<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
DPL INC.
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
DPL INC.
COURTHOUSE PLAZA S.W.
DAYTON, OHIO 45402
-------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 20, 1999
-----------------
TO SHAREHOLDERS OF
DPL INC.:
The Annual Meeting of Shareholders for DPL Inc. will be held at Miami Trace
High School, 3722 State Route 41 N.W., Washington Court House, Ohio, on Tuesday,
April 20, 1999, at 10:00 a.m. Centrally located between Dayton, Cincinnati and
Columbus, the selection of Washington Court House as this year's Annual Meeting
site keeps with the unique DPL tradition of meeting with Shareholders throughout
the communities we serve. Located in Central Ohio's Fayette County, the area has
a diversified and growing industrial base to go along with a strong agricultural
tradition.
The business of the meeting will be:
1. To elect three directors of DPL Inc., each of whom shall serve for a
term of three years.
2. To transact such other business as may properly come before the meeting
or any adjournments thereof.
Holders of common shares of record at the close of business on February 16,
1999 are entitled to vote at the meeting.
If you are a holder of common shares and will not be present personally,
please mark, sign, date and return the enclosed proxy in the enclosed
self-addressed envelope as promptly as possible so that the presence of a quorum
may be assured and unnecessary expense avoided. Giving the proxy will not affect
your right to vote in person if you attend the meeting.
Your vote is important to us and we thank you for your prompt response and
continued interest in DPL Inc.
Sincerely,
/s/ Stephen F. Koziar, Jr.
STEPHEN F. KOZIAR, JR.
GROUP VICE PRESIDENT AND SECRETARY
Dayton, Ohio
March 1, 1999
<PAGE>
DPL INC.
COURTHOUSE PLAZA S.W., DAYTON, OHIO 45402
-------------------
PROXY STATEMENT
-------------------
This Proxy Statement is furnished to you and other shareholders of DPL Inc.
in connection with the solicitation of proxies by its Board of Directors to be
used at the Annual Meeting of Shareholders to be held at Miami Trace High
School, 3722 State Route 41 N.W., Washington Court House, Ohio, on April 20,
1999 at 10:00 a.m. and any adjournments thereof. At the close of business on
February 16, 1999, the record date for the Annual Meeting, DPL Inc. had
outstanding 161,264,604 common shares. Only holders of common shares on such
record date are entitled to vote at the Annual Meeting, and each such
shareholder is entitled to one vote per share.
All common shares represented by properly executed proxies received by the
Board of Directors pursuant to this solicitation will be voted in accordance
with the shareholder's directions specified on the proxy. If no directions have
been specified by marking the appropriate squares on the accompanying proxy
card, the shares will be voted "FOR" the proposal as listed. A shareholder
signing and returning the accompanying proxy has the power to revoke it at any
time prior to its exercise.
All expenses in connection with this solicitation of proxies will be paid by
DPL Inc. Proxies will be solicited principally by mail but directors, officers,
and certain other individuals specified by DPL Inc. may personally solicit
proxies. In addition, DPL Inc. has retained Georgeson & Co., a proxy
solicitation firm, to assist in the solicitation of proxies. DPL Inc. will
reimburse custodians, nominees or other persons for their out-of-pocket expenses
in sending proxy material to beneficial owners and will pay Georgeson & Co. a
fee of approximately $12,000, plus out-of-pocket expenses.
This Proxy Statement together with the accompanying proxy card were first
mailed to common shareholders on or about March 1, 1999.
1
<PAGE>
BUSINESS OF THE MEETING
1. ELECTION OF DIRECTORS
The Regulations of DPL Inc. provide for the classification of Directors into
three classes, with each class being of approximately equal size and in no event
shall any class contain fewer than three directors nor more than four directors.
The term of each directorship is three years and the terms of the three classes
are staggered in a manner so that only one class is elected by the shareholders
annually. The Board is presently authorized to consist of nine directors. These
nine directors are also directors of The Dayton Power and Light Company
("DP&L"), the principal subsidiary of DPL Inc. Three directors are to be elected
this year to serve until the Annual Meeting of Shareholders in 2002 or until
their successors are duly elected and qualified.
Unless specifically instructed to the contrary, the Proxy Committee named in
the enclosed form of proxy will vote all duly executed proxies "FOR" the
election of the nominees named below. Should any nominee become unable to accept
nomination or election, the Proxy Committee will vote for the election of such
other person as a director as the present directors may recommend in the place
of such nominee. The following information regarding the nominees and the other
directors continuing in office is based on information furnished by them:
2
<PAGE>
NOMINEES FOR DIRECTOR FOR THREE-YEAR TERM EXPIRING IN 2002
<TABLE>
<CAPTION>
COMMON SHARES
BENEFICIALLY OWNED
AT JANUARY 31,
PRINCIPAL OCCUPATION AND OTHER INFORMATION 1999(1)
- - -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
JAMES F. DICKE, II, Age 53, Director since 1990. 96,220
President, Crown Equipment Corporation, New Bremen, Ohio,
[PHOTO4] international manufacturer and distributor of electric
lift trucks and material handling products.
