UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. __)
Filed by the Registrant | Filed by a Party other than the Registrant | ||
Check the appropriate box: | |||
Preliminary Proxy Statement | |||
CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE 14a-6(e)(2)) | |||
Definitive Proxy Statement | |||
Definitive Additional Materials | |||
Soliciting Material Under Rule 14a-12 | |||
PEPCO HOLDINGS, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other than the Registrant)
Payment of Filing Fee (Check the appropriate box): | |
No fee required. | |
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. | |
(1) Title of each class of securities to which transaction applies: | |
(2) Aggregate number of securities to which transaction applies: | |
(3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11: | |
(4) Proposed maximum aggregate value of transaction: | |
(5) Total fee paid: | |
Fee paid previously with preliminary materials. | |
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. | |
(1) Amount Previously Paid: | |
(2) Form, Schedule or Registration Statement No.: | |
(3) Filing Party: | |
(4) Date Filed: |
1. |
To elect 13 director candidates nominated by the Board of Directors, each to serve a one-year term and until his or her successor has been elected and qualified; |
2. |
To approve, on an advisory basis, our executive compensation; |
3. |
To ratify the appointment, by the Audit Committee of the Board of Directors, of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2013; and |
4. |
To transact such other business as may properly be brought before the meeting or any adjournment or postponement of the meeting. |
Date: |
May 17, 2013 |
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Time: |
10:00 a.m., Eastern time (the doors will open to the public at 9:15 a.m.) |
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Place: |
Delmarva Power Conference Center 4100 South Wakefield Drive Newark, Delaware 19702 |
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Record Date: |
March 20, 2013 |
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Agenda: |
Ø Election of 13 directors each to serve a term of one year
Ø Approval, on an advisory basis, of our
executive compensation
Ø Ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting
firm for 2013
Ø Transaction of any other business that may properly come before the meeting |
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Voting: |
Stockholders as of the record date are entitled to vote. Each share of common stock is entitled to one vote for each director nominee
and one vote for each of the proposals to be voted on. |
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Admission to Meeting: |
If you plan to attend the meeting in person, you must present an admission ticket and a valid form of government-issued photo identification. If you are a record holder, your admission ticket is: Ø attached to your proxy card, if you
received a full set of materials;
Ø the e-mail you received, if you received materials by e-mail; or
Ø the Notice of Availability, if
you did not receive proxy materials. If you hold your shares in street name and you are planning to attend the meeting in person,
you must send us a written request for an admission ticket, which we must receive by May 7, 2013. For more information, see The Pepco
Holdings, Inc. Annual Meeting Attending the Annual Meeting in Person beginning on page 5. |
Proposal No. |
|
Description of
Proposal |
|
Boards Recommendation |
||||||
---|---|---|---|---|---|---|---|---|---|---|
1 |
Election of 13 director candidates nominated by the Board, each to serve a one-year term and until his or her successor has been
elected and qualified |
FOR |
||||||||
2 |
Approval, on an advisory basis, of the Companys executive compensation (Say on Pay) |
FOR |
||||||||
3 |
The ratification of the appointment, by the Audit Committee of the Board, of
PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2013 |
FOR |
Proposal Number |
|
Description of
Proposal |
|
Vote Required
for Approval |
|
Abstentions |
|
Broker
Non Votes |
||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
1 |
Election of directors |
Majority of votes cast |
Not applicable |
Not taken into account |
||||||||||||||
2 |
Say on Pay advisory vote |
Majority of shares present and entitled to vote |
Against |
Not taken into account |
||||||||||||||
3 |
Ratification of independent registered public accounting firm |
Majority of shares present and entitled to vote |
Against |
Not applicable |
Name |
|
Age |
|
Director Since |
|
Occupation |
|
Independent |
|
Positions/Committee Memberships |
||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jack B. Dunn, IV |
62 |
2004 |
President and Chief Executive Officer, FTI Consulting, Inc. |
Yes |
C, CG |
|||||||||||||||||
H. Russell Frisby, Jr. |
62 |
2012 |
Partner, Stinson Morrison Hecker LLP |
Yes |
F |
|||||||||||||||||
Terence C. Golden |
68 |
2002 |
Chairman, Bailey Capital Corporation |
Yes |
A, AE, F |
|||||||||||||||||
Patrick T. Harker |
54 |
2009 |
President, University of Delaware |
Yes |
A, C (Chair) |
|||||||||||||||||
Frank O. Heintz |
69 |
2006 |
Retired President and Chief Executive Officer, Baltimore Gas and Electric Company |
Yes |
LID, C, CG, E (Chair) |
|||||||||||||||||
Barbara J. Krumsiek |
60 |
2007 |
President and Chief Executive Officer, Calvert Investments, Inc. |
Yes |
C, F |
|||||||||||||||||
George F. MacCormack |
69 |
2002 |
Retired Group Vice President, DuPont |
Yes |
CG (Chair), F |
|||||||||||||||||
Lawrence C. Nussdorf |
66 |
2002 |
President and Chief Operating Officer, Clark Enterprises, Inc. |
Yes |
A, AE, CG, E |
|||||||||||||||||
Patricia A. Oelrich |
59 |
2010 |
Retired Vice President, IT Risk Management, GlaxoSmithKline Pharmaceuticals |
Yes |
A (Chair), AE, CG |
|||||||||||||||||
Joseph M. Rigby |
56 |
2009 |
Chairman, President and Chief Executive Officer, Pepco Holdings, Inc. |
No |
E |
|||||||||||||||||
Frank K. Ross |
69 |
2004 |
Retired Managing Partner, KPMG LLP |
Yes |
A, AE, C |
|||||||||||||||||
Pauline A. Schneider |
69 |
2002 |
Partner, Orrick, Herrington & Sutcliffe LLP |
Yes |
E, F |
|||||||||||||||||
Lester P. Silverman |
66 |
2006 |
Director Emeritus, McKinsey & Company, Inc. |
Yes |
C, F (Chair) |
A |
Audit Committee |
||
AE |
Audit Committee Financial Expert (as defined under Securities and Exchange Commission regulation) |
||
C |
Compensation/Human Resources Committee |
||
CG |
Corporate Governance/Nominating Committee |
||
E |
Executive Committee |
||
F |
Finance Committee |
||
LID |
Lead Independent Director |
Ø |
Appropriately Sized Board (13 members) |
Ø |
Average Age of Directors is 64 |
Ø |
Twelve out of 13 Directors are Independent |
Ø |
Eight Board Meetings Held During 2012 |
Ø |
Diverse Board Members (as to Gender, Ethnicity, Experience and Skills) |
Ø |
All Directors are Elected Annually |
Ø |
Majority Voting for Directors |
Ø |
Board Operates with a Lead Independent Director |
Ø |
Compensation Committee Engaged Independent Compensation Consultant During 2012 |
Ø |
Independent Directors Routinely Meet Without Management Present |
Ø |
Robust Director Nomination Process to Identify Talented and Diverse Board Members |
Ø |
Board and Committees Conduct Annual Self-Evaluations |
Ø |
Non-Employee Directors Receive a Portion of Compensation in Equity |
Ø |
Significant Portion of Executive Compensation Tied to Our Performance |
Ø |
Executive Officers and Directors Interests Aligned with Stockholders Through Mandatory Stock Ownership Requirements |
Ø |
Compensation Recovery Provisions (Clawbacks) in Employment Agreements, 2012 Long-Term Incentive Plan and Award Agreements Intended to Comply with the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the Sarbanes-Oxley Act of 2002. |
Ø |
Directors Receive Orientation/Education Programs |
Ø |
Code of Business Conduct and Ethics for Directors and Corporate Compliance Program |
Ø |
Disclosure Committee For Financial Reporting |
Ø |
Say on Pay Advisory Vote Conducted Annually |
Ø |
Policy and Public Disclosure Related to Corporate Political and Lobbying Expenditures |
Ø |
No-Hedging and No-Pledging Policies Adopted |
Ø |
an investment of approximately $1.2 billion in infrastructure improvements in 2012 focused on enhancing reliability throughout our service territories, and the approval of a capital expenditure plan for $5.9 billion of additional expenditures over the five-year period from 2013 to 2017; |
Ø |
the filing of rate cases in each jurisdiction on an annual basis to align more closely revenue and related cash flow levels with other operation and maintenance spending and capital investments; |
Ø |
the continued implementation of a comprehensive plan to improve reliability and customer satisfaction across our utilities service territories, |
which resulted in a 24% reduction in the average number of power outages and a 26% decline in the average duration of outages in 2012 as compared to 2011; |
Ø |
enhancement of our emergency restoration improvement program to address storm response, which resulted in enabling the utilities to restore power to our customers more quickly after the derecho storm in June and Hurricane Sandy in October; and |
Ø |
installation and activation of advanced technology, such as smart meters and digital controls on overhead lines, throughout the majority of our utilities service territories, providing enhanced energy information and management options to customers and enabling more efficient power restoration. |
Ø |
We received approval from stockholders of the performance goal criteria under the Companys Long-Term Incentive Plan, or the LTIP, as required by Section 162(m) of the Internal Revenue Code of 1986, or the Code, in order to permit the deductibility of performance-based compensation paid under the LTIP in excess of $1 million. |
Ø |
We received stockholder approval of two new compensation plans (the Companys 2012 Long-Term Incentive Plan, or the 2012 LTIP, and the Companys Amended and Restated Executive Incentive Compensation Plan, or the EICP), both of which included performance goal criteria intended to comply with Section 162(m) of the Code. |
Ø |
We entered into an employment agreement with our new Executive Vice President and General Counsel, in which he elected to forego his right to an excise tax gross-up payment under the PHI Change-in-Control Severance Plan, and in which his compensation was aligned with specific performance objectives. |
Ø |
We continued the practice of using total shareholder return relative to our peer group to determine performance-based awards granted in 2012 under the LTIP and the 2012 LTIP. |
Ø |
We granted performance-based retention awards to certain executives under our long-term incentive plans in order to attract and retain these executives and to provide for compensation that is tied to the achievement of specific operational performance goal criteria. |
Ø |
We expanded the practice commenced in 2011 of including compensation recovery, or clawback, provisions in employment and other compensation agreements, including agreements for the award of RSUs pursuant to the 2012 LTIP. These provisions are intended to satisfy the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or the Dodd-Frank Act, and the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act. |
Section |
|
Page Number |
||||
---|---|---|---|---|---|---|
The Pepco Holdings, Inc. Annual Meeting |
1 | |||||
The Board of Directors and Corporate Governance |
7 | |||||
Proposal 1: Election of Directors |
13 | |||||
Director Independence |
20 | |||||
Director Nominations |
23 | |||||
Director Compensation |
25 | |||||
Proposal 2: Advisory Vote to Approve Executive Compensation |
28 | |||||
Compensation Discussion and Analysis |
29 | |||||
Executive Compensation |
50 | |||||
Comparison of 2012 Realized Pay to Reported Pay |
52 | |||||
Compensation Committee Interlocks and Insider Participation |
84 | |||||
Equity Compensation Plan Information |
85 | |||||
Audit Committee Report |
86 | |||||
Proposal 3: Ratification of the Appointment of the Independent Registered Public Accounting Firm |
87 | |||||
Certain Beneficial Ownership Matters |
88 | |||||
Communications, Stockholder Proposals and Company Information |
91 | |||||
Other Information |
94 | |||||
Annex A Policy on the Approval of Services Provided By the Independent
Auditor |
A-1 |
Ø |
references to the Board mean the Board of Directors of Pepco Holdings, Inc.; |
Ø |
references to common stock mean the common stock, $.01 par value per share, of Pepco Holdings, Inc.; and |
Ø |
references to we, us, our, the Company, Pepco Holdings or PHI are to Pepco Holdings, Inc. without its subsidiaries. |
Proposal No. |
|
Description of
Proposal |
|
Boards Recommendation |
||||||
---|---|---|---|---|---|---|---|---|---|---|
1 |
Election of 13 director candidates nominated by the Board, each to serve a one-year term and until his or her successor has been
elected and qualified |
FOR |
||||||||
2 |
Approval, on an advisory basis, of the Companys executive compensation |
FOR |
||||||||
3 |
The ratification of the appointment, by the Audit Committee of the Board, of
PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2013 |
FOR |
Ø |
Via Our Internet Voting Site at http://www. voteproxy.com. If you received printed proxy materials, follow the instructions for Internet voting printed on your proxy card. If you received a Notice of Availability, follow the instructions provided in the Notice of Availability. If you vote via the Internet, you also can elect to receive future proxy statements and annual reports electronically rather than receiving printed proxy materials or the Notice of Availability by mail. |
Ø |
By Telephone. Call toll-free 1-800-PROXIES (1-800-776-9437). You also can vote by telephone by following the instructions provided on the Internet voting site or, if you received printed proxy materials, by following the instructions provided on your proxy card or Notice of Availability. |
Ø |
In Writing. If we mailed you a printed copy of this proxy statement and a paper proxy card, you can vote by completing, signing, dating and returning the proxy card in the enclosed postage-paid envelope. |
Ø |
FOR the election of each of the Boards director nominees; |
Ø |
FOR the approval, on an advisory basis, of our executive compensation; and |
Ø |
FOR the ratification of the Audit Committees appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2013. |
Proposal No. |
|
Vote Required |
|
Treatment of Abstentions |
|
Treatment of Broker Non-Votes |
||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
1 |
Each director is elected by a majority of the votes cast FOR election |
Not applicable |
Not taken into account |
|||||||||||
2 |
A majority of the shares of common stock present and entitled to vote at the annual meeting must be voted FOR
approval |
Against |
Not taken into account |
|||||||||||
3 |
A majority of the shares of common stock present and entitled to vote at the annual meeting
must be voted FOR approval |
Against |
Not applicable |
Ø |
the Potomac Electric Power Company Savings Plan for Bargaining Unit Employees; |
Ø |
the Potomac Electric Power Company Retirement Savings Plan for Management Employees (which itself is the successor to the Potomac Electric Power Company Savings Plan for Non-Exempt, Non-Bargaining Unit Employees), and which was formerly known as the Potomac Electric Power Company Savings Plan for Exempt Employees; |
Ø |
the Conectiv Savings and Investment Plan and the Conectiv PAYSOP/ESOP; and |
Ø |
the Atlantic Electric 401(k) Savings and Investment Plan-B. |
Ø |
sending a written statement to that effect to our Corporate Secretary, which must be received by us before the meeting; |
Ø |
submitting a properly signed proxy card or voting instruction form dated a later date; |
Ø |
submitting a later dated proxy or providing new voting instructions via the Internet or by telephone; or |
Ø |
attending the meeting in person and voting your shares. |
Ø |
If you received your proxy materials by mail, your admission ticket is attached to your proxy card or 401(k) plan voting instruction form. |
Ø |
If you received your proxy materials by e-mail, your admission ticket is the e-mail, which you must print out and bring with you to the meeting. |
Ø |
If you received a Notice of Availability, your admission ticket is the Notice of Availability. |
|
A signed cover letter stating: |
o |
your name and complete mailing address, including daytime and evening telephone numbers; |
o |
that you are requesting an admission ticket; |
o |
the number of shares that you own in street name or that are subject to the legal proxy; and |
o |
the name, address and telephone number of the intermediary or the stockholder who gave the legal proxy, if applicable. |
|
An originally signed letter from the bank or broker holding your shares (or, in the case of a legal proxy, the shares owned by the stockholder who gave the legal proxy) verifying beneficial ownership of common stock as of the record date. A copy or printout of a brokerage statement (including any statement retrieved through the Internet) WILL NOT be sufficient without an originally signed letter from your bank, broker or other intermediary. |
|
If you are a holder of a valid legal proxy, a copy of the executed and dated proxy. |
|
A copy of your valid, government-issued photo identification. |
Ø |
the Audit Committee; |
Ø |
the Compensation/Human Resources Committee, referred to as the Compensation Committee; |
Ø |
the Corporate Governance/Nominating Committee, referred to as the Nominating Committee; |
Ø |
the Finance Committee; and |
Ø |
the Executive Committee. |
Committee |
|
Members |
|
Primary
Responsibilities |
|
Number of Meetings Held During 2012 |
||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Audit Committee |
Patricia A. Oelrich (Chairman)* Terence C. Golden* Patrick T. Harker** Lawrence C. Nussdorf* Frank K. Ross* |
Represents and assists the Board in overseeing:
n the integrity of our financial
statements, accounting and financial reporting processes and audits of our financial statements
n our
compliance with legal and regulatory requirements
n the independent registered public accounting firms
qualifications and independence
n the performance of our internal audit function
Appoints, compensates and oversees the independent auditor
Reviews guidelines and policies on risk assessment and management |
9 meetings |
|||||||||||
Compensation/Human Resources Committee |
Patrick T. Harker (Chairman) Jack B. Dunn, IV Frank O. Heintz Barbara J. Krumsiek Frank K. Ross Lester P. Silverman |
Evaluates annually the performance of our CEO
Reviews the performance of non-CEO executives
Approves
salaries for executive officers (other than the CEO), Vice Presidents, heads of business units, and other designated employees
Approves
annual salary ranges and merit budget increases for all non-union employees
Sets target award levels and approves payments under the
EICP
Approves awards under the PHI 2012 Long-Term Incentive Plan, or the 2012 LTIP
Reviews and assesses applicable risks and risk
mitigation strategies associated with compensation |
6 meetings |
|||||||||||
Corporate Governance/ Nominating Committee |
George F. MacCormack (Chairman) Jack B. Dunn, IV Frank O. Heintz Lawrence C. Nussdorf Patricia A. Oelrich |
Reviews and recommends director candidates to the Board
Makes recommendations to the Board regarding Board
structure, practices, and policies, including director compensation and committee assignments
Makes recommendations to the Board on
corporate governance matters and related person transactions
Evaluates Board performance and effectiveness
Oversees development
of corporate strategy and structure, including management development, succession and performance criteria
Oversees corporate and government
affairs
Oversees our technology and systems
Reviews and assesses applicable risks and risk mitigation strategies associated with
its areas of responsibility |
7 meetings |
|||||||||||
Finance Committee |
Lester P. Silverman (Chairman) H. Russell Frisby, Jr. Terence C. Golden Barbara J. Krumsiek George F. MacCormack Pauline A. Schneider |
Oversees our financial objectives, policies, procedures and activities, including
n debt and equity financings
n dividend policy
n acquisitions and dispositions of assets and businesses
n financial investments
Considers
long-term and short-term strategic plans
Reviews our risk mitigation profile
Reviews our insurance program
Reviews and
assesses applicable risks and risk mitigation strategies associated with its areas of responsibility |
7 meetings |
Committee |
|
Members |
|
Primary
Responsibilities |
|
Number of Meetings Held During 2012 | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Executive Committee |
Frank O. Heintz (Chairman) Lawrence C. Nussdorf Joseph M. Rigby Pauline A. Schneider |
When the Board is not in session, the Executive Committee exercises all the powers of the
Board in the management of the property, business and affairs of the Company, except as otherwise provided by law. |
No meetings |
* |
This Audit Committee member is independent as defined under our Corporate Governance Guidelines and applicable NYSE listing standards and is an audit committee financial expert as defined under SEC regulations. |
** |
This Audit Committee member is independent as defined under our Corporate Governance Guidelines and applicable NYSE listing standards. |
Ø |
the related persons relationship to the Company and interest in the transaction; |
Ø |
the material facts of the proposed related transaction, including the proposed aggregate value of the transaction; |
Ø |
benefits or advantages to the Company of the proposed transaction; |
Ø |
availability of other sources of comparable products or services that are the subject of the transaction; |
Ø |
an assessment of whether the proposed transaction is on terms and conditions that are comparable to terms available to an unrelated third party or to employees generally; and |
Ø |
any effect on a directors independence if the transaction involves a director. |
Ø |
chairs all executive sessions of the Boards non-management directors and has authority to call meetings of the non-management directors; |
Ø |
determines the agenda for the executive sessions of the directors and participates with the Chairman of the Board in establishing the agenda for Board meetings; |
Ø |
presides at Board meetings when the Chairman of the Board is not present; |
Ø |
coordinates feedback to the Chief Executive Officer and other members of management; |
Ø |
in consultation with the Chairman of the Board, consistent with Board policy, recommends to the Nominating Committee proposed committee assignments and chairmanships to be adopted at the annual organizational meeting of the Board, subject to the approval of the Board; |
Ø |
oversees the development of appropriate responses to communications from stockholders and other interested persons addressed to the non-management directors as a group; |
Ø |
on behalf of the non-management directors, retains such counsel or other advisors deemed appropriate; and |
Ø |
performs such other duties as the Board deems appropriate. |
Ø |
there was no firm evidence that financial performance of the Company would be improved by splitting the roles; |
Ø |
dividing the roles may weaken the Companys ability to effectively develop and implement strategy; and |
Ø |
as a matter of good governance, the Company already has measures in place to strengthen the Boards independence (for example, the Board has elected a Lead Independent Director and time is set aside at each Board meeting for the directors to meet in executive session without any management director or other management personnel present). |
|
strong enterprise-wide risk management policies and programs, which have undergone third-party risk assessments; |
|
cash incentives that are earned only if, in addition to the satisfaction of non-financial performance metrics, a corporate or business unit net earnings threshold is exceeded; |
|
the absence of compensation arrangement features often identified as encouraging excessive risk-taking, such as: |
o |
an incentive compensation mix overly weighted toward annual incentives; |
o |
payout cliffs that might cause short-term business decisions to be made solely for the purpose of meeting payout thresholds; and |
o |
bonuses awarded upon completion of a task, while the income and risk to the Company from the task extend over a significantly longer period of time; |
|
program designs that provide a balanced mix of cash and equity and short-term and long-term incentives; |
|
performance metrics, not all of which are financial in nature, such as safety, reliability, diversity and customer satisfaction; |
|
no stock options; and |
|
share ownership guidelines that are applicable to officers of the Company at the level of vice president and above. |
Mr. Dunn, age 62, since October 1995 has been Chief Executive Officer and since October 2004 has been President of FTI Consulting,
Inc., a publicly held, multi-disciplined consulting firm with practices in the areas of corporate finance/restructuring, forensic and litigation
consulting, economic consulting, technology and strategic and financial communications, located in West Palm Beach, Florida. He has served as a
director of FTI since 1992 and served as its Chairman of the Board from December 1998 to October 2004. Mr. Dunn served as a director of Aether Systems,
Inc., which became Aether Holdings, Inc., and then NexCen Brands, Inc., from June 8, 2002 through September 25, 2008. Mr. Dunn is also a limited
partner in the Baltimore Orioles and a member of the Board of Trustees of Johns Hopkins Medicine. He has been a director of the Company since May 21,
2004. Mr. Dunns qualifications for election to the Board include his broad knowledge of corporate finance and his perspective and experience as an active Chief Executive Officer of a global business advisory firm with a particular emphasis on customer service. Mr. Dunn is Chief Executive Officer and President of FTI, a public company that specializes in assisting public companies in the areas of finance and governance, among others. Prior to joining FTI, Mr. Dunn spent over ten years with Legg Mason, Inc., a major regional investment banking firm, where he was Managing Director, Senior Vice President, a member of its broker-dealers board of directors and head of its corporate finance group. Prior to his investment banking career, Mr. Dunn practiced corporate and securities law. |
Mr. Frisby, age 62, since 2009 has been a partner in the Energy and Telecommunications Group of Stinson Morrison Hecker LLP, a law
firm in Washington, D.C. From 1995 to 1998, he served as Chairman of the Maryland Public Service Commission, or MPSC. Mr. Frisby also was the President
and Chief Executive Officer of the Competitive Telecommunications Association from 1998 to 2005 and a partner with the law firms of Kirkpatrick &
