Document:

ex10-10.htm

     

     

     

     

     

     

     

     

     

     

     

     

    CONECTIV

     

    SUPPLEMENTAL
EXECUTIVE RETIREMENT PLAN

     

     

     

     

     

     

     

     

     

     

    Revised
as of

    October
2008

     

    
      
         

      

      
         

        
          
 

      

      
         

      

    

    CONECTIV

     

    SUPPLEMENTAL
EXECUTIVE RETIREMENT PLAN

     

    PREAMBLE

     

                The principal
objective of this Supplemental Executive Retirement Plan is to ensure the
payment of competitive level of Retirement income in order to attract, retain
and motivate selected executives.  The Plan is designed to provide a
benefit which, when added to other Retirement income of the executive, will meet
the objective described above.  Eligibility for participation in the
plan shall be limited to executives who are classified as directors or above,
who are participants in the Conectiv Deferred Income Plan, and other managers or
executive are selected by the Chief Executive Officer and approved by the
Personnel and Compensation Committee of the Board of Directors.  In
order to be eligible for benefits under this Plan on account of Service prior to
employment by an Employer, an executive must be (or have been) recruited into
the position (or for the position) as determined by the
Committee.  This Plan is a successor to the Delmarva Power & Light
Company Supplemental Executive Retirement Plan, the Atlantic City Electric
Company Supplemental Executive Retirement Plan, Supplemental Executive
Retirement Plan - II, and Excess Benefit Retirement Income
Program.  This Plan is effective January 1, 1999, and is effective as
to each Participant on the date he or she is designated as such
hereunder.

     

    
      
        
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    SECTION
I

     

    DEFINITIONS

     

                1.1     “Actuarial
Equivalent” or “Actuarial Equivalence” shall mean the method and amount by which
a single life annuity benefit is converted to any other form of benefit, or by
which a single sum benefit is converted to any form of annuity benefit, and
shall be determined by using the appropriate factors and methods as set forth in
the Basic Plan as of the date of
determination.

     

                1.2     “Affiliate”
means any corporation, partnership or other organization which, during any
period of employment of a Participant, was at least 50% controlled by the
Company or an affiliate of the Company.

     

                1.3    “Basic Plan” means
the Conectiv Retirement Plan as set forth in the Base Plan and the Cash Balance
Sub-Plan.

     

                1.4    “Basic Plan Benefit”
means the amount of benefit payable from the Basic Plan to a Participant (a) in
the form of an unreduced straight life annuity, where the Participant’s benefit
from this Plan is payable in the form of an annuity; or (b) in the form of a
single lump sum, where the. Participant’s benefit from this Plan is payable in
the form of a lump sum.

     

                1.5    “Beneficiary” means
the person or persons designated as the Participant’s beneficiary for purposes
of the Basic Plan or, for a Participant who is not a participant in the Basic
Plan, the person or persons designated as the Participant’s beneficiary for
purposes of this Plan on a form provided for such purpose and filed with the
Agent designated in Section VII.

     

                1.6     “Change in
Control” shall mean the
first to occur, after the effective date, of any of the
following:

     

                     (a)           If
any Person is or becomes the “beneficial owner” (as defined in Rule 13d-3 under
the Securities Exchange Act), directly or indirectly, of securities of Conectiv
(not including in the securities beneficially owned by such Person any
securities acquired directly from Conectiv or its subsidiaries) representing 25%
or more of either the then-outstanding shares of common stock of Conectiv or the
combined voting power of Conectiv’s then outstanding securities;
or

     

                      (b)          If
during any period of 24 consecutive months during the existence of the Plan
commencing on or after the effective date, the individuals who, at the beginning
of such period, constitute the Board (the “Incumbent Directors”) cease for
reason other than death to constitute at least a majority thereof; provided that
a director who was not a director at the beginning of such 24-month period shall
be deemed to have satisfied requirement (and be an Incumbent Director) if such
director was elected by, or on the recommendation of or with the approval of, at
least two-third of the directors who then qualified as Incumbent Directors
either

    
      
        
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    actually
(because they were directors at the beginning of such 24-month period) or by
prior operation of this Section 1.6; or

     

                      (c)           The
consummation of a merger or consolidation of Conectiv with any other corporation
other than (i) a merger or consolidation which would result in the voting
securities of Conectiv outstanding immediately prior to such merger or
consolidation continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity or any parent
thereof) at least 60% of the combined voting power of the voting securities of
Conectiv or such surviving entity or any parent thereof outstanding immediately
after such merger or consolidation, or(ii) a merger or consolidation effected to
implement a recapitalization of Conectiv (or similar transaction) in which no
Person is or becomes the beneficial owner, as defined in Section 1.6(a),
directly or indirectly, of securities of Conectiv (not including in the
securities beneficially owned by such Person any securities acquired directly
from Conectiv or its subsidiaries) representing 40% or more of either the
then-outstanding shares of common stock of Conectiv or the combined voting power
of Conectiv’s then- outstanding securities;
or

     

                      (d)           The
stockholders of Conectiv approve a plan of complete liquidation or dissolution
of Conectiv, or there is consummated an agreement for the sale or disposition by
Conectiv of all or substantially all of Conectiv’s assets, other than a sale or
disposition by Conectiv of all or substantially all of Conectiv’s assets to an
entity, at least 60% of the combined voting power of the voting securities of
which are owned by Persons in substantially the same proportion as their
ownership of Conectiv immediately prior to such
sale.

