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
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