Lockhart Nicholson Graham LLP from 2005 to 2006 and Fleischman and Harding LLP from 2006 to 2008. He has served as a director of PAETEC Holding Corp.,
a broadband communications provider, from February 2007 until November 2011. Mr. Frisby has been a director of the Company since September 27,
2012. Mr. Frisbys qualifications for election to the Board include his experience as a regulatory and corporate lawyer, as well as the regulatory, public policy and governmental affairs knowledge that he gained as a Chairman of the MPSC and chief executive officer of a telecommunications industry organization, as well as his prior service as a public company director. Mr. Frisby also lives, works and serves as a director of several non-profit organizations in the Companys operating territory, and therefore has significant community ties within the region. |
Mr. Golden, age 68, since 2000 has been Chairman of Bailey Capital Corporation in Washington, D.C. Bailey Capital Corporation is a
private investment company. From 1995 until May 2000, Mr. Golden was President and Chief Executive Officer of Host Marriott Corporation. He has been a
director of Host Marriott Corporation, the lodging real estate company that includes among its holdings Marriott, Ritz-Carlton, Four Seasons, Hyatt,
Hilton, Westin, W, Sheraton and Fairmont hotels, since 1995. He also serves as a trustee and member of the Audit Committee of Washington Real Estate
Investment Trust and as a member of the Federal City Council. He has been a director of the Company since August 1, 2002, and was a director of Potomac
Electric Power Company (Pepco) from 1998 until it merged with Conectiv on August 1, 2002. Mr. Goldens qualifications for election to the Board include his extensive accounting and financial management experience, as well as his perspective and experience as a former CEO and chief financial officer with responsibility for accounting, cash management, tax and corporate and project financing. From 1995 until May 2000, Mr. Golden was President and Chief Executive Officer of Host Marriott Corporation. Mr. Golden served as the Chief Financial Officer of the Oliver Carr Company, one of the largest real estate companies in the mid-Atlantic region. Mr. Golden also was national managing partner of Trammell Crow Residential Companies, one of the largest residential development companies in the United States. Mr. Golden lives, works and serves as a director for several non-profit organizations in the Companys operating territory, and therefore has significant community ties within the region. |
Dr. Harker, age 54, since 2007 has been President of the University of Delaware (UDel), Newark, Delaware. Concurrent with
his appointment as President, Dr. Harker was appointed professor of Business Administration in the Alfred Lerner College of Business and Economics and
a professor of Civil and Environmental Engineering in UDels College of Engineering. From 2000 to 2007, he was Dean of the Wharton School of the
University of Pennsylvania and served as a Professor of Electrical and Systems Engineering in the University of Pennsylvanias School of
Engineering and Applied Science. Dr. Harker served as a Trustee of the Goldman Sachs Trust and Goldman Sachs Variable Insurance Trust from 2000 through
September 2010. From 2004 to 2009, he was a member of the Board of Managers of the Goldman Sachs Hedge Fund Partners Registered Fund LLC. Dr. Harker
has been a member of the Board of Trustees of Howard University since May 2009 and also has served as a director of Huntsman Corporation since March
2010. Dr. Harker was elected as a director of the Federal Reserve Bank of Philadelphia in January 2012. Dr. Harker has been a director of the Company
since May 15, 2009. Dr. Harkers qualifications for election to the Board include his leadership skills and public and government affairs experience. Holding a Ph.D. in engineering and as the former Dean of the Wharton School, Dr. Harker brings to the Board a unique blend of technical expertise and business knowledge. Through his experience on the Board of Trustees of the Goldman Sachs Trust, Dr. Harker also contributes a strong background in capital markets. Dr. Harker lives, works and serves as a director for several non-profit organizations in the Companys operating territory, and therefore has significant community ties within the region. |
Mr. Heintz, age 69, is retired President and Chief Executive Officer of Baltimore Gas and Electric Company, the gas and electric
utility serving central Maryland, a position he held from 2000 through 2004. From 1982 to 1995, Mr. Heintz was Chairman of the MPSC. Previously he
served as agency head of the Maryland Employment Security Administration and was an elected member of the Maryland legislature. He has been a director
of the Company since May 19, 2006. Since May 2011, Mr. Heintz has served as Lead Independent Director. Mr. Heintzs qualifications for election to the Board include his perspective and experience as a former President and Chief Executive Officer of a regulated utility company and the regulatory, public policy and governmental affairs knowledge that he gained as a state public utility regulatory official. As President and Chief Executive Officer of Baltimore Gas and Electric Company, Mr. Heintz was responsible for overseeing the operations, finances, planning, and delivery of service to more than one million gas and electric customers. Additionally, as Executive Vice President of Constellation Energy Group, Inc., the then parent company of Baltimore Gas & Electric Company, he participated in executive and board deliberations regarding the holding companys diverse competitive lines of business. During Mr. Heintzs 13 years as Chairman of the MPSC, he became thoroughly knowledgeable about regulatory law, policy and process. As Executive Director of the American Gas Associations caucus of local distribution companies, Mr. Heintz worked with numerous chief executive officers of gas utilities on matters of federal and state regulation, public policy, cost of capital and federal legislation affecting gas companies and holding companies. During the two decades of his regulatory and utility career, Mr. Heintz participated in many organizations that have broadened his base of knowledge about the energy industry, utility operations, and state and federal regulations, including the National Association of Utility Regulators, the Edison Electric Institute, the American Gas Association, the U.S. Department of Energys National Petroleum Council and the Gas Research Institute. |
Ms. Krumsiek, age 60, since 1997 has been President and Chief Executive Officer and since 2006 Chair of Calvert Investments, Inc., an
investment management and research firm based in Bethesda, Maryland. Calvert offers a range of fixed income, money market and equity mutual funds
including a full family of socially responsible mutual funds. Ms. Krumsiek serves as a trustee/director for 44 Calvert-sponsored mutual funds. She has
been a director of the Company since May 18, 2007. Ms. Krumsieks qualifications for election to the Board include her financial knowledge from an investor standpoint and her insights as a current chief executive officer, including her familiarity with issues of compensation, risk assessment, and technology. Ms. Krumsiek has served as Chief Executive Officer of Calvert for 15 years, after 23 years of experience with Alliance Capital Management. In her capacity as CEO of Calvert, she has overseen all aspects of corporate operations, including strategic planning, compliance and risk management, financial management, financial statement preparation, and information technology. Ms. Krumsiek also has experience with environmental issues. Ms. Krumsiek lives and works in our operating territory, is a former Chair of the Greater Washington Board of Trade, and serves as a director for several other non-profit organizations in the Companys operating territory, and therefore has significant community ties within the region. |
Mr. MacCormack, age 69, is retired Group Vice President, DuPont, Wilmington, Delaware, a position he held from 1999 through 2003. He
was previously Vice President and General Manager (1998), White Pigments & Mineral Products Strategic Business Unit and Vice President and General
Manager (1995), Specialty Chemicals Strategic Business Unit for DuPont. Mr. MacCormack also serves as a director of Fuel Tech, Inc., a position he has
held since August 2011. He has been a director of the Company since August 1, 2002, and was a director of Conectiv from 2000 until it merged with Pepco
on August 1, 2002. Mr. MacCormacks qualifications for election to the Board include his insights as a former senior officer who held career leadership roles in technology, manufacturing, sales, business and mergers and acquisitions at a large publicly held corporation. As Group Vice President, Mr. MacCormack had corporate oversight responsibility for approximately 12,000 employees and a $6 billion revenue portfolio of capital and energy intensive global Strategic Business Units. He also had corporate oversight and governance responsibility as Chairman/Vice Chairman of the Board for four major joint ventures with international partners. Over the last 12 years of his career with DuPont, Mr. MacCormack was the lead executive on the sale of several significant chemical businesses, and was one of the senior executives responsible for the sale of the $5 billion Invista Fibers and Chemicals subsidiary company. |
Mr. Nussdorf, age 66, since 1998 has been President and Chief Operating Officer of Clark Enterprises, Inc. (Clark
Enterprises), a privately held investment and real estate company based in Bethesda, Maryland, whose interests include Clark Construction Group,
LLC, a general contracting company, of which Mr. Nussdorf has been Vice President and Treasurer since 1977. He served as a director of CapitalSource
Inc. from March 2007 through April 2010. Since September 2010, Mr. Nussdorf has served as a director of SAIC, Inc. He has been a director of the
Company since August 1, 2002, and was a director of Pepco from 2001 until it merged with Conectiv on August 1, 2002. Mr. Nussdorfs qualifications for election to the Board include his perspectives as a board member of two other NYSE-listed companies and as a long-serving Chief Operating Officer and former Chief Financial Officer. In addition to being the current President and Chief Operating Officer of Clark Enterprises, Mr. Nussdorf served for over 30 years as Chief Financial Officer. He has been at the forefront of strategic and long-term planning, as well as all aspects of management, operations, and finance of multiple businesses, involving different asset classes. Mr. Nussdorf lives, works and serves as a director for several non-profit organizations in the Companys operating territory and, therefore, has significant community ties within the region. |
Ms. Oelrich, age 59, from 2001 to 2009 was Vice President, IT Risk Management for GlaxoSmithKline Pharmaceuticals, a Global 100
public company. From 1995 to 2000, Ms. Oelrich served as Vice President, Internal Audit for GlaxoSmithKline. She was employed at Ernst & Young from
1975 to 1994, and was a partner from 1988 to 1994. She has been a director of the Company since May 21, 2010. Ms. Oelrichs qualifications for election to the Board include her perspectives on corporate governance, information technology, audit, compliance, and finance issues. Ms. Oelrich is a CPA and a Certified Information Systems Auditor. In her roles at GlaxoSmithKline, Ms. Oelrich directed internal audit activities worldwide, established GlaxoSmithKlines IT Risk Management Program, and participated in establishing GlaxoSmithKlines Corporate Compliance and Corporate Risk Management Oversight Programs. As a partner at Ernst & Young, Ms. Oelrich was in charge of the Chicago Office Information Systems Audit and Security practice that provided internal audit services and security consulting to highly regulated industries, including the financial services, insurance and healthcare industries. She also was lead financial audit partner on various engagements. |
Mr. Rigby, age 56, is Chairman, President and Chief Executive Officer of the Company. He has been President and Chief Executive
Officer of the Company since March 1, 2009. From March 2008 to March 2009, Mr. Rigby served as President and Chief Operating Officer of the Company and
from September 2007 to March 2008, he served as Executive Vice President and Chief Operating Officer of the Company. He was Senior Vice President of
the Company from August 2002 to September 2007 and Chief Financial Officer from May 2004 to September 2007. From September 2007 to March 2009, Mr.
Rigby was President and Chief Executive Officer of the Companys utility subsidiaries. He has been Chairman of the Companys utility
subsidiaries since March 1, 2009. Mr. Rigby has been a director and Chairman of the Company since May 15, 2009. Mr. Rigbys qualifications for election to the Board include his ability to provide unique insights as PHIs current Chief Executive Officer, as well as his 34 years of experience with the Company, Company subsidiaries and in the utility industry. Because of the various positions he has held within the Company, Mr. Rigby has broad experience across operations, finance and human resources, including mergers and acquisitions. Mr. Rigby also lives and works in the Companys operating territory, was Chairman of the Greater Washington Board of Trade and is Chairman of the United Way of the National Capital Area, and serves as a director for several non-profit organizations in the Companys operating territory and therefore has significant community ties within the region. |
Mr. Ross, age 69, is retired managing partner for the mid-Atlantic Audit and Risk Advisory Services Practice and managing partner of
the Washington, D.C. office of the accounting firm KPMG LLP, positions he held from July 1, 1996 to December 31, 2003. He currently teaches accounting
at Howard University, Washington, D.C., and provides consulting services to its Center for Accounting Education. He is a director of Cohen & Steers
Mutual Funds and serves as a director of 19 of these funds. Mr. Ross serves on The Greater Washington, D.C. Urban League and Howard University Math and
Science Middle School boards. Mr. Ross was a director of NCRIC Group, Inc. from 2004 to 2005. He has been a director of the Company since May 21,
2004. Mr. Ross qualifications for election to the Board include his extensive knowledge of accounting and strategy matters gained through his over 40 years of experience as an accountant and as a current director of 19 Cohen & Steers Mutual Funds. Mr. Ross also lives, works and serves as a director for several non-profit organizations in the Companys operating territory, and therefore has significant community ties within the region. |
Ms. Schneider, age 69, joined the Washington, D.C. office of the law firm of Orrick, Herrington & Sutcliffe LLP in September 2006
as a partner in its public finance group. From 1985 to September 2006, she was with the law firm of Hunton & Williams LLP. From October 2000 to
October 2002, Ms. Schneider served as Chair of the Board of MedStar Health, Inc., a community-based healthcare organization that includes ten hospitals
in the Washington, D.C./Baltimore area. From 1998 to 2002, she chaired the Board of The Access Group, Inc., a non-profit student loan provider
headquartered in Wilmington, Delaware. She continues her service on the Access Group board. From December 2003 to November 2010, she served as a
director of Diamond Management and Technology Consultants. She has been a director of the Company since August 1, 2002, and was a director of Pepco
from 2001 until it merged with Conectiv on August 1, 2002. Ms. Schneiders qualifications for election to the Board, in addition to her service on other public company and non-profit boards, include her experience in government and public affairs, as well as her experience as a transactional lawyer. As a partner at Orrick, Ms. Schneiders practice focuses on transactional matters, including the representation of state and local governments and governmental instrumentalities on general obligation and revenue bond financings for airports, mass transit, water and sewers, hospitals, educational facilities, convention centers, sports arenas and general government projects. Before joining Hunton & Williams, she spent four years in the District of Columbia government, where she was director of the Office of Intergovernmental Relations. Prior to joining the District of Columbia government, Ms. Schneider worked for four years in the Carter White House in the Office of Intergovernmental Affairs/Secretary to the Cabinet. Ms. Schneider also lives, works and serves as a director for several non-profit organizations in the Companys operating territory, and therefore has significant community ties within the region. |
Mr. Silverman, age 66, is Director Emeritus of McKinsey & Company, Inc., having retired from the international management
consulting firm in 2005. Mr. Silverman joined McKinsey in 1982 and was head of the firms Electric Power and Natural Gas practice from 1991 to
1999. From 2000 to 2004, Mr. Silverman was the leader of McKinseys Global Nonprofit Practice. Previous positions included Principal Deputy
Assistant Secretary for Policy and Evaluation in the U.S. Department of Energy from 1980 to 1981 and Director of Policy Analysis in the U.S. Department
of the Interior from 1978 to 1980. He is a trustee of and advisor to several national and Washington, D.C.-area non-profit organizations. Mr. Silverman
also is a member of the board of directors of Logos Energy, Inc., an energy technology start-up company. He has been a director of the Company since
May 19, 2006. Mr. Silvermans qualifications for election to the Board include his broad experience with the energy industry and extensive experience in government and public policy. Mr. Silverman was a consultant to electric and gas utilities for 23 years and has public policy experience in the energy field. Mr. Silverman also lives, works and serves as a director for several non-profit organizations in the Companys operating territory, and therefore has significant community ties within the region. |
Type of Relationship(1) |
|
Description of
Relationship |
||||
---|---|---|---|---|---|---|
Employee or executive officer of PHI(2) |
Ø A director who is, or has been within the last three years an employee of PHI OR
Ø An immediate family
member of a director who is, or has been within the last three years, an executive officer of PHI(3) |
|||||
Receipt of direct compensation from PHI(2) |
Receipt by the director or an immediate family member, during any 12-month period within the last three years, of more than $120,000
in direct compensation from PHI, other than director and committee fees and pension benefits or other forms of deferred compensation for prior service
(provided pension benefits or deferred compensation are not contingent in any way on continued service) |
|||||
Receipt of indirect compensation from PHI(2) |
Another company has made payments to, or received payments from, PHI for property or services in an amount which, in any of the last
three fiscal years, exceeds the greater of $1 million, or 2% of the other companys consolidated gross revenues AND The other company is a related entity, which means that: Ø A PHI director is a current employee of the other company OR Ø An immediate family member of the PHI director is a current executive officer of the other company(4) |
|||||
Relationships with external or internal auditor(2) |
Any of the following relationships exist:
Ø the director is a current partner or employee of PHIs internal or
external auditor
Ø the director has an immediate family member who is a current partner of the internal or external auditor
Ø the
director has an immediate family member who (a) is a current employee of the internal or external auditor and (b) personally works on the
Companys audit
Ø the director or an immediate family member of the director was, within the last three years, (a) a partner or employee
of the internal or external auditor and (b) personally worked on the Companys audit within that time |
|||||
Compensation committee interlocks(2) |
The director or an immediate family member of the director is, or has been within the last three years, employed as an executive
officer of another company where any of the PHIs present executive officers at the same time serves or served on that other companys
compensation committee. |
Type of Relationship(1) |
|
Description of
Relationship | ||||
---|---|---|---|---|---|---|
Relationships attributable to independence of Audit Committee members |
A director who is a member of the Audit Committee may not accept directly or indirectly any
consulting, advisory, or other compensatory fee from PHI or any subsidiary (other than fees for service as a director), provided that, unless the rules
of the NYSE provide otherwise, compensatory fees do not include the receipt of fixed amounts of compensation under a retirement plan (including
deferred compensation) for prior service (provided that such compensation is not contingent in any way on continued service).(5) A director who is an affiliated person of PHI or any subsidiary (other than in his or her capacity as a member of the Board or a Board committee) as defined by the SEC shall not be considered independent for purposes of Audit Committee membership. For purposes of this test only, a director who beneficially owns more than 3% of PHIs common stock will be considered to be an affiliated person. |
(1) |
In addition to the relationships described above, the Board considers all relevant facts and circumstances in assessing whether any material relationship exists. In particular, the Board considers other material relationships between PHI and persons or organizations with which the director has an affiliation. Material relationships may include, for example, those that are commercial, industrial, banking, consulting, legal, accounting, charitable and familial, among others. Under our Corporate Governance Guidelines, for purposes of considering the existence or materiality of a directors relationship with PHI or the relationship with PHI of a related entity, payments for electricity, gas or other products or services made in the normal course of business at prices generally applicable to similarly situated customers shall not be taken into account. |
(2) |
Also a disqualifying relationship under the NYSE listing standards. |
(3) |
Generally, under SEC rule, the term executive officer is defined to mean a president, principal financial officer, controller, any vice president in charge of a principal business unit, division or function, any other officer who performs a policy-making function, or any other person who performs similar policy-making functions. Officers of a subsidiary are deemed to be officers of the parent if they perform such policy-making functions for the parent. A list of PHIs executive officers as of the date of this proxy statement has been provided in the 2012 Annual Report. |
(4) |
Contributions by PHI to a tax exempt organization in which any PHI independent director serves as an executive officer shall not be considered payments for purposes of this test, if, within the preceding three years, contributions in any single fiscal year from PHI to the tax-exempt organization exceeded the numerical standards for this test, so long as PHI has disclosed in its proxy statement any such contributions. |
(5) |
The term indirect acceptance by a member of the Audit Committee of any consulting, advisory, or other compensatory fee includes acceptance of such fee by a spouse, a minor child or stepchild or a child or stepchild sharing a home with the member or by an entity in which such member is a partner, member, an officer such as a managing director occupying a comparable position or executive officer, or occupies a similar position (except limited partners, non-managing members and those occupying similar positions who, in each case, have no active role in providing services to the entity) and which provides accounting, consulting, legal, investment banking or financial advisory services to PHI or any subsidiary. |
Ø |
she has not worked and will not work on any of these matters; |
Ø |
she did not direct Orricks work on any of these matters; and |
Ø |
Orricks representation has had no effect on the compensation she receives from Orrick. |
Ø |
the relationship between each respective related entity (or its affiliates) and PHI or a subsidiary thereof was solely a business relationship which did not convey any special benefits upon the PHI director who was affiliated with such related entity; |
Ø |
the amounts paid to PHI or its subsidiary under the contract were below the numerical threshold set forth in the Corporate Governance Guidelines with respect to payments for property and services between the Company or its subsidiaries and a related entity; and |
Ø |
in the case of each director other than Ms. Schneider and Mr. Frisby, the amounts paid by the related entity to PHI or its subsidiary under the contract constituted payment for electricity and/or natural gas made in the normal course of business at prices generally applicable to similarly situated customers. |
Ø |
independence, as defined by the NYSE listing standards as then currently in effect; |
Ø |
integrity; |
Ø |
judgment; |
Ø |
credibility; |
Ø |
collegiality; |
Ø |
professional achievement; |
Ø |
constructiveness; and |
Ø |
public awareness. |
Ø |
financial acumen equivalent to the level of a Chief Financial Officer or senior executive of a capital markets, investment or financial services firm; |
Ø |
operational or strategic acumen germane to the energy industry, or other industry with similar characteristics (construction, manufacturing, etc.); |
Ø |
public and/or government affairs acumen germane to complex enterprises, especially in regulated industries; |
Ø |
customer service acumen germane to a service organization with a large customer base; |
Ø |
legal acumen in the field(s) of regulatory or commercial law at the partner or chief legal officer level; |
Ø |
technology expertise at the chief technology officer level; |
Ø |
salient community ties in areas of operation of Pepco Holdings enterprises; and |
Ø |
corporate governance acumen, gained through service as a senior officer or director of a large publicly held corporation or through comparable academic or other experience. |
Ø |
analytical skills; |
Ø |
a willingness and ability to constructively and collaboratively engage with management and each other; and |
Ø |
the ability and commitment to devote significant time to service on the Board and its committees. |
Process Steps |
|
Description |
||||
---|---|---|---|---|---|---|
Prepare list of potential candidates |
Nominating Committee develops and maintains a list of potential candidates for Board membership.