     

                Upon the occurrence
of a Change in Control as provided above, no subsequent event or condition shall
constitute a Change in Control for purposes of the Plan, with the result that
there can be no more than one Change in Control
hereunder.

     

                For purposes of this
Section, the term “Person” shall have the meaning given in Section 3(a)(9) of
the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof,
except that such term shall not include: (i) Conectiv or any of its
subsidiaries; (ii) a trustee or other fiduciary holding securities under an
employee benefit plan of Conectiv or any of subsidiaries; (iii) an underwriter
temporarily holding securities pursuant to an offering of such securities; (iv)
a corporation owned directly or indirectly by the stockholders of Conectiv
substantially the same proportions as their ownership of stock of Conectiv; or
(v) with respect to any particular Participant, such Participant or any “group”
(as such term is used in Sections 13(d) and 14(d) of the Securities Exchange
Act) which includes such Participant).

     

                1.7           “Committee”
means the Personnel and Compensation Committee of the Board of Directors of the
Company, which has been given authority by the Board of Directors to administer
this Plan.

     

                1.8           “Code”
means the Internal Revenue Code of 1986, as
amended.

     

                1.9           “Company”
means Conectiv and any successor
thereto.

     

    
      
        
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                1.10           “Compensation”
means any amount paid to a Participant as salary or bonus, including pre-tax
contributions and elective contributions that are not includible in gross income
under sections 125, 402(a)(8) or 402(h) of the Code, and all amounts deferred
pursuant to the Conectiv Deferred Income Plan in the year deferred (up to 50% of
Compensation as calculated prior to such deferral), but excluding (a)
contributions the Company makes to any other benefit plan; (b) any amounts paid
in the form of fringe benefits (cash or non-cash), expenses, or welfare
benefits, even though such amounts may be taxable for federal income tax
purposes; (c ) any amounts paid from the Conectiv Deferred Income Plan; and (d)
any amounts paid or deferred in connection with stock grants, stock options, or
payments based on stock performance such as stock appreciation rights or phantom
stock awards.

     

                1.11           “Disabled”
means a mental or physical condition which qualifies a Participant for benefits
under the Employer’s long-term disability
plan.

     

                1.12           “Effective
Date” means January 1, 1999.

     

                1.13           “Employee”
means any individual employed by an Employer, provided, however, that to qualify
as an Employee for purposes of the Plan, the individual must be a member of a
group of “key management or other highly compensated employees” within the
meaning of Sections 201, 301 and 401 of ERISA; and provided further than an
individual shall not be eligible to become or remain a Participant if (a) he or
she is not on an employee payroll of an Employer; (b) he or she has entered into
a written agreement with an Employer which provides that he or she shall not
participate in the Plan; or (c) he or she is in a group of employees that is
excluded from the Plan pursuant to a declaration by the Employer with respect to
the Employer’s adoption of the Plan or any amendment
thereto.

                            

                1.14           “Employer”
means the Company or an Affiliate that has adopted this Plan for its
Employees.

     

                1.15           “ERISA”
means the Employee Retirement Income Security Act of 1974, as
amended.

     

                1.16           “Other
Retirement Income” means, as determined by the Committee in its discretion,
retirement income payable from any other retirement plan whether or not such
plan was maintained by, or contributed to, by the
Company.

     

                1.17           “Participant”
means an Employee of an Employer who is (a) employed at a level of director or
above, (b) a participant in the Conectiv Deferred Income Plan who defers income
pursuant thereto, or (c) recommended by the Chief Executive Officer and
designated as a Participant by the Committee.  An Employee shall
become a Participant in the Plan as of the later of (a) the Effective Date of
this Plan, (b) the date he or she becomes an Employee, or (c) in the case of a
person who becomes an Employee pursuant to a resolution of the Committee, the
date his or her designation is individually approved by, and is specifically
named in the resolution of, the Committee for inclusion in the
Plan.

     

                1.18           “Plan”
means the Conectiv Supplemental Executive Retirement
Plan.

    
      
        
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                1.19           “Prior
Plan” means the Delmarva Power & Light Company Supplemental Executive
Retirement Plan, the Atlantic City Electric Company Supplemental Executive
Retirement Plan, the Atlantic City Electric Company Supplement Executive
Retirement Plan II, and the Atlantic City Electric Company Excess Benefit
Retirement Income Program.  Each such Prior Plan is hereby terminated
with respect to any person employed by the Company or an Affiliate on or after
the Effective Date, and any such person shall receive supplemental retirement
benefits only under this Plan or under the Supplemental Executive Retirement
Plan sponsored by Delmarva Capital Investments,
Inc.

     

                1.20           “Retirement”
means the termination of a Participant’s employment with an Employer on one of
the Retirement dates specified in Paragraph
2.2.

     

                1.21           “SERP
Payable Cash Balance” means the lump sum benefit payable from the Plan as
defined in Section III, Sub-section 3.1, and may include an Initial SERP Payable
Cash Balance credited pursuant to Section
1.22.