Director: Regional Boys and Girls Clubs of America,
Anderson-Cooke, Inc., Dayton Art Institute.
Chairman: Trinity University Board of Trustees.
Secretary: Culver Educational Foundation.
PETER H. FORSTER, Age 56, Director since 1979. 350,537(2)
Chairman, DPL Inc. and The Dayton Power and Light Company.
[PHOTO5] Chairman: Miami Valley Research Foundation.
Director: Amcast Industrial Corp., Comair Holdings, Inc.
Trustee: F.M. Tait Foundation, Arts Center Foundation.
JANE G. HALEY, Age 68, Director since 1978. 56,172
President and Chief Executive Officer, Gosiger, Inc.,
[PHOTO6] Dayton, Ohio, national importer and distributor of machine
tools.
Director: Ultra-Met, Urbana, Ohio, ONA America, Dayton,
Ohio.
Trustee: University of Dayton, Chaminade-Julienne High
School, Dayton, Ohio.
Member: Area Progress Council, Miami Valley Economic
Development Coalition.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
COMMON SHARES
BENEFICIALLY OWNED
AT JANUARY 31,
PRINCIPAL OCCUPATION AND OTHER INFORMATION 1999(1)
- - -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CLASS OF 2000
-------------
ERNIE GREEN, Age 60, Director since 1991. 38,597
President and Chief Executive Officer, Ernie Green
[PHOTO7] Industries, Dayton, Ohio, automotive components
manufacturer.
Director: Pitney Bowes Inc., WPTD-TV, Eaton Corp.,
Gradall.
DAVID R. HOLMES, Age 58, Director since 1994. 14,262
Chairman, President and Chief Executive Officer, The
[PHOTO8] Reynolds and Reynolds Company, Dayton, Ohio, information
management systems.
Director: NCR Corporation, Dayton, Ohio.
Advisor: J. L. Kellogg Graduate School of Management,
Northwestern University.
Member: Dayton Business Committee, Area Progress Council,
Downtown Dayton Partnership.
BURNELL R. ROBERTS, Age 71, Director since 1987. 40,341
Retired Chairman of the Board and Chief Executive Officer,
[PHOTO9] The Mead Corporation, Dayton, Ohio, forest products
producer.
Director: Rayonier, Inc., Universal Protective Packaging,
Inc., Vutek, Inc.
Trustee: Granum Value Fund.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
COMMON SHARES
BENEFICIALLY OWNED
AT JANUARY 31,
PRINCIPAL OCCUPATION AND OTHER INFORMATION 1999(1)
- - -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CLASS OF 2001
-------------
THOMAS J. DANIS, Age 49, Director since 1989. 39,871
Chairman and Chief Executive Officer, The Danis Companies,
[PHOTO1] Dayton, Ohio, construction, real estate and environmental
services.
Director: CSR America Inc.
Trustee: Dayton Foundation, Miami Valley Research Park
Foundation.
ALLEN M. HILL, Age 53, Director since 1989. 233,571(3)
President and Chief Executive Officer, DPL Inc. and The
[PHOTO2] Dayton Power and Light Company.
Director: Fifth Third Bank, Premier Health Partners.
Trustee: Dayton Business Committee, The University of
Dayton, Air Force Museum Foundation, Alliance Community
Schools.
W AUGUST HILLENBRAND, Age 58, Director since 1992. 24,334
President and Chief Executive Officer, Hillenbrand
[PHOTO3] Industries, Batesville, Indiana, a diversified public
holding company with four wholly-owned and autonomously
operated subsidiaries manufacturing caskets, hospital
furniture, hospital supplies and providing funeral planning
services.
Director: Forecorp, Inc., Forethought Life Insurance
Company.
Trustee: Denison University, National Committee for Quality
Health Care, Batesville Girl Scouts.
</TABLE>
- - ---------------
(1) The number of shares shown represents in each instance less than 1% of the
outstanding Common Shares. There were 938,067 shares or 0.58% of the total
number of Common Shares beneficially owned by all directors and executive
officers of DPL Inc. and DP&L as a group at January 31, 1999. The number of
shares shown includes Common Shares transferred to the Master Trust for
non-employee directors pursuant to the Directors' Deferred Stock
Compensation Plan.
5
<PAGE>
(2) The number of shares shown for Mr. Forster includes 40,537 Common Shares and
310,000 restricted share equivalents with no voting rights.