Potential
candidates are recommended by Nominating Committee members and other Board members. |
|||||
Review of attributes, skill sets and other criteria |
Nominating Committee annually reviews attributes, skill sets and other qualifications for potential candidates.
Modifications may be made from time to time based upon assessment of the needs of the Board and the skill sets required to meet those
needs. |
|||||
Review of candidates |
All potential candidates are reviewed against current attributes, skill sets and other qualifications established by the
Board to determine suitability for Board membership.
Suitable candidates receive a more detailed review performed through examination of
publicly available information, including:
o compliance with applicable director independence standards;
o the number
of other boards on which the candidate already serves;
o the possible applicability of restrictions on director interlocks or other
requirements or prohibitions imposed by applicable laws or regulations;
o proxy disclosure requirements; and
o actual,
potential or perceived conflicts of interest or other issues. |
|||||
Prioritization of candidates |
Nominating Committee annually determines whether to remove any candidate from consideration as a result of the detailed
review.
As needed, remaining candidates are prioritized by the Nominating Committee for recommendation to and final determination by the
Board prior to direct discussion with any candidate. |
|||||
Candidate contact and nomination |
Following the Boards determination of a priority-ranked list of approved
potential candidates, the Chairman of the Nominating Committee or, at his or her discretion, one or more other members of the Board, will contact and
interview the potential candidates in order of their priority.
When a potential candidate indicates his or her willingness to accept
nomination to the Board, no further candidates will be contacted.
Subject to a final review of eligibility under PHIs policies and
applicable laws and regulations using information supplied directly by the candidate, the candidate will then be nominated for election or
appointment. |
Ø |
the date the director leaves the Board; |
Ø |
the January 31 after the director leaves the Board; or |
Ø |
another date to be specified by the director in advance, which with respect to 2012 deferrals may not be before January 31, 2015. |
Name |
|
Fees Earned or Paid in Cash ($)(1) |
|
Stock Awards ($)(2) |
|
Total ($) |
||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jack B. Dunn, IV |
109,409 | 65,000 | 174,409 | |||||||||||
H. Russell Frisby, Jr.(3) |
22,500 | 41,504 | 64,004 | |||||||||||
Terence C. Golden |
113,500 | 65,000 | 178,500 | |||||||||||
Patrick T. Harker |
119,091 | 65,000 | 184,091 | |||||||||||
Frank O. Heintz |
149,000 | 65,000 | 214,000 | |||||||||||
Barbara J. Krumsiek |
109,500 | 65,000 | 174,500 | |||||||||||
George F. MacCormack |
117,000 | 65,000 | 182,000 | |||||||||||
Lawrence C. Nussdorf |
111,500 | 65,000 | 176,500 | |||||||||||
Patricia A. Oelrich |
121,386 | 65,000 | 186,386 | |||||||||||
Frank K. Ross |
116,364 | 65,000 | 181,364 | |||||||||||
Pauline A. Schneider |
97,500 | 65,000 | 162,500 | |||||||||||
Lester P. Silverman |
119,000 | 65,000 | 184,000 |
(1) |
Certain of our directors elected to receive all or a portion of their cash 2012 Board and committee retainer and meeting fees in the form of shares of common stock under the Directors Plan, or deferred the receipt of their cash retainer and fees under the PHI Deferred Compensation Plan, as summarized in the following table. |
Compensation Deferred Under the PHI Deferred Compensation Plan |
|||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name |
|
Shares of Common Stock (#) |
|
PHI Phantom Share Account ($) |
|
Interest Rate/Investment Fund Accounts ($) |
|||||||||
Terence C. Golden |
| 46,000 | | ||||||||||||
Frank O. Heintz |
1,739 | | | ||||||||||||
Barbara J. Krumsiek |
3,479 | | | ||||||||||||
George F. MacCormack |
| | 21,000 | ||||||||||||
Pauline A. Schneider |
| 33,750 | 33,750 |
Phantom Shares Credited (#) |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Name |
|
As of December 31, 2012 |
|
As of March 20, 2013 |
|||||||
Terence C. Golden |
2,434 | 2,944 | |||||||||
Barbara J. Krumsiek |
19,258 | 19,258 | |||||||||
George F. MacCormack |
6,162 | 6,162 | |||||||||
Lawrence C. Nussdorf |
4,442 | 4,442 | |||||||||
Pauline A. Schneider |
13,646 | 13,970 | |||||||||
Lester P. Silverman |
25,312 | 25,312 |
(2) |
The amount shown for 2012 is the aggregate grant date fair value, as determined in accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718 |
(3) |
Mr. Frisby was appointed to the Board in September 2012. |
Patrick T. Harker, Chairman Jack B. Dunn, IV Frank O. Heintz Barbara J. Krumsiek Frank K. Ross Lester P. Silverman |
Name |
|
Title |
||||
---|---|---|---|---|---|---|
Joseph M. Rigby |
Chairman, President and Chief Executive Officer |
|||||
Frederick J. Boyle |
Senior Vice President and Chief Financial Officer(1) |
|||||
Anthony J. Kamerick |
Former Executive Vice President and Chief Regulatory Officer (and Former Senior Vice President and Chief Financial Officer)(2) |
|||||
David M. Velazquez |
Executive Vice President, Power Delivery |
|||||
Kevin C. Fitzgerald |
Executive Vice President and General Counsel(3) |
|||||
Kirk J. Emge |
Senior Vice President and Special Counsel to the Chief Executive Officer(4) |
(1) |
Mr. Boyle was appointed Senior Vice President and Chief Financial Officer of PHI effective April 9, 2012. |
(2) |
Mr. Kamerick was promoted from Senior Vice President and Chief Financial Officer to Executive Vice President and Chief Regulatory Officer of PHI effective April 9, 2012, and he retired from PHI as of February 1, 2013. |
(3) |
Mr. Fitzgerald was appointed Executive Vice President and General Counsel on September 17, 2012. |
(4) |
Mr. Emge served as Senior Vice President and General Counsel of PHI until September 17, 2012, at which time he was appointed Senior Vice President and Special Counsel to the Chief Executive Officer of PHI. Mr. Emge has announced that he will retire from PHI effective April 1, 2013. |
Ø |
investments of approximately $1.2 billion in infrastructure improvements in 2012 focused on enhancing reliability, and the approval of a capital expenditure plan for $5.9 billion of additional expenditures over the five-year period from 2013 to 2017; |
Ø |
the filing of rate cases in each jurisdiction on an annual basis to align more closely revenue and related cash flow levels with other operation and maintenance spending and capital investments; |
Ø |
the continued implementation of a comprehensive plan to improve reliability and customer satisfaction across our utilities service territories, which resulted in a 24% reduction in the average number of power outages and a 26% decline in the average duration of outages in 2012 as compared to 2011; |
Ø |
enhancement of our emergency restoration improvement program to address storm response, which resulted in enabling the utilities to restore power to our customers more quickly after the derecho storm in June and Hurricane Sandy in October; and |
Ø |
installation and activation of advanced technology, such as smart meters and digital controls on overhead lines, throughout the majority of our utilities service territories, providing enhanced energy information and management options to customers and enabling more efficient power restoration. |
Ø |
We received approval from stockholders of the performance goal criteria under the LTIP as required by Section 162(m) of the Code, in order to permit the deductibility of performance-based compensation paid under the LTIP in excess of $1 million. |
Ø |
We received stockholder approval of two new compensation plans (the 2012 LTIP and the EICP) both of which included performance goal criteria intended to comply with Section 162(m) of the Code. |
Ø |
We entered into an employment agreement with our new Executive Vice President and General Counsel, in which he elected to forego his right to an excise tax gross-up payment under the PHI Change-in-Control Severance Plan, and in which his compensation was aligned with specific performance objectives. |
Ø |
We continued the practice of granting under our long-term incentive plans performance-based RSU awards, including retention awards which are tied to reliability and customer service achievements, in order to attract and retain our named executive officers. |
Ø |
We continued the practice of using total shareholder return relative to our peer group for determining performance-based awards under our long-term incentive plans. |
Ø |
We continued the practice of granting awards of time-based RSUs, instead of restricted stock awards, under our long-term incentive plans, together with dividend equivalents accrued in the form of additional RSUs that will not vest except and to the extent the underlying RSUs vest. |
Ø |
We expanded the practice commenced in 2011 of including compensation recovery (clawback) provisions in employment and other compensation agreements, including agreements for the award of RSUs pursuant to the Companys 2012 LTIP, intended to satisfy the requirements of the Dodd-Frank Act and the Sarbanes-Oxley Act. |
Ø |
We have established a pay-for-performance environment by linking short-term and long-term incentive-based compensation to the achievement of measurable business and individual performance goals. |
Ø |
Our executive compensation programs continued to focus on both long-term and short-term performance, and to emphasize at-risk over fixed compensation. |
Ø |
We determine base salaries and base salary increases by reference to a named executive officers performance and position and the salary range for that position, using competitive market survey data. |
Ø |
Our Compensation Committee receives advice on pay composition and levels of compensation from an independent compensation consultant. |
Ø |
We target compensation levels at approximately the 50th percentile of the competitive range for each pay element, assuming each named executive officer is fully performing in his position. |
Ø |
Long-term incentives are designed to align named executive officer focus with stockholders by measuring our stock price performance relative to that of companies in our utility peer group, as well as to serve as a retention mechanism. |
Ø |
We use equity-based, long-term incentive compensation as a means to align the interests of our named executive officers with those of our stockholders. To do this, we annually grant RSUs, |
two-thirds of which may vest based on performance over a three-year performance period. We have not granted stock options since 2002 and no named executive officer holds any stock options. |
Ø |
We have a common stock ownership requirement for our officers, which each named executive officer (other than the named executive officers who joined us in 2012 and are subject to a phase-in period) has satisfied. |
Ø |
We incorporate performance goals into our short-term and long-term incentive plans that are intended to balance the interests of our officers with those of our stockholders and customers. |
Ø |
We provide our named executive officers with only limited perquisites and personal benefits. |
Ø |
We maintain a strong risk management program which includes our Compensation Committees ongoing evaluation and oversight of the relationship between our compensation programs and risk. |
Ø |
We may recoup certain incentive compensation payments made to our Chief Executive Officer and Chief Financial Officer when required under the Sarbanes-Oxley Act. Employment agreements and award agreements under the 2012 LTIP with our executive officers include compensation recovery (clawback) provisions intended to satisfy the requirements of the Sarbanes-Oxley Act, and, when implemented, the Dodd-Frank Act. |
Ø |
We have adopted no hedging, no pledging and no margining policies. |
Ø |
attends Compensation Committee meetings and provides advice to the Compensation Committee, including a review of materials related to the meeting; |
Ø |
conducts peer group review and benchmarking analyses for the Compensation Committee; |
Ø |
analyzes certain compensation practices of the companies in our peer group; |
Ø |
prepares an update on executive compensation trends as requested by the Compensation Committee; |
Ø |
provides advice on compensation packages and proposed new salary ranges, to be provided to Company executives, as well as total executive compensation, as requested by the Compensation Committee; |
Ø |
conducts pay-for-performance analyses; and |
Ø |
provides other various industry and compensation data. |
Ø |
provide executives with salaries, incentive compensation opportunities and other benefits that are competitive with comparable companies in our industry; |
Ø |
reward executives for the achievement by the Company and its business segments of targeted levels of operational excellence and financial performance and for the achievement of individual performance goals; |
Ø |
align the financial interests of our named executive officers with those of the stockholders through equity-based, long-term incentive awards, time- and performance-based retention awards, as well as stock ownership requirements which require named executive officers to hold common stock in an amount equal to between one and five times such persons base salary; and |
Ø |
strike a careful balance between risk and compensation so as to not encourage executives to take excessive risk which could have a material adverse impact on our business and financial results. |
Alliant Energy Corporation Ameren Corporation CenterPoint Energy, Inc. CMS Energy Corporation Consolidated Edison, Inc. Great Plains Energy Incorporated |
Northeast Utilities NSTAR NV Energy, Inc. OGE Energy Corp. Pinnacle West Capital Corporation PPL Corporation |
Public Service Enterprise Group Incorporated SCANA Corporation TECO Energy, Inc. Westar Energy, Inc. Wisconsin Energy Corporation Xcel Energy Inc. |
Ø |
base salary; |
Ø |
annual cash incentive opportunities under the EICP and, where extraordinary efforts or special circumstances warrant, discretionary cash bonuses; |
Ø |
significant use of incentive awards of performance-based RSUs, and, to a lesser extent, time-based RSU awards (each with dividend equivalents), granted under the long-term incentive plans; |
Ø |
retirement and deferred compensation programs; |
Ø |
health and welfare benefits; and |
Ø |
limited perquisites and personal benefits. |
Name |
|
2013 Base Salary Level ($) |
|
2012 Base Salary Level ($) |
|
2011 Base Salary Level ($) |
||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Joseph M. Rigby |
1,015,000 | 985,000 | 880,000 | |||||||||||
Frederick J. Boyle |
470,000 | 440,000 | | |||||||||||
Anthony J. Kamerick(1) |
513,000 | 513,000 | 498,000 | |||||||||||
David M. Velazquez |
518,000 | 503,000 | 484,000 | |||||||||||
Kevin C. Fitzgerald |
550,000 | 550,000 | | |||||||||||
Kirk J. Emge(2) |
400,000 | 400,000 | 391,000 |
(1) |
Mr. Kamerick retired from the Company effective as of February 1, 2013. |
(2) |
Mr. Emge has announced his retirement from the Company, effective as of April 1, 2013. |
Ø |
the execution of plans to improve and enhance reliability and customer service; |
Ø |
the achievement of key initiatives related to the smart grid; |
Ø |
the implementation of key organization changes in the Power Delivery business; |
Ø |
navigation of the Companys derecho and Hurricane Sandy restoration efforts; and |
Ø |
sound management of the operating utilities budget. |
Name |
|
Target Award Opportunities as a Percentage of Annual Base Salary (%) |
||||
---|---|---|---|---|---|---|
Joseph M. Rigby |
100 | % | ||||
Frederick J. Boyle |
60 | % | ||||
Anthony J. Kamerick |
60 | % | ||||
David M. Velazquez |
60 | % | ||||
Kevin C. Fitzgerald |
60 | % | ||||
Kirk J. Emge |
60 | % |
Corporate Performance
Goal |
|
Weight (%) |
||||
---|---|---|---|---|---|---|
Company net earnings (excluding mark-to-market gains or losses associated with our retail energy supply business) relative to budgeted net
earnings of $229.8 million |
40 | % | ||||
Company free cash flow relative to budgeted free cash flow in the amount of negative $780 million(1) |
10 | % | ||||
Utility customer satisfaction as measured by the results of customer surveys and other performance metrics |
30 | % | ||||
Leadership initiatives, including: |
||||||
Ø diversity, as measured by the attainment of, or good faith efforts toward the attainment of, established affirmative action goals;
and |
||||||
Ø safety, as measured by the absence of fatalities and the number of recordable injuries and fleet accidents |
10 | % | ||||
Completion of key operational excellence projects |
10 | % |
(1) |
Free cash flow is defined to mean net cash from operating activities, plus net cash used by investing activities, plus dividends paid on common stock, minus common stock issued for the DRP. |
Performance Goal |
|
Weight (%) |
||||
---|---|---|---|---|---|---|
Power Delivery net earnings relative to budgeted net earnings of $191.3 million |
25 | % | ||||
Power Delivery capital spending that is at or below the approved budgeted capital spending (less certain estimated storm-related expenditures)
and percent of priority projects completed |
10 | % | ||||
Power Delivery operation and maintenance spending that is at or below the budgeted operation and maintenance spending of $859.6
million |
5 | % | ||||
Utility customer satisfaction and reliability as measured by the results of customer surveys and other metrics |
40 | % | ||||
Diversity, as measured by the attainment of, or good faith efforts toward the attainment of, established affirmative action goals, and safety,
as measured by the absence of fatalities and the number of recordable injuries and fleet accidents |
15 | % | ||||
Regulatory and compliance as measured by completion of rate cases on an established
schedule and compliance with North American Electrical Reliability Corporation requirements |
5 | % |
Named Executive Officer |
|
Performance
Goal |
|
Outcome |
||||||
---|---|---|---|---|---|---|---|---|---|---|
Joseph M. Rigby |
Ø Company adjusted net earnings relative to budgeted adjusted net earnings |
42.0 | % | |||||||
Frederick J. Boyle |
Ø Company free cash flow relative to budgeted free cash flow |
15.0 | % | |||||||
Anthony J. Kamerick |
Ø Customer satisfaction and reliability |
40.8 | % | |||||||
Kevin C. Fitzgerald |
Ø Leadership initiatives, comprised of safety and diversity goals |
8.2 | % | |||||||
Kirk J.
