Document:

EXHIBIT 10.31.1

 EXHIBIT 10.31.1 

PEPCO HOLDINGS, INC. 
 SECOND REVISED AND RESTATED 
 EXECUTIVE AND DIRECTOR DEFERRED COMPENSATION
PLAN 
  

	I.	INTRODUCTION 

Potomac Electric Power Company (“Pepco”) established the Potomac Electric Power Company Executive Deferred Compensation Plan
(the “Pepco plan”), effective November 18, 1982, to enable certain executives to supplement their retirement income by deferring the receipt of compensation for services performed while the plan was in effect. The Pepco plan was
amended from time to time thereafter, including an amendment to make Directors eligible to participate in the plan. On March 13, 2002, further amendments were authorized to the Pepco plan to recognize the intent to consummate a transaction (the
“Merger”) by which Pepco and Conectiv, Inc. (“Conectiv”) will become wholly owned subsidiaries of Pepco Holdings, Inc. (the “Company” or “Pepco Holdings”) and, for the near term future, to maintain for the
benefit of the executives of Pepco Holdings and its subsidiaries, the level of benefits provided to such executives prior to the Merger. Such amendments include authorization to name Pepco Holdings as the sponsor of the plan; to change the name of
the Pepco plan to reflect the change in plan sponsorship to amend the definition of “executive” eligible to participate in the plan; to add an in-service withdrawal feature to the plan; and to provide an investment option which credits a
participant’s account with increases or decreases in value attributable to phantom units of Pepco Holdings Common Stock, together with any dividends or stock reinvestment rights associated with the designated units. The plan was thereafter
amended in October 2008 to comply with Section 409A of the Internal Revenue Code and regulations issued thereunder. Further amendments to the plan were made in December 2011 to modify the deferral and payment

 
elections for Executives and to make certain other conforming changes and adjustments. The plan is amended and restated in its entirety as set forth herein and is known as the Pepco Holdings,
Inc. Executive and Director Deferred Compensation Plan. (the “Plan”). The Plan as amended supersedes and replaces in its entirety all of the terms and conditions of the Plan previously adopted prior to the date hereof, except (a) with
respect to the “Grandfathered Subaccount,” as described in Section 2.01, and (b) with respect to deferral elections made prior to December 1, 2011, which were made in accordance with the terms of the Plan then in effect.

  

	II.	DEFINITIONS 

 2.01
“Account” means the bookkeeping account maintained by the Company (i) for each participating Executive and (ii) for each participating Director, which is credited with the Executive’s or the Director’s Deferred
Compensation, as the case may be, and with additional amounts in the nature of interest and which is debited to reflect benefit distributions. Effective as of January 1, 2005, each Account shall be divided into two (2) subaccounts. The
first subaccount (the “Grandfathered Subaccount”) shall reflect the vested balance of such Account as of December 31, 2004, adjusted to reflect (i) subsequent earnings or losses attributable to the hypothetical investment options
in which such subaccount is deemed invested and (ii) any distributions made from such subaccount. The Grandfathered Subaccount shall be subject to the terms of the Plan as in effect on October 3, 2004, except to the extent that the terms
of this Second Revised and Restated Plan do not result in a material modification, as determined under Section 409A of the Internal Revenue Code. The second subaccount (the “Non-Grandfathered Subaccount”) shall reflect (i) all
amounts credited to the account on and after January 1, 2005, (ii) any amounts which had been credited to the account prior to January 1, 2005 but which first became vested on or after January 1, 2005, (iii) all earnings or
losses attributable to the hypothetical investment options in which such subaccount is deemed vested, and (iv) any distributions made from such subaccount. 

  
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 2.02 “Agreement” means the participation or deferral agreement (or other agreement
or document having similar purpose or effect) executed by the Company and an Executive or a Director, as the case may be, which designates the amount of the Executive’s or the Director’s Deferred Compensation, the time and manner of
benefit distributions, and the Executive’s or the Director’s Beneficiary. In the event of a conflict between the Agreement and this Plan, the Plan shall govern. 
 2.03 “Beneficiary” means any person designated by a participating Executive or a participating Director to receive benefits under the Plan in the event of the Executive’s or the
Director’s death prior to the completion of all benefit payments under the Plan. An Executive’s or a Director’s Agreement, as the case may be, may designate more than one Beneficiary or may designate primary and contingent
Beneficiaries. 
 2.04 “Board of Directors” means the Board of Directors of Pepco Holdings, Inc. 

2.05 “Deferred Compensation” means any remuneration which would otherwise be currently payable to the Executive or the
Director, but which the Executive or the Director irrevocably agrees to receive on a deferred basis in accordance with the terms of the Plan. 
 2.06 “Director” means a member of the Board of Directors. 
 2.07
“Executive” means such employee of Pepco Holdings or any Pepco Holdings subsidiary as designated by the Chief Executive Officer of Pepco Holdings (or, in the case of the Chief Executive Officer, as designated by the Board). 