     

                1.22           “Service”
means a Participant’s credited years of Service as defined in the Basic Plan,
plus any other years of service credited to such Participant prior to age 65
pursuant to an employment agreement with an Employer or pursuant to a resolution
of the Committee.  For a Participant who is not a participant in the
Basic Plan, “Service” shall mean the actual years and months of employment of
such participant by an Employer, plus any additional years and months of Service
credited to such Participant prior to age 65 pursuant to an employment agreement
with an Employer or pursuant to a resolution of the
Committee.  Effective with the Effective Date, the Committee may grant
such Participant an Initial SERP Payable Cash Balance in lieu of such prior
Service, and grants of prior Service made prior to the Effective Date may be
converted to an Initial SERP Payable Cash
Balance.

     

                1.23           “Surviving
Spouse” means the spouse of a Participant who is legally married to the
Participant at the time of the Participant’s Retirement, or death if still
employed by an Employer or an
Affiliate.

     

                1.24           “Termination”
means the termination of the Participant’s employment with an Employer or an
Affiliate, and shall occur at the commencement of any severance pay unless
otherwise specified in a written agreement relating to such severance
pay.

     

    SECTION
II

     

    ELIGIBILITY
FOR BENEFITS

     

                2..1           A
Participant will be eligible for benefits under the Plan
if

     

                     
(a)           the
Participant’s Basic Plan Benefit is reduced by reason of the limitation on the
maximum benefit payable under §415, or successor provisions, of the Code,
or

     

    
      
        
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                      (b)           the
Participant’s Basic Plan Benefit is reduced by reason of the limitation on
compensation under §401(a)(17), or successor provisions, of the Internal Revenue
Code of 1986, as amended;
or

     

                      (c)           the
Participant has deferred Compensation pursuant to the Conectiv Deferred Income
Plan; or

     

                      (d)           the
Participant has received a grant of Service prior to employment with an Employer
or an Initial SERP Payable Cash Balance pursuant to the terms of Section
1.22.

     

                2..2           Each Participant is eligible to retire
and receive a benefit under this Plan beginning
on one of the following
dates:

     

                      (a)           “Normal
Retirement Date,” which is the first of the month coincident with or next
following the Participant’s sixty-fifth (65th)
birthday after attaining five (5) years of Service with an Employer (not
including pre-employment service granted pursuant to Section
1.22.

     

                      (b)           “Early
Retirement Date,” which is the date the Participant elects to retire
after attaining age fifty-five (55) with fifteen (15) years of service or
attaining age sixty (60) with twenty (20) years of
service.

     

                      (c)           “Deferred
Retirement Date,” which is the date the Participant elects to retire after his
or her normal retirement date if he or she does not meet the policy-making
executive standard causing his or her mandatory retirement at age sixty- five
(65) or is requested by the Board of Directors to work beyond his or her 65th
birthday.

     

                      (d)           “Disability
Retirement Date,” which is the date the Participant elects to retire by
reason of Disability after completion of fifteen (15) years of
Service.  In order to retire on a Disability Retirement Date, in
accordance with Section VI, the Participant must provide the Committee
satisfactory evidence of
Disability.

     

                2..3           A
Participant who has a SERP Payable Cash Balance and who Terminates employment
before an applicable Retirement Date may receive a lump sum or annuity benefit
pursuant to Section III if and only if the benefit is vested pursuant to Section
IV, provided that a lump sum payable hereunder shall be paid no earlier than
twelve months after such Termination if the Participant is restricted by the
terms of Section 2.4.

     

                2.4           If any
Participant entitled to benefit under this Plan on account of a grant
of service prior to
employment with an Employer or an Initial SERP Payable Cash Balance pursuant to Section 1.22 is
discharged for cause, or enters into competition with the Company or an Affiliate, or
interferes with the relations between the Company or an Affiliate and any customer, or engages
in any activity that would result in any decrease or loss in sales by the Company or an
Affiliate, the rights of such Participant to a benefit under this Plan based on such Service,
including the rights of a Surviving Spouse to a benefit, will be forfeited, unless the
Committee determines that such activity is not detrimental
to the best interests of the Company or its Affiliates.  However, if
the individual
ceases such activity and notifies the Committee of this action, then the
Participant’s

    
      
        
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    right to
receive a benefit, and any right of a Surviving Spouse to a benefit, may be
restored if the Committee in its sole discretion determines that the prior
activity has not caused serious injury to the Company or its Affiliates and that
the restoration of the benefit would be in the best interest of the Company and
its Affiliates. All determinations by the Committee with respect to forfeiture
and restoration of benefits shall be final and conclusive.