Emge |
Ø Completion of key operational excellence projects |
15.0 | % | |||||||
Total |
121.0 | % | ||||||||
David M. Velazquez |
Ø Power Delivery adjusted net earnings relative to budgeted adjusted net earnings |
23.8 | % | |||||||
Ø Capital spending |
7.2 | % | ||||||||
Ø O&M spending |
| |||||||||
Ø Customer satisfaction and reliability |
54.2 | % | ||||||||
Ø Leadership initiatives, comprised of safety and diversity goals |
13.8 | % | ||||||||
Ø Regulatory and compliance goals |
6.0 | % | ||||||||
Total |
105.0 | % |
Name |
|
Target as a Percentage of Salary (%) |
||||
---|---|---|---|---|---|---|
Joseph M. Rigby |
250 | % | ||||
Frederick J. Boyle |
125 | % | ||||
Anthony J. Kamerick |
125 | % | ||||
David M. Velazquez |
125 | % | ||||
Kevin C. Fitzgerald |
125 | % | ||||
Kirk J. Emge |
100 | % |
Percentile of PHIs TSR vs. Peers |
|
% of Target Award Earned |
||||
---|---|---|---|---|---|---|
90th or Above |
200 | % | ||||
75th |
150 | % | ||||
50th |
100 | % | ||||
25th |
25 | % | ||||
Below 25th |
0 | % |
Performance Goal |
|
Determination |
|
Outcome |
||||||
---|---|---|---|---|---|---|---|---|---|---|
Reliability of electric service to customers |
Achieved, based on following accomplishments:
Ø completion of reliability enhancement plan and emergency restoration
improvement plan milestones
Ø achievement of state-mandated reliability standards
Ø completion of vegetation management and storm
restoration projects |
20 | % | |||||||
Residential customer satisfaction |
Exceeded target, based on the results of PHI and utility customer surveys |
20 | % | |||||||
Smart grid deployment and customer benefits |
Substantially achieved, based on:
Ø percentage of smart meter deployment and activation
Ø creation of automated
distribution deployment plan
Ø dynamic pricing achievements |
18 | % | |||||||
Improvement of Company reputation |
Satisfied one of three reputational metrics |
7 | % | |||||||
Management recruitment and talent development |
Achieved, as a result of the following, among other accomplishments:
Ø Successfully
transitioned three executive positions during 2012
Ø Executed development assignment plan
Ø Initiated development plan for high potential executives
Ø Completed corporate communications talent rollout |
20 | % | |||||||
Total |
85 | % |
Named Executive
Officer |
|
Number of Shares Vested in 2013 Under Time-Based Awards Granted in 2010 (#) |
||||
---|---|---|---|---|---|---|
Joseph M. Rigby |
34,258 | (1) | ||||
Anthony J. Kamerick |
9,421 | (2) | ||||
David M. Velazquez |
9,421 | |||||
Kirk J. Emge |
6,304 |
(1) |
Does not include any shares vested under Mr. Rigbys time-based retention award granted under his employment agreement, the vesting of which is described above under Grants of Time-Based RSU Awards in 2012. |
(2) |
Does not include shares vested under Mr. Kamericks 2011 time-based RSU award as a result of his retirement on February 1, 2013, which are described in the section 2012 Option Exercises and Stock Vested on page 67 of this proxy statement. |
Ø |
the inclusion of compensation deferred under the Companys executive deferred compensation plans; and |
Ø |
to the extent not permitted by the Pepco Holdings Retirement Plan, the inclusion of annual cash incentive compensation received by the participant. |
Ø |
provide competitive retirement benefits; |
Ø |
protect eligible participants against reductions in retirement benefits due to limitations under the Code; |
Ø |
attract new employees to the Company and encourage the continued employment of existing employees; and |
Ø |
establish a more unified approach to the Companys retirement programs, consistent with current market practices. |
Ø |
Mr. Rigby is entitled to reimbursement from the Company of the cost of purchasing a health insurance policy comparable to the Company-sponsored healthcare plan in which Mr. Rigby is enrolled, for a period equal to the longer of one year following the termination of his employment agreement or the remaining term of the agreement. |
Ø |
In the event Mr. Rigbys employment is terminated without cause or he resigns for good reason, in each case following a change in control, he would be entitled to receive Company-paid healthcare, life insurance and disability benefits no less favorable than those in effect immediately prior to the termination, for a period of 24 months after such termination. |
Ø |
interest at the prime rate; |
Ø |
the return that would have been earned had the account balance been invested in any one or a combination of investment funds; or |
Ø |
the return the executive would have earned had the account balance been invested in shares of common stock. |
Officer Level |
|
Multiple of Salary (#) |
||||
---|---|---|---|---|---|---|
Chief Executive Officer, President |
5 times |
|||||
Executive Vice President |
3 times |
|||||
Senior Vice President |
2 times |
|||||
Vice President |
1 time |
Ø |
pledging their PHI common stock to secure indebtedness of any kind; |
Ø |
using PHI common stock in a margin account as collateral for investments in other securities; or |
Ø |
engaging in any other transaction of a similar nature that has the effect of using PHI securities as collateral. |
Ø |
our principal executive officer; |
Ø |
all persons who served as our principal financial officer at any time during 2012; and |
Ø |
the three other most highly compensated executive officers employed as of December 31, 2012, determined on the basis of their total compensation for 2012 (excluding the amounts under the column Change in Pension Value and Nonqualified Deferred Compensation Earnings below). |
Name and Principal
Position |
|
Year |
|
Salary ($) |
|
Bonus ($) |
|
Stock Awards ($)(1) |
|
Non-Equity Incentive Plan Compensation ($)(2) |
|
Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(3) |
|
All Other Compensation ($)(4) |
|
Total Compensation ($) |
|||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Joseph M. Rigby |
2012 |
985,000 | | 4,749,521 | 1,191,850 | 4,234,725 | 204,737 | 11,365,833 | |||||||||||||||||||||||||||
Chairman, President and |
2011 |
880,000 | | 2,322,631 | 748,000 | 2,511,103 | 259,796 | 6,721,530 | |||||||||||||||||||||||||||
Chief Executive Officer |
2010 |
880,000 | | 1,941,743 | | 588,975 | 140,586 | 3,551,304 | |||||||||||||||||||||||||||
Frederick J. Boyle |
2012 |
320,984 | 40,000 | 505,694 | 233,034 | 28,159 | 144,402 | 1,272,273 | |||||||||||||||||||||||||||
Senior Vice President and Chief Financial Officer(5) |
|||||||||||||||||||||||||||||||||||
Anthony J. Kamerick |
2012 |
513,000 | | 653,209 | 372,438 | 1,054,393 | 74,440 | 2,667,480 | |||||||||||||||||||||||||||
Executive Vice President and |
2011 |
498,000 | | 657,209 | 253,980 | 1,532,675 | 85,516 | 3,027,380 | |||||||||||||||||||||||||||
Chief Regulatory Officer |
2010 |
484,000 | | 533,982 | 338,026 | 844,732 | 69,113 | 2,269,853 | |||||||||||||||||||||||||||
(Former Senior Vice President and Chief Financial Officer)(6) |
|||||||||||||||||||||||||||||||||||
David M. Velazquez |
2012 |
503,000 | 100,000 | 640,472 | 316,890 | 1,260,208 | 82,101 | 2,902,671 | |||||||||||||||||||||||||||
Executive Vice President |
2011 |
484,000 | 125,000 | 638,719 | 198,053 | 2,517,536 | 97,546 | 4,060,854 | |||||||||||||||||||||||||||
2010 |
484,000 | | 533,982 | | 118,719 | 62,091 | 1,198,792 | ||||||||||||||||||||||||||||
Kevin C. Fitzgerald |
2012 |
159,280 | | 1,270,379 | 115,645 | 4,276 | 16,593 | 1,566,173 | |||||||||||||||||||||||||||
Executive Vice President and General Counsel |
|||||||||||||||||||||||||||||||||||
Kirk J. Emge |
2012 |
400,000 | | 407,448 | 290,400 | 763,190 | 71,387 | 1,932,425 | |||||||||||||||||||||||||||
Senior Vice President and |
2011 |
391,000 | | 412,791 | 199,410 | 789,255 | 82,639 | 1,875,095 | |||||||||||||||||||||||||||
Special Counsel to the |
2010 |
381,000 | | 357,291 | 266,090 | 471,012 | 79,497 | 1,554,890 | |||||||||||||||||||||||||||
Chief Executive Officer(7) |
(1) |
The amount shown for each year is the aggregate grant date fair value as determined in accordance with FASB ASC Topic 718 (excluding the effect of estimated forfeitures) of awards of time-based restricted stock, time-based RSUs and performance-based awards, as applicable, granted during that year. The values shown with respect to each performance-based award (i) assume that such award will vest at 100% of the target level at the end of the performance period and the recipient will remain employed by us through such date; and (ii) reflect that dividends have been factored into the determination of grant date fair value. Furthermore, the values shown assume that each award of time-based restricted stock or time-based RSUs, as applicable, will vest in full at the end of the three-year service period. For a further description of these stock-based awards, see Compensation Discussion and Analysis Components of the Executive Compensation Program Equity and Incentive Awards Under the LTIP and the 2012 LTIP. For a discussion of the other assumptions made in determining the aggregate grant date fair value of these awards, see Note (13), Stock-Based Compensation, Dividend Restrictions, and Calculations of Earnings Per Share of Common Stock Stock-Based Compensation in the Companys consolidated financial statements included in its 2012 Form 10-K. |
Grant Date Fair Value (Maximum Level)
of Performance-Based Awards Granted In: |
|
||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name |
|
2012 |
|
2011 |
|
2010 |
|||||||||
Joseph M. Rigby |
$ | 3,407,661 | $ | 3,135,312 | $ | 2,751,602 | |||||||||
Frederick J. Boyle |
697,692 | | | ||||||||||||
Anthony J. Kamerick |
887,365 | 887,163 | 756,694 | ||||||||||||
David M. Velazquez |
870,075 | 862,205 | 756,694 | ||||||||||||
Kevin C. Fitzgerald |
725,643 | | | ||||||||||||
Kirk J. Emge |
553,514 | 557,225 | 506,298 |
(2) |
Consists of awards under the EICP. For a further description of these awards, see Compensation Discussion and Analysis Components of the Executive Compensation Program Annual Cash Incentive Awards Under the EICP, and Discretionary Cash Bonuses. |
(3) |
Consists of the aggregate annual increase in the actuarial present value of the executives accumulated benefit under all defined benefit and actuarial pension plans. None of the named executive officers received above-market earnings (as defined by SEC regulation) under any of the Companys nonqualified deferred compensation plans. |
(4) |
The totals shown in this column for 2012 consist of: |
Name |
|
Dividends Paid on Unvested Shares of Restricted Stock ($) |
|
Market Value of Dividend Equivalents Credited on Time-Based RSU Awards ($)(a) |
|
Company- Paid Premiums on Term Life Insurance ($) |
|
Company Matching Contributions Under 401(k) Plan ($) |
|
Company Matching Contributions on Deferred Compensation ($) |
|
Perquisites and Other Personal Benefits ($)(b) |
|
Total ($) |
||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Joseph M. Rigby |
36,999 | 90,981 | 2,281 | 11,250 | 29,550 | 33,676 | 204,737 | |||||||||||||||||||||||
Frederick J. Boyle |
| 6,950 | 742 | 9,023 | | 127,687 | 144,402 | |||||||||||||||||||||||
Anthony J. Kamerick |
11,820 | 24,746 | 1,188 | 11,250 | 6,150 | 19,286 | 74,440 | |||||||||||||||||||||||
David M. Velazquez |
10,175 | 24,150 | 1,165 | 11,250 | 7,141 | 28,220 | 82,101 | |||||||||||||||||||||||
Kevin C. Fitzgerald |
| 2,378 | 368 | 1,375 | | 12,472 | 16,593 | |||||||||||||||||||||||
Kirk J. Emge |
6,808 | 15,492 | 926 | 8,670 | 7,343 | 32,148 | 71,387 |
(a) |
Represents the market value of dividend equivalents credited quarterly during 2012 with respect to unvested time-based RSU awards granted under the LTIP (with respect to Mr. Fitzgerald, the 2012 LTIP). These amounts were computed based upon the closing market price of a share of common stock on the trading day immediately prior to the dividend payment date. |
(b) |
The following perquisites and other personal benefits were paid in 2012 (all amounts shown reflect cash payments made by the Company, except as otherwise stated): |
Name |
|
Automobile Allowance ($)* |
|
Parking ($) |
|
Tax Preparation Fee ($) |
|
Financial Planning Fee ($) |
|
Executive Physical Fee ($) |
|
Club Dues ($) |
|
Spousal Travel ($) |
|
Reimbursed Relocation Expenses ($) |
|
Total ($) |
||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Joseph M. Rigby |
11,700 | 2,400 | 2,500 | 10,820 | 800 | 2,400 | 3,056 | | 33,676 | |||||||||||||||||||||||||||||
Frederick J. Boyle |
8,288 | 1,800 | 2,500 | 13,466 | | 495 | | 101,138 | ** | 127,687 | ||||||||||||||||||||||||||||
Anthony J. Kamerick |
11,700 | 2,400 | 2,500 | | | 2,386 | 300 | | 19,286 | |||||||||||||||||||||||||||||
David M. Velazquez |
11,700 | 2,400 | 2,500 | 10,820 | 800 | | | | 28,220 | |||||||||||||||||||||||||||||
Kevin C. Fitzgerald |
3,413 | 800 | | 4,489 | | 3,770 | | | 12,472 | |||||||||||||||||||||||||||||
Kirk J. Emge |
11,700 | 2,400 | 2,500 | 10,820 | | 450 | 4,278 | | 32,148 |
* |
Consists of a non-accountable expense allowance to compensate executives for the business use of their automobiles. |
** |
Includes a $27,250 adjustment made pursuant to the Companys longstanding non-discriminatory relocation policy to compensate the named executive officer for the effect of the relocation expense payment under the Code. |
(5) |
Mr. Boyle was appointed Senior Vice President and Chief Financial Officer of PHI effective April 9, 2012. |
(6) |
Mr. Kamerick was promoted to Executive Vice President and Chief Regulatory Officer effective April 9, 2012 and served in that position until his retirement on February 1, 2013. |
(7) |
Mr. Emge served as Senior Vice President and General Counsel of PHI until September 17, 2012, when he was appointed as Senior Vice President and Special Counsel to the Chief Executive Officer. Mr. Emge has announced his retirement as an executive officer of PHI, effective April 1, 2013. |
Ø |
Base salary, EICP awards and Discretionary Cash Bonuses. We have included the named executive officers base salary and awards under the EICP earned based on fiscal year 2012 performance, as well as any discretionary cash bonuses earned with respect to 2012. See Compensation Discussion and Analysis Components of the Executive Compensation Program Annual Cash Incentive Awards Under the EICP, and Discretionary Cash Bonuses beginning on page 39 of this proxy statement. |
Ø |
Vested LTIP Restricted Stock Awards. We have included the value of the vested portion of restricted stock awards that PHI granted in 2009 under the LTIP to certain of the named executive officers, which awards vested in 2012. |
Ø |
Vested LTIP Performance-Based Awards. We have included the value of the vested portion of performance-based awards that PHI granted in 2009 under the LTIP to the named executive officers with respect to the 2009 to 2011 performance period, the vesting of which was determined in February 2012. See the 2012 Option Exercises and Stock Vested table on page 67 of this proxy statement. |
Ø |
Perquisites to the Extent Includible in Gross Income. We have included the value of all perquisites and other personal benefits, to the extent they were includible in the named executive officers gross income or otherwise resulted in imputed income for tax purposes. |
2012 Realized Pay |
|
||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name |
|
Base Salary, EICP and Discretionary Cash Bonuses ($) |
|
Vested LTIP Restricted Stock Awards ($) |
|
Vested LTIP Performance- Based Awards ($) |
|
Perquisites and Other Personal Benefits Included on W-2 ($) |
|
Total Realized Pay ($) |
|
2012 Total Compensation Reported in Summary Compensation Table ($) |
|
Realized Pay as a Percentage of 2012 Reported Pay (%) |
|||||||||||||||||
Joseph M. Rigby |
2,176,850 | 581,708 | 706,776 | 94,625 | 3,559,959 | 11,365,833 | 31.3 | ||||||||||||||||||||||||
Frederick J. Boyle |
594,018 | | | 125,817 | 719,835 | 1,272,273 | 56.6 | ||||||||||||||||||||||||
Anthony J. Kamerick |
885,438 | 138,174 | 172,259 | 32,470 | 1,228,341 | 2,667,480 | 46.0 | ||||||||||||||||||||||||
David M. Velazquez |
919,890 | 156,021 | 186,233 | 42,336 | 1,304,480 | 2,902,671 | 44.9 | ||||||||||||||||||||||||
Kevin C. Fitzgerald |
274,925 | | | 7,901 | 282,826 | 1,566,173 | 18.1 | ||||||||||||||||||||||||
Kirk J. Emge |
690,400 | 111,645 | 135,757 | 43,449 | 981,251 | 1,932,425 | 50.8 |
Provision of Employment
Agreement |
|
Description |
||||
---|---|---|---|---|---|---|
Annual salary |
During 2012, $985,000 ($1,015,000 for 2013), subject to annual review by the Board, and his salary may not be decreased during the
remainder of the term of the employment agreement. |
|||||
Incentive compensation |
Incentive compensation to be received under plans applicable to our senior executives, if the Board determines in good faith that Mr.
Rigbys performance merits payment of such compensation. |
|||||
Retirement and other benefit plans |
Mr. Rigby will participate, in a manner similar to other senior executives, in retirement plans, fringe benefit plans, supplemental
benefit plans and other plans and programs (including insurance coverage) provided by us for our executives or employees, except that Mr. Rigbys
annual minimum annuity benefit under the 2011 SERP will be augmented to an amount equal to 1.65% of Mr. Rigbys five-year average base pay and
bonus multiplied by years of service as determined under the PHI Sub-Plan (for all other executives, the 2011 SERP provides for an annual benefit equal
to 1.45% of the five-year average base pay and bonus multiplied by years of service). |
|||||
RSU retention awards |
Mr. Rigby is entitled to receive three annual performance-based retention awards of 36,945 RSUs each under the LTIP (and, beginning
in 2013, the 2012 LTIP) to be granted over the term of the employment agreement. The vesting of each award is contingent upon Mr. Rigbys
continued employment with us during the relevant performance period covered by the award and the achievement of performance goals established for that
performance period. Mr. Rigby has also received a time-based retention award of 73,891 RSUs under the LTIP, one-third of which vested on January 4, 2013 and the remaining two-thirds of which will vest ratably on a day-to-day basis over the two-year period beginning January 4, 2013, provided that Mr. Rigby remains continually employed by us during such period. Mr. Rigby may not settle vested RSUs under these retention awards until the day after his employment with us terminates, except that he may elect to surrender vested RSUs as permitted by the employment agreement to satisfy applicable tax withholding obligations. Vested RSUs will be credited with dividend equivalents in the form of additional fully-vested RSUs. |
|||||
Payments upon termination or change in control |
See Termination of Employment and Change in Control Benefits for a description of various payments and other
benefits that Mr. Rigby may be entitled to receive under the employment agreement in connection with the termination of Mr. Rigbys
employment. |
|||||
Compensation recovery (clawback) provisions |
The employment agreement includes provisions intended to satisfy the compensation recovery
provisions of both the Dodd-Frank Act and the Sarbanes-Oxley Act. |
Provision of Employment
Agreement |
|
Description |
||||
---|---|---|---|---|---|---|
Annual salary |
$550,000, subject to annual review by the Board, with the condition that, if at any time and during the term of the employment
agreement his annual base salary is increased, such annual base salary will not be subsequently decreased during the remainder of the
term. |
|||||
Cash incentive compensation |
Mr. Fitzgerald is entitled to a target incentive opportunity under the EICP equal to 60% of his annual base salary. Any award paid
with respect to 2012 will be prorated based upon the number of days he was continuously employed with us in 2012. |
|||||
Retirement and other benefit plans |
Mr. Fitzgerald will be eligible to participate (in a manner similar to other senior executives of PHI of comparable rank) in
PHIs retirement, supplemental retirement benefit, savings, deferred compensation, health, welfare and insurance plans, and in other plans and
programs provided by PHI from time to time for its senior executives of comparable rank. Mr. Fitzgerald will also be entitled to receive such
perquisites and other personal benefits provided by PHI from time to time to its senior executives of comparable rank. |
|||||
Long-term incentive plan compensation |
Mr. Fitzgerald is entitled to receive 2012 LTIP awards with aggregate target award opportunities equal to 125% of his base salary.