  
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 2.08 “Human Resources Committee” shall mean that committee comprised of members of
the Board of Directors, which governs the development of personnel policies for the Company. 
 2.09 “Internal Revenue
Code” shall mean the Internal Revenue Code of 1986, as amended. References in the Plan to any section of the Internal Revenue Code shall be deemed to include, as applicable, any amendment or successor provision to such section, and any Treasury
regulations promulgated thereunder. 
 2.10 “Normal Compensation” with respect to an Executive means the amount of
base salary that would be payable to an Executive for the twelve (12) month period commencing on the first day of any Plan Year if the Executive were not participating hereunder. “Normal Compensation” with respect to a Director means
the amount of retainer/fees that would be payable in cash to a Director for the twelve (12) month period commencing on the first day of any Plan Year if the Director were not participating hereunder. 

2.11 “Plan Year” means the twelve-month period commencing on July 1 of each calendar year and ending on June 30 of
the following calendar year. Notwithstanding the above, the time period between July 1, 2005 and December 31, 2005 shall be treated as a separate Plan Year and effective as of January 1, 2006, the Plan Year shall constitute the
calendar year. 
 2.12 “Separation from Service” means an Executive’s termination of employment with the Company
and any of its subsidiaries or a Director’s cessation of participation on the Board of Directors. An Executive who terminates regular employment or a Director who discontinues participation on the Board of Directors and who thereafter performs
consulting services for the Company on a part-time basis will nonetheless be deemed to have had a Separation from Service at the date of termination of regular employment or the date of discontinuance of participation on

  
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the Board of Directors, as the case may be. For purposes of the Non-Grandfathered Subaccount, a “Separation from Service” shall mean a “separation from service” as defined
under Section 409A of the Internal Revenue Code. 
 2.13 “Unforeseen Financial Emergency” means a severe
financial hardship to the Executive or Director resulting from an illness or accident of the Executive or Director, the Executive or Director’s spouse, or a dependent (as defined in Section 152 of the Internal Revenue Code, without regard
to Section 152(b)(1), (b)(2), and (d)(1)(B) of the Internal Revenue Code) of the Executive or Director, loss of the Executive or Director’s property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as
a result of events beyond the control of the Executive or Director. 
  

	III.	PARTICIPATION 

3.01 An Executive or a Director may execute an Agreement and become a participant in the Plan prior to the first day of any Plan Year.
Except as set forth in Section 5.02, an Executive’s or a Director’s Agreement for a Plan Year may not be amended or revoked once that Plan Year has commenced, provided that a participating Executive or a participating Director may at
any time change his Beneficiary designation by providing written notice of such change to the Company. Notwithstanding the above, any election to participate in the Plan in respect of the short Plan Year beginning July 1, 2005 and ending
December 31, 2005 must be made prior to March 15, 2005. 
 3.02 An Executive’s or a Director’s Agreement
shall relate to (i) compensation for services performed during the Plan Year to which it relates, (ii) benefit entitlements otherwise payable in connection with prior deferrals pursuant to Section 5.01 of the Potomac Electric Power
Company Director and Executive Deferred Compensation Plan, (iii) other remuneration 

  
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approved by the Board of Directors as eligible to be deferred under the Plan, provided that such Agreement shall be entered into prior to the year in which the Executive or Director begins to
perform services related to such compensation, or (iv) other remuneration approved by the Board of Directors as eligible to be credited under the Plan by way of a transfer of a deferred compensation entitlement to this Plan from any other
nonqualified deferred compensation program maintained by the Company (provided that such transfer does not change the time and form of payment of such deferred compensation). Notwithstanding the above, any Agreement entered into on or after
January 1, 2005 shall be structured so as to comply with the timing of election rules contained in Section 409A(a)(4) of the Internal Revenue Code, as interpreted by the Internal Revenue Service through any proposed or final Regulation or
other guidance. 
  

	IV.	DEFERRAL OF COMPENSATION - EXECUTIVE AND DIRECTOR RULES 

 4.01 The deferral of compensation for an Executive shall be made in accordance with the following provisions and as set forth in the Executive’s Agreement. 

