8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of report (Date of earliest event reported):  October 5, 2004

DPL Inc.

(Exact Name of Registrant as Specified in Its Charter)

Ohio	1-9052	31-1163136
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1065 Woodman Drive, Dayton, Ohio	45432
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code:   (937) 224-6000

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01.  Other Events

On October 5, 2004, DPL Inc. and The Dayton Power and Light Company (collectively, the “Companies”) and Robert D. Biggs entered into a letter agreement that amends the employment agreement among the Companies and Mr. Biggs, dated July 21, 2004 and effective as of May 16, 2004.  Section 3(c) of the original employment agreement provided for the grant of an option, which had not been granted prior to the date of the letter agreement, to purchase 200,000 common shares of DPL Inc. at a per share exercise price equal to the Fair Market Value (as defined in the Company’s Stock Option Plan) of such stock on May 16, 2004.  Pursuant to the letter agreement, this section of the employment agreement has been amended to provide that the options to be granted will have an exercise price equal to the Fair Market Value on the date of grant.  The options were granted on October 5, 2004 at an exercise price of $20.94.  This exercise price is approximately $1.87 per share higher than the exercise price that would have been assigned to the option had the option been issued as set forth in Mr. Biggs’ original employment agreement.

A copy of each of the employment agreement, the letter agreement and the stock option plan agreement is attached hereto as Exhibit 10.1, Exhibit 10.2 and Exhibit 10.3, respectively.

Item 9.01 (c). Exhibits.

10.1	Employment Agreement among DPL Inc., The Dayton Power and Light Company and Robert D. Biggs, dated July 21, 2004 and effective as of May 16, 2004.
10.2	Letter Agreement among DPL Inc., The Dayton Power and Light Company and Robert D. Biggs, dated September 20, 2004 and effective as of October 5, 2004.
10.3	Stock Option Plan Agreement among DPL Inc., The Dayton Power and Light Company and Robert D. Biggs, dated October 5, 2004.

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Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:  October 8, 2004	DPL Inc.
	/s/ Miggie E. Cramblit
	Name:	Miggie E. Cramblit
	Title:	Vice President and General Counsel

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EXHIBIT INDEX

Exhibit No.	Description	Paper (P) or Electronic (E)
10.1	Employment Agreement among DPL Inc., The Dayton Power and Light Company and Robert Biggs, dated July 21, 2004 and effective as of May 16, 2004.	E
10.2	Letter Agreement among DPL Inc., The Dayton Power and Light Company and Robert Biggs, dated September 20, 2004 and effective as of October 5, 2004.	E
10.3	Stock Option Plan Agreement among DPL Inc., The Dayton Power and Light Company and Robert D. Biggs, dated October 5, 2004.	E

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EX-10.1

Exhibit 10.1

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT is made as of July 21, 2004 among DPL INC., an Ohio corporation (“DPL”), The Dayton Power and Light Companies, an Ohio corporation (“DP&L”; and, collectively with DPL, the “Companies”) and Robert Biggs (“Executive”) under the following circumstances:

A.DPL is a holding company headquartered in Dayton, Ohio, having as its principal subsidiary DP&L.

B.Executive is currently the acting non-executive Chairman of the Board of Directors of the DPL and DP&L;

C.Executive has rendered extraordinary services to the Companies in the preceding months and has had to forgo certain benefits from his prior employer in connection with his employment hereunder; and

D.The Companies and Executive believe that it is in the best interests of the Companies for Executive to assume the duties of Executive Chairman of DPL and DP&L; and

E.Subject to the terms and considerations hereinafter set forth, the Companies wish to employ Executive in the positions set forth herein and Executive wishes to accept such employment.

NOW, THEREFORE, the parties agree as follows:

Section 1.  Employment and Duties.  The Companies hereby employ Executive and Executive hereby accepts such employment, as an executive of the Companies, subject to the terms and conditions set forth in this Agreement.  Executive shall serve as Executive Chairman of the Boards of Directors of DPL and DP&L and shall properly perform such duties as may reasonably be assigned to him from time to time by each such Board of Directors.  If requested by the Companies’ Boards of Directors, Executive shall serve on any committee of the Companies’ Boards of Directors without additional compensation.  During the Term of this Agreement, Executive shall devote such time as Executive and Companies’ Boards of Directors deem necessary for the performance of Executive’s duties hereunder.