     

    SECTION
III

     

    AMOUNT AND
FORM OF RETIREMENT BENEFIT

     

                3.1           Cash
Balance Benefit.  As of any determination date, the Participant
shall be credited with a SERP Payable Cash Balance equal to the Payable Cash
Balance that would have been payable under the Basic Plan as if the following
assumptions were correct, reduced by the Participant’s Payable Cash Balance
actually payable under the Basic Plan as of such determination
date:

     

                      (a)           as
if the provisions of the Bask Plan were administered without regard to the
benefit limitations set forth in the Basic Plan as a result of section 415 of
the Code;

     

                      (b)           as
if the provisions of the Basic Plan were administered without regard to the
compensation limitations set forth in the Basic Plan as a result of section
401(a)(17) of the Code;

     

                      (c)           as
if all Compensation were taken into account under the Basic Plan for the year
such amounts were earned by such Participant (and not in the year such amounts
are actually paid);

     

                      (d)           as
if such Participant’s Payable Cash Balance under the Basic Plan as of his
employment commencement date were equal to the Initial SERF Payable Cash
Balance; and

     

                      (e)           as
if such Participant had been employed by the Employer during the period for
which prior service has been credited for purposes of this Plan pursuant to
Section 1.22 (this sub-section (e) shall not be applicable to a Participant
whose prior service has been converted to an Initial SERP Payable Cash Balance
pursuant to Section 1.22).

     

                In the event the
Employer adopts or maintains any other qualified or non-qualified retirement
plan that is deemed by the Committee in its sole discretion to constitute Other
Retirement Income, the SERP Payable Cash Balance shall be reduced by the
Actuarial Equivalent lump sum value of such Other Retirement
Income.

     

                3.2           
Minimum
Benefit.

     

                      (a)           A
Participant who was a participant in a Prior Plan as of December 31, 1998
shall be entitled to a minimum benefit equal to the annual retirement benefit
payable at his actual Retirement or Termination Date as calculated under the
Prior Plan as of December 31, 1998, reduced by the Basic Plan Benefit as of the
Participant ‘s actual

    
      
        
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    Retirement
or Termination Date, and further reduced by any Other Retirement Income to which
the Participant has a vested right as the actual Retirement or Termination
Date.  Notwithstanding the foregoing, no minimum benefit under this
Section 3.2 shall be paid to a Participant if the Participant had received a
distribution from a Prior Plan on account of the same Service.

     

                      (b)           If
a Participant described in Section 3.2(a) also satisfies the requirements to be
a Grandfathered Participant under the Basic Plan (whether or not such
Participant is a participant in the Basic Plan), he or she shall be entitled to
a minimum benefit under this Plan equal to the annual retirement benefit payable
at his actual Retirement or Termination Date calculated-in accordance with the
Grandfathered Participant provisions of the Basic Plan, applying the
presumptions set forth in Section 3.1, reduced by the Basic Plan Benefit, and
further reduced by any Other Retirement Income to which the Participant has a
vested right or which the Participant previously
received.

     

                3.3           The
benefit payable at any Retirement Date or upon Termination of employment shall
be paid to the Participant (or on his behalf, to his Beneficiaries) in the form
of a lump-sum equal to the greater of (i) the SERP Payable Cash Balance, or (ii)
the Actuarial Equivalent of the minimum or grandfathered benefit as defined in
Section 3.2.

     

                     
(a)           any
benefit that has an Actuarial Equivalent Value of $50,000 or less (such amount
to be increased by vote of the Committee to be applicable to any calendar year
or the remainder of any calendar year after the date of such vote) and shall be
paid in the form of a lump sum;

     

                      (b)           if
the Participant has elected a lump sum distribution from the Basic Plan and has
not submitted an election pursuant to sub-paragraph (c) below, the Participant’s
benefit shall be paid in the form of a 50% joint and survivor annuity (with the
Participant’s spouse as joint annuitant) unless the Participant elects a
different annuity form prior to his Retirement Date or Termination Date;
and

     

                      (c)           if
the Participant has made a separate election at least one year prior to the
calendar year containing his Retirement Date, the Participant may receive a
different form of benefit as set forth in such separate
election.

     

                      (d)           The
benefit payable in the form of a lump sum shall be the greater of (1) the SERP
Payable Cash Balance, or (ii) the Actuarial Equivalent of the minimum or
grandfathered benefit as defined in Section 3.2. The benefit payable in the form
of an annuity shall be the greater of (i) the SERP Payable Cash Balance
converted to an annuity pursuant to the provisions the Basic Plan, or (ii) the
minimum or grandfathered benefit as defined in Section 3.2, subject to any
adjustments or actuarial reductions as set forth in the Basic Plan for benefits
payable prior to Normal Retirement Date or in any form other than a single life
annuity.

     

                3.4           The
Committee may make appropriate adjustments to the benefits payable under the
Plan to reflect the timing and form of payments of any Other Retirement
Income.

    
      
        
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    SECTION
IV

     

    VESTING OF
RETIREMENT BENEFITS

     

                4.1           Participants
benefits will vest upon Retirement or in accordance with Section VIII,
Subsection 8.71. No benefits are payable under the Plan if a Participant’s
employment is Terminated voluntarily or involuntarily for any reason prior to
completion of five (5) years of Service with an Employer (excluding any prior
Service credited pursuant to Section 1.22), except as specifically voted by the
Committee in its sole discretion.

     

    SECTION
V

     

    DEATH
BENEFIT PAYABLE

     

                5.1           If
a Participant should die after completion of five (5) years of Service and
before Retirement, the Surviving Spouse will receive a benefit in the form of an
annuity equal to 50% of the amount of Participant’s benefit determined in
accordance with Section III as if the Participant had retired and commenced
receiving a benefit on the first of the month following the date of his or her
death. This survivor annuity will not be reduced on account of the age of the
Participant or of the Surviving Spouse. Notwithstanding the foregoing, in no
event shall the Surviving Spouse benefit be less than the Actuarial Equivalent
of the SERP Payable Cash Balance.