(3) The number of shares shown for Mr. Hill includes 33,571 Common Shares and
200,000 restricted share equivalents with no voting rights.
The three candidates receiving the greatest number of votes will be elected
as directors. Abstentions and broker non-votes will be treated as non-votes.
Under Ohio law, if a shareholder gives written notice to the President, a
Vice President or the Secretary, not less than 48 hours before the Annual
Meeting, that such shareholder desires the voting at the election of directors
to be cumulative, and if an announcement of the giving of such notice is made
upon the convening of the meeting by or on behalf of the shareholder giving such
notice, then shareholders will be entitled to give one candidate as many votes
as the number of directors to be elected multiplied by the number of their
shares, or to distribute their votes on the same principle among two or more
candidates. In the event that directors are elected by cumulative voting and
cumulated votes represented by proxies solicited hereby are insufficient to
elect all the nominees, then the Proxy Committee will vote such proxies
cumulatively for the election of as many of such nominees as possible and in
such order as the Proxy Committee may determine.
INFORMATION CONCERNING THE BOARD OF DIRECTORS AND ITS COMMITTEES FOR 1998
The Board of Directors of DPL Inc. met on seven occasions and the Board of
Directors of DP&L met on six occasions during 1998. The three standing
committees of DPL Inc. -- Executive, Finance and Audit Review and Compensation
and Management Review -- held fourteen meetings in total and the standing
committee of DP&L -- Community and External Relations -- met two times in total.
COMMITTEES OF DPL INC.
FINANCE AND AUDIT REVIEW COMMITTEE
This Committee consists of the following non-employee members of the Board:
Thomas J. Danis, Chairman, Ernie Green, Peter H. Forster, Jane G. Haley and
David R. Holmes. Allen M. Hill is a non-voting member.
The Finance and Audit Review Committee oversees the financial plans,
approves the terms and conditions of financial arrangements and recommends to
the Board of Directors such actions and policies that will best accommodate DPL
Inc.'s objectives and operating strategies while maintaining its sound fiscal
health. It also provides direct communication between DPL Inc.'s internal
auditors, the independent auditors, PricewaterhouseCoopers LLP, and the Board of
Directors. It is intended to assure the independent auditors the freedom,
cooperation and opportunity necessary to accomplish their functions. It is also
intended to assure that appropriate action is taken on the recommendations of
the auditors. This Committee met four times during 1998.
6
<PAGE>
COMPENSATION AND MANAGEMENT REVIEW COMMITTEE
This Committee consists of the following non-employee members of the Board:
Burnell R. Roberts, Chairman, James F. Dicke, II and W August Hillenbrand.
The Compensation and Management Review Committee has the broad
responsibility to see that the officers and key management personnel of DPL Inc.
and its subsidiaries perform in accordance with corporate objectives, and are
effectively compensated in terms of salaries, supplemental compensation and
benefits which are internally equitable and externally competitive. The
Committee administers the deferred and incentive compensation plans for
directors and officers. This Committee met four times during 1998.
EXECUTIVE COMMITTEE
This Committee consists of the following non-employee members of the Board:
Peter H. Forster, Chairman, James F. Dicke, II, W August Hillenbrand and Burnell
R. Roberts. Allen M. Hill is a non-voting member.
The principal duties of this Committee include evaluating executive
management development, succession and organizational structure in addition to
director selection, tenure and succession. This Committee also serves on a
standby basis for use in an emergency which requires immediate action. This
Committee met six times during 1998.
The non-employee members of the Executive Committee act as a nominating
committee for the Board of Directors and endeavor to identify, seek out, and if
necessary actively recruit, the best available candidates who, in the judgment
of the Committee, have the character, education, training, experience and proven
accomplishments which give promise of significant contribution to the
responsible and profitable conduct of DPL Inc.'s business in the interest of all
shareholders, customers and employees. This Committee considers qualified
nominees submitted to DPL Inc. by shareholders.
COMMITTEE OF DP&L
COMMUNITY AND EXTERNAL RELATIONS COMMITTEE
This Committee consists of the following non-employee members of the Board:
Jane G. Haley, Chairman, Thomas J. Danis, Peter H. Forster, Ernie Green and
David R. Holmes. Allen M. Hill is a non-voting member.
The Community and External Relations Committee provides for a periodic
review of DP&L's relations with all sectors of the community with which it is
vitally concerned -- shareholders, customers, governmental bodies and agencies,
political groups, regulatory agencies, elected officials and the media. This
Committee met two times during 1998.
