ex10-22.htm


    Pepco Holdings,
Inc.

    


    Annual Executive Incentive
Compensation Plan

    


    Plan
Document

    


    Pepco Holdings, Inc. ("PHI"; the
"Company"), pursuant to authority granted by its Board of Directors, hereby
establishes and adopts the PHI Executive Incentive Compensation Plan (the
"Plan").

    


    1.           Purpose of the Plan.
The PHI Annual Executive Incentive Compensation Plan is a cash-based incentive
program designed to accomplish the following objectives:

    


    
      	
               
      

            	
              ·

            	
              Link
      annual corporate and business priorities and group performance
      goals.

            


    

    


    
      	
               
      

            	
              ·

            	
              Reinforce
      a high performance culture tying rewards to measurable accountabilities
      and achievement.

            


    

    


    
      	
               
      

            	
              ·

            	
              Recognize
      and reward individual performance and differentiate award levels based on
      absolute and relative
contributions.

            


    

    


    
      	
               
      

            	
              ·

            	
              Provide
      a variable award opportunity as part of total compensation that enables
      the Company to attract, retain and motivate key
  executives.

            


    

    


    2.           Definitions. The
following terms where used in this Plan, shall have the meanings set forth
below:

    


    
      	
               
      

            	
              "Award"
      shall mean an incentive payment made in accordance with the terms of this
      Plan.

            


    

    


    "Board of
Directors" or "Board" shall mean the Board of Directors of the
Company.

    


    "Business
Unit" shall mean a discrete segment of the Company which has a separate
incentive plan approved by the Committee.

    


    "Chairman"
shall mean Chairman of the Board of Directors of the Company.

    


    "Compensation/Human
Resources Committee" or "Committee" shall mean the Compensation/Human Resources
Committee of the Board of Directors of the Company.

    



    
      
         


      

      
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    "Maximum
Award Opportunity" shall mean an amount established annually for each
Participant in the Plan which represents the maximum incentive payment which may
be given under the Plan to that Participant for performance during the Plan
Year.

    


    "Participant"
shall mean an executive selected to participate in the Plan.

    


    "Performance
Goals" shall mean goals which are established for the purpose of assisting the
Chairman and the Committee in determining the amount, if any, of Awards to be
made for performance during a Plan year and may include:

    


    
      	
               
      

            	
              A.

            	
              Annual
      performance objectives for the Company as a whole ("Corporate Performance
      Goals");

            


    

    


    
      	
               
      

            	
              B.

            	
              Business
      unit performance objectives for the business units of the Company
      ("Business Unit Performance Goals");
and

            


    

    


    
      	
               
      

            	
              C.

            	
              Individual
      performance goals for individual executives participating in the Plan
      ("Individual Performance Goals").

            


    

    


    "Plan
Year" shall mean a calendar year during which the Plan is in
effect.

    


    "Target
Award Level" shall mean an amount established annually for each Participant in
the Plan which represents the incentive opportunity which may be available to
that Participant if all established Corporate, Business Unit and Individual
Performance Goals are met, expressed as a percentage of base earnings, including
deferred compensation (other than deferred Awards under the Plan).

    


    3.           Plan
Administration

    


    
      	
               
      

            	
              A.

            	
              The
      Plan shall be administered in accordance with the terms of this Plan
      Document by the Compensation/Human Resources Committee upon the
      recommendations of the Chairman. All decisions of the Committee shall be
      binding and conclusive on the Participants in the Plan, and upon any party
      claiming an interest in the Plan through or on behalf of a Participant or
      former Participant, or on any other basis. Notwithstanding any other
      provision of the Plan, the Committee shall have the discretion to adjust
      or eliminate awards within any Participant's Maximum Award Opportunity. A
      Participant's participation in the Plan shall not be deemed to create a
      contractual relationship or any other form of obligation between the
      Participant and the Company, and shall not establish entitlement to any
      Award.

            


    


    
      
         


      

      
         
2

        
          

        

      

      
         


      

    


    


    
      	
               
      

            	
              B.