A. Before the beginning of each Plan Year, the Executive may elect any or all of the following four options for deferring compensation,
to the extent applicable. The Executive may make separate elections with respect to base salary and bonus, and each election shall become irrevocable by December 31 of the year preceding the year in which services are first performed with
respect to the compensation being deferred: 
 Option 1 - The Executive may elect to defer an amount of Normal
Compensation (expressed as a percentage of Normal Compensation) on a ratable basis throughout the Plan Year. 
 Option 2.
- The Executive may elect to defer an amount of Normal Compensation equal to 6% of Normal Compensation in excess of the lesser of: (a) the limit on 

  
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 compensation imposed by Section 401(a)(17) of the Internal Revenue Code (i.e., $250,000
for 2012); or (b) the limit on pre-tax contributions imposed by Section 402(g) of the Internal Revenue Code (i.e., $17,000 for 2012) divided by 6%. This amount is intended to provide deferrals in an amount that, absent limits imposed by
the Internal Revenue Code, could otherwise be contributed to the principal tax-qualified defined contribution plan of the Company or its Subsidiaries in which the Executive participates and for which matching contributions would otherwise be made
under such defined contribution plan (assuming the Executive obtained the maximum matching contribution available under such defined contribution plan). 
 Option 3 - The Executive may elect to defer such other compensation which would otherwise be paid to the Executive during the Plan Year or a later Plan Year provided such compensation has been
approved by the Board of Directors in its sole discretion as eligible to be deferred under the Plan and provided that the deferral election applies only to compensation for services performed in one or more Plan Years that occur after the Plan Year
in which the election is made, except as otherwise permitted under Section 409A of the Internal Revenue Code. 
 Option 4
- Subject to the prior approval of the Board of Directors, which approval may be granted or withheld in the sole discretion of the Board of the Directors, the Executive may elect to have the Executive’s Account under this Plan credited with
a deferred compensation entitlement attributable to any other nonqualified deferred compensation program maintained by the Company, provided that such transfer will be accompanied by a corresponding elimination of the Company’s obligation under
such other deferred compensation arrangement and provided further that no such 

  
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transfer will be permitted with respect to any deferred compensation entitlement which would otherwise become payable to the Executive under the terms of such other nonqualified deferred
compensation program within the same calendar year as the year of the proposed transfer, and provided that such transfer does not change the time and form of payment of the deferred compensation. Each Executive who elects Deferred Compensation with
respect to a Plan Year shall specify in his Agreement for such Plan Year the Option or Options which shall apply for such Plan Year. 
 B. The Company will credit the Deferred Compensation to the Account of each participating Executive as of the day such amount would have been paid to the Executive if the Executive’s Agreement had
not been in effect. The Executive may elect to have the Company credit, on a monthly basis all Deferred Compensation into the Executive’s Account with an amount in the nature of interest at either (i) the prime rate quoted by the Chase
Manhattan Bank, N.A. (the “Prime Rate”), as of the last day of the month; (ii) a rate equal to the rate of return with respect to any one or a combination of the investment funds selected by the Human Resources Committee (an
“Investment Fund Rate”); or (iii) a combination of the Prime Rate and an Investment Fund Rate. The Prime Rate or the appropriate Investment Fund Rate(s) shall be credited to the Executive’s Account as of the last day of each
calendar month based on the daily balances in the Account which are to be adjusted with respect to the Prime Rate or each designated Investment Fund, as the case may be. The crediting of such interest on a monthly basis shall continue until such
balance in the Executive’s Account has been reduced to zero by reason of benefit payments under the Plan. 

  
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 The Executive may also elect to have the investment return applicable to all or part of any
Deferred Compensation credited to the Executive’s Account determined by reference to phantom shares of Pepco Holdings Common Stock (“Common Stock”). In order to initially determine the number of shares of Common Stock which will serve
as the basis for adjusting the value of an Executive’s account, the full amount of Deferred Compensation to be credited with an investment return based upon phantom shares shall be divided by the average of the high and low sales prices of the
Common Stock on the New York Stock Exchange on the second business day prior to the date upon which the Executive’s Account is to be credited with such Deferred Compensation. The resulting number will represent the number of phantom shares to
be credited to such Executive’s Account. For purposes of determining the value of the Executive’s Account which is attributable to phantom shares, each phantom share shall be deemed to have a value of one share of Common Stock and any time
a dividend payment is made with respect to a share of Common Stock, an equivalent amount shall be added to the account of the Executive with respect to each phantom share then credited to the Account. All such dividend equivalent amounts added to
the Executive’s Account shall be expressed in the form of phantom shares or fractions thereof. 
 C. If the Executive
elects to defer base salary under Option 2, the Company shall credit to the Executive’s Account, at the time each deferral is credited to the Executive’s Account, a matching contribution credit with respect to the amount deferred. The
amount of the matching contribution credit shall be determined by applying the matching contribution formula that would apply to the Executive if the deferrals under this Plan had, instead, been made under the principal tax-qualified defined
contribution plan of the Company or its Subsidiaries in which the Executive participates (determined without regard to any limitations imposed on 

  
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compensation or contributions by the Internal Revenue Code but assuming the Executive contributed the maximum amount permitted under the Internal Revenue Code to the tax-qualified plan).