7
<PAGE>
OTHER MATTERS
DPL Inc. directors, all of whom are also directors of DP&L, receive no
annual fee for their services as directors of DPL Inc. Directors of DP&L who are
not employees receive $12,000 annually for services as a director, $600 for
attendance at a Board meeting, and $500 for attendance at a committee meeting or
operating session of DPL Inc. and DP&L. Members of the Executive Committee
receive $2,000 annually for services on that committee. Each committee chairman
receives an additional $1,600 annually. Directors who are not employees of DP&L
also participate in a Directors' Deferred Stock Compensation Plan (the "Stock
Plan") under which a number of shares are awarded to directors each year. All
shares awarded under the Stock Plan are transferred to a grantor trust (the
"Master Trust") maintained by DPL Inc. to secure its obligations under various
directors' and officers' deferred and incentive compensation plans. Receipt of
the shares or cash equal to the value thereof is deferred until the participant
retires as a director or until such other time as designated by the participant
and approved by the Committee. In the event of a change of control (as defined
in the Stock Plan), the authority and discretion which is exercisable by the
Compensation and Management Review Committee, will be exercised by the trustees
of the Master Trust. In April 1998, each non-employee director was awarded 2,700
shares.
DPL Inc. maintains a Deferred Compensation Plan (the "Compensation Plan")
for non-employee directors in which payment of directors' fees may be deferred.
The Compensation Plan also includes a supplementary deferred income program
which provides that DPL Inc. will match $5,000 annually of deferred directors'
fees for a maximum of ten years. Under the supplementary program, a $150,000
death benefit is provided until such director ceases to participate in the
Compensation Plan. Under the standard deferred income program directors are
entitled to receive a lump sum payment or payments in installments over a period
up to 20 years. A director may elect payment in either cash or common shares.
Participants in the supplementary program are entitled to receive deferred
payments over a ten-year period in equal installments. The Compensation Plan
provides that in the event of a change in control of DPL Inc., as defined in the
Compensation Plan, all benefits provided under the supplementary deferred income
program become immediately vested without the need for further contributions by
the participants and the discretion which, under the Compensation Plan, is
exercisable by the Chief Executive Officer of DPL Inc. will be exercised by the
trustees of the Master Trust. If the consent of the Chief Executive Officer of
DPL Inc. is obtained, individuals who have attained the age of 55 and who are no
longer directors of DPL Inc. may receive a lump sum payment of amounts credited
to them under the supplementary deferred income program.
Mr. Forster, who retired as Chief Executive Officer of DPL Inc. effective
December 31, 1996, has entered into an agreement with DPL Inc. and DP&L pursuant
to which he serves as Chairman of the Board of DPL Inc. and DP&L and provides
advisory and strategic planning services. The term of the agreement expires on
December 31, 1999 (which term is automatically extended on December 31, 1999 and
each December 31 thereafter for an additional year unless either party gives
advance notice of nonrenewal). For these services, Mr. Forster receives an
annual fee of $500,000 (as well as such bonuses, if any, as may be determined by
the Compensation and Management Review Committee in its discretion) and an award
opportunity of 35,000 restricted shares under the Stock
8
<PAGE>
Plan. As Chairman, Mr. Forster is responsible for the long-term strategic
planning of the Company, the oversight of financial assets, and the evaluation
and recommendations relating to the merger, acquisition and disposition of
utility assets. Mr. Forster participates in a bonus program for individuals
managing financial assets. Under this program bonuses will be paid in 2000 based
on net cumulative investment performance of such assets over the four-year
period 1996 through 1999 and for each year thereafter based on annual
performance. Payments under the bonus program, if and as earned, will be
credited to a deferred payment account, and will continue following termination
of the agreement. Mr. Forster's average annualized bonus payable under the
program is estimated to be 83,600 SIU's (at an estimated value of $19 per unit)
for each of 1996, 1997, and 1998 based on investment performance through 1998.
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
DPL Inc. has designed its executive compensation programs to create a strong
and direct link between the compensation paid to senior executives and current
and long-term level of company performance. The program also recognizes each
executive's individual contribution to that performance.
There are three elements of DPL Inc.'s executive compensation program. Each
element is designed to reward different aspects of executive performance.
1. Base salary and salary increases recognize competitive pay levels,
sustained long-term value creation and contributions by individual
executives.
2. Annual incentives, which are awarded through the Management
Incentive Compensation Program, reward the achievement of operational and
strategic milestones. Actual objectives vary from year to year depending on
Company priorities and are different for each executive. Each executive has
three or four individual objectives. The individual objectives for 1998 were
related to maintaining competitive energy prices and providing superior
customer service. They included reductions in operating expenses, outside
service costs, fuel inventory expenses and capital expenditures, as well as
improvements in plant productivity, customer satisfaction and earnings per
share. Over half of each executive's annual incentive payout is determined
based on their performance as compared to their individual objectives. The
remaining portion of the executive's annual incentive payout is based on the
executive group's aggregate performance on their individual objectives. For
1998, executives met their individual objectives. Target incentive awards
range from thirty to sixty percent of base salary, depending upon the
executive's position. Executives can earn from zero to one and a half times
the target amount.
