchant energy subsidiary.
PROPERTY, MAINTENANCE AND DEPRECIATION
Property is shown at its original cost. Cost includes direct labor and material
and allocable overhead costs.
For the majority of the depreciable property, when a unit of property is
retired, the original cost of that property plus the cost of removal less any
salvage value is charged to accumulated depreciation.
Depreciation expense is calculated using the straight-line method, which
depreciates the cost of property over its estimated useful life, at an average
rate of 3.5%.
136
<PAGE>
DPL Inc. and its subsidiaries lease office equipment and office space under
operating leases with varying terms. Future minimum rental payments under these
operating leases at December 31, 2000 are not material.
REPAIRS AND MAINTENANCE
Costs associated with all planned major work and maintenance activities,
primarily power plant outages, are recognized at the time the work is performed.
Outage costs include labor, materials and supplies and outside services required
to maintain DPL Inc. and DP&L equipment and facilities. These costs are either
capitalized or expensed based on DPL Inc. and DP&L defined criteria identifying
specific units of property to be capitalized.
INCOME TAXES
Deferred income taxes are provided for all temporary differences between the
financial statement basis and the tax basis of assets and liabilities using the
enacted tax rate. For rate-regulated business units, additional deferred income
taxes and offsetting regulatory assets or liabilities are recorded to recognize
that the income taxes will be recoverable/refundable through future revenues.
Investment tax credits, previously deferred, are being amortized over the lives
of the related properties.
CONSOLIDATED STATEMENT OF CASH FLOWS
Temporary cash investments consist of liquid investments with an original
maturity of three months or less.
INSURANCE AND CLAIMS COSTS
A wholly-owned captive subsidiary of DPL Inc. provides certain property and
liability insurance coverage to DPL Inc. and its other subsidiaries and business
interruption and specific risk coverage for DP&L. Insurance and claims costs on
the Consolidated Balance Sheet represent insurance reserves of the captive
subsidiary. These reserves are provided based on actuarial methods and loss
experience data. Such liabilities are determined, in the aggregate, based on a
reasonable estimation of probable insured events occurring throughout each
period. There is uncertainty associated with the loss estimates, and actual
results could differ from the estimates. Modification of these loss estimates
based on experience and changed circumstances are then reflected in the period
in which the estimate is reevaluated.
FINANCIAL ASSETS
DPL Inc. accounts for its investments in debt and equity securities by
classifying the securities into different categories (held-to-maturity and
available-for-sale). Available-for-sale securities are carried at fair market
value and unrealized gains and losses, net of deferred income taxes, are
presented as a separate component of shareholders' equity for those investments.
Investments classified as held-to-maturity are carried at amortized cost. The
value of equity security investments and fixed maturity investments is based
upon market quotations or investment cost that is believed to approximate
market. The cost basis for equity security and fixed maturity investments is
average cost and amortized cost, respectively.
137
<PAGE>
- --------------------------------------------------------------------------------
2. RECENT ACCOUNTING STANDARD
On January 1, 2001, DPL Inc. adopted the provisions of the Financial Accounting
Standard Board's ("FASB") Statement No. 133, "Accounting for Derivative
Instruments and Hedging Activities," as amended ("SFAS No. 133"). The impact of
adopting SFAS No. 133 was not material to DPL Inc.'s financial position or
results of operations. The FASB's Derivative Implementation Group is currently
evaluating the application of SFAS No. 133 to certain electricity contracts. On
January 1, 2001, DPL Inc. was party to such contracts of which the fair value on
that date was not material. Conclusions ultimately reached by the FASB could,
however, result in future earnings volatility which may be material.
- --------------------------------------------------------------------------------
3. SALE OF THE GAS BUSINESS
In October 2000, DP&L sold its natural gas retail distribution assets and
certain liabilities for $468 million in cash. The transaction was valued
pursuant to an arms-length negotiation and resulted in a pre-tax gain of $183
million ($121 million net of tax), which is reflected in "other income
(deductions)" on the Consolidated Statement of Results of Operations. Proceeds
from the sale were used to finance the regional merchant generation expansion
and reduce outstanding short-term debt.
- --------------------------------------------------------------------------------
4. REGULATORY MATTERS
DP&L applies the provisions of the FASB Statement of Financial Accounting
Standards No. 71, "Accounting for the Effects of Certain Types of Regulation"
("SFAS No. 71") to its regulated operations. This accounting standard provides
for the deferral of costs authorized for future recovery by regulators. Based on
existing regulatory authorization, regulatory assets on the Consolidated Balance
Sheet include:
<TABLE>
<CAPTION>
At December 31,
$ in millions 2000 1999
- --------------------------------------------------------------------------------
<S> <C> <C>
Income taxes recoverable
through future revenues (b) $ 19.8 $168.5
Regulatory transition costs (a) 144.8 --
Other costs (b) 1.6 53.3
------ ------
Total $166.2 $221.8
====== ======
</TABLE>
(a) During 1999, legislation was enacted in Ohio, which restructures the state's
electric utility industry ("the Legislation"). Beginning in 2001, electric
generation, aggregation, power marketing and power brokerage services supplied
to Ohio retail customers are not subject to regulation by the Public Utilities
Commission of Ohio ("PUCO"). As required by the Legislation, DP&L filed its
transition plan ("the Plan") at the PUCO in 1999, which included an application
for DP&L to receive transition revenues to recover regulatory assets and other
potentially stranded costs. Final PUCO approval of the plan was received in
September 2000.