     

                5.2           A
Surviving Spouse’s benefits will be payable in a lump-sum which is the Actuarial
Equivalent of the benefit described in Section
5.1.

     

                5.3           In
the event the Participant dies without a Surviving Spouse after completing five
(5) years of Service, the SERP Payable Cash Balance shall be paid to his or her
Beneficiary, in a single lump sum.

     

    SECTION
VI

     

    DISABILITY
BENEFITS PAYABLE

     

                6.1           A
Participant shall be entitled to retire on his or her Disability Retirement
Date.

     

                6.2           The
annual disability benefit will be equal the Retirement benefit that would be
payable under Section III of this Plan, based on years of Service to his or her
Retirement Date and based on Earnings determined as of the last day of active
employment with the Employer before commencement of
Disability.

     

                6.3           The
disability benefit determined in accordance with Paragraph 6.2 will be offset by
any disability benefit payable under the Basic Plan, any long-term disability
benefits payable by the Employer or by any insurance policy provided by or
through the Employer, and any Other Retirement
Income.

    
      
        
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                6.4           Disability
benefits will be payable monthly and will commence on the Participant’s
Disability Retirement Date. The last payment will be as of the first of the
month during which the disabled Participant
dies.

     

                6.5           In
the event a disabled Participant dies before attaining Normal Retirement Age,
death benefits will be payable pursuant to Section V. In the event a disabled
Participant attains Normal Retirement Age while disabled, the Participant’s
benefit shall be converted to a Normal Retirement benefit pursuant to Section
III and paid in accordance with the provisions
thereof.

     

                6.6           The
Committee may require, no more frequently than once in any calendar year, that a
disabled Participant submit medical evidence of Disability satisfactory to the
Committee. The Committee will have sole discretion to discontinue a disability
benefit based on it consideration of such evidence or lack
thereof.

     

    SECTION
VII

     

    ADMINISTRATION
OF PLAN

     

                7.1           The
Committee, as plan administrator, shall have full power and authority to
interpret the Plan, to prescribe, amend, and rescind any rules, form,
procedures, and regulations as it deems necessary or appropriate for the proper
administration of the Plan, and to make any other determinations and to take any
other such actions as it deems necessary or advisable in carrying out its duties
under the Plan. All action taken by the Committee arising out of, or in
connection with, the administration of the Plan or any rules adopted thereunder,
shall, in each case, lie within its sole discretion, and shall be final,
conclusive and binding upon the Employer, all Employees, and all Beneficiaries
of Employees and all persons and entities having an interest therein. The
Committee may, however, delegate to any person or entity of its powers or duties
under the Plan. To the extent of such delegation, the delegate shall become
invested with the same discretionary authority as the Committee. Any decisions,
actions or interpretations to be made under the Plan by the Committee, an
Employer, or a delegate of any of them shall be made in their respective sole
discretion, not as a fiduciary, and need not be uniformly applied to similarly
situated individuals.

     

                7.2           The
Company shall indemnify and hold harmless the Committee and any delegate of the
Committee’s functions from any and all claims, losses, damages. expenses
(including counsel fees) and liability (including any amounts paid in settlement
any claim or any other matter with the consent of the Board) arising from any
act or omission of such member, except when the same is due to gross negligence
or willful misconduct.

     

                7.3           Claims
Procedure.

     

                     
(a)           The
Committee shall designate a person or executive to whom claims for benefits
shall be submitted. If the person claiming a benefit is such designated Agent or
a relative or survivor of such Agent, the Chief Executive Officer of the Company
shall serve

    
      
        
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    as the
Agent with respect to such claim. If the person claiming a benefit is the
current or former Chief Executive Officer, the chairperson of the Committee
shall serve as the Agent with respect to such claim.

     

                      (b)           Claim.  A
person who believes that be is being denied a benefit to which he is entitled
under the Plan (hereinafter referred to as a “Claimant”) may file a written
request for such benefit with the Agent, setting forth the
claim.

     

                      (c)           Claim
Decision.  Upon receipt of a claim, the Agent may (but shall
not be required to consult with the Committee, and shall advise the Claimant
within (90) days of receipt of the claim whether the claim is denied. If special
circumstances require more than ninety (90) days for processing, the Claimant
will be notified in writing within ninety (90) days of filing the claim that the
Agent requires up to an additional ninety (90) days to reply.  The
notice will explain what special circumstances make an extension necessary and
indicate the date a final decision is expected to be
made.

     

                If the Claimant does
not receive a written denial notice or notice of an extension within ninety (90)
days, the Claimant may consider the claim denied and may then request a review
of denial of the claim, as described
below.

     

                If the claim is
denied in whole or in part, the Claimant shall be provided a written opinion,
using language calculated to be understood by the Claimant, setting
forth:

     

                            (i)           The
specific reason or reasons for such
denial;

     

                            (ii)           The
specific reference to pertinent provisions of this Plan on which such denial is
based;

     

                            (iii)           A
description of any additional material or information necessary for the Claimant
to perfect his claim and an explanation why such material or such information is
necessary;

     

                            (iv)           Appropriate
information as to the steps to be taken if the Claimant wishes to submit the
claim for review; and

     

                            (v)           The
time limits for requesting a review under subsection (c) and for review under
subsection (d) hereof.