 D. The Company shall furnish each participating Executive with an annual report showing the balance in the Executive’s
Account as of June 30 of each year. Effective as of December 31, 2005, the annual report will be prepared as of the December 31st of each calendar year. 
 4.02 The deferral of Normal Compensation for a Director shall be made in accordance with the following provisions: 
 A. Before the beginning of each Plan Year, each Director may elect to defer an amount of retainer/fees constituting such Director’s Normal Compensation for the Plan Year. Such election shall remain
in effect until the Director provides written notification of cancellation of a previous election with respect to a succeeding Plan Year. The Agreement may specify that the Director’s retainer/fees will be reduced by the elected amount of the
Deferred Compensation on a ratable basis throughout the Plan Year (expressed as a percentage of cash retainer/fees). In addition, subject to the prior approval of the Board of Directors, which approval may be granted or withheld in the sole
discretion of the Board of Directors, a Director may elect to have the Director’s Account under this Plan credited with a deferred compensation entitlement attributable to any other nonqualified deferred compensation program maintained by the
Company, provided that such transfer will be accompanied by a corresponding elimination of the Company’s obligation under such other deferred compensation arrangement and provided further that no such transfer will be permitted with respect to
an deferred compensation entitlement which would otherwise become payable to the Director under the terms of such other 

  
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nonqualified deferred compensation program within the same calendar year as the year of the proposed transfer. Such transfer shall not change the time and form of payment of the deferred
compensation. 
 B. The Company will credit the Deferred Compensation to the Account of each participating Director as of the
day such amount would have been paid to the Director if the Director’s Agreement had not been in effect. A Director may elect to have any Deferred Compensation which would otherwise have been paid to the Director in the form of cash had no
deferral election been made expressed in the form of phantom shares by so advising the Human Resources Committee as part of the Director’s Agreement. The full amount of Deferred Compensation to be credited in the form of phantom shares shall be
divided by the average of the high and low sale prices of the Common Stock on the New York Stock Exchange on the second business day prior to the date upon which the Director’s Account is to be credited with such Deferred Compensation. The
resulting number will represent the number of phantom shares to be credited to such Director’s Account. For purposes of determining the value of the Director’s Account which is attributable to phantom shares, each phantom share shall be
deemed to have a value of one share of Common Stock and any time a dividend payment is made with respect to a share of Common Stock, an equivalent amount shall be added to the account of the Director with respect to each phantom share then credited
to the Account. All such dividend equivalent amounts added to the Director’s Account shall be expressed in the form of phantom shares or fractions thereof. 
 With respect to any Deferred Compensation credited to the Account of a Director which is not credited in the form of phantom shares, the Company will, in addition, credit the Director’s Account on a
monthly basis with an amount in the nature of interest at a rate equal to 

  
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(i) the Prime Rate, as of the last day of the month, (ii) the Investment Fund Rate, or (iii) a combination of the Prime Rate and the Investment Fund Rate. The appropriate rate or rates
of interest shall be credited to the Director’s Account as of the last day of each calendar month based on the daily balances in the Account which are to be adjusted with respect to the Prime Rate or each designated Investment Fund Rate, as the
case may be. The crediting of such interest on a monthly basis shall continue until such balance in the Director’s Account has been reduced to zero by reason of benefit payments under the Plan. 

C. The Company shall furnish each participating Director with an annual report showing the balance in the
Director’s Account as of June 30 of each year. Effective as of December 31, 2005, the annual report will be prepared as of the December 31st of each calendar year. 
 D. Subject to compliance with applicable law (including Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 409A of the Internal Revenue
Code), the Company may establish and may amend, from time to time, a procedure pursuant to which a Director may prospectively modify the manner in which his Account is credited with an investment return, as between the alternatives of phantom shares
and such other investments as may be provided for by the Plan from time to time. 
  

	V.	PAYMENT OF BENEFITS 

5.01 Except as otherwise provided in this Article V, the payment of benefits to a participating Executive shall commence as of the date
specified by the Executive in the Executive’s Agreement under one of the following options: (i) on the first day of the month following the Executive’s Separation from Service; (ii) on January 31 of calendar year following
Separation from Service; (iii) on January 31 of the calendar year following the later of the year 

  
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of the Executive’s Separation from Service or attainment of an age specified in the Agreement; or (iv) on January 31 of the calendar year specified in the Agreement, which may not
be earlier than the second calendar year following the calendar year which includes the first day of the Plan Year for which the Agreement is made. Except as otherwise provided in this Article V, the payment of benefits to a participating Director
shall commence as of the date specified by the Director in the Director’s Agreement under one of the following options: (i) on the first day of the month following the Director’s Separation from Service; (ii) on January 31
of the calendar year following the year of the Director’s Separation from Service; (iii) on January 31 of the calendar year following the later of the year of the Director’s Separation from Service or attainment of an age
specified in the Agreement; or (iv) on January 31 of the calendar year specified in the Agreement, which may not be earlier than the second calendar year following the calendar year which includes the first day of the Plan Year for which
the Agreement is made. Notwithstanding the above, if an individual who then qualifies as a “specified employee”, as defined in Section 409A(a)(2)(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 (other than from the Grandfathered Subaccount) as a result of such Separation from Service, no such distribution otherwise payable to such specified employee during the first six
(6) months after the date of such Separation from Service, shall, to the extent required by Section 409A(a)(2)(B)(i), 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). 
 5.02 As specified in the
Executive’s or the Director’s Agreement, as the case may be, benefits shall be paid (i) in a lump sum in cash in an amount equal to the Executive’s or the 