Section 2.  Term.  The term of this Agreement (the “Term”) shall commence on May 16, 2004 (the “Effective Date”) and shall continue until the second anniversary of the Effective Date; provided that the Term shall automatically be extended for successive one-year periods unless either party shall give the other at least ninety (90) days written notice of its intention not to extend the Term.

Section 3.  Compensation.  As compensation for his services hereunder, Executive shall receive the following:

(a)Base Salary.  During the Term, the Companies shall pay to Executive an annual base salary of Two Hundred Fifty Thousand Dollars ($250,000) for his services hereunder.  Executive’s base salary, as in effect at any time, is hereinafter referred to as the “Base Salary.”  Executive’s Base Salary shall be paid in substantially equal installments on a basis consistent with the Companies’ payroll practices.

(b)Participation in MICP.  For each calendar year during the Term (commencing with calendar year 2004), Executive shall be eligible to receive an annual bonus under the Companies’ Management Incentive Compensation Plan (“MICP”) in an amount, if any, determined by the Board of Directors of DPL in its discretion.

(c)Stock Options.  DPL shall grant to Executive an option to purchase 200,000 common shares of DPL (the “Option”) under the DPL Inc. Stock Option Plan (the “Option Plan”).  The per share exercise price of the Option will be the Fair Market Value (as defined in the Option Plan) on the Effective Date. The Option will become vested and exercisable as to 50% of the shares subject thereto on each of the first two anniversaries of the Effective Date; provided that the Option shall become fully vested and exercisable upon the consummation of a Change of Control (as defined below).  The Option shall be exercisable for a period of five years from the date(s) it becomes vested.  In connection with Executive’s exercise of the Option at any time during which Executive is employed by or serving as a director of either of the Companies, Executive may sell a sufficient number of DPL shares to satisfy any exercise price and income taxes arising in connection with such exercise.  However, Executive agrees that he will hold any DPL shares delivered in connection with the exercise of the Option, which remain after giving effect to the foregoing sentence, until the earlier of (i) the first anniversary of the date of exercise or (ii) the first date on which he is neither an employee nor a director of either of the Companies.

(d)Annuity.  As soon as practicable following the Effective Date, in consideration of the existing pension benefits foregone by Executive to accept employment hereunder, DPL shall purchase an annuity for the benefit of the Executive that provides the Executive with a lifetime annual benefit of $71,000 and that includes a joint and survivor benefit feature that provides thirty [30] percent of the amount of Executive’s annual annuity benefit to his surviving spouse for her lifetime.  In addition, DPL shall pay Executive an amount in respect of any income taxes incurred by Executive as a result of its provision of the annuity to Executive (the “Annuity Taxes”) such that after payment of the Annuity Taxes and any additional taxes as a result of the additional payments provided for in this sentence, Executive is in the same position as if no Annuity

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Taxes had been incurred (such a payment in respect of a tax liability by Executive incurred under this Agreement shall hereinafter be referred to as a “Tax Gross Up”).

(e)Benefits.  During the Term, Executive shall be entitled to receive such fringe benefits as are generally made available to non-employee directors of the Companies in accordance with the plans, practices, programs and policies of the Companies in effect from time to time.  In addition, during the Term, the Companies shall provide Executive with a term life insurance policy with a death benefit of $500,000.

Section 4.  Dayton Residence and Automobile.  During the Term, the Companies shall provide, at their expense, such place of residence and automobile for Executive’s use while in Dayton, Ohio as Executive and the Companies may reasonably agree.  In addition, the Companies shall pay Executive a Tax Gross Up in respect of such residence and automobile.

Section 5.  Expenses; Corporate Aircraft.  The Companies shall reimburse Executive for all reasonable out-of-pocket expenses properly incurred by him in connection with the performance of his duties hereunder in accordance with the policies established from time to time by the Companies.  In addition, the Companies shall provide Executive with the use of corporate aircraft in connection with Executive’s travel between Dayton and Executive’s home in Florida and shall pay the Executive a Tax Gross Up in respect of such use.  Other use of corporate aircraft shall be in accordance with the policies of the Companies.