138
<PAGE>
The Plan, which began in January 2001, provides for a three-year transition
period ("the transition period") ending December 31, 2003, at which time DP&L's
generation business unit will be fully merchant. As a result of the PUCO final
approval of the transition plan and tariff schedules, the application of SFAS
No. 71 was discontinued for generation-related assets. Transmission and
distribution services, which continue to be regulated based on PUCO-approved
cost based rates, continue to apply SFAS No. 71. The plan, as approved, provides
for the recovery of a portion of DP&L's transition costs, including
generation-related regulatory assets, during the transition period. Based on
DP&L's assessment of recoveries of regulatory assets during the transition
period, a $63.7 million before tax benefits ($41.4 million net of taxes)
reduction of generation-related regulatory assets was recorded in the third
quarter of 2000 as an extraordinary item in accordance with FASB Statement of
Accounting Standards No. 101, "Regulated Enterprises-Accounting for the
Discontinuation of Application of FASB Statement No. 71" and other
generation-related regulatory assets were reclassified to the "Regulatory
transition costs" asset.
(b) Certain deferred costs remain authorized for recovery by regulators. These
relate primarily to DP&L's electric transmission and distribution operations and
are being amortized over the recovery period of the assets involved.
- --------------------------------------------------------------------------------
5. INCOME TAXES
<TABLE>
<CAPTION>
For the years ended December 31,
$ in millions 2000 1999 1998
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
COMPUTATION OF TAX EXPENSE
Federal income tax (a) $155.0 $116.5 $108.6
Increases (decreases) in tax from -
Regulatory assets -- 4.4 4.0
Depreciation 6.5 13.1 12.5
Investment tax credit amortized (6.1) (3.0) (3.0)
Other, net 1.2 (3.0) (1.7)
------ ------ ------
Total tax expense $156.6 $128.0 $120.4
====== ====== ======
<CAPTION>
For the years ended December 31,
2000 1999 1998
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
COMPONENTS OF TAX EXPENSE
Taxes currently payable $236.1 $112.6 $136.1
Deferred taxes--
Regulatory assets (13.3) (5.8) (8.3)
Liberalized depreciation and amortization (28.2) 8.6 6.7
Fuel and gas costs (7.2) 9.2 (5.8)
Insurance and claims costs 1.2 5.2 (1.1)
Recapitalization (16.8) -- --
Other (9.1) 1.2 (4.2)
Deferred investment tax credit, net (6.1) (3.0) (3.0)
------ ------ ------
Total tax expense $156.6 $128.0 $120.4
====== ====== ======
</TABLE>
139
<PAGE>
(A) THE STATUTORY RATE OF 35% WAS APPLIED TO PRE-TAX INCOME BEFORE PREFERRED
DIVIDENDS.
COMPONENTS OF DEFERRED TAX ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
At December 31,
$ in millions 2000 1999
- --------------------------------------------------------------------------------
<S> <C> <C>
NON-CURRENT LIABILITIES
Depreciation/property basis $(406.8) $(429.7)
Income taxes recoverable (17.3) (58.9)
Regulatory assets (50.6) (16.3)
Investment tax credit 21.1 23.2
Other 38.8 9.8
------ ------
Net non-current liability $(414.8) $(471.9)
====== ======
NET CURRENT ASSET (LIABILITY) $ 11.1 $(10.0)
====== ======
</TABLE>
- --------------------------------------------------------------------------------
6. PENSIONS AND POSTRETIREMENT BENEFITS
PENSIONS
Substantially all DP&L employees participate in pension plans paid for by DP&L.
Employee benefits are based on their years of service, age, compensation and
year of retirement. The plans are funded in amounts actuarially determined to
provide for these benefits.
The following tables set forth the plans' obligations, assets and amounts
recorded in Other assets on the Consolidated Balance Sheet at December 31:
<TABLE>
<CAPTION>
$ in millions 2000 1999
- --------------------------------------------------------------------------------
<S> <C> <C>
CHANGE IN PROJECTED BENEFIT OBLIGATION
Benefit obligation, January 1 $272.8 $269.2
Service cost 5.1 5.9
Interest cost 18.9 16.2
Amendments 21.1 --
Curtailment (a) (3.1) --
Actuarial (gain) loss (26.6) (3.8)
Benefits paid (14.5) (14.7)
------ ------
Benefit obligation, December 31 273.7 272.8
------ ------
CHANGE IN PLAN ASSETS
Fair value of plan assets, January 1 421.3 358.9
Actual return on plan assets (45.5) 77.0
Benefits paid (14.5) (14.6)
------ ------
Fair value of plan assets, December 31 361.3 421.3
------ ------
Plan assets in excess of projected benefit obligation 87.6 148.5
Actuarial gain (45.8) (101.8)
Unamortized prior service cost 23.2 9.8
Unamortized transition obligation -- (2.8)
------ ------
Net pension assets $ 65.0 $ 53.7
====== ======
</TABLE>
140
<PAGE>
(A) THE CURTAILMENT WAS RECOGNIZED AS A RESULT OF THE SALE OF THE NATURAL GAS
RETAIL DISTRIBUTION OPERATIONS ON OCTOBER 31, 2000 (SEE NOTE 3).