For the 2012 to 2014 performance period, Mr. Fitzgerald received awards (prorated based on his first day of employment) consisting of:
Ø
two-thirds performance-based RSUs (including dividend equivalents), which shall vest only if Mr. Fitzgerald remains continuously employed by us until
the end of the performance period and the Compensation Committee determines that PHIs Relative TSR (as determined by the Compensation Committee)
for the 2012 to 2014 performance period has exceeded certain established thresholds; and |
|||||
Ø one-third time-based RSUs (including dividend equivalents), which will vest in January 2015, provided that Mr. Fitzgerald
remains continuously employed by PHI until the vesting date. |
Provision of Employment
Agreement |
|
Description |
||||
---|---|---|---|---|---|---|
RSU retention awards |
Mr. Fitzgerald is entitled to receive a series of three annual performance-based retention awards under the 2012 LTIP:
Ø to be granted over the term of the employment agreement;
Ø each to consist of such number of RSUs equal to $166,666.67, divided
by the closing price of a share of common stock on the last trading day prior to the first day of the calendar year in which the award is executed and
delivered; and
Ø the vesting of which shall be contingent upon Mr. Fitzgeralds continued employment with us during the annual
performance period and achievement of the performance goals covered by each award. Mr. Fitzgerald also received a time-based retention award of 39,494 RSUs under the 2012 LTIP, four-fifteenths of which will vest each on September 17, 2013 and September 17, 2014, and the remainder of which will vest on September 17, 2015, in each case provided that Mr. Fitzgerald remains continually employed by us. Mr. Fitzgerald may not settle vested RSUs under these retention awards until the day after his employment with us terminates, except that he may elect to surrender vested RSUs as permitted by the employment agreement to satisfy applicable tax withholding obligations. Vested RSUs will be credited with dividend equivalents in the form of additional fully-vested RSUs. |
|||||
Payments upon termination or change in control |
PHI may terminate Mr. Fitzgeralds employment at any time, with or without cause, and Mr. Fitzgerald may resign as an employee
at any time and for any reason, in each case without further compensation under the employment agreement. Mr. Fitzgerald is a participant in the PHI Change-in-Control Severance Plan, at a level that provides for payment in the amount of three times salary and bonus if Mr. Fitzgeralds employment with PHI terminates under certain circumstances within one year after a change in control of PHI; however, Mr. Fitzgerald elected to forego his right to receive any tax gross-up payment under this plan. |
|||||
Compensation recovery (clawback) provisions |
The employment agreement includes provisions intended to satisfy the compensation recovery
provisions of both the Dodd-Frank Act and the Sarbanes-Oxley Act. |
Provision of Retirement
Agreement |
|
Description |
||||
---|---|---|---|---|---|---|
Continued employment with PHI until retirement |
Until April 1, 2013, Mr. Emge will continue to be employed as our executive at his current annual base salary of $400,000, with such
duties and responsibilities as will be assigned to him by PHIs Chief Executive Officer, and otherwise on the same terms and conditions as were in
effect immediately prior to the date of the retirement agreement, including participation in our pension, deferred compensation, health and welfare
plans in accordance with the terms thereof. |
|||||
Severance payment |
On or about April 1, 2013, Mr. Emge will receive a non-pensionable severance payment in the amount of $706,667, consisting of:
Ø $466,667, which is equal to the amount of salary that Mr. Emge would have earned at his current annual base salary over the period from
April 1, 2013 through May 31, 2014, which would have been his normal retirement date under the PHI Retirement Plan; and
Ø $240,000, equal to
what Mr. Emges potential target award opportunity for 2013 would be if he were eligible to participate in the EICP and assuming no change in the
calculation of this award opportunity from 2012. To receive this payment, Mr. Emge must execute a general release in favor of us and our subsidiaries as required by the retirement agreement. |
|||||
Annuity payment |
Mr. Emge will receive an annuity of $547 per month, payable at the same time and in the same form as Mr. Emges benefits under
the 2011 SERP, to offset lower monthly retirement benefit payments as a result of his early retirement. |
|||||
Cash incentive compensation |
Mr. Emge was entitled to receive an award under the EICP for 2012 (which was paid in 2013). Mr. Emge is not entitled to participate
in the EICP for 2013. |
|||||
Long-term incentive plan participation |
With regard to Mr. Emges ongoing participation in the LTIP and the 2012 LTIP through April 1, 2013:
Ø Payments
under Mr. Emges time-based restricted stock and performance-based awards under the LTIP for the 2010 to 2012 award cycle were not affected by the
retirement agreement. |
Provision of Employment
Agreement |
|
Description |
||||
---|---|---|---|---|---|---|
Ø Payments, if any, under Mr. Emges performance-based RSU award under the LTIP for the 2011 to 2013 award cycle (and
additional RSUs accrued as dividend equivalents thereupon) will be based on actual performance over the entire three-year performance period relative
to the performance goals as determined by the Compensation Committee in accordance with the terms of the award, and will be prorated for the number of
full months elapsed over the period beginning on the grant date and ending on April 1, 2013.
Ø Payments under Mr. Emges time-based RSU
award under the LTIP for the 2011 to 2013 award cycle (and additional RSUs accrued as dividend equivalents thereupon) will be prorated based on the
number of full months elapsed over the period beginning on the grant date and ending on April 1, 2013.
Ø Mr. Emges time-based and
performance-based awards under the LTIP for the 2012 to 2014 award cycle will be forfeited, effective April 1, 2013.
Ø Mr. Emge is not
entitled to any awards under the 2012 LTIP with respect to the 2013 to 2015 award cycle. |
||||||
Transition of responsibilities |
From September 6, 2012 through April 1, 2013, Mr. Emge has agreed to assist us in the
efficient transfer of his responsibilities. Until April 1, 2016, Mr. Emge also has agreed to be available, upon our reasonable request, to consult with
us with regard to matters within the scope of his responsibilities while employed with us. As consideration for Mr. Emges agreement to provide
the foregoing assistance and consultations:
Ø Mr. Emge will receive the non-pensionable severance payment described above;
Ø we will
reimburse Mr. Emge for any out-of-pocket expenses he reasonably incurs; and
Ø beginning on June 1, 2014, we will compensate Mr. Emge at the
hourly rate of $200. In addition, Mr. Emge has agreed to a general release of claims involving us and our subsidiaries. |
Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) |
|
Estimated Future Payouts Under Equity Incentive Plan Awards(2) |
All Other Stock Awards: Number of |
Grant Date Fair Value of Stock and | |||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name |
|
Grant Date |
|
Approval Date |
|
Threshold ($)(3) |
|
Target ($) |
|
Maximum ($) |
|
Threshold Number of Shares (#) |
|
Target Number of Shares (#) |
|
Maximum Number of Shares (#) |
|
Shares of Stock or Units (#) |
|
Option Awards ($)(4) |
|||||||||||||||||||||||
Joseph M. Rigby |
|||||||||||||||||||||||||||||||||||||||||||
EICP(5) |
1-26-12 | 1-26-12 | 197,000 | 985,000 | 1,773,000 | | | | | | |||||||||||||||||||||||||||||||||
LTIPTime-based RSU award(6) |
1-26-12 | 1-26-12 | | | | | | | 40,109 | 804,587 | |||||||||||||||||||||||||||||||||
LTIPPerformance-based RSU award(7) |
1-26-12 | 1-26-12 | | | | 20,055 | 80,218 | 160,436 | | 1,703,830 | |||||||||||||||||||||||||||||||||
LTIPTime-based RSU retention award pursuant to employment agreement(8) |
1-4-12 | 12-15-11 | | | | | | | 73,891 | 1,499,987 | |||||||||||||||||||||||||||||||||
LTIPPerformance-based RSU retention award pursuant to employment agreement(9) |
1-26-12 | 12-15-11 | | | | | 36,945 | | | 741,117 | |||||||||||||||||||||||||||||||||
Frederick J. Boyle |
|||||||||||||||||||||||||||||||||||||||||||
EICP(5) |
4-9-12 | 3-26-12 | 38,518 | 192,590 | 346,662 | | | | | | |||||||||||||||||||||||||||||||||
LTIPTime-based RSU award(6) |
4-9-12 | 3-26-12 | | | | | | | 8,460 | 156,848 | |||||||||||||||||||||||||||||||||
LTIPPerformance-based RSU award(7) |
4-9-12 | 3-26-12 | | | | 4,106 | 16,424 | 32,848 | | 348,846 | |||||||||||||||||||||||||||||||||
Anthony J. Kamerick |
|||||||||||||||||||||||||||||||||||||||||||
EICP(5) |
1-26-12 | 1-26-12 | 61,560 | 307,800 | 554,040 | | | | | | |||||||||||||||||||||||||||||||||
LTIPTime-based RSU award(6)(10) |
1-26-12 | 1-26-12 | | | | | | | 10,445 | 209,527 | |||||||||||||||||||||||||||||||||
LTIPPerformance-based RSU award(7)(10) |
1-26-12 | 1-26-12 | | | | 5,222 | 20,889 | 41,778 | | 443,682 | |||||||||||||||||||||||||||||||||
David M. Velazquez |
|||||||||||||||||||||||||||||||||||||||||||
EICP(5) |
1-26-12 | 1-26-12 | 37,725 | 301,800 | 543,240 | | | | | | |||||||||||||||||||||||||||||||||
LTIPTime-based RSU award(6) |
1-26-12 | 1-26-12 | | | | | | | 10,241 | 205,434 | |||||||||||||||||||||||||||||||||
LTIPPerformance-based RSU award(7) |
1-26-12 | 1-26-12 | | | | 5,121 | 20,482 | 40,964 | | 435,038 | |||||||||||||||||||||||||||||||||
Kevin C. Fitzgerald |
|||||||||||||||||||||||||||||||||||||||||||
EICP(5) |
9-17-12 | 9-6-12 | 19,115 | 95,574 | 172,033 | | | | | | |||||||||||||||||||||||||||||||||
2012 LTIPTime-based RSU award(6) |
9-17-12 | 9-6-12 | | | | | | | 8,806 | 165,465 | |||||||||||||||||||||||||||||||||
2012 LTIPPerformance-based RSU award(7) |
9-17-12 | 9-6-12 | | | | 4,271 | 17,082 | 34,164 | | 362,822 | |||||||||||||||||||||||||||||||||
2012 LTIPTime-based RSU retention award pursuant to employment agreement(11) |
9-17-12 | 9-6-12 | | | | | | | 39,494 | 742,092 | |||||||||||||||||||||||||||||||||
Kirk J. Emge |
|||||||||||||||||||||||||||||||||||||||||||
EICP(5) |
1-26-12 | 1-26-12 | 48,000 | 240,000 | 432,000 | | | | | | |||||||||||||||||||||||||||||||||
LTIPTime-based RSU award(6) |
1-26-12 | 1-26-12 | | | | | | | 6,515 | 130,691 | |||||||||||||||||||||||||||||||||
LTIPPerformance-based RSU award(7) |
1-26-12 | 1-26-12 | | | | 3,258 | 13,030 | 26,060 | | 276,757 |
(1) |
The target amount represents the amount of payment for an award opportunity under the EICP based upon achievement of the performance criteria at the target level as determined by the Compensation Committee. The threshold amount represents the minimum amount of an award which may be received by the executive under the EICP, assuming that an award is paid. The maximum amount represents the highest possible payment with respect to an EICP award based on performance, which for 2012 was equal to 180% of the target payment. |
(2) |
The threshold number of shares of an award under the LTIP and the 2012 LTIP represents achievement of Relative TSR at the 25th percentile, the target number of shares represents achievement of Relative TSR at the 50th percentile, and the maximum number of shares represents achievement of Relative TSR at or above the 90th percentile. |
(3) |
The amounts in this column do not reflect the Compensation Committees retained discretion to reduce these minimum award amounts by up to 30% of the target amount of the award opportunity. |
(4) |
Represents the grant date fair value, as determined in accordance with FASB ASC Topic 718 (excluding the effect of estimated forfeitures), of time-based RSUs and performance-based RSUs granted under the LTIP and the 2012 LTIP. The grant date fair value of each performance-based RSU award has been calculated using the target number of shares that the named executive officer is entitled to receive, consistent with the estimate of aggregate compensation cost to be recognized over the service period in accordance with ASC Topic 718. |
(5) |
For a further description of these award opportunities, see Compensation Discussion and Analysis Components of the Executive Compensation Program Annual Cash Incentive Awards Under the EICP, and Discretionary Cash Bonuses. |
(6) |
This time-based RSU award vests on the third anniversary of the date of grant if the executive has been continuously employed by us through that date, subject to the acceleration of vesting under certain circumstances as described in Termination of Employment and Change in Control Benefits. |
(7) |
This performance-based RSU award vests if the executive is continuously employed by the Company through the end of the performance period and the Compensation Committee has determined that the performance targets are met at least at the threshold level of performance, subject to the acceleration of vesting under certain circumstances as described below in Termination of Employment and Change in Control Benefits. For a further discussion of these awards, see Compensation Discussion and Analysis Components of the Executive Compensation Program Equity and Incentive Awards Under the LTIP and the 2012 LTIP Performance-Based Awards. |
(8) |
One-third of this award vested on January 4, 2013, and the remaining two-thirds of this award will vest ratably on a day-to-day basis over the two-year period beginning January 4, 2013, in each case provided that Mr. Rigby continuously remains employed by us through each vesting date. |
(9) |
This award is the first in a series of three annual performance-based RSU awards to be granted each year over the term of Mr. Rigbys employment agreement, the vesting of which shall be contingent upon continued employment during each annual performance period and achievement of the performance goals established for the annual performance period covered by the award. |
(10) |
Following his retirement from the Company on February 1, 2013, the pro rata value of this award is to be paid to Mr. Kamerick in cash. |
(11) |
Four-fifteenths of this award will vest on each of September 17, 2013 and September 17, 2014, and the remainder will vest on September 17, 2015, in each case provided that Mr. Fitzgerald continually remains employed by us through each vesting date. |
Ø |
the date the director ceases to be a director of PHI; |
Ø |
the January 31 after the date the director ceases to be a director of PHI; or |
Ø |
a date specified by the director, which must be on or after January 31, 2015. |
Ø |
is required by law, including Section 409A of the Code; or |
Ø |
is deemed by the Board necessary in order to comply with the requirements of Section 162(m) of the Code or Rule 16b-3 under the Exchange Act. |
Ø |
increasing the total number of shares of common stock which may be issued under the 2012 LTIP; |
Ø |
increasing the maximum number of shares with respect to options, SARs and other awards that may be granted to any individual under the 2012 LTIP (including, without limitation, the maximum number of shares of common stock subject to certain awards to any person who is or may be a covered employee as defined under Section 162(m) of the Code); |
Ø |
modifying the requirements as to eligibility for awards under the 2012 LTIP; or |
Ø |
permitting, either through the amendment of the 2012 LTIP or any award agreement, options, SARs or other awards encompassing rights to purchase common stock to be repriced, replaced or regranted through cancellation, or by decreasing the option price of an outstanding option or the exercise price of an outstanding SAR, or the purchase price of any other outstanding award that encompasses the right to purchase common stock. |
Ø |
link annual corporate and business priorities with performance goals; |
Ø |
reinforce a high-performance culture by tying executive compensation to measurable accountabilities and achievement; |
Ø |
recognize and reward team and individual performance; and |
Ø |
provide a variable and competitive award opportunity as part of an overall compensation program to enable PHI to attract, retain and motivate key employees. |
Ø |
selects the persons eligible to participate in the EICP; |
Ø |
approves performance goals; |
Ø |
approves target payout levels and maximum award opportunities; |
Ø |
approves the proportion of each award among categories of performance goals; |
Ø |
determines whether awards should be made to participants; and |
Ø |
establishes future service requirements as a condition to vesting in full of an award. |
Stock Awards |
|
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name |
|
Number of Shares or Units of Stock That Have Not Vested (#)(1) |
|
Market Value of Shares or Units of Stock That Have Not Vested ($)(1)(2) |
|
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(3) |
|
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(2)(3) |
|||||||||||
Joseph M. Rigby |
|||||||||||||||||||
Awarded 1-26-12 |
42,431 | 832,072 | 84,863 | 1,664,163 | |||||||||||||||
Awarded 1-26-12(4) |
| | 36,945 | 724,491 | |||||||||||||||
Awarded 1-4-12(5) |
73,891 | 1,449,003 | | | |||||||||||||||
Awarded 1-27-11 |
44,806 | 878,646 | 22,404 | 439,342 | |||||||||||||||
Awarded 2-25-10 |
| | 81,473 | 1,597,686 | |||||||||||||||
Awarded 1-28-10 |
34,258 | 671,799 | | | |||||||||||||||
Frederick J. Boyle |
|||||||||||||||||||
Awarded 4-9-12 |
8,823 | 173,019 | 17,129 | 335,900 | |||||||||||||||
Anthony J. Kamerick |
|||||||||||||||||||
Awarded 1-26-12(6) |
11,049 | 216,671 | 22,099 | 433,361 | |||||||||||||||
Awarded 1-27-11(6) |
12,678 | 248,616 | 6,339 | 124,308 | |||||||||||||||
Awarded 2-25-10 |
| | 22,405 | 439,362 | |||||||||||||||
Awarded 1-28-10 |
9,421 | 184,746 | | | |||||||||||||||
David M. Velazquez |
|||||||||||||||||||
Awarded 1-26-12 |
10,833 | 212,435 | 21,669 | 424,929 | |||||||||||||||
Awarded 1-27-11 |
12,322 | 241,634 | 6,161 | 120,817 | |||||||||||||||
Awarded 2-25-10 |
| | 22,405 | 439,362 | |||||||||||||||
Awarded 1-28-10 |
9,421 | 184,746 | | | |||||||||||||||
Kevin C. Fitzgerald |
|||||||||||||||||||
Awarded 9-17-12(7) |
39,494 | 774,477 | | | |||||||||||||||
Awarded 9-17-12 |
8,929 | 175,098 | 17,321 | 339,665 | |||||||||||||||
Kirk J. Emge |
|||||||||||||||||||
Awarded 1-26-12 |
6,893 | 135,172 | 13,784 | 270,304 | |||||||||||||||
Awarded 1-27-11 |
7,963 | 156,154 | 3,982 | 78,087 | |||||||||||||||
Awarded 2-25-10 |
| | 14,991 | 293,974 | |||||||||||||||
Awarded 1-28-10 |
6,304 | 123,621 | | |
(1) |
These are time-based restricted stock and RSU awards granted under the LTIP and, as to Mr. Fitzgerald, the 2012 LTIP. Except as otherwise noted, these awards vest in full on the third anniversary of the grant date if the named executive officer has been continually employed by us by that date, subject to the acceleration of vesting under certain circumstances. See Termination of Employment and Change in Control Benefits. Except as otherwise noted, amounts with respect to time-based RSU awards include additional RSUs credited to an executive when the Company pays a dividend on the common stock during the vesting period, although the shares of common stock underlying such credited RSUs are earned if and only to the extent that an award vests. |
(2) |
Market value is calculated by multiplying the number of shares shown in the immediately preceding column by $19.61, the closing market price of a share of common stock on December 31, 2012. |
(3) |
These are performance-based awards under the LTIP, and with respect to Mr. Fitzgerald, the 2012 LTIP. Except as otherwise noted, the awards granted in 2010, 2011 and 2012 entitle the named executive officer to earn shares of common stock to the extent pre-established performance objectives are satisfied for, respectively, (i) the three-year performance period beginning on January 1, 2010 and ending on December 31, 2012; (ii) the three-year performance period beginning on January 1, 2011 and ending on December 31, 2013; and (iii) the three-year performance period beginning on January 1, 2012 and ending on December 31, 2014. Except as otherwise noted, for each award, the named executive officer is eligible to earn a number of shares of common stock ranging from 25% to 200% of the target performance award depending on the extent to which the performance objective is achieved, assuming that the named executive officer has been continually employed by us during the performance period. For each named executive officer, the number in this column reflects the number of shares that could be earned pursuant to each performance-based award outstanding as of December 31, 2012, based on the following assumed level of performance for each award, as follows: |
Performance Cycle |
|
Relative TSR as of December 31, 2012 |
|
Assumed Level of
Performance for Purposes of Outstanding Equity Awards at FY End Table |
||||||
---|---|---|---|---|---|---|---|---|---|---|
2010 to 2012 performance period |
Between 25% and 50% |
Target |
||||||||
2011 to 2013 performance period |
Less than 25% |
Threshold |
||||||||
2012 to 2014 performance period |
Between 25% and 50% |
Target |
(4) |
This is the first in a series of three annual performance-based RSU awards to be granted over the term of Mr. Rigbys employment agreement. The vesting of the initial performance-based award, which was granted on January 26, 2012, covers a performance period of January 1, 2012 to December 31, 2012 and may range from 0% to 100%. Dividend equivalents accrue only on the vested portion of the award. If and to the extent the award has vested, settlement of the award in shares of common stock will be deferred (subject to certain exceptions) until the day after the day Mr. Rigbys employment with us terminates. For further discussion of the terms of this performance-based retention award, see Compensation Discussion and Analysis Components of the Executive Compensation Program Equity and Incentive Awards Under the LTIP and the 2012 LTIP Performance-Based Awards Performance-Based Retention RSU Awards. |
(5) |