Section 6.  Withholding.  The Companies may withhold from any amounts payable to Executive hereunder such federal, state or local taxes or other amounts as the Companies shall be required to withhold pursuant to applicable law.

Section 7.  Termination.  (a)  Executive’s employment with the Companies may be terminated at any time, with or without Cause, by either the Companies or Executive upon ninety [90] days’ prior written notice; provided this Agreement and Executive’s employment with the Companies may be terminated by the Companies for Cause without prior notice.  In addition, this Agreement and Executive’s employment with the Companies shall automatically terminate upon Executive’s death or Disability.

(b)  Upon the termination of Executive’s employment with the Companies, there shall be no further liability on the part of either party, other than based upon its obligations under this Agreement.

(c)  Any termination of Executive’s employment with the Companies, other than due to Executive’s death or due to expiration of the term, shall be communicated by a Notice of Termination. For this purpose, a “Notice of Termination” means a written notice given by the Companies to Executive or by Executive to the Companies which (i) indicates the specific termination provision(s) relied upon, (ii) to the extent applicable, sets forth in reasonable detail

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the facts and circumstances claimed to provide a basis for termination and (iii) specifies the Date of Termination.

Section 8.  Severance Benefits.  (a)  In the event of termination of Executive’s employment hereunder for any reason, Executive shall be entitled to his Base Salary earned through the Date of Termination and any accrued benefits under any of the Companies’ compensation or benefit plans or arrangements (including, without limitation, this Agreement) in accordance with their terms, including, without limitation, any unpaid bonus payable in respect of a completed fiscal period.

(b)  If the Companies terminate Executive’s employment with the Companies without Cause prior to a Change of Control, then, in addition to the payments and benefits provided for under Section 8(a) and contingent upon execution by Executive of a full and unconditional release of any claims which he may have against the Companies:

(i)the Companies shall pay to Executive as severance compensation a lump sum in cash not later than the fifteenth day after the Date of Termination in an amount equal to the aggregate amount of the Base Salary which would have been payable to Executive during the remainder of the Term;

(ii)the Companies shall, at their expense, continue to provide to Executive benefits substantially equivalent to the benefits required to be provided to him pursuant to Section 3(e) during the remainder of the Term; and

(iii)all unvested stock options awarded to Executive under the Stock Option Plan shall become fully vested.

(c)  If Executive’s employment is terminated by the Companies without Cause or due to non-extension of the Term by the Companies, in each case within one year following a Change of Control, then in addition to the payments and benefits provided for under Section 8(a) and contingent upon execution by Executive of a full and unconditional release of any claims which he may have against the Companies:

(i)the Companies shall pay to Executive as severance compensation a lump sum in cash not later than the fifteenth day after the Date of Termination in an amount equal to the sum of: (x) 200% of Executive’s Base Salary, (y) 200% of the annual bonus paid or payable to Executive for the calendar year immediately preceding the year in which the Date of Termination occurs; provided that if executive has not had an opportunity to earn an annual bonus prior to the Date of Termination, the annual bonus amount shall be deemed to be $250,000 for purposes of this clause (y), and (z) any amount payable to Executive pursuant to Section 9;

(ii)the Companies shall, at their expense, continue to provide to Executive benefits substantially equivalent to the benefits required to be provided to him pursuant to Section 3(e) until the second anniversary of the Date of Termination.

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(iii)all unvested stock options awarded to Executive under the Stock Option Plan shall become fully vested.

Notwithstanding the foregoing or any other provision of this Agreement, if (x) the event constituting a Change of Control is only the commencement of a tender offer, (y) the tender offer is abandoned or terminated and (z) a majority of the Original Directors and/or their Successors (as such terms are defined within the definition of “Change of Control”) determine that the tender offer will not be effectuated or result in a subsequent Change of Control and gives Executive written notice of such determination, then, as to that particular event only, a subsequent termination of employment by the Company will not entitle Executive to the benefits provided for in this Section 8(c). For purposes of this Agreement, termination of employment shall be deemed to have occurred within 12 months following the occurrence of a Change of Control if a Notice of Termination with respect thereto is given within such 12 month period.

