PEPCO HOLDINGS, INC.
FINANCE COMMITTEE CHARTER
The purpose of the Finance Committee (the "Committee") shall be to oversee the financial objectives, policies, procedures, and activities of the Company. The Committee will consider both the long- and short-term strategic plans of the Company. The Committee will provide input to management on its vision of the future and the assumptions underlying that view. The Committee will monitor its work so as to avoid duplication of efforts with other Board Committees (particularly Audit).
Committee Composition and Operation
The Committee shall consist
of no fewer than three, nor more than seven,
directors, none of whom are employees of the Company or any of its affiliates
and a majority of whom are independent as required under the rules promulgated
from time to time by the New York Stock Exchange and the Securities and
The Board shall have the authority to remove at any time one or more of the members of the Committee, to fill any vacancy that may exist on the Committee or to fill any newly created Committee membership caused by the increase in the size of the Committee.
The Committee shall meet at least twice annually, or more frequently as circumstances require.
Each meeting shall include a time of executive session.
The Committee may create one or more sub-Committees to which it may delegate some or all of its authority.
The Committee may make such rules of procedure as it deems necessary or appropriate for its efficient functioning.
Committee Duties and Responsibilities
1. The Committee shall review and make recommendations to the Board with respect to the Company's financial plans and policies, including (a) financings (both debt and equity) impacting the capitalization of the Company or its subsidiaries, (b) dividend policy, (c) asset acquisition or disposition (e.g., power plant sales, business segment sales or acquisitions), (d) mergers and acquisitions and (e) financial investments.
2. The Committee shall provide guidance to management in connection with the Company's strategic planning process (including Board retreat planning), financial plans, financial reporting process, and investor relations plan.
3. The Committee shall monitor the financial condition and operating results of the Company and other internal and external factors affecting the strategic planning process of the Company, including an on-going assessment of the effects on the Company of the capital markets, emerging technologies, the economy and the regulatory, competitive and mergers and acquisitions environments.
4. The Committee shall review and make recommendations to the Board with respect to the Corporate Approval Policy for expenditures and commitments.
5. The Committee shall review and oversee the Company's insurance program and recommend to the Board the Company's Director and Officer insurance program.
6. The Committee shall discuss and review with management the Company's risk profile, including financial risks, and the steps management has taken to take risk management into consideration in its strategic plans and implementation of those plans.
7. The Committee shall direct the preparation by management of such periodic or special reports as the Committee deems necessary and appropriate in carrying out its assigned responsibilities.
8. The Committee shall undertake from time to time such additional activities within the scope of the Committee's primary functions as it may deem appropriate and/or as assigned by the Board.
9. The Committee shall have full power and authority to retain such outside advisors or consultants as the Committee deems appropriate to carry out its duties and to authorize the payment of compensation to any such advisors or consultants, without first seeking Board approval.
10. The Committee shall conduct an annual evaluation of its performance of its duties.
11. The Committee shall report to the Board at least annually (and more frequently, if the Committee believes its activities merit such reporting) as to the Committee's activities and shall also make such recommendations to the Board as the Committee deems appropriate.