Assumptions used in determining the projected benefit obligation were as
follows:
<TABLE>
<CAPTION>
2000 1999 1998
------- ------- -------
<S> <C> <C> <C>
Discount rate for obligations 7.25 % 6.25% 6.25%
Expected return on plan assets 9.00 % 7.50% 7.50%
Average salary increases 5.00 % 5.00% 5.00%
</TABLE>
The following table sets forth the components of pension expense (portions of
which were capitalized):
<TABLE>
<CAPTION>
$ in millions 2000 1999 1998
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
EXPENSE FOR YEAR
Service cost $ 5.1 $ 5.9 $ 5.9
Interest cost 18.9 16.2 15.9
Expected return on plan assets (33.9) (25.3) (23.3)
Amortization of unrecognized:
Actuarial (gain) loss (5.0) (0.5) 1.2
Prior service cost 4.2 2.1 2.1
Transition obligation (2.8) (4.3) (4.2)
----- ----- -----
Net pension cost (13.5) (5.9) (2.4)
Curtailment (a) 2.1 -- --
----- ----- -----
Net pension cost after curtailment $(11.4) $(5.9) $(2.4)
===== ===== =====
</TABLE>
(a)THE CURTAILMENT WAS RECOGNIZED AS A RESULT OF THE SALE OF THE NATURAL GAS
RETAIL DISTRIBUTION OPERATIONS ON OCTOBER 31, 2000 (SEE NOTE 3).
POSTRETIREMENT BENEFITS
Qualified employees who retired prior to 1987 and their dependents are eligible
for health care and life insurance benefits. DP&L has funded the union-eligible
health benefit using a Voluntary Employee Beneficiary Association Trust.
The following tables set forth the accumulated postretirement benefit obligation
("APBO"), assets and funded status amounts recorded in Other Deferred Credits on
the Consolidated Balance Sheet at December 31:
<TABLE>
<CAPTION>
$ in millions 2000 1999
- -------------------------------------------------------------------------------
<S> <C> <C>
CHANGE IN APBO
Benefit obligation, January 1 $32.4 $32.9
Interest cost 2.2 2.0
Curtailment (a) (0.1) --
Actuarial (gain) loss (1.0) 0.2
Benefits paid (2.7) (2.7)
----- -----
Benefit obligation, December 31 30.8 32.4
----- -----
141
<PAGE>
<CAPTION>
<S> <C> <C>
CHANGE IN PLAN ASSETS
Fair value of plan assets, January 1 10.9 12.4
Actual return on plan assets 1.0 (0.3)
Company contributions 1.7 1.4
Benefits paid (2.7) (2.6)
----- -----
Fair value of plan assets, December 31 10.9 10.9
----- -----
APBO in excess of plan assets 19.9 21.5
Unamortized transition obligation (6.9) (10.0)
Actuarial gain 21.8 22.7
----- -----
Accrued postretirement benefit liability $34.8 $34.2
===== =====
</TABLE>
Assumptions used in determining the projected benefit obligation were as
follows:
<TABLE>
<CAPTION>
2000 1999 1998
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Discount rate for obligations 7.25% 6.25% 6.25%
Expected return on plan assets 7.00% 5.70% 5.70%
</TABLE>
The assumed health care cost trend rate used in measuring the accumulated
postretirement benefit obligation was 7.5% and 8.0% for 2000 and 1999,
respectively, and decreases to 5.0% by 2005. A one percentage point change in
the assumed health care trend rate would affect the service and interest cost by
$0.1 million. A one percentage point increase in the assumed health care trend
rate would increase the postretirement benefit obligation by $2.0 million; and a
one percentage point decrease would decrease the benefit obligation by $1.6
million.
The following table sets forth the components of postretirement benefit expense:
<TABLE>
<CAPTION>
$ in millions 2000 1999 1998
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
EXPENSE FOR YEAR
Interest cost $2.2 $2.0 $2.0
Expected return on plan assets (0.7) (0.7) (1.0)
Amortization of unrecognized:
Actuarial (gain) loss (2.2) (2.4) (2.2)
Transition obligation 2.9 3.0 3.0
---- ---- ----
Postretirement benefit cost 2.2 1.9 1.8
Curtailment (a) 0.1 -- --
---- ---- ----
Postretirement benefit cost after curtailment $2.3 $1.9 $1.8
==== ==== ====
</TABLE>
(a) THE CURTAILMENT WAS RECOGNIZED AS A RESULT OF THE SALE OF THE NATURAL GAS
RETAIL DISTRIBUTION OPERATIONS ON OCTOBER 31, 2000 (SEE NOTE 3).