  
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Director’s Account balance as of the benefit commencement date, or (ii) in a series of approximately equal monthly or annual installments, as computed by the Company, over a period of
between two (2) and fifteen (15) years with the final payment equaling the then remaining balance in the Executive’s or the Director’s Account. If annual installments are elected by the Executive or the Director, such annual
installments shall be payable on the benefit commencement date and each succeeding January 31 during the payment period. Notwithstanding a specification of installment payments in an Executive’s or Director’s Agreement, as the case
may be, if the balance in the Executive’s or the Director’s Account as of the benefit commencement date is less than one thousand dollars ($1,000.00), the Company shall instead make a lump sum payment of that amount on that date to the
extent permitted under the plan aggregation rules under Treasury Regulation section 1.409A-3(j)(4)(v). Except as provided below, the time for payment of benefits to an Executive or a Director may be modified by the Executive or Director by the
filing of a written election prior to the beginning of the calendar year in which benefits would otherwise become payable under the existing Agreement. Notwithstanding the above, (i) any delay in the time and any change in the form of a
distribution from the Non-Grandfathered Subaccount (A) may not take effect until at least 12 months after the date the election is made, (B) must involve a further deferral of not less than five (5) years from the date such payment
would otherwise be made (except for a payment made due to the death, disability (as defined under Section 409A of the Internal Revenue Code) or Unforeseen Financial Emergency of the electing Executive or Director, as the case may be, and
(C) must be made, in the case of payments otherwise scheduled to be made at a specified time or pursuant to a fixed schedule, at least 12 months prior to the date such payments were originally scheduled to be made; and (ii) no amendment or
other modification may be made to a prior election with respect to the payment of Deferred Compensation that has been credited in the form of phantom shares unless such amendment or modification is approved by the Committee. 

  
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 5.03 An Executive may apply to the Human Resources Committee for early distribution of all
or any part of his Grandfathered Subaccount which is not subject to Section 409A of the Internal Revenue Code. Any such early distribution shall be made in a single lump sum, provided that ten percent (10%) of the amount withdrawn in such
early distribution shall be forfeited prior to payment of the remainder to the Executive. An Executive may not elect an early distribution hereunder if he has received an early distribution or a distribution under Section 5.05 within the
previous twelve (12) months. In the event an Executive’s early distribution is submitted within sixty (60) days after a Change in Control (as may be defined in an agreement between the Executive and the Company or in a plan in which
the Executive participates) or an elimination of an investment alternative under the Plan that the Human Resources Committee determines is a substantial detriment to the Executive, the forfeiture penalty shall be reduced to five percent (5%).

 5.04 In the event that a participating Executive or a participating Director dies before the benefit commencement date, the
Company shall make benefit payments to the Executive’s or the Director’s Beneficiary or Beneficiaries in an aggregate amount equal to twice the balance credited to the Account of the participating Executive or participating Director, as
the case may be, immediately prior to such individual’s death. An amount equal to such participant’s Account balance will be paid on the first of the month following the Executive’s or the Director’s death and payment of the
remaining amount of the death benefit will commence as of January 31 of the calendar year following the Executive’s or the Director’s death in accordance with the method of payment under Section 5.02 specified in the
Executive’s or the Director’s Agreement. In the 

  
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event that a participating Executive or a participating Director dies after the benefit commencement date, any remaining benefit payments shall be paid to the Executive’s or the
Director’s Beneficiary or Beneficiaries at the same time the amounts would have been paid to the Executive or Director. In the event that no Beneficiary survives the Executive or the Director, an amount equal to the remaining balance in the
Executive’s or Director’s Account (or two times the Account balance if death occurs prior to the benefit commencement date) shall be paid to the estate of the Executive or the Director, as the case may be, in a lump sum within thirty
(30) days following the date on which the Company is notified of the Beneficiary’s death. 
 5.05 Notwithstanding the
foregoing, the Company may at any time make a lump sum payment to an Executive or Director (or surviving Beneficiary) equal to part or all of the balance in the Executive’s or Director’s Account, as the case may be, upon a showing of a
financial emergency caused by circumstances beyond the control of the Executive or Director (or surviving Beneficiary) which would result in serious financial hardship if such payment were not made. The determination whether such emergency exists
shall be made in the sole discretion of the Board of Directors of the Company, the amount of the payment shall be limited to the amount necessary to meet the financial emergency, and any remaining balance in the Executive’s or Director’s
Account shall be paid at the time and in the manner otherwise set forth in the Executive’s or Director’s Agreement, as the case may be. However, no payment shall be made with respect to the Non-Grandfathered Subaccount unless the financial
emergency constitutes an Unforeseeable Emergency and the payment satisfies the conditions in Treasury Regulation Section 1.409A-3(i)(3). 
 5.06 In the event that a participating Executive or Director ceases to be an employee or Director of the Company and becomes a proprietor, officer, partner, employee, or otherwise

