Contract
2008
AMENDMENT
TO
This Amendment (the "Amendment") to the
EMPLOYMENT AGREEMENT (the "Agreement") made as of August 1, 2002 between PEPCO
HOLDINGS, INC. (the "Company") and XXXXXXX X. XXXXXXXXX (the "Executive ") is
adopted by the parties hereto to be effective as of August 1, 2008.
WHEREAS, the Parties wish to modify and
supplement the terms of the Employee's employment with the Company for
compliance with Section 409A of the Internal Revenue Code of 1986, as amended
(the "Code"), as hereinafter provided;
WHEREAS, while the Agreement must be
operated in compliance with Code Section 409A, pursuant to guidance issued by
the Internal Revenue Service amendments to comply with the provisions Code
Section 409A to bring the applicable document into compliance with Code Section
409A must be made no later than December 31, 2008, to be effective no later than January 1,
2009:
Accordingly, the Parties agree as
follows:
Section 5(b)(i) is amended in is
entirety to read as follows:
"(i) Any outstanding service based
restricted stock that would become vested (that is, transferable and
nonforfeitable) if the Executive remained an employee through the Term of this
Agreement will become vested as of the date of the Executive's termination of
employment. In addition, with respect to any outstanding performance based
restricted stock and any restricted stock the Company has agreed to award the
Executive at the end of a performance period subject to the Company's
achievement of performance goals, if the date as of which the restricted stock
is to become vested falls within the Term of this Agreement, the stock will
become vested, at the end of the performance period if and to the extent that
the performance goals are met."
Section 5(b)(iv) is deleted in its
entirety.
Section 5(d)(iv) shall be added to the
Agreement to read as follows:
"(iv) Any Gross-up Payment shall be
made not later than the end of the Executive's taxable year next following the
taxable year in which the Executive remits the excise tax under Code Section
4999 and any taxes related thereto."
Section 15 shall be added to the
Agreement to read as follows:
(a) Notwithstanding any provision herein or
in any other agreement with the Company to the contrary, if the Executive
qualifies as a "specified employee", as defined in Code Section 409A(2)(B)(i) at
the time of the Executive's separation from service
for any
reason other than death, any benefits otherwise provided or payable which are
subject to Code Section 409A(a)(2)(B) shall be subject to a six month deferral
in payment and will not be otherwise payable, or provided to the Executive,
until the earlier of the date of the Employee's death or six months after the
date of such separation from service. Any amounts that are deferred in respect
of this six month restriction shall be paid to Executive as soon as practicable
after the end of the six- month period (or date of death if earlier), but in no
event later than 5 business days after the end of such six month period, at
which time any remaining payments and benefits will continue to be paid and
provided for in the normal form described in herein.
(b) Notwithstanding
any provision herein, any payment or benefit under this Agreement which is
considered a reimbursement under Code Section 409A must be made no later than
the last day of the Executive's taxable year following the Executive's taxable
year in which the expense subject to the reimbursement was
incurred."
This Amendment shall be effective
August 1, 2008.
IN WITNESS WHEREOF, the Parties hereto,
intending to be legally bound hereby, have executed this Agreement.
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EXECUTIVE
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/s/ Xxxxxxx X.
Xxxxxxxxx
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PEPCO
HOLDINGS, INC.
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By:
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/s/ X. X. Xxxxxx | |||
| Name: | Xxxxxx X. Xxxxxx | |||
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Title: | Chairman & CEO |
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