- --------------------------------------------------------------------------------
7. COMMON SHAREHOLDERS' EQUITY
DPL Inc. has a leveraged Employee Stock Ownership Plan ("ESOP") to fund matching
contributions to DP&L's 401(k) retirement savings plan and certain other
payments to full-time employees. Common shareholders' equity is reduced for the
cost of 4,918,537 unallocated shares held by the trust and for 2,813,354 shares
related to another employee plan. These shares reduce the number of common
shares used in the calculation of earnings per share.
142
<PAGE>
Dividends received by the ESOP are used to repay the loan to DPL Inc. As debt
service payments are made on the loan, shares are released on a pro-rata basis.
Dividends on the allocated shares are charged to retained earnings, and
dividends on the unallocated shares reduce interest and principal on the loan.
Cumulative shares allocated to employees and outstanding for the calculation of
earnings per share were 2,143,871 in 2000, 1,933,653 in 1999, and 1,646,780 in
1998. Compensation expense, which is based on the fair value of the shares
allocated, amounted to $3.8 million in 2000, $3.5 million in 1999 and $4.0
million in 1998.
DPL Inc. had 902,490 authorized but unissued shares reserved for its dividend
reinvestment plan at December 31, 2000. The plan provides that either original
issue shares or shares purchased on the open market may be used to satisfy plan
requirements.
DPL Inc. purchased 25 million shares of its common stock in a Dutch Auction
self-tender in March 2000. Through December 31, 2000, DPL Inc. repurchased an
additional 5.0 million shares under an authorized share repurchase program of up
to 6.6 million shares. These shares are held as treasury stock and represent
authorized but unissued shares.
DPL Inc. has a Shareholder Rights Plan pursuant to which four-ninths of a Right
is attached to and trades with each outstanding DPL Inc. Common Share. The
Rights would separate from the Common Shares and become exercisable in the event
of certain attempted business combinations.
As part of DPL Inc.'s recapitalization transaction (see Note 8), 31.6 million
warrants were issued, representing approximately 25% of DPL Inc. shares
currently outstanding, with a term of 12 years, and an exercise price of $21 per
share. These warrants were sold for an aggregate purchase price of $50 million.
Pursuant to the warrant agreement, DPL Inc. has reserved out of its authorized
shares of common stock a number of shares sufficient to provide for the exercise
in full of all outstanding warrants.
- --------------------------------------------------------------------------------
8. PREFERRED STOCK
DPL Inc.:
o No par value, 8,000,000 shares authorized, 6,800,000 shares outstanding.
o As part of DPL Inc.'s recapitalization, 6.8 million shares of mandatorily
redeemable voting preferred securities, redeemable par value of $0.01 per
share, were issued at an aggregate purchase price of $68,000. These
preferred securities carry voting rights for up to 4.9% of DPL Inc.'s total
voting rights and the nomination of one Board seat.
DP&L:
o $25 par value, 4,000,000 shares authorized, no shares outstanding; and $100
par value, 4,000,000 shares authorized, 228,508 shares without mandatory
redemption provisions outstanding.
Current Redemption Current Shares Par Value at December 31,
Series/Rate Price Outstanding 2000 and 1999 ($ in millions)
- --------------------------------------------------------------------------------
A 3.75% $102.50 93,280 $9.3
B 3.75% $103.00 69,398 7.0
C 3.90% $101.00 65,830 6.6
-------- ------
Total 228,508 $22.9
======== ======
143
<PAGE>
The shares may be redeemed at the option of DP&L at the per share prices
indicated, plus cumulative accrued dividends.
In February 2000, DPL Inc. entered into a series of recapitalization
transactions including the issuance of $550 million of a combination of voting
preferred and trust preferred securities and warrants to an affiliate of
investment company Kohlberg Kravis Roberts & Co. ("KKR"). The trust preferred
securities sold to KKR have an aggregate face amount of $550 million, were
issued at an initial discounted aggregate price of $500 million, have a maturity
of 30 years (subject to acceleration six months after the exercise of the
warrants), and pay distributions at a rate of 8.5% of the aggregate face amount
per year. DPL Inc. recognized the entire trust preferred securities original
issue discount of $50 million in 2000. The proceeds from this recapitalization
were used to finance the regional merchant generation expansion, repurchase 30.0
million shares of DPL Inc. common shares, and reduce outstanding short-term
debt.
- --------------------------------------------------------------------------------
9. LONG-TERM DEBT
<TABLE>
<CAPTION>
At December 31,
$ in millions 2000 1999
- --------------------------------------------------------------------------------
<S> <C> <C>
First mortgage bonds maturing:
2024-2026 8.01% (a) $446.0 $446.0
Pollution control series maturing
through 2027 6.43% (a) 106.0 106.4
-------- --------
552.0 552.4
Guarantee of Air Quality Development
Obligations 6.10% Series due 2030 110.0 110.0
Senior Notes 6.25% Series due 2008 100.0 100.0
Senior Notes 8.25% Series due 2007 425.0 --
Senior Notes 6.67% Series due 2004 (b) 500.0 500.0
Notes maturing through 2007 - 7.83% 70.0 76.0
Obligation for capital lease 4.9 --
Unamortized debt discount and premium (net) (3.4) (1.8)
-------- --------
Total $1,758.5 $1,336.6
======== ========
</TABLE>
(a) WEIGHTED AVERAGE INTEREST RATES FOR 2000 AND 1999.