  
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becomes affiliated with any business or entity that is in competition with the Company, or becomes employed by any governmental agency’ having jurisdiction over the affairs of the Company,
the Company reserves the right in the sole discretion of its Board of Directors to make an immediate lump sum payment to the Executive or the Director in an amount equal to the balance in the Executive’s or the Director’s Account at that
time, to the extent that such payment is permitted under Section 409A of the Internal Revenue Code. 
 5.07 If an Executive
or a Director has entered into two (2) or more Agreements with respect to different Plan Years which specify different benefit commencement dates under Section 5.01 or different methods of payment under Section 5.02, the Company will
separately account for the Deferred Compensation attributable to each such Agreement and distribute the amounts covered by each Agreement in accordance with the terms thereof. 

 

	VI.	RIGHTS OF PARTICIPANTS AND BENEFICIARIES 

 6.01 Nothing contained in this Plan or any Agreement 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 Director, any Beneficiary or any other person; provided the Company has established a grantor trust (Trust No. 3 originally executed on November 28, 2001) to hold assets to secure the Company’s obligations to
participants under the Plan if the establishment of such a trust does not result in the Plan being “funded” for purposes of the Internal Revenue Code. Except to the extent provided through a grantor trust established under the provisions
of the preceding sentence, any compensation deferred under the Plan shall continue for all purposes to be a part of the general funds of the Company. 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. 

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

6.03 If the Company finds that any person to whom any payment is payable under the 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 therefor shall have been made by a duly 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 expense for the person who is otherwise entitled to payment, and, after making such payment, no amount shall be due with respect to such benefit under the Plan. 

6.04 Notwithstanding the foregoing, with respect to any participant who is an officer, director or stockholder subject to Section 16
of the Exchange Act, the portion of any Account creditable to phantom shares shall be subject to such restrictions, limitations and other conditions as the Human Resources Committee may deem necessary or appropriate to ensure that Plan transactions
are not subject to the short-swing profit liability requirements of Section 16(b) of the Exchange Act. 
  

	VII.	MISCELLANEOUS 

7.01 This Plan may be amended, suspended or terminated at any time by the Company; provided, however, that no amendment, suspension
or termination shall have the effect of impairing the rights of (i) participating Executives or their Beneficiaries or (ii) participating Directors or their Beneficiaries, with respect to amounts credited to their Accounts before the date
of the amendment, suspension or termination. 

  
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 7.02 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 with such benefit payments.

 7.03 This Plan is intended, and shall be interpreted, to comply with Section 409A of the Internal Revenue Code (except
with respect to the Grandfathered Subaccount). However, the Company shall not be liable to any Executive or Director (or Beneficiary thereof) for any tax the Executive or Director (or Beneficiary thereof) might owe as a result of participating in
this Plan. The installment payment option under the Plan is treated as the entitlement to a single payment for purposes of Treasury Regulation section 1.409A-2(b)(2)(iii). 
 7.04 This Plan and all Agreements hereunder shall be construed in accordance with and governed by the laws of the State of Delaware, without reference to principles of conflict of laws, except as may be
preempted by Federal law. 
 IN WITNESS WHEREOF, the Company has caused this version of the Plan to be signed on which
version reflects all modifications made to the Plan through such date of execution. 
  

									
	ATTEST	 		 	Pepco Holdings, Inc.
					
	By:	 	 /s/ Jane K. Storero
	 		 	By:	 	 /s/ Joseph M. Rigby

		 	Jane K. Storero	 		 		 	Joseph M. Rigby
		 	Secretary	 		 		 	Chairman of the Board, President and Chief Executive Officer