This is a time-based RSU award that was granted under the LTIP pursuant to the terms of Mr. Rigbys employment agreement. One-third of the RSUs covered by this award vested on January 4, 2013 and the remaining two-thirds will vest ratably on a day-to-day basis over the two-year period beginning January 4, 2013, in each case provided that Mr. Rigby remains continually employed by us through each vesting date. Dividend equivalents accrue only on the vested portion of the award. If and to the extent the award has vested, settlement of the award in shares of common stock will be deferred (subject to certain exceptions) until the day after the day Mr. Rigbys employment with us terminates. |
(6) |
Following his retirement from the Company on February 1, 2013, the pro rata value of this award is to be paid to Mr. Kamerick in cash. |
(7) |
This is a time-based RSU award that was granted under the 2012 LTIP pursuant to the terms of Mr. Fitzgeralds employment agreement. Four-fifteenths of the RSUs covered by this award will vest on September 17, 2013, another four-fifteenths will vest on September 17, 2014, and the remainder will vest on September 17, 2015, in each case provided that Mr. Fitzgerald remains continually employed by us through the vesting date. Dividend equivalents accrue only on the vested portion of the award. If and to the extent the award has vested, settlement of the award in shares of common stock will be deferred (subject to certain exceptions) until the day after the day Mr. Fitzgeralds employment with us terminates. |
Ø |
time-based restricted stock awards granted in 2009 that vested during 2012; and |
Ø |
performance awards (including dividend equivalents) that vested during 2012 with respect to the 2009 to 2011 performance period. |
Stock Awards |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Name |
|
Number of Shares Acquired on Vesting (#) |
|
Value Realized on Vesting ($)(1) |
|||||||
Joseph M. Rigby |
64,731 | 1,288,484 | |||||||||
Frederick J. Boyle |
| | |||||||||
Anthony J. Kamerick |
15,687 | 310,433 | |||||||||
David M. Velazquez |
17,197 | 342,254 | |||||||||
Kevin C. Fitzgerald |
| | |||||||||
Kirk J. Emge |
12,433 | 247,402 |
(1) |
Represents the aggregate market value of the shares realized on vesting, calculated by multiplying the vested number of shares by the average of the low and high trading prices of a share of common stock on the vesting date (or on the last trading day prior thereto when the vesting day occurs on a non-trading day). |
Ø |
time-based restricted stock awards granted in January 2010 that vested in January 2013; |
Ø |
performance awards (including dividend equivalents) that vested in February 2013 with respect to the 2010 to 2012 performance period; |
Ø |
a time-based RSU award granted in January 2011 to Mr. Kamerick that vested on a prorated basis on February 1, 2013 upon his retirement (although the vested shares are not to be received until August 2, 2013); |
Ø |
Mr. Rigbys time-based retention RSU award described in his employment agreement, one-third of which vested on January 4, 2013 (although the shares underlying such RSUs are not to be received until the day after his employment with us terminates); and |
Ø |
Mr. Rigbys performance-based retention RSU award described in his employment agreement that vested in February 2013 with respect to the 2012 performance period stated therein (although the shares underlying such RSUs are not to be received until the day after his employment with us terminates). |
Stock Awards |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Name |
|
Number of Shares Acquired on Vesting (#) |
|
Value Realized on Vesting ($)(1) |
|||||||
Joseph M. Rigby |
139,990 | (2) | 2,812,028 | ||||||||
Frederick J. Boyle |
| | |||||||||
Anthony J. Kamerick |
31,540 | (3) | 623,400 | ||||||||
David M. Velazquez |
23,088 | 459,423 | |||||||||
Kevin C. Fitzgerald |
| | |||||||||
Kirk J. Emge |
15,449 | 307,415 |
(1) |
Represents the aggregate market value of the shares realized on vesting, calculated by multiplying the vested number of shares by the average of the low and high trading prices of a share of common stock on the vesting date. |
(2) |
Includes 56,033 shares that have vested as of January 4, 2013 under Mr. Rigbys time-based and performance-based retention RSU awards described in his employment agreement, the receipt of which will not occur until the day after Mr. Rigbys employment with the Company terminates, and does not include any shares that vest on a day-to-day basis thereafter. |
(3) |
Includes 8,452 shares that have vested as of February 1, 2013 under Mr. Kamericks time-based RSU award granted in January 2011, the receipt of which will not occur until August 2, 2013. |
Name |
|
Plan Name(1) |
|
Number of Years of Credited Service (#) |
|
Present Value of Accumulated Benefits ($)(2) |
|
Payments During Last Fiscal Year ($) |
||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Joseph M. Rigby |
Conectiv Cash Balance Sub-Plan |
29 yrs., 11 mos.(3) |
1,777,113 | | ||||||||||||||
2011 SERP/Conectiv SERP |
33 yrs., 11 mos. |
7,873,632 | | |||||||||||||||
Contractual benefit(4) |
33 yrs., 11 mos. |
1,331,137 | | |||||||||||||||
Frederick J. Boyle |
PHI Sub-Plan |
0 yrs., 8 mos. |
19,663 | | ||||||||||||||
2011 SERP |
0 yrs., 8 mos. |
8,496 | | |||||||||||||||
Anthony J. Kamerick |
Pepco General Retirement Sub-Plan |
40 yrs., 0 mos.(5) |
2,134,455 | | ||||||||||||||
2011 SERP/Executive Retirement Plan |
42 yrs., 2 mos. |
4,801,476 | | |||||||||||||||
David M. Velazquez |
Conectiv Cash Balance Sub-Plan |
30 yrs., 0 mos.(6) |
1,109,302 | | ||||||||||||||
2011 SERP/Conectiv SERP |
31 yrs., 6 mos. |
3,347,713 | | |||||||||||||||
Kevin C. Fitzgerald |
PHI Sub-Plan |
0 yrs., 3 mos. |
3,834 | | ||||||||||||||
2011 SERP |
0 yrs., 3 mos. |
442 | | |||||||||||||||
Kirk J. Emge |
Pepco General Retirement Sub-Plan |
26 yrs., 2 mos. |
1,338,912 | | ||||||||||||||
2011 SERP/Executive Retirement Plan |
26 yrs., 2 mos. |
2,244,068 | | |||||||||||||||
Contractual benefit(7) |
26 yrs., 2 mos. |
83,860 | |
(1) |
For participants in a pre-existing supplemental retirement plan prior to August 1, 2011, the 2011 SERP provides a minimum supplemental retirement benefit equal to the amount, if any, by which the executives benefit calculated under the 2011 benefit formula exceeds the supplemental retirement benefit provided under the pre-existing plan. Where the pre-existing plan provides for a greater benefit, the executive will receive the benefit provided for under the pre-existing plan. |
(2) |
Represents the actuarial present value of the executives accumulated pension benefit calculated as of December 31, 2012, assuming the executive retires at the earliest time he may retire under the applicable plan without any benefit reduction due to age. The valuation method and all material assumptions applied in calculating the actuarial present value are set forth in Note (10), Pension and Other Postretirement Benefits, to our consolidated financial statements, which are included in the 2012 Annual Report that accompanies this proxy statement. |
(3) |
The Conectiv Cash Balance Sub-Plan provides for certain grandfathered rights under predecessor plans, as described further below under Description of Pension and Other Retirement Plans. Under these grandfathering provisions, the benefit is calculated for all years of service up to December 31, 2008. The number of actual years of service with the Company and its predecessors for Mr. Rigby under this plan is 33 years, 11 months. |
(4) |
Represents the net present value of accumulated benefits provided under Mr. Rigbys employment agreement, which was effective as of January 1, 2012. |
(5) |
The number of years of credited service under this plan is capped at 40 years. The number of actual years of service with the Company and its predecessors for Mr. Kamerick under this plan is 42 years, 2 months. |
(6) |
Participants in the Conectiv Cash Balance Sub-Plan will be provided the greater of the benefit under that plan or a benefit calculated using the PHI Sub-Plan formula, under which the number of years of credited service is capped at 30 years. As of December 31, 2012, Mr. Velazquezs benefit under the PHI Sub-Plan formula exceeds his benefit under the Conectiv Cash Balance Sub-Plan. The number of actual years of service with the Company and its predecessors for Mr. Velazquez under the PHI Sub-Plan is 31 years, 6 months. |
(7) |
Represents the net present value of accumulated benefits provided under Mr. Emges retirement agreement, which was effective as of September 6, 2012. |
Name |
|
Executive Contributions in Last Fiscal Year ($)(1) |
|
Registrant Contributions in Last Fiscal Year ($)(2) |
|
Aggregate Earnings in Last Fiscal Year ($) |
|
Aggregate Withdrawals/ Distributions ($) |
|
Aggregate Balance at Last Fiscal Year End ($)(3) |
||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Joseph M. Rigby |
||||||||||||||||||||||
Conectiv Deferred Compensation Plan |
| | 3,663 | | 497,911 | |||||||||||||||||
PHI Executive and Director Deferred Compensation Plan |
39,400 | 29,550 | 31,632 | | 735,873 | |||||||||||||||||
Frederick J. Boyle |
||||||||||||||||||||||
PHI Executive and Director Deferred Compensation Plan |
31,167 | | 804 | | 31,971 | |||||||||||||||||
Anthony J. Kamerick |
||||||||||||||||||||||
PHI Executive and Director Deferred Compensation Plan |
59,529 | 6,150 | 21,427 | | 726,944 | |||||||||||||||||
David M. Velazquez |
||||||||||||||||||||||
PHI Executive and Director Deferred Compensation Plan |
9,656 | 7,141 | 2,461 | | 47,633 | |||||||||||||||||
Kevin C. Fitzgerald |
||||||||||||||||||||||
PHI Executive and Director Deferred Compensation Plan |
| | | | | |||||||||||||||||
Kirk J. Emge |
||||||||||||||||||||||
PHI Executive and Director Deferred Compensation Plan |
53,769 | 7,343 | 42,035 | | 463,252 |
(1) |
All amounts shown are included in the Salary column of the Summary Compensation Table for the year 2012, located on page 50 of this proxy statement. |
(2) |
All amounts shown are included in the All Other Compensation column of the Summary Compensation Table for the year 2012. |
(3) |
Includes the following amounts reported as compensation in the Summary Compensation Table in years prior to 2012: |
Name |
|
PHI Deferred Compensation Plan ($) |
|
Conectiv Deferred Compensation Plan ($) |
||||||
---|---|---|---|---|---|---|---|---|---|---|
Joseph M. Rigby |
572,697 | 21,468 | ||||||||
Frederick J. Boyle |
| | ||||||||
Anthony J. Kamerick |
223,296 | | ||||||||
David M. Velazquez |
15,378 | | ||||||||
Kevin C. Fitzgerald |
| | ||||||||
Kirk J. Emge |
149,018 | |
Ø |
the interest at the prime rate that would have been paid on an amount equal to the participants prime rate account balance; |
Ø |
an amount equal to the return that the participant would have earned had his or her investment fund account balance been invested in any one or a combination of the investment funds selected by the Compensation Committee; |
Ø |
an amount equal to the return the participant would have earned had the phantom stock account balance been invested in shares of common stock. |
|
payment of unpaid salary and accrued vacation pay through the date of termination, as well as any earned and unpaid bonus for the year prior to the year in which the termination occurs; |
|
subject to execution and delivery of an irrevocable release of claims: |
o |
a lump sum cash payment equal to the product of (i) three times the Calculation Amount (as defined below), and (ii) a fraction (A) the numerator of which is 730 minus the number of days that have elapsed from and including January 1, 2013, through the day immediately prior the termination date and (B) the denominator of which is 730; and |
o |
a lump sum payment in cash equal to a prorated portion of Mr. Rigbys target annual bonus under the EICP for the year in which the termination occurs; |
|
vesting in full of the unvested portion of the time-based retention award provided under his employment agreement; |
|
vesting in full of the outstanding performance-based retention awards under his employment agreement to the extent that the performance goals are achieved; |
|
with respect to the unvested portion of all other time-based restricted stock or RSU awards under the LTIP (or any successor plan): |
o |
for awards that would have vested had Mr. Rigby remained employed by the Company for the remainder of the three-year term of his employment agreement, the vesting of each such award in full on the date his employment terminates, or |
o |
for awards that would have vested in full after the last day of the three-year term of his employment agreement, the vesting of each such award on a prorated basis for the length of his service up to the date of termination, except if such termination occurs within one year following a change of control (as defined in the employment agreement), the award will vest in full; and |
|
with respect to the unvested portion of all other performance-based awards under the LTIP (or any successor plan): |
o |
if the performance period ends within the three-year term of his employment agreement, the vesting of each such award in full, if and to the extent the performance goals are achieved; or |
o |
if the performance period ends after the last day of the three-year term of his employment agreement, the vesting of each such award (to the extent earned based on performance through the end of the performance period) |
on a prorated basis for the length of his service up to the date of termination; but |
o |
in either case, if a termination occurs within one year following a change of control, each outstanding performance award shall vest on the date Mr. Rigbys employment terminates and the amount of the award shall be determined on the assumptions that: |
n |
Mr. Rigby had remained employed through the end of the performance period; and |
n |
the target level of performance had been achieved. |
Ø |
intentional fraud or material misappropriation with respect to the business or assets of PHI; |
Ø |
the persistent refusal or willful failure to perform substantially his duties and responsibilities to PHI after notice of, and an opportunity to remedy, such failure have been given; or |
Ø |
conduct that constitutes disloyalty to PHI or that materially damages the property, business or reputation of PHI. |
|
Mr. Rigbys annual base salary in effect on the date of the termination of employment; and |
|
the higher of: |
o |
his target award opportunity under the EICP for the year in which the termination of employment occurs; or |
o |
the highest payment received under the EICP during the three calendar years preceding the calendar year in which the termination of employment occurs. |
Ø |
his base salary is reduced (other than a reduction consistent and proportional with the overall reduction, due to extraordinary business conditions, in the compensation of all other senior executives of the Company); |
Ø |
he is not considered in good faith for incentive awards under the Companys plans in which senior executives are eligible to participate; |
Ø |
the Company fails to provide him with retirement, fringe and supplemental benefits in a manner similar to other senior executives; |
Ø |
the Company relocates Mr. Rigbys place of employment to a location further than 50 miles from Washington, D.C. (other than the Washington, D.C. or Wilmington, Delaware metropolitan areas); or |
Ø |
he is removed from the position of Chief Executive Officer (other than due to his disability). |
Ø |
provide Mr. Rigby with healthcare, life insurance and disability benefits no less favorable than those benefits as in effect immediately prior to such termination; or |
Ø |
reimburse Mr. Rigby for the cost of obtaining such benefits. |
Ø |
a severance payment equal to the sum of executives salary and target annual bonus for the year in which the termination occurs, multiplied by a benefit factor of 1.5, 2 or 3, depending upon the executives position; |
Ø |
a prorated portion (based on the number of days the executive was employed during the year) of the executives target annual bonus for the year; |
Ø |
a lump sum supplemental retirement benefit paid in cash equal to the difference between (i) the present value of the executives vested retirement benefit accrued at the time of termination under the Pepco Holdings Retirement Plan and any excess or supplemental retirement plan in which the executive is a participant and (ii) the benefit the executive would be entitled to receive under such plans assuming that the executive was the number of years older and had been credited with the number of years of service equal to the executives benefit factor; |
Ø |
for a number of years equal to the executives benefit factor, medical, dental, group life and disability benefits that generally are at least at a level substantially similar to the level in effect prior to the change in control; and |
Ø |
for executives (other than Mr. Fitzgerald) who initially became participants in the Change-in-Control Severance Plan prior to November 1, 2012, a gross-up payment in an amount equal to the amount of all excise taxes imposed upon compensation payable upon termination of employment and the additional taxes that result from such payment, such that the aggregate net payments received by the executive would be the same as they would have been had such excise tax not been imposed. |
Ø |
the assignment to the participant of any duties inconsistent in any materially adverse respect with his or her position, authority, duties or responsibilities from those in effect immediately prior to the change in control: |
Ø |
a material reduction in the participants base compensation (as defined in applicable Treasury regulations), as in effect immediately before the change in control; |
Ø |
a material diminution in the authority, duties, or responsibilities of the supervisor to whom the participant is required to report; |
Ø |
a material diminution in the budget over which the participant retains authority; |
Ø |
a requirement by the Company (or, if applicable, a subsidiary) that the participant must be based in any office or location that is more than 50 miles from the location at which he or she performed his or her services immediately prior to the occurrence of a change in control, except for travel reasonably required in the performance of the participants responsibilities; or |
Ø |
any other action or inaction that constitutes a material breach by the Company (or a subsidiary) of the agreement under which the participant provides services to the Company (or a subsidiary). |
Ø |
unvested time-based restricted stock or RSUs will immediately vest and become free of restrictions; |
Ø |
options and SARs will be immediately exercisable in full; |
Ø |
a percentage of unvested performance-based restricted stock and RSUs will immediately vest and become free of restrictions, with such percentage equaling a fraction, the numerator of which is the number of days of the performance period that have elapsed as of the date of the change in control (or, in the case of a qualifying termination for good reason, as of the date of such qualifying termination) and the denominator of which is the total number of days in the performance period, assuming that all target performance objectives shall have been achieved at the 100% level; and |
Ø |
unvested performance shares and performance units will be paid out on an accelerated basis, based on the number of performance shares and/or performance units subject to the target performance objectives as established on the date of grant, prorated based on the number of months of the performance period that have elapsed as of the payout date, and assuming that target performance objectives were achieved at the 100% level. |
Termination Event |
|
Definition of Termination
Event under the EICP |
|
Adjustment to Award for
Termination Event During Year |
||||||
---|---|---|---|---|---|---|---|---|---|---|
Death |
Death of the participant |
Award opportunity will be reduced proportionately for the year based on the date of death |
||||||||
Disability |
Permanent and total disability of the participant, as determined by the Compensation Committee |
Award opportunity will be reduced proportionately for the year based on the date of disability |
||||||||
Retirement |
Separating from service with PHI or any subsidiary on or after attaining age 55 and achieving at least 10 years of continuous employment with PHI
or any subsidiary |
Award opportunity will be reduced proportionately for the year based on the date of separation from service |
||||||||
Termination |
Any other resignation or discharge from employment not covered above |
No award shall be made |
Ø |
each of Messrs. Rigby, Boyle, Velazquez, Fitzgerald and Emge would have been entitled to receive under the Companys compensation plans; |
Ø |
Mr. Rigby would have been entitled to receive under the terms of his employment agreement; and |
Ø |
Mr. Fitzgerald would have been entitled to receive under the terms of his employment agreement |
Termination Event |
|
Severance Payment ($)(1) |
|
EICP Payment ($)(2) |
|
Accelerated Vesting of Time-Based Restricted Stock and RSUs ($)(3)(4) |
|
Accelerated Vesting of Performance- Based RSUs ($)(4)(5) |
|
Welfare Plan Benefit Payment ($) |
|
Healthcare and Related Benefits ($) |
|
Total ($) |
||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Change in Control(6) |
6,023,654 | 985,000 | 3,831,520 | 5,743,671 | 9,976 | 21,232 | 16,615,053 | |||||||||||||||||||||||
Voluntary Termination |
113,654 | 985,000 | 1,449,003 | 724,491 | | | 3,272,148 | |||||||||||||||||||||||
Termination Without Cause/For Good Reason(7) |
6,023,654 | 985,000 | 3,253,692 | 5,743,671 | | 21,232 | 16,027,249 | |||||||||||||||||||||||
Death or Disability |
113,654 | 985,000 | 2,917,737 | 4,048,455 | | | 8,064,846 | |||||||||||||||||||||||
Termination With Cause |
113,654 | | | | | | 113,654 |
(1) |
Mr. Rigbys severance payment amount includes accrued but unpaid vacation pay through the date of his termination in the amount of $113,654. This amount has been calculated based upon the maximum number of eligible vacation days in accordance with the Companys vacation policy. |