(b) IN MARCH 2000, THE INTEREST RATE ADJUSTED FROM 6.32% TO 6.67%
The amounts of maturities and mandatory redemptions for first mortgage bonds,
notes, and the capital lease are (in millions) $7.0 in 2001, $8.0 in 2002, $9.0
in 2003, $511.0 in 2004, and $13.0 in 2005. Substantially all property of DP&L
is subject to the mortgage lien securing the first mortgage bonds.
During 2000, $425 million of a series of Senior Notes due 2007 were issued with
an interest rate of 8.25%. The proceeds were used to finance the regional
merchant generation expansion, repurchase 30.0 million shares of DPL Inc. common
shares, and reduce outstanding short-term debt.
144
<PAGE>
During 1999, DPL Inc. completed a private placement issuance of $500 million of
Senior Notes due 2004, with an interest rate of 6.32%. The proceeds were used
for the redemption of DP&L's $225 million 8.40% Series of First Mortgage Bonds,
the reduction of short-term debt and for general corporate purposes.
- --------------------------------------------------------------------------------
10. NOTES PAYABLE AND COMPENSATING BALANCES
DPL Inc. and its subsidiaries have up to $300 million available through
revolving credit agreements with a consortium of banks. A $200 million agreement
expires in 2001 and the other, for up to $100 million, also expires in 2001.
Facility fees are approximately $500,000 per year. The primary purpose of the
revolving credit facilities is to provide back-up liquidity for the commercial
paper program. At December 31, 2000 and 1999, DPL Inc. had no outstanding
borrowings under these credit agreements.
DP&L has $75.0 million available in short-term informal lines of credit. The
commitment fees are immaterial. Borrowings at December 31, 2000 and 1999 were
zero.
DPL Inc. had no outstanding commercial paper balances at year-end 2000 and
$171.0 million outstanding at a weighted average interest rate of 6.0% at
December 31, 1999. DP&L had no outstanding commercial paper balances at year-end
2000 and $123.1 million in commercial paper outstanding at a weighted average
interest rate of 5.9% at December 31, 1999.
- --------------------------------------------------------------------------------
11. EMPLOYEE STOCK PLANS
In 2000, DPL Inc.'s Board of Directors adopted and its shareholders approved The
DPL Inc. Stock Option Plan. On February 1, 2000, options were granted at an
exercise price of $21.00, which was above the market price of $19.06 per share
on that date. The exercise price of options granted after that date approximated
the market price of the stock on the date of grant. Options granted represent
three-year awards, vest five years from the grant date, and expire ten years
from the grant date. At December 31, 2000, there were 390,000 options available
for grant.
Summarized stock option activity was as follows:
<TABLE>
<CAPTION>
2000
------------
<S> <C>
Options granted at beginning of year
Granted 7,610,000
Exercised --
Expired --
Outstanding at year-end 7,610,000
Exercisable at year-end --
- --------------------------------------------------------------------------------
Weighted average option prices per share:
At beginning of year $ --
Granted 22.10
Exercised --
Expired --
Outstanding at year-end 22.10
Exercisable at year-end $ --
</TABLE>
145
<PAGE>
The weighted-average fair value of options granted was $3.65 per share in 2000.
The fair values of options were estimated as of the date of grant using a
Black-Scholes option pricing model. The weighted averages for the assumptions
used in determining the fair values of options granted in 2000 were as follows:
expected lives of 5.1 years, expected volatility of 18.5%, a dividend yield of
3.5%, and a risk-free interest rate of 6.8%.
DPL Inc. has elected to follow Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" ("APB 25") and related
interpretations in accounting for its employee stock options. Under APB 25,
compensation expense of $2.3 million was recorded for grants issued prior to the
measurement date for accounting purposes. If DPL Inc. had used a fair-value
method of accounting for stock-base compensation cost, reported net income for
2000 would have been $242.1 million. Basic earnings per share and diluted
earnings per share for 2000 would have been $1.90 and $1.82, respectively.
The following table reflects information about stock options outstanding at
December 31, 2000:
<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
Weighted-Average
Range of Exercise Contractual Life Weighted-Average
Prices Number Outstanding (in years) Exercise Price Number Weighted-Average
Exercisable Exercise Price
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$21.00-$29.63 7,610,000 9.2 $22.10 -- --
</TABLE>
- --------------------------------------------------------------------------------
12. OWNERSHIP OF FACILITIES
DP&L and other Ohio utilities have undivided ownership interests in seven
electric generating facilities and numerous transmission facilities. Certain
expenses, primarily fuel costs for the generating units, are allocated to the
owners based on their energy usage. The remaining expenses, as well as
investments in fuel inventory, plant materials and operating supplies, and
capital additions, are allocated to the owners in accordance with their
respective ownership interests. As of December 31, 2000, DP&L had $47 million of
construction in progress at such facilities. DP&L's share of the operating cost
of such facilities is included in the Consolidated Statement of Results of
Operations, and its share of the investment in the facilities is included in the
Consolidated Balance Sheet.