            	
              The
      Human Resources/Compensation Committee, upon recommendation of the
      Chairman, shall have the authority to do all such things as are
      appropriate to ensure the proper administration of this Plan according to
      its terms, including but not limited
to:

            


    

    


    (i)           Approval
of the Participants in the Plan;

    


    (ii)           Approval
of Corporate Performance Goals;

    


    (iii)           Approval
of Business Unit Performance Goals;

    


    
      	
               
      

            	
              (iv)

            	
              Approval
      of (a) Target Award Levels, (b) Maximum Award Opportunities, and (c)
      allocation of the proportion of Awards to be based on Corporate, Business
      Unit and Individual Goals;

            


    

    


    
      	
               
      

            	
              (v)

            	
              Determination
      of the Award, if any, that may be made to each Participant, such
      determination to be reported to the Board at its next regularly scheduled
      meeting after the determination is made;
and

            


    

    


    
      	
              (vi)  

            	
              Establishment
      of any policies, rules or regulations necessary for the proper
      administration of the Plan.

            


    

    


    
      	
               
      

            	
              (vii)

            	
              Establishment
      of any future service requirements which must be met as a condition to the
      full vesting of an Award.

            


    

     

    4.           Participation.
Participants in the Plan for a Plan Year shall be key executives of the Company,
selected by the Chairman and approved by the Compensation/Human Resources
Committee. The decision as to selection of participants shall normally be made
for a Plan Year prior to the beginning of that Plan Year. The Committee may,
however, upon the recommendation of the Chairman, add additional participants
during the Plan Year.

    


    If a Participant in the Plan retires,
dies or becomes disabled prior to the determination of Awards for a Plan Year,
the Participant, or his or her beneficiary, may be given an Award for that Plan
Year. If the retirement, death or disability took place during the Plan Year,
any such Award shall be made on a pro-rata basis. If a Participant's employment
is terminated for any other reason during a Plan Year, no Award shall be made to
or on behalf of that Participant for that Plan Year.

    


    At no time shall any person have a
right (i) to be selected as a Participant for any Plan Year, (ii) if so
selected, to be entitled to any Award, or (iii) having been selected
as


    
      
         


      

      
        3 


        
          

        

      

      
         


      

    


    a
Participant for one Plan Year, to be selected as a Participant for any
subsequent Plan Year.

    


    5.           Performance
Goals.

    


    
      	
               
      

            	
              A.

            	
              Corporate Performance
      Goals. The Compensation/Human Resources Committee, upon the
      recommendation of the Chairman, shall establish in advance of each Plan
      Year Corporate Performance Goals designed to accomplish the purpose set
      forth in Section 1 of the Plan. The Committee, upon the recommendation of
      the Chairman, shall have the authority to amend Corporate Performance
      Goals at any time when, in the Committee's judgment, unforeseen
      circumstances exist which require modification in order to ensure that the
      purpose of the Plan is properly
served.

            


    

    


    
      	
               
      

            	
              B.

            	
              Business Unit
      Performance Goals. The Chairman, upon the recommendation of the
      senior officer of each of the business units of the Company shall
      establish in advance of each Plan Year Business Unit Performance Goals
      designed to accomplish the business plan of the business unit for the Plan
      Year. The Chairman, upon the recommendation of the senior officer of the
      business unit, shall have the authority to amend Business Unit Performance
      Goals at any time when, in the Chairman's judgment, unforeseen
      circumstances exist which require modification in order to ensure that the
      purpose of the Plan is properly
served.

            


    

    


    
      
        	
                 
      

              	
                C.

              	
                Individual Performance
      Goals. Individual Performance Goals for Participants in the Plan
      shall be established in advance for each Plan Year. These Goals will be
      developed mutually by the Participant and the Senior Officer to whom the
      Participant reports, and will be reviewed and approved by the Chairman.
      Individual Performance Goals shall be designed to encourage the
      accomplishment of such management objectives as are deemed appropriate in
      light of the purpose of the Plan. The Chairman and any other officer
      involved in setting Individual Performance Goals, shall ensure that they
      meet the following general criteria:

              
	 	 	 	 
	 	 	      
                (1)

              	      
                Business
      Unit and Individual Performance Goals shall not be established which
      conflict with the Corporate Performance Goals.

              
	 	 	 	 
	 	 	(2) 	Business
      Unit and Individual Performance Goals shall be considered so that the
      Goals of one Business Unit and/or Participant do not conflict
      inappropriately with the Goals of another Business Unit and/or
      Participant.


      

    

     

     

    
      
         


      

      
        4 


        
          

        

      

      
         


      

    


    


    
      	
               
      

            	
              D.