  
 -19-EXHIBIT 10.32

 Exhibit 10.32 

Pepco Holdings, Inc. 
 2012 NON-MANAGEMENT DIRECTOR COMPENSATION ELECTION AGREEMENT 
 I
understand that I am permitted to elect, with respect to the compensation due me for my services as a director of the Company, either (i) to receive my cash compensation currently in the form of either, or a combination of, cash and shares of
Company common stock (“Common Stock”) pursuant to the Non-Management Director Compensation Plan or (ii) to defer the receipt of my cash compensation under the terms of the Company’s Second Revised and Restated Executive and
Director Deferred Compensation Plan (the “Deferred Compensation Plan”). In addition, I understand that I am permitted to elect to receive my stock-based compensation granted pursuant to the terms of the 2012 Long-Term Incentive Plan
(subject to stockholder approval) (the “2012 LTIP”), or to defer the settlement of such stock-based compensation under the terms of the 2012 LTIP. If I choose to defer the receipt of my cash compensation, I must also complete and return to
the Company the attached form directing how the deferred funds are to be credited. 
 I am making the following election with
the understanding that (i) the elections will apply to all of the compensation paid to me for service as a director in 2012 and that these elections for 2012 cannot be altered or revoked after December 31, 2011, and (ii) the elections
also apply to all such compensation paid to me in subsequent years for services as a director, unless I notify the Company of any changes, either in writing or by execution of a new election form prior to January 1 of the year for which the
changes are to take effect. 
 I acknowledge that stock-based awards described herein are subject to approval of the 2012 LTIP
by the Company’s stockholders at the 2012 Annual Meeting of Stockholders. 
  

	1.	Current Receipt or Deferral Election. 

 I hereby elect to receive my compensation for services as a director of the Company as follows (the percentages for each type of compensation must total 100%): 

 

	 	a.	Annual Cash Retainer 

  

	 	        %    	Cash (by check or direct deposit). 

	 	        %    	Common Stock (registered as indicated below). 

	 	        %    	Credit to my account under the Deferred Compensation Plan, to be paid in cash at the time I elect in Item 2 below. 

 

	 	b.	Retainer Paid in Form of Restricted Stock Units (“RSUs”) 

 I will receive an annual stock-based retainer award in the form of RSUs (and any associated dividend equivalents) under the 2012 LTIP (subject to stockholder approval), to be settled in Common Stock as
indicated below: 
  

	 	        %    	Common Stock (registered as indicated herein) to be received upon settlement of the RSUs (and any associated dividend equivalents), shall be issued to me upon vesting
of the RSUs as provided in the award agreement. 

	 	        %    	Common Stock (registered as indicated herein) to be received upon settlement of the RSUs (and any associated dividend equivalents), shall be deferred under the 2012
LTIP and paid in Common Stock at the time I elect in Item 3 below. 

	 	c.	Meeting Fees 

  

	 	        %    	Cash (by check or direct deposit). 

  

	 	        %    	Common Stock (registered as indicated below). 

  

	 	        %    	Credit to my account under the Deferred Compensation Plan, to be paid in cash at the time I elect in Item 2 below. 

 

	 	d.	Committee Chairman Retainer (please complete whether or not you currently are a committee chairman): 

 

	 	        %    	Cash (by check or direct deposit). 

  

	 	        %    	Common Stock (registered as indicated below). 

  

	 	        %    	Credit to my account under the Deferred Compensation Plan, to be paid in cash at the time I elect in Item 2 below. 

 

	2.	Cash Deferral Instructions. 

 If you have elected to have all or any portion of your cash retainer(s) or meeting fees credited to your account under the Deferred Compensation Plan, please complete the following: 

 

	 	a.	Payment Instructions Related to Cash Amounts Deferred 

 I hereby elect to have the cash amounts I have deferred under the Deferred Compensation Plan (and accruals thereon) paid to me beginning on the date selected below (check one): 

 

	 	            	On the first day of the month immediately following the month in which I cease to be a director. 

 

	 	            	On January 31 of the year immediately following the month in which I cease to be a director. 

 

	 	            	On January 31 of the year following the calendar year in which (i) I cease to be a director or (ii) I attain the age
            , whichever is later. 

  

	 	            	On January 31 of              [insert year] or, if later, January 31 of the second calendar
year following the calendar year which includes the first day of the Plan year for which the election is made. 

  

	 	b.	Manner of Payment 

 I
hereby elect to have the cash amounts I have deferred under the Deferred Compensation Plan (and accruals thereon) paid to me in the following manner (check one): 
  

	 	            	In a lump sum on the date of payment selected above. 

  

	 	            	In equal annual installments over              consecutive years [insert a number of years between 2
and 15] beginning on the date selected above, with subsequent installments to be paid on each succeeding January 31. 

  

	 	            	In equal monthly installments over              consecutive months [insert a number of months between
24 and 180] beginning on the date selected above. 

  
 2 

	3.	Stock-Based Award Deferral Instructions 

 If I have elected to defer the settlement of my RSU award (and any associated dividend equivalents) under Item 1.b. above, I hereby elect payment to me (or, if applicable, my beneficiary) in a lump
sum solely in shares of Common Stock on one of the dates I designate below (but only to the extent that such award has vested): 
  

	 	            	On the date I cease to be a director of the Company. 

  

	 	            	On the January 31 following the date I cease to be a director. 

 

	 	            	On a specified date (which may not be prior to January 31, 2015): 

 ____________________ 
 More information on the deferral of Stock-Based Awards under
the 2012 Long-Term Incentive Plan is provided in Item 6 below. 
  