The following table presents DP&L's undivided ownership interest in such
facilities at December 31, 2000:
146
<PAGE>
DP&L
DP&L Share INVESTMENT
----------------------------------------------
Production Gross Plant
Ownership Capacity in Service
(%) (MW) ($ in millions)
- --------------------------------------------------------------------------------
Production Units:
Beckjord Unit 6 50.0 210 $ 56
Conesville Unit 4 16.5 129 31
East Bend Station 31.0 186 152
Killen Station 67.0 418 381
Miami Fort Units 7&8 36.0 360 125
Stuart Station 35.0 823 256
Zimmer Station 28.1 365 993
Transmission (at
varying percentages) 70
- ---------------------------------------------------- ---------------------------
13. EARNINGS PER SHARE
Basic earnings per share are based on the weighted-average number of common
shares outstanding during the year. Diluted earnings per share are based on the
weighted-average number of common and common equivalent shares outstanding
during the year.
The following illustrates the reconciliation of the numerators and denominators
of the basic and diluted EPS computations for income before extraordinary item
(prior year periods are not presented because no potentially dilutive securities
were outstanding in the prior year):
2000
-----------------------------------------
In millions except Income(a) Shares Per Share
per share amounts (Numerator) (Denominator) Amount
------------ ------------ ------------
BASIC EPS $284.9 127.7 $2.23
=====
EFFECT OF DILUTIVE SECURITIES
Warrants -- 4.5
Stock Option Plan -- 0.7
------ ----
DILUTED EPS $284.9 132.9 $2.14
====== ===== ======
(A) INCOME BEFORE EXTRAORDINARY ITEM
147
<PAGE>
- --------------------------------------------------------------------------------
14. RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES
For the years ended December 31,
$ in millions 2000 1999 1998
- -------------------------------------------------------------------------------
Net income $243.5 $204.2 $189.1
Adjustments:
Depreciation and amortization 135.6 136.5 127.1
Amortization of trust preferred discount 50.0 -- --
Income from investing activities (52.1) (31.2) (8.0)
Non-cash extraordinary item, net of tax 41.4 -- --
Gain on sale of natural gas retail distribution
operations (182.5) -- --
Amortization of regulatory assets, net 16.3 25.8 33.0
Operating expense provisions 17.8 (21.0) 9.1
Deferred income taxes (79.5) 15.4 (15.7)
Other deferred credits 29.0 2.3 15.4
Accounts receivable (45.8) 9.6 (16.3)
Accounts payable (4.6) 26.5 (24.1)
Accrued taxes payable 60.7 5.4 6.6
Inventory (6.1) 19.3 (24.9)
Other (9.0) 4.4 10.7
------ ------ ------
Net cash provided by operating activities $214.7 $397.2 $302.0
====== ====== ======
- --------------------------------------------------------------------------------
15. BUSINESS SEGMENT REPORTING
DPL Inc.'s principal subsidiary, DP&L, sells and distributes electricity to
residential, commercial, industrial and governmental customers within a 6,000
square mile service territory. DP&L also sold and distributed natural gas until
October 31, 2000, at which time DP&L sold its natural gas retail distribution
assets and certain liabilities (see Note 3).
For purposes of the segment disclosure required by the FASB Statement of
Accounting Standards No. 131, "Disclosure about Segments of an Enterprise and
Related Information," DPL Inc.'s results are classified in two reportable
segments, electric and natural gas. Amounts attributed to segments below the
quantitative thresholds for separate disclosure are primarily for a natural gas
supply management subsidiary, a wholesale merchant energy subsidiary, street
lighting services, insurance, and financial support services.