     

                      (d)           Request for
Review. Within sixty (60) days after the receipt by the Claimant of the
written opinion described above, the Claimant may request in writing that the
Committee review the initial determination. The Claimant or his duly authorized
representative may, but need not, review the pertinent documents and submit
issues and comments in writing for consideration by the Committee. If the
Claimant does not request a review of the initial determination within such
sixty (60) day period, the Claimant shall be barred and estopped from
challenging the determination.

     

    
      
        
          - 11 -

        

         

      

      
         

        
          
 

      

      
         

      

    

     

                      (e)           Review of
Decision.  Within sixty (60) days after the Committee’s receipt
of a request for review, it will review the initial determination. After
considering all materials presented by the Claimant, the Committee will render a
written opinion, written in a manner calculated to be understood by the
Claimant, setting forth the specific reasons for the decision and containing
specific references to the pertinent provisions of this Agreement on which the
decision is based. If special circumstances require that the sixty (60) day time
period be extended, the Committee will so notify the Claimant and will render
the decision as soon as possible, but no later than one hundred twenty (120)
days after receipt of the request for
review.

     

                7.4           Each
Participant may receive a copy of this Plan on request, and the Committee will
make available for inspection by any Participant a copy of the rules and
regulations used by the Committee in administering the
Plan.

     

    SECTION
VIII

     

    MISCELLANEOUS

     

                8..1           Amendment
and Termination of Plan. The Committee may, in its sole discretion,
terminate, suspend or amend this Plan at any time or from time to time, in whole
or in part. However, no amendment or suspension of the Plan will affect a
retired Participant’s right or the right of a Surviving Spouse to continue to
receive a benefit in accordance with this Plan as in effect on thee date such
Participant commenced to receive a benefit under this
Plan.

     

                8.2           Limitation
of Participant’s Right. Nothing in this Plan shall be construed as
conferring upon any Participant any right to continue in the employment of the
Employer, nor shall it interfere with the rights of the Employer or any
Affiliate to terminate the employment of any Participant and/or to take any
personnel action affecting any Participant without regard to the effect which
such action may have upon such Participant as a recipient or prospective
recipient of benefits under the Plan.  Any amounts payable hereunder
shall not be deemed salary or other compensation to a Participant for the
purposes of computing benefits to which the Participant may be entitled under
any other arrangement established by the employer for the benefit of its
employees. Nothing contained in the Plan shall be construed to prevent the
company or any Affiliate from taking any action which is deemed by it to be
appropriate or in its best interest.  No Participant, Beneficiary, or
other person shall have any claim against the company or any Affiliate as a
result of such action.

     

                8.3           Individually
Negotiated Benefits. Any agreement entered into by the Employer and an
employee who is from a select group of management or highly compensated
employees which provides individually negotiated benefits to such employee which
are not otherwise described in the Plan shall be deemed to be incorporated by
reference hereunder.

     

                8.4           Taxes.
The Company may make such provisions and take such action as it may deem
appropriate for the withholding of any taxes which the Company is required by
any law or regulation of any governmental authority, whether Federal, state or
local, to withhold in connection with any benefits under the Plan, including,
but not limited to, the withholding
of

    
      
        
          - 12 -

        

         

      

      
         

        
          
 

      

      
         

      

    

    appropriate
sums from any amount otherwise payable to the Participant (or his Beneficiary).
Each Participant, however, shall be responsible for the payment of all
individual tax liabilities relating to any such benefits.

     

                8.5           Unfounded
Status of Plan. The Plan is intended to constitute an “unfunded” plan of
deferred compensation for Participants. Benefits payable hereunder shall be
payable out of the general assets of the Company, and no segregation of any
assets whatsoever for such benefits shall be made. Notwithstanding any
segregation of assets or transfer to a grantor trust, with respect to any
payments not yet made to a Participant, nothing contained herein shall give any
such Participant any rights to assets that are greater than those of a general
creditor of the Company.

     

                8.6           Obligation
to Company. If a Participant becomes entitled to a distribution of benefits under the
Plan, and if at such time the Participant has outstanding any debt,
obligation, or other liability representing an amount owing to the
company or any Employer or Affiliate, then the Company, Employer, or Affiliate
may offset such amount owned to it against the amount of benefits otherwise
distributable. Such determination shall be made by the Committee. To the maximum
extent permitted by law, no benefit under this Plan otherwise shall be
assignable or subject in any manner to alienation, sale, transfer, claims of
creditors, pledge, attachment or encumbrances of any kind, other than a
qualified domestic relations order that is otherwise enforceable against the
Plan and not preempted by ERISA.

     

                8.7           Change in
Control. In the event of a Change in Control and a termination of
employment or service for any reason, each affected Participant’s benefit shall
be distributed immediately to the Participant in one lump-sum
payment.

     

                8.8           Governing
Law. This plan is established under and will be construed according to
ERISA and, where not preempted, the laws of the State of
Delaware.