Section 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 Executive an additional amount (the “Gross-Up Payment”) such that the net amount retained by Executive 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 Executive in connection with a Change of Control or Executive’s 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 Executive such payments or benefits do not constitute parachute payments or excess parachute payments. For purposes of determining the amount of the Gross-Up Payment, Executive 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 in which Executive is taxed on the payments giving rise to the Gross-Up Payment, 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, Executive 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, 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

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paid not later than the date on which the payments giving rise to the Gross-Up Payment are made, 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.

Section 10.Indemnification.  The Companies shall indemnify Executive against any and all losses, liabilities, damages, expenses (including attorneys’ fees) judgments, fines and amounts paid in settlement incurred by Executive in connection with any claim, action, suit or proceeding (whether civil, criminal, administrative or investigative), including any action by or in the right of either of the Companies, by reason of any act or omission to act in connection with the performance of his duties hereunder to the full extent that the Companies are permitted to indemnify a director, officer, employee or agent against the foregoing under Ohio law, including, without limitation, Section 1701.13(E) of the Ohio Revised Code.  The Companies shall at all times cause Executive to be included, in his capacities hereunder, under all liability insurance coverage (or similar insurance coverage) maintained by any of the Companies from time to time.

Section 11.Legal Expenses.  The Companies shall reimburse Executive in full for all legal fees and expenses reasonably incurred by him in connection with this Agreement (including, without limitation, any such fees and expenses incurred in contesting or disputing any termination of this or related Agreement or in seeking to obtain or enforce any right or benefit provided herein, regardless of the outcome), unless, in the case of a legal action brought by Executive or in his name, a court finally determines that such action was not brought in good faith.

Section 12.  Non-Competition and Confidentiality.  In consideration of the Companies entering into this Agreement and as an inducement for them to do so, Executive agrees that for a period of two years after termination of his employment for any reason, he will not, without the Companies’ prior written consent, directly or indirectly, (i) participate or be interested in any business (aa) which is engaged in Ohio, Indiana, Kentucky, Michigan and/or Pennsylvania in providing (as a public utility or otherwise) electric power or services on a retail and/or wholesale basis or in providing energy marketing, aggregation and/or procurement services, or (bb) which is engaged in any other business being conducted or proposed to be conducted by the Companies; (ii) solicit for employment with himself or any firm or entity with which he is associated, any employee of the Companies or otherwise disrupt, impair, damage or interfere with the Companies’ relationship with their employees; (iii) solicit for his own behalf or on behalf of any other person(s), any customer of the Companies that has purchased products or services from the Companies at any time in the twelve (12) months preceding his Date of Termination or that the Companies are actively soliciting or have known plans to solicit, for the purpose of marketing or distributing any product, pricing or service competitive with any product, pricing or service then offered by the companies or which the Companies have known plans to offer; or (iv) engage or be affiliated with any person(s), in the development or marketing, including but not limited to the establishment of product or service prices, of any product or service which will compete with any product or service the Companies are then developing or marketing in any geographic market where the Companies are doing or preparing to do business.

At all times, Executive (i) will keep all confidential, nonpublic and/or proprietary

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

Section 13.  Certain Definitions.  For purposes of this Agreement, the following terms have the following meanings:

“Cause” shall mean (a) commission of a felony, (b) embezzlement; (c) the illegal use of drugs, or (d) if no Change of Control has occurred (other than the commencement of a tender offer and/or the entering into of an agreement referred to in clauses (ii) or (iii) of the definition of Change of Control), the failure by Executive to substantially perform his duties with the Companies (other than any such failure resulting from Executive’s 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 Executive 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 Executive and an opportunity for Executive, together with Executive’s 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 Executive is guilty of conduct set forth above in clauses (a), (b), (c) or (d) of the first sentence of this definition and specifying the particulars thereof in detail.