3. DPL Inc.'s long-term SIU plan rewards longer-term financial results
and total return to shareholders. The actual number of SIU's earned is based
on return on equity as compared with the performance of the 72 largest
electric and natural gas utilities.
9
<PAGE>
Compensation opportunities are positioned at the general industry median for
the top two executives and between the utility industry 75th percentile and
general industry median for other executives. Over half of the target total
compensation for each executive will vary with performance. Long-term incentives
are paid only when return on equity performance exceeds electric and natural gas
utility industry medians.
The Chief Executive Officer's total compensation potential is based on
consideration of median general industry practices. The Chief Executive
Officer's annual and long-term incentive programs are variable enough to provide
actual total compensation at median general industry levels only if DPL Inc.'s
performance is in the top quartile of electric and natural gas utilities. If DPL
Inc.'s long-term performance is at the median of the electric and natural gas
utility industry or lower, the Chief Executive Officer's actual total
compensation will be at or close to electric and natural gas utility industry
median levels.
Overall, Mr. Hill exceeded his annual performance objectives for 1998. Mr.
Hill's salary was increased in 1998 based on his individual contributions and
consistent with the performance criteria used for all executives. Under the
Management Incentive Compensation Program, Mr. Hill received a bonus based
seventy-five percent on DPL Inc.'s performance and twenty-five percent on the
Committee's assessment of his individual performance. Company performance
objectives were based on equal consideration of earnings per share performance,
which objective was satisfied, and the aggregate performance of the executive
group versus their individual objectives. The Committee based its assessment of
Mr. Hill's individual performance on consideration of several factors, including
DPL Inc.'s performance versus other electric and natural gas utilities,
investment community evaluations and progress on management development and
succession planning. Mr. Hill was contingently awarded 37,500 SIU's in 1998
based on consideration of median general industry long-term incentive
opportunities and the overall competitiveness of the remainder of his
compensation package. Mr. Hill will receive these SIU's in 2002 based on the
extent by which DPL Inc.'s long-term financial performance between 1999, 2000
and 2001 exceeds the median for other electric and natural gas utilities.
Beginning in 1999, DPL Inc. revised the SIU plan in response to changing
performance expectations and requirements in the emerging competitive
marketplace. To reflect the increasing importance of long-term stock market
performance in a deregulated environment, the Company added a total return to
shareholders measure to its SIU plan to complement the return on equity measure.
This measure receives a weighting of 35 percent, and the return on equity
measure receives a weighting of 65 percent.
The Committee believes including both return on equity and total return to
shareholders measures will encourage executives to continue to deliver
operational results that drive longer-term success while still meeting the
longer-term performance expectations of investors. With these changes, no SIU's
will be earned for return on equity or total return to shareholders performance
that is below median performance levels for the 72 largest electric and natural
gas utilities.
10
<PAGE>
The net effect of DPL Inc.'s changes to the SIU plan increases the level of
risk in the program and strengthens the linkage between executive and
shareholder interests.
Based on current compensation levels and the present structure of DPL Inc.'s
executive compensation programs, the Committee believes that the compensation
payable to executives will not be subject to the limitation on deductibility
imposed by the Omnibus Budget Reconciliation Act of 1993.
The Committee believes that DPL Inc.'s annual and long-term incentive plan
goals have contributed to the strong stock market performance shown in the
performance chart in the next section. DPL Inc.'s total return to shareholders
between 1993 and 1998 was significantly higher than total return to shareholders
for the utility industry as a whole.
Compensation Management Review
Committee
Burnell R. Roberts, Chairman
James F. Dicke, II
W August Hillenbrand
11
<PAGE>
1997 Proxy Graph Data (PowerPoint)
<TABLE>
<CAPTION>
DOW JONES DOW JONES RRA 75 S&P ELECTRIC
DATE DPL INC. INDUSTRIAL UTILITIES UTILITIES CO.'S
<S> <C> <C> <C> <C> <C>
Dec-92 $ 1,000.00 $ 1,000.00 $ 1,000.00 $ 1,000.00 $ 1,000.00
Dec-93 $ 1,102.28 $ 1,169.09 $ 1,095.26 $ 1,118.90 $ 1,125.56
Dec-94 $ 1,161.92 $ 1,228.13 $ 927.14 $ 1,007.74 $ 979.65
Dec-95 $ 1,481.25 $ 1,679.95 $ 1,225.20 $ 1,307.00 $ 1,282.80
Dec-96 $ 1,531.69 $ 2,164.58 $ 1,335.82 $ 1,344.97 $ 1,278.22
Dec-97 $ 1,915.23 $ 2,703.86 $ 1,643.24 $ 1,749.84 $ 1,611.33
</TABLE>
12
<PAGE>
SUMMARY COMPENSATION TABLE
Set forth below is certain information concerning the compensation of the
Chief Executive Officer and each of the other four most highly compensated
executive officers of DPL Inc. and its major subsidiary DP&L, for the last three
fiscal years, for services rendered in all capacities to DPL Inc. and its
subsidiaries, including DP&L.