            	
              Future Service
      Requirements.  The Chairman may condition any
      Participant’s right to receive all or any portion of an Award by
      establishing a future service requirement pursuant to which the
      Participant’s right to receive a designated portion of an Award will be
      forfeited if the Participant terminates employment for any reason other
      than death or disability after the Plan Year to which the Award relates
      and prior to the end of the designated service
  period.

            


    

    


    6.           Target Award Levels and
Maximum Award Opportunities. The Compensation/Human Resources Committee
shall establish in advance for each Plan Year the Target Awards Levels and
Maximum Award Opportunities applicable to Participants in the Plan. Target Award
Levels shall be expressed as a percentage of base salary including deferred
compensation (other than deferred Awards under this Plan) earned during the Plan
Year and may vary among individual Participants or among classes of
Participants. Target Award Levels may also be allocated as between Corporate
Performance Goals, Business Unit Performance Goals and Individual Performance
Goals, by Participant or by classes of Participants. Maximum Award Opportunities
shall be expressed as a percentage of Target Award Level and may vary among
individual Participants or among classes of Participants.

    


    7.           Determination of
Awards. The Compensation/Human Resources Committee shall determine the
Awards, if any, to be made for each Plan Year as soon after the end of the Plan
Year and is practicable, considering the purpose of the Plan, the Performance
Goals and Target Award Levels previously established for that Plan Year, the
actual performance of the Company and of each Business Unit and Participant
during the Plan Year, and any other factor or circumstance the Committee, in its
sole discretion determines to take into consideration.

    


    8.           Payment of Awards.
Awards determined for each Plan Year shall be paid as soon as is practicable
after both (i) such determination has been made and (ii) if applicable, any
applicable future service requirement has been satisfied.  In all
events, such Award shall be paid prior to the expiration of two and one-half
months following (i) the close of the Plan Year to which such Awards relate or
(ii) if later, the close of the Plan Year during which any applicable future
service requirement was satisfied.  Payment will be made in a lump
cash sum, except, if a Participant is otherwise eligible to participate in any
executive deferred compensation plan of the Company, the Participant may elect
to defer payment of any Award in whole or in part under the terms of that
plan.  Such election must have been exercised prior to the beginning
of the Plan Year for which the Award is made unless the Participant first became
a Participant after the beginning of the Plan Year.

     

    9.           Other Plans. Amounts
received by Participants under this Plan shall not be considered compensation
for the purpose of any other benefit plan maintained by the Company, unless the
terms of such other benefit plan so provide.

    



    
      
         


      

      
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    10.           Nothing
contained in this Plan, and no action taken hereunder, shall create or be
construed to create a trust of any kind, or a fiduciary relationship between the
Company and any executive, any beneficiary or any other person. To the extent
that any person acquires a right to receive payments from the Company under this
Plan, such right shall be no greater than the right of any unsecured general
creditor of the Company.

    


    11.           The
right of any Participant, beneficiary, or other person to receive benefits under
the Plan may not be assigned, transferred, pledged or encumbered except by will
or by the laws of descent and distribution, nor shall it be subject to
attachment or other legal process of whatever nature.

    


    12.           If
the Company finds that any person to whom any payment is payable under this Plan
is unable to care for his or her affairs because of illness or accident, or is a
minor, any payment due (unless a prior claim therefore shall have been made by a
fully appointed guardian, committee or other legal representative) may be paid
to the spouse, a parent, or a brother or sister, or to any person deemed by the
Company to have incurred expenses for the person who is otherwise entitled to
payment, in such manner and proportions as the Company may determine. Any such
payment will serve to discharge any liability of the Company under this Plan to
make payment to the person who is otherwise entitled to payment.

    


    13.           To
the extent required by law, the Company shall withhold federal or state income
or payroll taxes from benefit payments hereunder and shall furnish the recipient
and the applicable governmental agency or agencies with such reports, statements
or information as may be legally required in connection therewith.

    


    14.           This
Plan shall be construed in accordance with and governed by the laws of the
District of Columbia.

    


    IN WITNESS WHEREOF, the Company has
caused this restated version of the Plan to be signed on this 9th day of
February, 2009.

    


    
      	 
      	 
      	 
      	
              PEPCO
      HOLDINGS, INC.

            
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
              By:

            	
              /s/
      D. R. WRAASE

            
	 
      	 
      	 
      	 
      	
              Chairman
      of the Board

                and
      Chief Executive Officer

            
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
              By:

            	
               /s/
      ELLEN S. ROGERS

            	 
      	 
      	 
      
	 
      	
              Secretary