     

                8.9           Headings,
Gender, Singular and Plural. Headings are inserted in this Plan for
convenience of reference only and are to be ignored in the construction of the
provisions of the Plan. The masculine gender, where appearing in the Plan, will
be deemed to include the feminine gender, and the singular may include the
plural, unless the context clearly indicates the
contrary.

     

                8.10           Section
409A Compliance. Notwithstanding the above, if an individual who then
qualifies as a ‘specified employee’, as defined in Section 409A(a)(2A)(B)(i) of
the Internal Revenue Code, incurs a separation from service for any reason other
than death and becomes entitled to a distribution from this Plan then, to the
extent required by Section 409A(a)(2)(B), no distribution otherwise payable to
such specified employee during the first six (6) months after the date of such
separation from service shall be paid to such specified employee until the date
which is one day after the date which is six (6) months after the date of such
separation from service (or, if earlier, the date of death of the specified
employee).

     

    
      
        
          - 13 -

        

         

      

      
         

        
          
 

      

      
         

      

    

     

                IN WITNESS
WHEREOF, the Company has caused this Plan to be signed on this 3rd day of
November, 2008 which version reflects all modifications made to the Plan through
such date of execution.

     

    
      	 
      	 
      	 
      	
              PEPCO
      HOLDINGS, INC.

            
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
              By:

            	
              /s/
      D. R. WRAASE

            
	 
      	 
      	 
      	 
      	
              Chairman
      of the Board

                and
      Chief Executive Officer

            
	 
      	 
      	 
      	 
      	 
      
	
              ATTEST

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
              By:

            	
               /s/
      ELLEN S. ROGERS

            	 
      	 
      	 
      
	 
      	
              Secretary

            	 
      	 
      	 
      

    

     

    
      
        
          - 14 -ex10-21.htm

    PEPCO
HOLDINGS, INC.

     

    NON-MANAGEMENT DIRECTORS
COMPENSATION PLAN

     

    1.           Purpose
of the Plan.

     

    The Pepco Holdings, Inc. Non-Management
Directors Compensation Plan (the “Plan”) has been established by Pepco Holdings,
Inc. (the “Company”) to compensate directors who are not employees of the
Company or any of its subsidiaries for their service as members of the Board of
Directors of the Company and to enable such directors to strengthen their common
interest with the shareholders of the Company by providing them with the
opportunity to increase their equity interest in the Company either through the
acquisition of Company common stock or through the acquisition of common stock
equivalents.

     

    2.           Definitions.

     

    (a)  “Board” means the Board
of Directors of the Company.

     

    (b)  “Common Stock” means the
common stock, par value $.01 per share, of the Company.

     

    (c)  “Deferred Compensation
Plan” means the Pepco Holdings, Inc. Executive and Director Deferred
Compensation Plan.

     

    (d)  "Fair Market Value"
means the closing price of the Common Stock as reported by the New York Stock
Exchange on the day of determination or, if the day of determination is not a
trading day or there are no trades on the day of determination, the last trading
day preceding the day of determination.

     

    (e)  “Governance Committee”
means the Corporate Governance/Nominating Committee of the Board.

     

    (f)  “Non-Management
Director” means a member of the Board who is not an employee of the Company or
any of its subsidiaries.

     

    3.           Shares
of Common Stock Subject to the Plan.

     

    (a)  Subject to the
provisions of paragraph (b) below, the aggregate number of shares of Common
Stock that may be issued under the Plan shall not exceed 500,000
shares.  Such shares may, as determined by the Company, be authorized
but unissued shares, treasury shares or shares purchased on the open
market.

     

    (b)  In the event of any
stock split, stock dividend, recapitalization, merger, consolidation,
reorganization, combination, or exchange of shares or other similar event
affecting the Common Stock, the number of shares of Common Stock reserved for
issuance under the Plan shall be proportionately adjusted to the extent required
to prevent dilution or enlargement of shares issuable under the Plan by reason
of such transaction.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    4.           Administration
of the Plan.

     

    The Plan shall be administered by the
Governance Committee, which, except as otherwise expressly provided herein,
shall have the sole and complete authority to interpret the Plan and to make all
other determinations necessary for the Plan’s administration.  All
action taken by the Governance Committee in the interpretation and
administration of the Plan shall be final and binding on all
concerned.  The Governance Committee may designate officers and
employees of the Company to assist the Governance Committee in the
administration of the Plan by executing documents on behalf of the Company
relating to the administration of the Plan and by performing such ministerial
duties in connection with the administration of the Plan as are assigned to them
by the Governance Committee.

     

    5.           Annual
Retainer and Meeting Fees.

     

    Each Non-Management Director shall
receive as compensation for his or her services as a director an annual retainer
and a per-meeting fee, in each case in an amount and payable at such time as the
Board shall determine.  Each Non-Management Director who serves as the
chairman of a committee of the Board may receive as a fee for such services an
additional annual retainer in an amount and payable at such time as the Board
shall determine.  The Board, at its discretion, may elect to pay
prorated compensation to any Non-Management Director for services as a director
or committee chairman for any portion of a year.