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
-----------------
-------------------- RESTRICTED STOCK ALL OTHER
SALARY BONUS(1) UNIT AWARDS(2) COMPENSATION(3)
NAME AND PRINCIPAL POSITION* YEAR ($) ($) ($) ($)
- - ------------------------------------------- --------- --------- --------- ----------------- -----------------
<S> <C> <C> <C> <C> <C>
Allen M. Hill 1998 500,000 300,000 880,000 ('99-01) 1,000
President and Chief Executive 1997 430,000 258,000 834,000 ('98-00) 1,000
Officer -- DPL Inc. and DP&L 1996 377,000 226,000 717,000 ('97-99) 1,000
Peter H. Forster(4) 1998 500,000 200,000 840,000 ('99-01) 87,000
Chairman -- DPL Inc. 1997 500,000 150,000 840,000 ('98-00) 70,400
and DP&L 1996 597,000 358,000 984,000 ('97-99) 1,000
Judy W. Lansaw 1998 264,000 119,000 347,000 ('99-01) 1,000
Group Vice President -- DPL Inc. 1997 240,000 108,000 411,000 ('98-00) 1,000
and DP&L 1996 214,000 96,000 393,000 ('97-99) 1,000
Stephen F. Koziar, Jr. 1998 244,000 110,000 336,000 ('99-01) 1,000
Group Vice President and 1997 231,000 104,000 234,000 ('98-00) 1,000
Secretary -- DPL Inc. and DP&L 1996 218,000 98,000 216,000 ('97-99) 1,000
H. Ted Santo 1998 243,000 109,000 326,000 ('99-01) 1,000
Group Vice President -- DP&L 1997 226,000 102,000 297,000 ('98-00) 1,000
1996 205,000 92,000 305,000 ('97-99) 1,000
</TABLE>
- - ------------
* In addition to the named executive officers, Beth E. Mooney, Executive Vice
President and Chief Operating Officer--DPL Inc., and James P. Torgerson,
Vice President, Chief Financial Officer and Treasurer--DPL Inc., joined DPL
Inc. in mid-year 1998.
(1) Amounts in this column represent awards made under the Management Incentive
Compensation Program. Awards are based on achievement of specific
predetermined operating and management goals in the year indicated and paid
in the year earned or in the following year.
(2) Amounts shown in this column have not been paid, but are contingent on
performance and represent the dollar value of restricted SIU's awarded to
the named executive officer under the Management Stock Incentive Plan
("MSIP") based on the closing price of a DPL Inc. common share on the New
York Stock Exchange -- Consolidated Transactions Tape on the date of award.
For plan years '97-99 and '98-00, the SIU's may be earned only to the extent
that the DPL Inc. average return on equity ("ROE") over a three-year
performance period is above the RRA industry median. For the '99-01 plan,
SIU's may be earned only to the extent the DPL Inc.
13
<PAGE>
average ROE and total return to shareholders ("TRS") over a three-year
performance period is above the RRA industry median. The weighting of the
two factors is 65% ROE and 35% TRS.
Depending on the performance of DPL Inc., these SIU's may be earned in
amounts ranging from 0% to 100% of the target award at an ROE between 0 and
100 basis points above median ROE and from 100% to 150% of target award at
an ROE between 100 and 200 basis points above median ROE. For plan years
'99-01, SIU's are earned based on both ROE, as previously stated, and TRS in
amounts ranging from 0-100% of the target award at a TRS between the 50th
and 80th percentile and from 100%-200% of the target award at a TRS between
the 80th and 100th percentile.
Units may be earned only if the three-year average ROE is above 10% for
incentive award years '97-99 and '98-00 and if the TRS exceeds the return on
a three-year treasury security for plan years '99-01. Amounts shown for
1996, 1997 and 1998 reflect target awards. For each SIU which vests, a
participant receives the cash equivalent of one DPL Inc. common share plus
dividend equivalents from the date of award. Prior to payout at retirement,
an individual may elect to convert a portion of vested SIU's to a cash
equivalent and accrue interest thereon. All payouts of vested SIU's under
the MSIP are deferred until retirement.