	4.	Registration of Stock Certificates. 

 With respect to any shares of Common Stock that (a) may be issued upon settlement of an RSU (and any associated dividend equivalents) granted under the 2012 LTIP, whether or not deferred under
Item 1.b above, or (b) in payment of any portion of my retainer or meeting fees, please register the stock certificates for those shares in the name set forth below, and provide a mailing or street address for such person: 

			
		
	 	 	
		
	 	 	
		
	 	 	
	 	 	

  

	5.	Beneficiary Designation. 

I designate the following Beneficiary (or Beneficiaries) to receive any benefits due under the Deferred Compensation Plan and/or the 2012
LTIP in the event of my death (specify full name, relationship and address): 
  

					
			
	 Primary:            
	  	 	  	
			
		  	 	  	
			
		  	 	  	
			
		  	 	  	
			
	 Contingent:
	  	 	  	
			
		  	 	  	
			
		  	 	  	
			
		  	 	  	

  
 3 

	6.	Material Terms Related to My Deferral of an Annual Stock-Based Retainer Award. 

If I have elected in Item 1.b. above to defer settlement of my annual stock-based retainer award (and any associated dividend
equivalents), I hereby acknowledge and agree that such deferral shall be subject to the following material terms, which have been approved by the Board of Directors: 
  

	 	a.	This deferral election applies only to Common Stock underlying RSUs and/or performance shares or units granted under the 2012 LTIP. 

	 	b.	Such award will be settled, to the extent vested, in accordance with my irrevocable deferral election set forth herein. 

	 	c.	To the extent vested, such retainer will be paid in a lump sum and solely in shares of Common Stock, and will not be credited to any of the options set forth on the
Cash Deferral Allocation Form provided herewith. 

	 	d.	If a dividend equivalent award has been granted with a deferred RSU or performance share or unit award, such dividend equivalent award shall also be deferred under the
terms provided herein. Such dividends shall be credited, when and as declared and paid by the Board of Directors, in additional shares or units of the same type and tenor as the stock-based award, based on the Fair Market Value (as defined in the
2012 LTIP) on the business day prior to the payment date of such dividend. 

	 	e.	Fractional shares shall be eliminated without compensation. Any fractional shares shall be rounded up to the next whole share if greater than or equal to a half-share,
and rounded down to the next whole share if less than a half-share. 

	 	f.	The award and deferral is subject to the other terms and conditions of the 2012 LTIP, including with respect to approval of such plan by the Company’s stockholders
at the 2012 Annual Meeting, as well as vesting, forfeiture, tax withholding and other legal requirements and conditions with respect to such award and deferral. 

	 	g.	The Board of Directors retains full discretion over the terms of this deferral arrangement and may amend, suspend or terminate such arrangement at any time or from time
to time, or impose additional or different restrictions, conditions or limitations on such deferral at any time as permitted or not prohibited by the terms of 2012 LTIP. 

	 	h.	The terms of my deferral election are intended to comply, and should be interpreted consistently with, Section 409A of the Internal Revenue Code of 1986, as
amended. 

 IN WITNESS WHEREOF, the undersigned has executed this Agreement effective for all purposes as of
the          day of                 , 2011. 

	
	
	 
	Signature
	
	 
	Name (Please Print)

 Acknowledged and confirmed this          day of
                , 2011. 
  

	
	Pepco Holdings, Inc.
	
	 
	Signature
	
	 
	Name (Please Print)

  
 4 

 Pepco Holdings, Inc. 

CASH RETAINER DEFERRAL ALLOCATION FORM 
  

									
	 Name:
	  	 	 	(the “Participant”)
		  	Last	  	First	  	Middle Initial	 	

 Social Security Number:              -
             -              
 I request that the Company credit my election of my cash deferred amounts in the Second Revised and Restated Executive and Director Deferred Compensation Plan to the options indicated below: 

(Minimum per fund – 10%) (Please be sure your percentages total = 100%) 
         % Money Market
                                    % High Yield
Bond                                  % Equity 

        % Diversified Bond
                                % Government
Income                             % Stock Index 

        % Value
                                         
         % Natural
Resources                                 % Conserv. Balanced 

        % Flexible
Managed                               %
Global                                        
            % Prudential Jennison 

        % Small Cap
Stock                                 % Prime
Rate                                        
     % Am Cent. Value Fund 
         % Janus Aspen
Growth                           % MFS Emerg.
Growth                             % TRP Int’l Stock 

        % Pepco Holdings Phantom Shares 
 NOTE: If you have elected to defer the settlement of your stock-based annual retainer award under the 2012 LTIP, you do not need to complete this Cash Retainer Deferral Allocation Form
unless you are also deferring in whole or in part your annual cash retainer. 
  

	
	Participant
	
	 
	Signature
	
	 
	Date

  
 5

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