     

    6.           Form
of Payment.

     

    (a) Each Non-Management Director who is
entitled to receive a retainer or fee under the Plan may elect, in respect of
all or any portion of the payment as specified by the Non-Management Director,
to receive, in lieu of a payment in cash, either (i) a number of whole shares of
Common Stock determined by dividing (A) the amount of the retainer or fee that
the Non-Management Director elects to receive in the form of Common Stock by (B)
the Fair Market Value of the Common Stock as of the date on which the retainer
or fee otherwise would be paid in cash (with cash issued for any fraction of a
share) or (ii) a credit of an amount equal to the amount otherwise payable in
cash to the Non-Management Director’s account under the Deferred Compensation
Plan (a “ DCP Deferral Election”).

     

    (b) In order to be effective, a DCP
Deferral Election must be made prior to the year in which the retainer or fee is
to be paid, and after the beginning of the year in which the retainer or fee is
to be paid such election shall be irrevocable, except that if a individual first
becomes a Non-Management Director during a year, a DCP Deferral Election must be
made within 30 calendar days after the date the individual first becomes a
Non-Employee Director and such election shall apply only to payments made in
respect of service after the election is made.  Elections to receive
shares of Common Stock in lieu of cash may be made at any time prior to the date
on which the cash payment otherwise is to be made.  Notwithstanding
the above, no modification may be made to a DCP Deferral Election, even prior to
the beginning of the year in which the retainer or fee is to be paid, except in
strict compliance with Section 409A(a)(4) of the Internal Revenue
Code.

     

    
      
         

      

      
        2 

        
          

        

      

      
         

      

    

    (c) The shares of Common Stock issued
under the Plan shall not be subject to forfeiture and shall be free of any and
all restrictions on transfer, except for any restrictions that may be required
by law.  Any such restrictions on transfer may be reflected in
appropriate legends on the certificates for the shares.

     

    7.           Limitations
on the Issuance of Shares.

     

    No shares of Common Stock shall be
issued under the Plan and no certificates representing shares of Common Stock
shall be delivered:

     

    (a) if any requisite approval or
consent of any governmental authority having jurisdiction over the issuance of
the shares shall not have been secured or if the issuance of shares of Common
Stock would violate any federal, state or local law, regulation or order that
may be applicable;

     

    (b) at any time that the Common Stock
is listed on a stock exchange, if the shares of Common Stock pursuant to the
award shall not have been effectively listed on such exchange, unless the
Company determines that such listing is not required; or

     

    (c) at any time that the Company
determines that the satisfaction of withholding tax or other withholding
liabilities is necessary or desirable, unless such withholding shall have been
effected.

     

    8.           No
Registration.

     

    The Company shall have no obligation to
register any of the shares of Common Stock issuable under this Plan under the
Securities Act of 1933, as amended, or under any state securities laws, but may
in its discretion elect to do so if it determines that such registration is
necessary or appropriate.

     

    9.           Taxes.

     

    Each Non-Management Director (or the
Non-Management Director’s beneficiary) shall be responsible for all applicable
taxes on payments made to the Non-Management Director under the Plan (or
beneficiary) regardless of the form of such payments.  The Company may
make appropriate arrangements to collect from any Non-Management Director (or
the Non-Management Director’s beneficiary) the taxes, if any, that the Company
may be required to be withheld by any government or government agency prior to
payment under the Plan.

     

    10.           No
Right to Continued Service

     

    Neither the eligibility to participate
in the Plan nor the receipt of any payment under the Plan shall confer upon any
Non-Management Director the right to continue to serve as a director of the
Company if validly removed or the right to be nominated for reelection as
director.

     

    
      
         

      

      
        3 

        
          

        

      

      
         

      

    

    11.           No
Prohibition on Other Compensation

     

    Neither the existence of this Plan nor
any provision of this Plan shall preclude the Company from authorizing or
approving other plans or forms of compensation for directors of the
Company.

     

    12.           Expenses

     

    All reasonable expenses of
administering the Plan shall be paid by the Company.

     

    13.           Amendment
and Termination

     

    The Board may amend, suspend, or
terminate the Plan at any time; provided that no amendment shall be made without
shareholder approval if shareholder approval is required by law, regulation, or
securities exchange listing requirement.

     

    14.           Governing
Law

     

    The Plan shall be construed,
administered, and regulated in accordance with the laws of the State of Delaware
(excluding the choice of law provisions thereof) and any applicable requirements
of federal law.

     

    15.           Effectiveness
and Expiration of the Plan

     

    The Plan shall become effective January
1, 2005, and, unless terminated earlier by the Board, shall expire on December
31, 2014, after which no further payments may be made under the
Plan.

     

    IN WITNESS WHEREOF, the Company has
caused this Plan to be signed on this 3rd day of
November, 2008 which version reflects all modifications made to the Plan through
such date of execution.

     

    
      	 
      	 
      	 
      	
              PEPCO
      HOLDINGS, INC.

            
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
              By:

            	
              /s/
      D. R. WRAASE

            
	 
      	 
      	 
      	 
      	
              Chairman
      of the Board

                and
      Chief Executive Officer

            
	 
      	 
      	 
      	 
      	 
      
	
              ATTEST

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
              By:

            	
               /s/
      ELLEN S. ROGERS

            	 
      	 
      	 
      
	 
      	
              Secretary

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