“Change of Control” shall mean any change in control of DPL, or its principal subsidiary, DP&L, of a nature that would be required to be reported in response to Item 6 (e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended (the ‘Exchange Act’) as determined by the Board of Directors of DPL in its sole discretion; provided that, without limitation, such a Change of Control shall be deemed to have occurred if (i) any ‘person’ (as such term is defined in Sections 13 (d) and 14 (d) (2) of the Exchange Act; hereafter, a ‘Person’) other than DPL or DP&L or an entity then directly or indirectly controlling, controlled by or under common control with DPL or DP&L is on the date hereof or becomes or commences a tender offer to become the beneficial owner, directly or indirectly, of securities of DPL or DP&L representing (A) 15% or more of the combined voting power of the then outstanding securities of DPL or DP&L if the acquisition of such beneficial ownership or such tender offer is not approved by the Board of Directors of DPL prior to the acquisition or the commencement of such tender offer or (B) 50% or more of such combined voting power in all other cases; (ii) DPL or DP&L enters into an agreement to merge or consolidate itself, or an agreement to consummate a ‘combination’ or ‘majority share acquisition’ in which it is the ‘acquiring corporation’ (as such terms are defined in Ohio Rev. Code § 1701.01 as in effect on December 31, 1990) and in which shareholders of DPL or DP&L, as the case may

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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 July 1, 2004 (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).

“Date of Termination” shall mean (a) the date specified in a Notice of Termination or (b) if this Agreement is terminated due to executive’s death or expiration of the Term, the date of such termination.

“Disability” shall mean, for the purposes of this agreement, Executive’s inability to perform the duties required of Executive 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.

Section 14.  Parties in Interest.  This Agreement is for the sole benefit of the parties and shall not create any rights to any person not a party.  This Agreement is personal and may not be assigned by any party without the prior written consent of the other party.  Subject to the foregoing, this Agreement shall be binding upon, inure to the benefit of, and be enforceable by, the respective successors and assigns of the parties (including the heirs and estate of Executive), but no assignment shall, of itself, relieve any party of its obligations hereunder.

Section 15.  Entire Agreement.  This Agreement sets forth the entire agreement and understandings of the parties in respect to the subject matter hereof and supersedes all prior agreements, arrangements and understandings relating to the subject matter hereof.

Section 16.  Interpretation.  The section and other headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.  Words used in this Agreement in the singular number shall include the plural, and vice versa, unless the context requires otherwise.  Words of gender used in this Agreement may be read as masculine, feminine or neuter as the context may require.  The terms “this

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Agreement”, “hereto” “herein”, “hereby”, “hereof” and similar expressions refer to this Agreement in its entirety and not to any particular provision or portion of this Agreement.  When a reference is made to Sections, such reference shall be to a Section of this Agreement, unless otherwise indicated.  Whenever the words “include”, “includes” or “including” are used herein, they shall be deemed to be followed by the words “without limitation”.

Section 17.  Law Governing.  This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Ohio without regard to its conflicts of laws rules.

Section 18.  Counterparts.  This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original but all of which taken together shall constitute one and the same instrument.

Section 19.  Amendment.  Any amendment to this Agreement or any waiver of rights or any consent hereunder shall not be operative unless it is in writing and signed by the party sought to be charged.

Section 20.  Equitable Relief.  Executive acknowledges that the Companies may be irreparably injured by any breach of Section 12.  Accordingly, the Companies shall be entitled to specific performance and other injunctive relief as remedies for any breach (or threatened breach) of Section 12, in addition to all other remedies available at law or in equity.

Section 21.  Severability.  If any provision of this Agreement or the application thereof to any party or circumstance shall be held invalid or unenforceable to any extent, the remainder of this Agreement and the application of such provision to another party or circumstance shall not be affected thereby and such provision shall be enforced to the greatest extent permitted by applicable law.

Section 22.  Waiver.  The failure or delay on the part of any party to insist upon strict performance of any of the terms or conditions of this Agreement will not constitute a waiver of any of its rights hereunder.  No right or remedy herein conferred upon or reserved to any party is intended to be exclusive of any other right or remedy and all such rights and remedies shall be cumulative.