(3) Amounts in this column represent employer matching contributions on behalf
of each named executive under the DP&L Employee Savings Plan made to the DPL
Inc. Employee Stock Ownership Plan.
(4) Annual compensation shown for Mr. Forster for 1997 and 1998 was paid
pursuant to an agreement with DPL Inc. and DP&L. Long term compensation
award opportunities shown for 1996, 1997 and 1998 represent the dollar value
of restricted shares awarded to Mr. Forster under the Directors' Stock Plan
which are subject to the same earning and vesting criteria generally
applicable to SIU's. All other compensation shown for 1998 represents
directors fees of $37,000 and the dollar value of the annual award of 2,700
shares to each non-employee director under the Directors' Stock Plan and for
1997 represents directors fees of $32,600 and an award of 2,400 shares under
the Directors' Stock Plan. See "Information Concerning the Board of
Directors and its Committees -- Other Matters."
CERTAIN SEVERANCE PAY AGREEMENTS
DPL Inc. entered into severance pay agreements with each of Messrs. Hill,
Koziar, and Santo and Mrs. Lansaw providing for the payment of severance
benefits in the event that the individual's employment with DPL Inc. or its
subsidiaries is terminated under specified circumstances within three years
after a change in control of DPL Inc. or DP&L (generally, defined as the
acquisition of 15% or more of the voting securities or certain mergers or other
business combinations). The agreements entered into between 1987 and 1991
require the individuals to remain with DPL Inc. throughout the period during
which any change of control is pending in order to help put in place the best
plan for the shareholders. The principal severance benefits under each agreement
include payment of the following: (i) the individual's full base salary and
accrued benefits through the date of termination and any awards for any
completed or partial period under the MICP and the individual's
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<PAGE>
award for the current period under the MICP (or for a completed period if no
award for that period has yet been determined) fixed at an amount equal to his
average annual award for the preceding three years; (ii) 300% of the sum of the
individual's annual base salary at the rate in effect on the date of termination
(or, if higher, at the rate in effect as of the time of the change in control)
plus the average amount awarded to the individual under the MICP for the three
preceding years; (iii) all awarded or earned but unpaid SIU's; and (iv)
continuing medical, life, and disability insurance. In the event any payments
under these agreements are subject to an excise tax under the Internal Revenue
Code of 1986, the payments will be adjusted so that the total payments received
on an after-tax basis will equal the amount the individual would have received
without imposition of the excise tax. The severance pay agreements are effective
for one year but are automatically renewed each year unless DPL Inc. or the
participant notifies the other one year in advance of its or his or her intent
not to renew. DPL Inc. has agreed to secure its obligations under the severance
pay agreements by transferring required payments to the Master Trust. Mr.
Forster's agreement with DPL Inc. and DP&L contains similar severance benefits
provisions.
PENSION PLANS
The following table sets forth the estimated total annual benefits payable
under the DP&L retirement income plan and the supplemental executive retirement
plan to executive officers at normal retirement date (age 65) based upon years
of accredited service and final average annual compensation (including base and
incentive compensation) for the three highest years during the last ten:
<TABLE>
<CAPTION>
TOTAL ANNUAL RETIREMENT
BENEFITS FOR
YEARS OF ACCREDITED SERVICE AT
AGE 65
------------------------------
FINAL AVERAGE 20-30
ANNUAL EARNINGS 10 YEARS 15 YEARS YEARS
----------------- -------- -------- ----------
<S> <C> <C> <C>
$ 200,000............................. $ 52,000 $ 78,000 $104,000
400,000............................. 109,000 163,500 218,000
600,000............................. 166,000 249,000 332,000
800,000............................. 223,000 334,500 446,000
1,000,000............................. 280,000 420,000 560,000
1,200,000............................. 337,000 505,500 674,000
1,400,000............................. 394,000 591,000 788,000
</TABLE>
The years of accredited service for the named executive officers are Mr.
Hill -- 29 yrs.; Mr. Koziar -- 29 yrs.; Mrs. Lansaw -- 19 yrs. and Mr. Santo --
23 yrs. Years of service under the retirement income plan are capped at 30
years, however, the retirement and supplemental plans, taken together, can
provide full benefits after 20 years of accredited service. Benefits are
computed on a straight-life annuity basis, are subject to deduction for Social
Security benefits and may be reduced by benefits payable under retirement plans
of other employers. For each year an individual retires prior to age 62,
benefits under the supplemental plan are reduced by 3% or 21% for early
15
<PAGE>
retirement at age 55. Mr. Forster ceased to accrue benefits under the retirement
and supplemental plans effective as of December 31, 1996 upon his retirement as
an employee of DPL Inc. and DP&L.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
As of January 31, 1999, there are no persons known by the Board of Directors
of the Company to be the beneficial owner of more than 5% of the outstanding
shares of Common Stock of DPL Inc.