148
<PAGE>
<TABLE>
<CAPTION>
SEGMENT INFORMATION
For the years ended December 31,
$ in millions 2000 1999 1998
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
ELECTRIC
Revenues from external customers $1,089.7 $1,056.0 $1,070.7
Intersegment revenues 2.4 4.5 4.8
Depreciation and amortization 122.9 125.9 118.0
Earnings before interest, taxes, and extraordinary item
389.4 352.7 336.2
Segment assets 2,516.1 2,584.0 2,702.1
Expenditures - construction additions 117.8 69.9 101.1
NATURAL GAS (a)
Revenues from external customers 183.8 215.0 211.2
Intersegment revenues 4.0 3.9 2.8
Depreciation and amortization 7.4 8.1 7.5
Earnings before interest, taxes, and extraordinary item
24.2 27.2 23.9
Segment assets -- 321.7 322.7
Expenditures - construction additions 7.1 9.6 9.7
OTHER
Revenues from external customers 163.4 67.9 70.3
Intersegment revenues 8.9 12.6 20.9
Depreciation and amortization 5.3 2.5 1.6
Earnings before interest, taxes, and extraordinary item
31.1 25.2 21.9
Segment assets 365.7 114.6 25.7
Expenditures - construction additions 219.0 87.0 0.6
TOTAL
Revenues from external customers 1,436.9 1,338.9 1,352.2
Intersegment revenues 15.3 21.0 28.5
Depreciation and amortization 135.6 136.5 127.1
Earnings before interest, taxes, and extraordinary item
444.7 405.1 382.0
Segment assets 2,881.8 3,020.3 3,050.0
Expenditures - construction additions 343.9 166.5 111.4
</TABLE>
149
<PAGE>
<TABLE>
<CAPTION>
RECONCILIATION (b)
For the years ended December 31,
$ in millions 2000 1999 1998
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PROFIT OR LOSS
Total earnings before interest, taxes, and extraordinary item
$ 444.7 $ 405.1 $ 382.0
Investment income 88.8 50.8 21.3
Other income and deductions 135.6 (13.2) (1.4)
Interest expense (140.3) (110.5) (92.4)
Trust preferred distributions by subsidiary (87.3)
-------- -------- --------
Income before income taxes and extraordinary item
$ 441.5 $ 332.2 $ 309.5
======== ======== ========
ASSETS
Total segment assets $2,881.8 $3,020.3 $3,050.5
Unallocated corporate assets 1,554.2 1,320.1 805.4
-------- -------- --------
Total Assets $4,436.0 $4,340.4 $3,855.9
======== ======== ========
</TABLE>
(a) DP&L SOLD ITS NATURAL GAS RETAIL DISTRIBUTION ASSETS AND CERTAIN
LIABILITIES ON OCTOBER 31, 2000 (SEE NOTE 3).
(b) FOR CATEGORIES NOT RECONCILED ABOVE, SEGMENT TOTALS EQUAL
CONSOLIDATED TOTALS.
- --------------------------------------------------------------------------------
16. FAIR VALUE OF FINANCIAL INSTRUMENTS
<TABLE>
<CAPTION>
At December 31,
2000 1999
----------------------------------------------------------------------------------------
Gross Unrealized Gross Unrealized
-------------------- ------------------
$ in millions Fair Value Gains Losses Cost Fair Value Gains Losses Cost
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Available-for-sale equity $1,336.9 $ 199.4 $ (33.2) $1,170.7 $1,113.1 $ 182.1 $ (13.2) $ 944.2
securities
Held-to-maturity securities:
Debt securities (a) 50.2 0.8 -- 49.4 45.8 -- (1.1) 46.9
Temporary cash investments 112.3 -- -- 112.3 83.3 -- -- 83.3
-------- -------- -------- -------- -------- -------- -------- --------
Total $1,499.4 $ 200.2 $ (33.2) $1,332.4 $1,242.2 $ 182.1 $ (14.3) $1,074.4
Liabilities (b)
Debt $1,795.0 $1,765.5 $1,605.0 $1,636.0
Capitalization
Unallocated stock in ESOP $ 163.1 $ 62.7 $ 88.7 $ 65.3
</TABLE>
(a) MATURITIES RANGE FROM 2001 TO 2010.
(b) INCLUDES CURRENT MATURITIES.
Gross realized gains (losses) were $56.6 and $(5.2) million in 2000, $31.7
and $(1.2) million in 1999, $19.5 and $(1.0) million in 1998, respectively.
150
<PAGE>
Report of Independent Accountants
PRICEWATERHOUSECOOPERS LLP
To the Board of Directors and Shareholders of DPL Inc.
In our opinion, the accompanying Consolidated Balance Sheet and the related
Consolidated Statements of Results of Operations, of Shareholders' Equity, and
of Cash Flows present fairly, in all material respects, the financial position
of DPL Inc. and its subsidiaries at December 31, 2000 and 1999, and the results
of their operations and their cash flows for each of the three years in the
period ended December 31, 2000 in conformity with accounting principles
generally accepted in the United States of America. These financial statements
are the responsibility of the Company's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with auditing standards
generally accepted in the United States of America, which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for the opinion.
/s/ PricewaterhouseCoopers LLP
Dayton, Ohio
January 29, 2001
151
<PAGE>
Financial and Statistical Summary DPL Inc.