Section 23.  No Mitigation.  Executive shall not be required to mitigate the amount of any payment provided for pursuant to this Agreement by seeking other employment and, to the extent that Executive obtains or undertakes other employment, the payment will not be reduced by the earnings of Executive from the other employment.

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

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DPL INC.
By:
Its:	/s/ Chief Executive Officer
Robert Biggs
W August Hillenbrand
Vice Chairman

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EX-10.2

Exhibit 10.2

September 20, 2004

Mr. Robert D. Biggs

Executive Chairman

DPL Inc.

1065 Woodman Drive

Dayton, OH 45432

Dear Bob:

You entered into an employment agreement with DPL Inc. and The Dayton Power and Light Company (collectively, the “Companies”) on July 21, 2004, which was effective as of May 16, 2004.

This will confirm that the option to purchase 200,000 common shares of DPL Inc. (the “Option”) contemplated by Section 3(c) your agreement, which has not been granted to date, will be granted on the date you sign the attached Stock Option Agreement (the “Grant Date”).  Notwithstanding anything in your agreement to the contrary, the per share exercise price of the Option will be the Fair Market Value (as defined in the DPL Inc. Stock Option Plan) on the Grant Date.

Please execute this letter agreement where indicated below to express your acknowledgement and agreement to the above and return one signed original of this letter agreement to Pamela Holdren.

	Very truly yours,
	DPL Inc.
	By:
		W August Hillenbrand
		Vice Chairman
Acknowledged and Agreed to:
Robert D. Biggs	Dated:

EX-10.3

Exhibit 10.3

DPL INC.

STOCK OPTION PLAN

Management Stock Option Agreement

This Agreement is made as of October 5, 2004 (the “Grant Date”), by and between DPL Inc., an Ohio corporation (the “Company”) and Robert Biggs (the “Participant”).

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

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

1.Award.  The Participant is hereby granted a stock option (an “Option”) to purchase from the Company up to a total of 200,000 Common Shares of the Company at the Fair Market Value, as defined in the Plan, on the Grant Date, or $20.94, per share (the “Exercise Price”).  The term of such Option shall be seven years from May 16, 2004 (the “Term”).  This Option is not intended to qualify as an incentive stock option under Code Section 422.

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

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

Cumulative Percent of Option	Vested as of May 16
50%	2005
100%	2006

b.Exercise.  Each vested portion of the Option shall become exercisable on the date of its vesting, and shall remain exercisable for a period of five years from the date it becomes vested.  The Option may be exercised for less than the full number of Shares for which the Option is then exercisable.  To the extent then exercisable, the Option may be exercised by the Participant by giving written notice of exercise to the Company in such form as may be provided by the Committee, specifying the number of Shares with respect to which the Option is to be exercised and such other information as the Committee may require.  Such exercise shall be effective upon receipt by the Company of such written

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

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

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

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

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

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

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

5.Restriction on Sale of Shares.  If, after January 1, 2000, a Person acquires beneficial ownership of securities of the Company representing 15% or more of the combined voting power of the then outstanding securities of the Company, such acquisition has been approved by the Board of Directors, and if the

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

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

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

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

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

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

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

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

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

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

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

a.“Cause” means (i) the commission of a felony, (ii) embezzlement, (iii) the illegal use of drugs or (iv) if no Change of Control has occurred other than the entering into of an agreement referred to in items (ii) or (iii) of the definition of Change of Control, the failure by the Participant to substantially perform his duties with the Company or any Subsidiary (other than any such failure resulting from his Disability) as determined by the Committee.  Notwithstanding the foregoing, “Cause” shall not be deemed to exist unless and until there shall have been delivered to the Participant a copy of a resolution duly adopted by the written consent of not less than three-fourths of the number of directors of the Company then in office (after reasonable notice to the Participant and an opportunity for the Participant, together with his counsel, to be heard at a meeting of the Board of Directors called and held for that purpose), finding that in the

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good faith opinion of such directors the Participant was guilty of conduct set forth in clauses (i), (ii), (iii) or (iv) of the preceding sentence and specifying the particulars thereof in detail.

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

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

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

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

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

DPL INC.
By:
	W August Hillenbrand
	Vice Chairman
	Robert Biggs
	Participant

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