(2) |
Represents the award that would be received assuming target-level performance occurred in 2012. |
(3) |
Represents the market value on December 31, 2012 of unvested time-based restricted stock and time-based RSU awards granted under the LTIP that would vest and become non-forfeitable immediately upon the date of termination of employment. |
(4) |
These amounts include additional shares that Mr. Rigby would have been entitled to receive upon vesting of RSU awards as a result of dividend equivalents thereon, in each of the following circumstances: |
Additional Shares Vested as a Result
of Dividend Equivalents on Accelerated RSU Awards |
|
||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Termination Event |
|
Time-Based (#) |
|
Performance-Based (#) |
|||||||
Change in Control |
7,055 | 27,070 | |||||||||
Voluntary Termination |
| | |||||||||
Termination Without Cause/For Good Reason |
5,443 | 27,070 | |||||||||
Death or Disability |
3,734 | 20,817 |
(5) |
Represents the market value on December 31, 2012 of shares of common stock issuable under performance-based awards granted under the LTIP which Mr. Rigby would be entitled to receive (and in each case assuming performance at target): |
|
under his initial performance-based retention award granted under his employment agreement, at the end of the performance period to the extent that the Compensation Committee then determines that the awards performance goals have been achieved; |
|
with respect to all other performance-based awards granted to Mr. Rigby under the LTIP, if such termination occurs in connection with: |
o |
a change in control, immediately upon the date of termination, as if he had remained employed with the Company through the end of the performance period and assuming the target level of performance had been achieved; or |
o |
a termination of employment by the Company without cause or a termination of employment by Mr. Rigby with good reason, other than in connection with a change in control, at the end of the performance period if and to the extent the performance goals are met. |
(6) |
Assumes the occurrence of a termination of Mr. Rigbys employment by PHI other than for cause or the termination by Mr. Rigby of his employment for good reason as defined under Mr. Rigbys employment agreement, within one year following a change in control. |
(7) |
Other than in connection with a change in control. |
Termination Event |
|
Severance Payment ($) |
|
EICP Payment ($)(1) |
|
Lump Sum Supplemental Retirement Benefit Payment ($) |
|
Accelerated Vesting of Time- Based Restricted Stock and RSUs ($)(2) |
|
Accelerated Vesting of Performance- Based RSUs ($)(3) |
|
Welfare Plan Benefit Payment ($) |
|
Section 280G Gross- Up Payment ($)(4) |
|
Total ($) |
|
|||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Change in Control(5) |
2,112,000 | 192,590 | 237,801 | 38,566 | 81,657 | 2,721 | 1,080,626 | 3,745,961 | ||||||||||||||||||||||||||||||
Voluntary Termination |
| 192,590 | | | | | | 192,590 | ||||||||||||||||||||||||||||||
Termination Without Cause/For Good Reason(6) |
| 192,590 | | | | | | 192,590 | ||||||||||||||||||||||||||||||
Death or Disability |
| 192,590 | | 38,566 | 81,657 | | | 312,813 | ||||||||||||||||||||||||||||||
Termination With Cause |
| | | | | | | |
(1) |
Represents the award that would be received assuming target-level performance occurred in 2012. |
(2) |
Represents the market value on December 31, 2012 of an unvested time-based RSU award granted under the LTIP that would vest and become non-forfeitable immediately upon the date of termination of employment. These amounts include 363 additional shares that Mr. Boyle would have been entitled to receive upon vesting of such award as a result of dividend equivalents thereon. |
(3) |
Represents the market value on December 31, 2012 of shares of common stock issuable under a performance-based RSU award granted under the LTIP which Mr. Boyle would be entitled to receive on a prorated basis: |
Ø |
immediately upon the date of termination, if such termination occurs in connection with a change in control, as if he had remained employed with the Company through the end of the performance period and assuming the target level of performance had been achieved; or |
Ø |
at the end of the performance period if and to the extent the Compensation Committee determines that the performance goals are met (assuming performance at target), in connection with his death or disability. |
(4) |
Represents a payment the executive would have received under the Change-in-Control Severance Plan had the executive incurred an excise tax under Section 4999 of the Code. |
(5) |
Assumes the occurrence of a termination of Mr. Boyles employment by PHI other than for cause or the termination by Mr. Boyle of his employment for good reason as defined under the Change-in-Control Severance Plan, in each case within one year following a change in control. |
(6) |
Other than in connection with a change in control. |
Termination Event |
|
Severance Payment ($)(1) |
|
EICP Payment ($)(2) |
|
Accelerated Vesting of Time- Based Restricted Stock and RSUs ($)(3) |
|
Accelerated Vesting of Performance- Based RSUs ($)(4) |
|
Total ($) |
||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Retirement as of February 1, 2013(5) |
226,837 | 372,438 | 164,400 | 328,812 | 1,092,487 |
(1) |
This payment represents the fact that, following his retirement from the Company on February 1, 2013, the pro rata value of certain RSU awards is to be paid to Mr. Kamerick in cash. |
(2) |
Represents the award actually received by Mr. Kamerick based on 2012 performance. |
(3) |
Represents the market value on February 1, 2013 of unvested time-based RSU awards granted under the LTIP that vested on a prorated basis and became non-forfeitable in part immediately upon such date. These amounts include 1,339 additional shares that Mr. Kamerick received upon the prorated vesting of such awards as a result of dividend equivalents thereon. |
(4) |
Represents the market value on February 1, 2013 of shares of common stock issuable under performance-based RSU awards granted in 2011 under the LTIP which Mr. Kamerick received upon his retirement upon such date. These amounts include 2,679 additional shares that Mr. Kamerick received upon the vesting of such awards as a result of dividend equivalents thereon. |
(5) |
Retirement is the sole termination event reported because Mr. Kamerick, who was our Executive Vice President and Chief Regulatory Officer prior to his retirement as of February 1, 2013, will not be a named executive officer in 2013 and did not enter into a negotiated severance agreement with PHI in connection with his retirement. |
Termination Event |
|
Severance Payment ($) |
|
EICP Payment ($)(1) |
|
Lump Sum Supplemental Retirement Benefit Payment ($) |
|
Accelerated Vesting of Time- Based Restricted Stock and RSUs ($)(2) |
|
Accelerated Vesting of Performance- Based RSUs ($)(3) |
|
Welfare Plan Benefit Payment ($) |
|
Section 280G Gross- Up Payment ($)(4) |
|
Healthcare and Related Benefits ($) |
|
Total ($) |
||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Change in Control(5) |
2,414,400 | 301,800 | 5,458,622 | 398,910 | 903,186 | 7,642 | 3,766,384 | 46,296 | 13,297,240 | |||||||||||||||||||||||||||||
Voluntary Termination |
| 301,800 | | | | | | | 301,800 | |||||||||||||||||||||||||||||
Termination Without Cause/For Good Reason(6) |
| 301,800 | | | | | | | 301,800 | |||||||||||||||||||||||||||||
Death or Disability |
| 301,800 | | 398,910 | 903,186 | | | | 1,603,896 | |||||||||||||||||||||||||||||
Termination With Cause |
| | | | | | | | |
(1) |
Represents the award that would be received assuming target-level performance occurred in 2012. |
(2) |
Represents the market value on December 31, 2012 of unvested time-based restricted stock and time-based RSU awards granted under the LTIP that would vest and become non-forfeitable immediately upon the date of termination of employment. These amounts include 1,894 additional shares that Mr. Velazquez would have been entitled to receive upon the vesting in full of such awards as a result of dividend equivalents thereon. |
(3) |
Represents the market value on December 31, 2012 of shares of common stock issuable under performance-based awards granted under the LTIP which Mr. Velazquez would be entitled to receive on a prorated basis: |
Ø |
immediately upon the date of termination, if such termination occurs in connection with a change in control, as if he had remained employed with the Company through the end of the performance period and assuming the target level of performance had been achieved; or |
Ø |
at the end of the performance period if and to the extent the Compensation Committee determines that the performance goals are met (assuming performance at target), in connection with his death or disability. |
(4) |
Represents a payment the executive would have received under the Change-in-Control Severance Plan had the executive incurred an excise tax under Section 4999 of the Code. |
(5) |
Assumes the occurrence of a termination of Mr. Velazquezs employment by PHI other than for cause or the termination by Mr. Velazquez of his employment for good reason as defined under the Change-in-Control Severance Plan, in each case within one year following a change in control. |
(6) |
Other than in connection with a change in control. |
Termination Event |
|
Severance Payment ($) |
|
EICP Payment ($)(1) |
|
Lump Sum Supplemental Retirement Benefit Payment ($) |
|
Accelerated Vesting of Time- Based Restricted Stock and RSUs ($)(2) |
|
Accelerated Vesting of Performance- Based RSUs ($)(3) |
|
Welfare Plan Benefit Payment ($) |
|
Healthcare and Related Benefits ($) |
|
Total ($) |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Change in Control(4) |
2,640,000 | 95,574 | 171,060 | 949,575 | 28,294 | 2,785 | 43,378 | 3,930,666 | ||||||||||||||||||||||||||
Voluntary Termination |
| 95,574 | | | | | | 95,574 | ||||||||||||||||||||||||||
Termination Without Cause(5) |
| 95,574 | | 789,063 | 28,294 | | | 912,931 | ||||||||||||||||||||||||||
Termination For Good Reason(5) |
| 95,574 | | 774,477 | | | | 870,051 | ||||||||||||||||||||||||||
Death or Disability |
| 95,574 | | 789,063 | 28,294 | | | 912,931 | ||||||||||||||||||||||||||
Termination With Cause |
| | | | | | | |
(1) |
Represents the award that would be received assuming target-level performance occurred in 2012. |
(2) |
Represents the market value on December 31, 2012 of unvested time-based RSU awards granted under the 2012 LTIP that would vest and become non-forfeitable immediately upon the date of termination of employment. These amounts include 123 additional shares that Mr. Fitzgerald would have been entitled to receive upon vesting in each of the termination events shown above (except in the case of a termination of employment for good reason, other than in connection with a change in control) as a result of dividend equivalents on such awards. |
(3) |
Represents the market value on December 31, 2012 of an unvested performance-based RSU award granted under the 2012 LTIP that would vest and become non-forfeitable on a prorated basis: |
Ø |
immediately upon the date of termination, if such termination occurs in connection with a change in control, as if he had remained employed with the Company through the end of the performance period and assuming the target level of performance had been achieved; or |
Ø |
at the end of the performance period if and to the extent the Compensation Committee determines that the performance goals are met (and assuming performance at target), in the case of a termination of employment by the Company without cause or a termination by Mr. Fitzgerald with good reason, other than in connection with a change in control. |
(4) |
Assumes the occurrence of a termination of Mr. Fitzgeralds employment by PHI other than for cause or the termination by Mr. Fitzgerald of his employment for good reason as defined under the Change-in-Control Severance Plan, in each case following a change in control. |
(5) |
Other than in connection with a change in control. |
Termination Event |
|
Severance Payment ($) |
|
EICP Payment ($)(1) |
|
Lump Sum Supplemental Retirement Benefit Payment ($) |
|
Accelerated Vesting of Time- Based Restricted Stock and RSUs ($)(2)(3) |
|
Accelerated Vesting of Performance- Based RSUs ($)(3)(4) |
|
Welfare Plan Benefit Payment ($) |
|
Section 280G Gross- Up Payment ($)(5) |
|
Healthcare and Related Benefits ($) |
|
Total ($) |
||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Change in Control(6) |
1,280,000 | 240,000 | 353,763 | 261,260 | 592,295 | 4,051 | 674,059 | 21,453 | 3,426,881 | |||||||||||||||||||||||||||||
Retirement at Mr. Emges Request(7)(8) |
| 240,000 | | | | | | | 240,000 | |||||||||||||||||||||||||||||
Retirement at the Companys Request(8) |
806,667 | 240,000 | | 219,951 | 502,203 | | | | 1,768,821 | |||||||||||||||||||||||||||||
Death or Disability |
| 240,000 | | 261,260 | 592,295 | | | | 1,093,555 |
(1) |
Represents the award that would be received assuming target-level performance occurred in 2012. |
(2) |
Represents the market value on December 31, 2012 of unvested time-based restricted stock and time-based RSU awards granted under the LTIP that would vest and become non-forfeitable immediately upon the date of termination of employment. |
(3) |
These amounts include additional shares that Mr. Emge would have been entitled to receive upon vesting of RSU awards as a result of dividend equivalents thereon, in each of the following circumstances |
Additional Shares Vested as a Result
of Dividend Equivalents on Accelerated RSU Awards |
|
||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Termination Event |
|
Time-Based (#) |
|
Performance-Based (#) |
|||||||
Change in Control |
653 | 3,757 | |||||||||
Retirement at Mr. Emges Request |
| | |||||||||
Retirement at the Companys Request |
537 | 3,506 | |||||||||
Death or Disability |
653 | 3,757 |
(4) |
Represents the market value on December 31, 2012 of shares of common stock issuable under performance-based awards granted under the LTIP which Mr. Emge would be entitled to receive: |
Ø |
immediately upon the date of termination, if such termination occurs in connection with a change in control, as if he had remained employed with the Company through the end of the performance period and assuming the target level of performance had been achieved; or |
Ø |
at the end of the performance period if and to the extent the Compensation Committee determines that the performance goals are met, with respect to a termination other than in connection with a change in control (and assuming performance at target). |
(5) |
Represents a payment the executive would have received had the executive incurred an excise tax under Section 4999 of the Code. |
(6) |
Assumes the occurrence of a termination of Mr. Emges employment by PHI other than for cause or the termination by Mr. Emge of his employment for good reason as defined under the Change-in-Control Severance Plan, in each case following a change in control. |
(7) |
These amounts assume no benefits would be paid under his retirement agreement, as this agreement would be null and void if he voluntarily terminates his employment prior to April 1, 2013. |
(8) |
Other than in connection with a change in control. |
Plan Category |
|
Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (a) |
|
Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (b) |
|
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (c) |
||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Equity compensation plans approved by stockholders(1) |
2,782,593 | (2) | | 12,883,388 | (3) | |||||||||
Equity compensation plans not approved by stockholders(4) |
| | 457,211 | |||||||||||
Total |
| | 13,340,599 |
(1) |
Equity compensation plans approved by stockholders include the LTIP and the 2012 LTIP. No stock-based awards may be granted under the Pepco Long-Term Incentive Plan or the Conectiv Incentive Compensation Plan, which have expired and under which no awards were outstanding as of December 31, 2012. |
(2) |
The number of shares shown in column (a) represents the number of shares of commons stock subject to outstanding awards under the LTIP and the 2012 LTIP as of December 31, 2012. Such amounts were based upon (i) the maximum number of shares that could be received under all outstanding awards, including outstanding performance-based RSU awards, and (ii) the crediting of dividend equivalents accrued on all such outstanding awards through December 31, 2012. |
(3) |
The number of shares shown in column (c) represents the number of shares of common stock subject to awards (including RSUs) (i) that could have been granted in the future under the LTIP as of December 31, 2012, had the LTIP not expired as of August 1, 2012 pursuant to its terms, and (ii) that may be granted in the future under the 2012 LTIP, as follows: |
Plan |
|
Maximum Number of Shares Subject to Equity Awards That May be Granted Under the Plan |
|
Shares Subject to Equity Awards Outstanding Under the Plan as of December 31, 2012(a) |
|
Shares Subject to Equity Awards that May be Granted After December 31, 2012 Under the Plan |
||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
LTIP |
10,000,000 | 2,618,125 | 5,047,856 | (b) | ||||||||||
2012 LTIP |
8,000,000 | 164,468 | 7,835,532 |
(a) |
The foregoing amounts reflect (i) the maximum number of shares that could be received under all outstanding awards, including outstanding performance-based RSU awards and (ii) the crediting of dividend equivalents accrued on all such outstanding awards through December 31, 2012. |
(b) |
As of May 18, 2012, the 2012 LTIP was approved by stockholders to replace the LTIP, and as of that date no new awards are to be granted under the LTIP. However, dividend equivalents will continue to accrue on outstanding awards granted under the LTIP prior to May 18, 2012 until all such awards are settled or forfeited. |
(4) |
Consists of shares of common stock available for future issuance under the Directors Plan. Under the Directors Plan, each non-employee director is entitled to elect to receive his or her annual cash retainer, cash retainer for service as a committee chairman, if any, and cash meeting fees in: (i) cash; (ii) shares of common stock; (iii) a credit to an account for the non-employee director under the terms of the PHI Deferred Compensation Plan; or (iv) any combination thereof. The Directors Plan expires on December 31, 2014 unless terminated earlier by the Board. |
Ø |
each director; |
Ø |
each director nominee; |
Ø |
each named executive officer included in the 2012 Summary Compensation Table; and |
Ø |
all of the Companys directors and executive officers as a group. |
Ø |
the address for each beneficial owner in the table below is c/o Pepco Holdings, Inc., 701 Ninth Street, N.W., Washington, D.C. 20068; and |
Ø |
subject to applicable community property laws, to the Companys knowledge, each person named in the tables below has sole voting and dispositive power over the shares shown as beneficially owned by that person. |
Name of Beneficial Owner |
|
Shares of Common Stock Beneficially Owned(1) |
|
Percentage of Common Stock Beneficially Owned |
||||||
---|---|---|---|---|---|---|---|---|---|---|
Frederick J. Boyle |
634 | * | ||||||||
Jack B. Dunn, IV |
10,495 | * | ||||||||
Kirk J. Emge(2) |
70,397 | * | ||||||||
Kevin C. Fitzgerald |
705 | * | ||||||||
H. Russell Frisby, Jr. |
30 | * | ||||||||
Terence C. Golden(3) |
44,132 | * | ||||||||
Patrick T. Harker |
9,789 | * | ||||||||
Frank O. Heintz(4) |
18,502 | * | ||||||||
Anthony J. Kamerick(5) |
74,680 | * | ||||||||
Barbara J. Krumsiek |
11,479 | * | ||||||||
George F. MacCormack |
11,282 | * | ||||||||
Lawrence C. Nussdorf |
10,000 | * | ||||||||
Patricia A. Oelrich |
4,266 | * | ||||||||
Joseph M. Rigby(6) |
190,737 | 0.1 | % | |||||||
Frank K. Ross |
17,539 | * | ||||||||
Pauline A. Schneider |
8,897 | * | ||||||||
Lester P. Silverman(7) |
5,000 | * | ||||||||
David M. Velazquez |
56,096 | * | ||||||||
All directors and executive officers as a group (25 persons)(8) |
702,005 | * |
* |
Less than 1% (with respect to a named executive officer, less than 0.1%). |
(1) |
Except as noted above or as otherwise indicated in the other footnotes below, each beneficial owner named in this table has sole voting and dispositive power over such owners shares. Except as may otherwise be indicated, these amounts include shares held through the DRP and shares allocated to a persons 401(k) plan account, but do not include the following interests in our common stock, which interests do not confer voting power or dispositive power: |
Ø |
shares of common stock underlying RSU awards granted under the LTIP or the 2012 LTIP which have not vested as of March 14, 2013 and will not vest on or before May 13, 2013; |
Ø |
shares of common stock underlying RSU awards granted under the LTIP or the 2012 LTIP which have vested as of March 14, 2013 or will vest on or before May 13, 2013, but the settlement of the RSU award and the receipt of common stock thereby is deferred to a date that is later than May 13, 2013; and |
Ø |
phantom shares credited to the account of a participant in the PHI Deferred Compensation Plan, from which a distribution may be received only in cash and which do not confer voting or dispositive power. |
(2) |
Includes 1,173 shares owned by Mr. Emges spouse. Mr. Emge disclaims beneficial ownership of these shares. Does not include 5,751 shares (plus all associated dividend equivalents) underlying an RSU award that will vest on a prorated basis on April 1, 2013, the settlement of which will not occur until October 2, 2013. |
(3) |
Includes 11,600 shares owned by Mr. Goldens spouse. Mr. Golden disclaims beneficial ownership of these shares. Also includes 15,532 shares owned by Mr. Golden and his spouse as tenants in common. |
(4) |
Shares are owned through the Frank O. Heintz Trust of which Mr. Heintz is Trustee. |