<TABLE>
<CAPTION>
2000 1999 1998 1997 1996
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
FOR THE YEARS ENDED DECEMBER 31,
DPL INC.: Earnings per share of common stock $ 2.23(a) 1.35 1.24 1.20 1.15
Dividends paid per share $ 0.94 0.94 0.94 0.91 0.87
Dividend payout ratio % 42.2(a) 69.6 75.8 75.8 75.7
Income before extraordinary item $ 284.9 204.2 189.1 181.4 172.9
(millions)
Utility service revenues (millions) $1,273.5 1,271.0 1,281.9 1,252.2 1,256.1
Construction additions (millions) $ 343.9 166.5 111.4 110.6 115.5
Market value per share at December 31 $ 33.19 17.31 21.63 19.19 16.19
DP&L: Electric sales (millions of kWh) - (b)
Residential 4,816 4,725 4,790 4,788 4,924
Commercial 3,539 3,390 3,518 3,408 3,407
Industrial 4,851 4,876 4,655 4,749 4,540
Other 4,317 3,876 4,518 3,664 3,443
------ ------ ------ ------ ------
Total 17,523 16,867 17,481 16,609 16,314
Gas sales (thousands of MCF) -- (c)
Residential 18,538 24,450 24,877 29,277 31,087
Commercial 5,838 7,647 7,433 9,567 9,424
Industrial 2,034 2,246 1,916 2,520 3,404
Other 776 1,182 1,699 2,153 2,829
Transported gas 16,105 20,190 17,788 18,523 16,953
------ ------ ------ ------ ------
Total 43,291 55,715 53,713 62,040 63,697
AT DECEMBER 31,
DPL INC.: Book value per share $ 7.43 9.65 9.01 8.45 7.97
Total assets (millions) $4,436.0 4,340.4 3,855.9 3,585.2 3,418.7
Long-term debt (millions) $1,758.5 1,336.6 1,065.9 971.0 1,014.3
DP&L: First mortgage bond ratings --
Fitch AA AA AA AA AA
Standard & Poor's Corporation BBB+ AA- AA- AA- AA-
Moody's Investors Service A2 Aa3 Aa3 Aa3 Aa3
NUMBER OF SHAREHOLDERS
DPL INC.: Common 35,903 39,399 41,791 43,689 46,532
DP&L: Preferred 471 509 559 625 684
</TABLE>
(a) Represents Basic Earnings Per Share before extraordinary item. Basic EPS
and the dividend payout ratio for 2000 were $1.56 and 60.3%, respectively,
before non-recurring (see Notes 3 and 8) and extraordinary items (see Note
4).
(b) Electric sales include electric peaking generation capacity sales. (c) On
October 31, 2000, DP&L completed the sale of its natural gas retail
distribution assets and certain liabilities (see Note 3).
Selected Quarterly Information (Unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended
$ in millions except per share March 31, June 30, September 30, December 31,
amounts 2000 1999 2000 1999 2000 1999 2000 1999
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Utility service revenues $ 360.3 $ 362.4 $ 292.0 $ 276.6 $ 320.7 $ 319.2 $ 300.5 $ 312.8
Income before income taxes and
extraordinary item 82.8 117.4 23.5 59.3 83.3 90.8 251.9 64.6
Income before extraordinary item 50.1 72.5 15.8 37.4 53.2 53.6 165.8 40.7
Net income 50.1 72.5 15.8 37.4 11.8 53.6 165.8 40.7
Earnings per share of common stock:
BASIC
Before extraordinary item 0.34 0.47 0.13 0.25 0.44 0.36 1.38(b) 0.27
Net income 0.34 0.47 0.13 0.25 0.10(a) 0.36 1.38(b) 0.27
DILUTED
Before extraordinary item 0.34 0.47 0.12 0.25 0.41 0.36 1.27 0.27
Net income 0.34 0.47 0.12 0.25 0.09 0.36 1.27 0.27
Dividends paid per share 0.235 0.235 0.235 0.235 0.235 0.235 0.235 0.235
Common stock market price - High 22.31 21.69 24.38 19.88 30.71 19.63 33.69 20.31
- Low 16.63 16.50 21.94 16.38 22.75 16.94 26.69 16.63
</TABLE>
(a) Results include extraordinary item associated with the deregulation order
(see Note 4).
(b) Results include the gain on the sale of the natural gas retail distribution
operations (see Note 3).
152
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21
<SEQUENCE>10
<FILENAME>a2043323zex-21.txt
<DESCRIPTION>EXHIBIT 21
<TEXT>
<PAGE>
EXHIBIT 21
Subsidiaries of DPL Inc.
DPL Inc. had the following wholly-owned subsidiaries on February 28, 2001:
<TABLE>
<CAPTION>
STATE OF INCORPORATION
<S> <C>
The Dayton Power and Light Company............................... Ohio
Miami Valley Insurance Company................................... Vermont
Miami Valley Leasing, Inc........................................ Ohio
Miami Valley Resources, Inc...................................... Ohio
Miami Valley Lighting, Inc....................................... Ohio
Miami Valley Development Company................................. Ohio
Miami Valley CTC, Inc............................................ Ohio
DPL Energy, Inc.................................................. Ohio
Plaza Building, Inc.............................................. Ohio
DPL Capital Trust I.............................................. Delaware
DPL Energy Resources, Inc........................................ Ohio
Customer Payment Center, Inc..................................... Ohio
MacGregor Park, Inc.............................................. Ohio
</TABLE>
153
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23
<SEQUENCE>11
<FILENAME>a2043323zex-23.txt
<DESCRIPTION>EXHIBIT 23
<TEXT>
<PAGE>
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUTANTS
We hereby consent to the incorporation by reference in the Registration
Statements on Form S-3 (Nos. 33-34316 and 33-44370), the Registration Statement
on Form S-4 (Registration No. 33-2551) and the Registration Statement on Form
S-8 (Registration No. 333-39982) and, of our report dated January 29, 2001
relating to the financial statements, which appears in the 2000 Annual Report to
Shareholders, which is incorporated in this Annual Report on Form 10-K. We also
consent to the incorporation by reference of our report dated January 29, 2001
relating to the financial statement schedule, which appears in this Form 10-K.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Dayton, Ohio
March 30, 2001
154
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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