SECURITY OWNERSHIP OF CERTAIN EXECUTIVE OFFICERS
Set forth below is information concerning the beneficial ownership of shares
of Common Stock of DPL Inc. by each executive officer of DPL Inc. or DP&L named
in the Summary Compensation Table (other than executive officers who are
directors of DPL Inc. whose security ownership is found under "Election of
Directors") as of January 31, 1999. Please refer to Note (1) on Page 5 for the
security ownership of all directors and executive officers of DPL Inc. and DP&L.
<TABLE>
<CAPTION>
NAME OF AMOUNT AND NATURE OF PERCENT OF
EXECUTIVE OFFICER BENEFICIAL OWNERSHIP CLASS
------------------------ -------------------- -----------
<S> <C> <C>
Stephen F. Koziar, Jr. 14,655 shares *
H. Ted Santo 3,932 shares *
Judy W. Lansaw 3,704 shares *
</TABLE>
- - ------------
* Less than one percent
INDEPENDENT PUBLIC ACCOUNTANTS
PricewaterhouseCoopers LLP served as independent public accountants of DPL
Inc. for the year 1998 and has been appointed as independent public accountants
for 1999. A representative of PricewaterhouseCoopers LLP will be present at the
Annual Meeting with the opportunity to make a statement if he desires to do so
and to respond to appropriate questions from shareholders.
SHAREHOLDER PROPOSALS
A proposal by a shareholder intended for inclusion in the proxy materials of
DPL Inc. for the 2000 Annual Meeting of Shareholders pursuant to Rule 14a-8 must
be received by DPL Inc. at P.O. Box 1247, Dayton, Ohio 45401, Attn.: Secretary,
on or before November 1, 1999 in order to be considered for such inclusion.
Shareholder proposals intended to be submitted at the 2000 Annual Meeting of
Shareholders outside the framework of Rule 14a-8 will be considered untimely
under Rule 14a-4(c)(1) if not received by DPL Inc. at the above address on or
before (i) 50 days before the
16
<PAGE>
date of the 2000 meeting (or 10 days after notice of the meeting if less than
sixty days notice is given) for proposals relating to nomination of persons for
election as directors or (ii) January 15, 2000 for any other proposals. If DPL
Inc. does not receive notice of the matter by the applicable date, the Proxy
Committee will vote on the matter, if presented at the meeting, in its
discretion.
OTHER BUSINESS
The Board of Directors does not intend to present, and has no knowledge that
others will present, any other business at the meeting. However, if any other
matters are properly brought before the meeting, it is intended that the holders
of proxies will vote thereon in their discretion.
By order of the Board of Directors,
/s/ Stephen F. Koziar, Jr.
STEPHEN F. KOZIAR, JR.
GROUP VICE PRESIDENT AND SECRETARY
17
<PAGE>
NOTICE OF
ANNUAL
MEETING
OF SHAREHOLDERS
APRIL 20, 1999
AND
PROXY
STATEMENT
[DPL LOGO]
DPL INC.
DAYTON, OHIO
<PAGE>
DPL INC.
PROXY Solicited by the Board of Directors
for 1999 Annual Meeting of Shareholders
Peter H. Forster, W August Hillenbrand and Burnell R. Roberts or any of them
with full power of substitution, are hereby appointed proxies to votes as
specified at the Annual Meeting of Shareholders of DPL Inc. on Tuesday, April
20, 1999, at 10:00 A.M., and at any adjournments thereof, all shares of
Common Stock which the undersigned is entitled to vote and in their
discretion upon any other matters which may properly come before the meeting.
UNLESS OTHERWISE MARKED, YOUR PROXY WILL BE VOTED FOR THE PROPOSAL BY SIMPLY
SIGNING YOUR NAME ON THE REVERSE SIDE AND RETURNING THIS CARD.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE /SEE REVERSE SIDE/
<PAGE>
/X/ Please mark votes as in this example
This proxy is solicited on behalf of the Board of Directors. If no boxes are
marked, your vote will be cast as recommended by the Board of Directors by
simply signing your name below and returning this card.
1. Election of Three Directors
Nominees: James F. Dicke, II, Peter H. Forster, Jane G. Haley
FOR WITHHELD
/ / / /
For, except vote withheld from the following nominee(s):
The Annual Meeting of Shareholders will be held at Miami Trace High School,
Washington Court House, Ohio. To request an attendance card for the
meeting, please mark below:
MARK HERE FOR ATTENDANCE CARD / /
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT / /
Please sign exactly as your name appears. If acting as attorney, executor,
trustee, or in a representative capacity, sign name and title.
Signature: ____________ Date: _________ Signature: ____________ Date: _________