(5) |
Does not include 8,452 shares underlying a vested RSU award, the settlement of which will not occur until August 2, 2013. |
(6) |
Includes 2,631 shares jointly owned with Mr. Rigbys spouse. Does not include 60,757 shares underlying certain vested RSU awards, the settlement of which will not occur until the day after Mr. Rigbys employment with PHI terminates (subject to compliance with Section 409A of the Code). |
(7) |
Includes 1,000 shares owned by Mr. Silvermans spouse. Mr. Silverman disclaims beneficial ownership of these shares. |
(8) |
See responses to all footnotes above. Includes 157,345 shares beneficially owned by executive officers of the Company not named in the table above. |
Name and Address of Beneficial
Owner |
|
Shares of Common Stock Owned |
|
Percent of Common Stock Outstanding |
||||||
---|---|---|---|---|---|---|---|---|---|---|
BlackRock, Inc. 40 East 52nd Street New York, NY 10022(1) |
12,541,749 | 5.5 | % | |||||||
State Street Corporation One Lincoln Street Boston, MA 02111(2) |
12,096,128 | 5.3 | % | |||||||
The Vanguard Group 100 Vanguard Blvd. Malvern, PA 19355(3) |
14,132,458 | 6.2 | % |
(1) |
This disclosure is based solely on information contained in a Schedule 13G/A, as filed with the SEC on February 11, 2013, by BlackRock, Inc. |
(2) |
This disclosure is based solely on information contained in a Schedule 13G, as filed with the SEC on February 12, 2013, by State Street Corporation, in which it reported that it has shared voting and dispositive power over 12,096,128 shares of common stock. |
(3) |
This disclosure is based solely on information contained in a Schedule 13G/A, as filed with the SEC on February 11, 2013, by The Vanguard Group, in which it reported that it has: |
Ø |
sole voting power over 630,676 shares of common stock; |
Ø |
sole dispositive power over 13,758,582 shares of common stock; and |
Ø |
shared dispositive power over 373,876 shares of common stock. |
Ø |
we will furnish a copy of the 2012 Form 10-K (without exhibits), including the financial statements and the financial statement schedules contained in such report; and |
Ø |
we will furnish a copy of any exhibit to our 2012 Form 10-K upon the payment of a fee equal to our reasonable expenses incurred in furnishing such exhibit. |
How to Contact Us |
|
How to Contact Our
Transfer Agent |
||||
---|---|---|---|---|---|---|
Pepco Holdings, Inc. 701 Ninth Street, N.W., Room 1300 Washington, D.C. 20068 Attention: Corporate Secretary |
American Stock Transfer & Trust Company 6201 15th Avenue Brooklyn, New York 11219-9821 (866) 254-6502 (toll-free) |
Ø |
the Compensation Committee Report; |
Ø |
the Audit Committee Report; |
Ø |
the 2012 Annual Report to Stockholders that accompanies this proxy statement; and |
Ø |
the Five-Year Performance Graph contained in the 2012 Annual Report. |
I. |
Overview |
II. |
Statement of Principles |
|
The Audit Committee shall approve in advance all services both audit and permitted non-audit services provided to the Company or any of its subsidiaries by the Companys independent auditor in accordance with the procedures set forth in this Policy. |
|
The Audit Committee shall not engage the Companys independent auditor to provide to the Company or any of its subsidiaries any non-audit services that are unlawful under Section 10A of the Exchange Act or that would impair the independence of the Companys independent auditor under the standards set forth in Rule 2-01 of SEC Regulation S-X (Prohibited Non-Audit Services). |
III. |
Approval of Annual Audit Services |
|
The audit of the annual consolidated financial statements of the Company and each other Reporting Company and the other procedures required to be performed by the independent auditor to be able to form an opinion on the financial statements. |
|
Review of the quarterly consolidated financial statements of the Company and each Reporting Company. |
|
The attestation engagement for the independent auditors report on managements statement on the effectiveness of the Companys internal control over financial reports. |
|
Services associated with SEC registration statements, periodic reports and other documents filed with the SEC or issued in connection with securities offerings, including consents and comfort letters provided to underwriters, reviews of registration statements and prospectuses, and assistance in responding to SEC comment letters. |
|
All such audit services must be approved annually by the Audit Committee following a review by the Audit Committee of the proposed terms and scope of the engagement and the projected fees. Any subsequent change of a material nature in the terms, scope or fees associated with such annual audit services shall be approved in advance by the Audit Committee. |
|
Any additional audit services may be pre-approved annually at the Annual Meeting at which the annual audit services are approved. If not pre-approved, each additional annual audit service must be approved by the Audit Committee in advance on a case-by-case basis. |
IV. |
Approval of Audit-Related Services |
|
Employee benefit plan audits. |
|
Due diligence related to mergers and acquisitions. |
|
Accounting consultations and audits in connection with acquisitions. |
|
Internal control reviews. |
|
Attest services related to financial reporting that are not required by statute or regulation. |
V. |
Approval of Tax Services |
VI. |
Approval of All Other Services |
VII. |
Procedures |
|
a written description (which may consist of or include a description furnished to the Company by the independent auditor) of the services to be provided in detail sufficient to enable the Audit Committee to make an informed decision with regard to each proposed service, and, to the extent determinable, an estimate provided by the independent auditor of the fees for each of the services; and |
|
confirmation of the independent auditor that (i) it would not be unlawful under Section 10A of the Exchange Act for the independent auditor to provide the listed non-audit services to the Company or any of its subsidiaries and (ii) none of the services, if provided by the independent auditor to the Company or any of its subsidiaries, would impair the independence of the auditor under the standards set forth in Rule 2-01 of SEC Regulation S-X. |
VIII. |
Delegation |
21330300000000000100 9
|
051713
|
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL OF THE NOMINEES LISTED IN ITEM 1: |
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEM 2:
|
FOR | AGAINST | ABSTAIN | |||||
1. | Election of 13 director candidates nominated by the Board of Directors, each to serve a one-year term and until his or her successor has been elected and qualified. | 2. |
A proposal to approve, on an advisory basis, the Company's executive compensation.
|
o | o | o | |||
NOMINEES:
|
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEM 3:
|
FOR | AGAINST | ABSTAIN | |||||
o |
FOR ALL NOMINEES
|
O | Jack B. Dunn, IV | 3. | A proposal to ratify the appointment, by the Audit Committee of the Board of Directors, of PricewaterhouseCoopers LLP as the independent registered public accounting firm of the Company for 2013. | o | o | o | |
O |
H. Russell Frisby, Jr.
|
||||||||
o | WITHHOLD AUTHORITY FOR ALL NOMINEES | O |
Terence C. Golden
|
||||||
O |
Patrick T. Harker
|
4. |
To transact such other business as may properly be brought before the meeting or any adjournment or postponement of the meeting.
|
||||||
o |
FOR ALL EXCEPT
(See instructions below)
|
O |
Frank O. Heintz
|
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
|
|||||
O |
Barbara J. Krumsiek
|
||||||||
O |
George F. MacCormack
|
||||||||
O |
Lawrence C. Nussdorf
|
||||||||
O |
Patricia A. Oelrich
|
||||||||
O |
Joseph M. Rigby
|
||||||||
O |
Frank K. Ross
|
||||||||
O |
Pauline A. Schneider
|
||||||||
O |
Lester P. Silverman
|
||||||||
|
|||||||||
INSTRUCTIONS:
To withhold authority to vote for any individual nominee(s), mark “FOR ALL
EXCEPT” and fill in the circle next to each nominee you wish to withhold, as shown here:●
|
|||||||||
To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method.o
|
MARK “X” HERE IF YOU PLAN TO ATTEND THE MEETING.
|
o |
Signature of Stockholder
|
Date:
|
Signature of Stockholder
|
Date:
|
Note:
|
Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, only one holder must sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person.
|
Pepco Holdings, Inc.
|
Delmarva Power Conference Center
|
|
2013 Annual Meeting
|
4100 South Wakefield Drive
|
|
Newark, Delaware 19702
|
||
May 17, 2013 at 10:00 a.m.
|
PROXY
|
PROXY VOTING INSTRUCTIONS |
MAIL - Mark, sign, and date your proxy card and return it (so that it is received on or before 5:00 p.m. Eastern Time the day before the meeting date) in the postage-paid envelope we have provided or return it to: Operations Center, American Stock Transfer & Trust Company, 6201 15th Avenue, Brooklyn, NY 11219-9821
-OR -
TELEPHONE - 1-800-PROXIES (1-800-776-9437) Use any touch-tone telephone to transmit your voting instructions up until 5:00 p.m. Eastern Time the day before the meeting date. Have your proxy card in hand when you call. You will be given simple voting instructions to follow.
-OR -
INTERNET - www.voteproxy.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 5:00 p.m. Eastern Time the day before the meeting date. Have your proxy card in hand when you access the Web site. You will be given simple voting instructions to obtain your records and to create an electronic voting instruction form.
|
|||
COMPANY NUMBER | |||
ACCOUNT NUMBER | |||
ADMISSION TICKET on reverse side. | |||
21330300000000000100 9
|
051713
|
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL OF THE NOMINEES LISTED IN ITEM 1: |
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEM 2:
|
FOR | AGAINST | ABSTAIN | |||||
1. | Election of 13 director candidates nominated by the Board of Directors, each to serve a one-year term and until his or her successor has been elected and qualified. | 2. |
A proposal to approve, on an advisory basis, the Company's executive compensation.
|
o | o | o | |||
NOMINEES:
|
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEM 3:
|
FOR | AGAINST | ABSTAIN | |||||
o |
FOR ALL NOMINEES
|
O | Jack B. Dunn, IV | 3. | A proposal to ratify the appointment, by the Audit Committee of the Board of Directors, of PricewaterhouseCoopers LLP as the independent registered public accounting firm of the Company for 2013. | o | o | o | |
O |
H. Russell Frisby, Jr.
|
||||||||
o | WITHHOLD AUTHORITY FOR ALL NOMINEES | O |
Terence C. Golden
|
||||||
O |
Patrick T. Harker
|
4. |
To transact such other business as may properly be brought before the meeting or any adjournment or postponement of the meeting.
|
||||||
o |
FOR ALL EXCEPT
(See instructions below)
|
O |
Frank O. Heintz
|
THIS PROXY CARD IS VALID ONLYWHEN SIGNED AND DATED
|
|||||
O |
Barbara J. Krumsiek
|
||||||||
O |
George F. MacCormack
|
||||||||
O |
Lawrence C. Nussdorf
|
||||||||
O |
Patricia A. Oelrich
|
Shares held in the Shareholder Dividend Reinvestment Plan are voted on this Proxy.
|
|||||||
O |
Joseph M. Rigby
|
||||||||
O |
Frank K. Ross
|
||||||||
O |
Pauline A. Schneider
|
||||||||
O |
Lester P. Silverman
|
||||||||
|
|||||||||
INSTRUCTIONS: To withhold authority to vote for any individual nominee(s), mark “FOR ALL EXCEPT” and fill in the circle next to each nominee you wish to withhold, as shown here:●
|
|||||||||
To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method.o
|
MARK “X” HERE IF YOU PLAN TO ATTEND THE MEETING.
|
o |
Signature of Stockholder
|
Date:
|
Signature of Stockholder
|
Date:
|
Note:
|
Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, only one holder must sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person.
|
21330300000000000100 9
|
051713
|
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL OF THE NOMINEES LISTED IN ITEM 1: |
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEM 2:
|
FOR | AGAINST | ABSTAIN | |||||
1. | Election of 13 director candidates nominated by the Board of Directors, each to serve a one-year term and until his or her successor has been elected and qualified. | 2. |
A proposal to approve, on an advisory basis, the Company's executive compensation.
|
o | o | o | |||
NOMINEES:
|
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEM 3:
|
FOR | AGAINST | ABSTAIN | |||||
o |
FOR ALL NOMINEES
|
O | Jack B. Dunn, IV | 3. | A proposal to ratify the appointment, by the Audit Committee of the Board of Directors, of PricewaterhouseCoopers LLP as the independent registered public accounting firm of the Company for 2013. | o | o | o | |
O |
H. Russell Frisby, Jr.
|
||||||||
o | WITHHOLD AUTHORITY FOR ALL NOMINEES | O |
Terence C. Golden
|
||||||
O |
Patrick T. Harker
|
4. |
To transact such other business as may properly be brought before the meeting or any adjournment or postponement of the meeting.
|
||||||
o |
FOR ALL EXCEPT
(See instructions below)
|
O |
Frank O. Heintz
|
THESE VOTING INSTRUCTIONS ARE VALID ONLY WHEN SIGNED AND DATED.
|
|||||
O |
Barbara J. Krumsiek
|
||||||||
O |
George F. MacCormack
|
||||||||
O |
Lawrence C. Nussdorf
|
||||||||
O |
Patricia A. Oelrich
|
||||||||
O |
Joseph M. Rigby
|
||||||||
O |
Frank K. Ross
|
||||||||
O |
Pauline A. Schneider
|
||||||||
O |
Lester P. Silverman
|
||||||||
|
|||||||||
INSTRUCTIONS: To withhold authority to vote for any individual nominee(s), mark “FOR ALL EXCEPT” and fill in the circle next to each nominee you wish to withhold, as shown here:●
|
|||||||||
To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method.o
|
MARK “X” HERE IF YOU PLAN TO ATTEND THE MEETING.
|
o |
Signature of Plan Participant
|
Date:
|
Signature of Plan Participant
|
Date:
|
Pepco Holdings, Inc.
|
Delmarva Power Conference Center
|
|
2013 Annual Meeting
|
4100 South Wakefield Drive
|
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Newark, Delaware 19702
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May 17, 2013 at 10:00 a.m.
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VOTING INSTRUCTION FORM
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PROXY VOTING INSTRUCTIONS |
MAIL - Mark, sign, and date your instruction form and return it (so that it is received on or before 5:00 p.m. Eastern Time the day before the meeting date) in the postage-paid envelope we have provided or return it to: Operations Center, American Stock Transfer & Trust Company, 6201 15th Avenue, Brooklyn, NY 11219-9821
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TELEPHONE - 1-800-PROXIES (1-800-776-9437) Use any touch-tone telephone to transmit your voting instructions up until 5:00 p.m. Eastern Time the day before the meeting date. Have your instruction form in hand when you call. You will be given simple voting instructions to follow.
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INTERNET - www.voteproxy.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 5:00 p.m. Eastern Time the day before the meeting date. Have your instruction form in hand when you access the Web site. You will be given simple voting instructions to obtain your records and to create an electronic voting instruction form.
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COMPANY NUMBER | |||
ACCOUNT NUMBER | |||
ADMISSION TICKET on reverse side. | |||
21330300000000000100 9
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051713
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL OF THE NOMINEES LISTED IN ITEM 1: |
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEM 2:
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FOR | AGAINST | ABSTAIN | |||||
1. | Election of 13 director candidates nominated by the Board of Directors, each to serve a one-year term and until his or her successor has been elected and qualified. | 2. |
A proposal to approve, on an advisory basis, the Company's executive compensation.
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o | o | o | |||
NOMINEES:
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEM 3:
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FOR | AGAINST | ABSTAIN | |||||
o |
FOR ALL NOMINEES
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O | Jack B. Dunn, IV | 3. | A proposal to ratify the appointment, by the Audit Committee of the Board of Directors, of PricewaterhouseCoopers LLP as the independent registered public accounting firm of the Company for 2013. | o | o | o | |
O |
H. Russell Frisby, Jr.
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o | WITHHOLD AUTHORITY FOR ALL NOMINEES | O |
Terence C. Golden
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O |
Patrick T. Harker
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4. |
To transact such other business as may properly be brought before the meeting or any adjournment or postponement of the meeting.
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o |
FOR ALL EXCEPT
(See instructions below)
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O |
Frank O. Heintz
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THESE VOTING INSTRUCTIONS ARE VALID ONLY WHEN SIGNED AND DATED.
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O |
Barbara J. Krumsiek
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O |
George F. MacCormack
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O |
Lawrence C. Nussdorf
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O |
Patricia A. Oelrich
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O |
Joseph M. Rigby
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O |
Frank K. Ross
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O |
Pauline A. Schneider
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O |
Lester P. Silverman
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INSTRUCTIONS: To withhold authority to vote for any individual nominee(s), mark “FOR ALL EXCEPT” and fill in the circle next to each nominee you wish to withhold, as shown here:●
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To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method.o
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MARK “X” HERE IF YOU PLAN TO ATTEND THE MEETING.
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o |
Signature of Plan Participant
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Date:
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Signature of Plan Participant
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Date:
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PEPCO HOLDINGS, INC.
ANNUAL MEETING FOR HOLDERS AS OF 3/20/13
TO BE HELD ON 5/17/13
Your vote is important. Thank you for voting.
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Read the Proxy Statement and have the voting instruction form below at hand. Please note that the telephone and Internet voting turns off at 11:59 p.m. ET the night before the meeting or cutoff date.
To vote by Internet
1) Go to website www.proxyvote.com.
2) Follow the instructions provided on the website.
To vote by Telephone
1) Call 1-800-454-8683.
2) Follow the instructions.
To vote by Mail
1) Check the appropriate boxes on the voting instruction form below.
2) Sign and date the voting instruction form.
3) Return the voting instruction form in the envelope provided.
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
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M57718-P34217
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Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting. The following materials are available at www.proxyvote.com: Notice and Proxy Statement and Annual Report
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For
All
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Withhold
All
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For All
Except
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To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below.
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The Board of Directors recommends you vote FOR
the following:
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o | o | o | ||||||||||||
1. |
Election of 13 director candidates nominated by
the Board of Directors, each to serve a one-year
term and until his or her successor has been elected
and qualified.
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PLEASE "X" HERE ONLY IF YOU PLAN TO ATTEND THE MEETING AND VOTE THESE SHARES IN PERSON
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o | ||||||||||||
Nominees:
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01) Jack B. Dunn, IV
02) H. Russell Frisby, Jr.
03) Terence C. Golden
04) Patrick T. Harker
05) Frank O. Heintz
06) Barbara J. Krumsiek
07) George F. MacCormack
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08) Lawrence C. Nussdorf
09) Patricia A. Oelrich
10) Joseph M. Rigby
11) Frank K. Ross
12) Pauline A. Schneider
13) Lester P. Silverman
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For
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Against
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Abstain
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The Board of Directors recommends you vote FOR the following proposals:
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2.
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A proposal to approve, on an advisory basis, the Company's executive compensation.
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o | o | o | |||||||||||
3.
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A proposal to ratify the appointment, by the Audit Committee of the Board of Directors, of PricewaterhouseCoopers LLP as the independent registered public accounting firm of the Company for 2013.
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o | o | o | |||||||||||
4.
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To transact such other business as may properly be brought before the meeting or any adjournment or postponement of the meeting.
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Signature [PLEASE SIGN WITHIN BOX]
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Date
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