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Pepco Holdings DEFA14A 2014

Documents found in this filing:

  1. Defa14A
  2. Defa14A





Washington, D.C. 20549




Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.     )



Filed by the Registrant  x                             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
x   Soliciting Material under Rule 14a-12


(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):

x   No fee required.
¨   Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

Title of each class of securities to which transaction applies:




Aggregate number of securities to which transaction applies:




Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11:




Proposed maximum aggregate value of transaction:




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:

Amount Previously Paid:




Form, Schedule or Registration Statement No:




Filing Party:




Date Filed:






Filed by Pepco Holdings, Inc.

Pursuant to Rule 14a-12

Under the Securities Exchange Act of 1934

Subject Company: Pepco Holdings, Inc.

Commission File No.: 001-31403

On August 13, 2014, the following frequently asked questions were posted on the Pepco Holdings, Inc. intranet.

Merger Commitments FAQ:

August 2014



Question: Is my employment protected by the terms of the merger agreement?

Answer: The merger agreement does not “protect” any specific individual employee or position. With respect to our unionized workforce at each utility, the merger is not expected to cause any loss of bargaining-unit employment as these individuals are covered by the recently renewed collective bargaining agreements.

Question: What is meant by no net reductions, due to involuntary attrition as a result of the transaction integration process, in the employment levels at Pepco, Delmarva Power, or Atlantic City Electric for at least two years following the closing of the transaction?

Answer: This regulatory commitment in the merger agreement means that, at the end of two years after the closing of the merger, the total number of utility employees at each utility cannot be lower than at the time of the signing of the merger agreement due to involuntary reductions as a result of the transaction integration process.

For example, as a result of the merger process, certain positions may be eliminated in one part of a utility but added to another part of that utility, as long as at the end of two years the number of employees employed at that utility is not lower than the number of employees at the time of the signing of the merger agreement due to involuntary reductions.

This commitment does not guarantee employment or preclude involuntary terminations of utility employees. It simply represents a commitment by Exelon not to permit a net reduction in the workforce of each utility as a result of involuntary attrition associated with the transaction integration process. For example, reductions in force that are caused by voluntary resignations or retirements would not be included in the determination of whether a net reduction has occurred.

Each utility may still make certain decisions that are not related to the transaction integration process that may result in a lower level of employment. For instance, an employee could still be terminated “for cause,” and reductions that are completely unrelated to the merger could also still occur.

Please keep in mind that Exelon is committed to excellence and the success of PHI’s utilities. The regulatory responsibilities of Atlantic City Electric, Delmarva Power and Pepco to serve their customers will continue beyond the transaction completion date. This will require an experienced and properly-sized workforce, and the integration process will ensure such a workforce will be in place on Day One of the merger.

Question: Who are considered “utility employees”?

Answer: A utility employee is an employee who works directly for, and is paid directly by one of PHI’s utilities, which are Atlantic City Electric, Delmarva Power and Pepco and includes our unionized employees. Employees of PHI Service Company or Pepco Energy Services are not considered to be utility employees.

Question: What if an employee of PHI Service Company provides services solely to support one or more of PHI’s utilities?

Answer: Any person employed by PHI Service Company is not considered to be a utility employee regardless of the services they provide.

Question: Will all employees be offered a voluntary severance opportunity?

Answer: At this time, we don’t anticipate offering large-scale voluntary severance opportunities. However, we may offer voluntary severance opportunities to non-union employees in certain areas depending on business needs. The integration team will ultimately determine where and how voluntary severances will be offered.


Cautionary Statements Regarding Forward-Looking Information

Except for the historical information contained herein, certain of the matters discussed in this communication constitute “forward-looking statements” within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, both as amended by the Private Securities Litigation Reform Act of 1995. Words such as “may,” “might,” “will,” “should,” “could,” “anticipate,” “estimate,” “expect,” “predict,” “project,” “future”, “potential,” “intend,” “seek to,” “plan,” “assume,” “believe,” “target,” “forecast,” “goal,” “objective,” “continue” or the negative of such terms or other variations thereof and words and terms of similar substance used in connection with any discussion of future plans, actions, or events identify forward-looking statements. These forward-looking statements include, but are not limited to, statements regarding benefits of the proposed merger, integration plans and expected synergies, the expected timing of completion of the transaction, anticipated future financial and operating performance and results, including estimates for growth. These statements are based on the current expectations of management of PHI and its utility subsidiaries. There are a number of risks and uncertainties that could cause actual results to differ materially from the forward-looking statements included in this communication. For example, (1) PHI may be unable to obtain shareholder approval required for the merger; (2) PHI or Exelon may be unable to obtain regulatory approvals required for the merger, or required regulatory approvals may delay the merger or cause the companies to abandon the merger; (3) conditions to the closing of the merger may not be satisfied; (4) an unsolicited offer of another company to acquire assets or capital stock of PHI could interfere with the merger; (5) problems may arise in successfully integrating the businesses of the companies, which may result in the combined company not operating as effectively and efficiently as expected; (6) the combined company may be unable to achieve cost-cutting synergies or it may take longer than expected to achieve those synergies; (7) the merger may involve unexpected costs, unexpected liabilities or unexpected delays, or the effects of purchase accounting may be different from the companies’ expectations; (8) the credit ratings of the combined company or its subsidiaries may be different from what the companies expect; (9) the businesses of PHI and its utility subsidiaries may suffer as a result of uncertainty surrounding the merger; (10) PHI and its utility subsidiaries may not realize the values expected to be obtained for properties expected or required to be sold; (11) the industry may be subject to future regulatory or legislative actions that could adversely affect PHI and its utility subsidiaries; and (12) PHI and its utility subsidiaries may be adversely affected by other economic, business, and/or competitive factors. Other unknown or unpredictable factors could also have material adverse effects on future results, performance or achievements of the combined company. Therefore, forward-looking statements are not guarantees or assurances of future performance, and actual results could differ materially from those indicated by the forward-looking statements. Discussions of some of these other important factors and assumptions are contained in PHI’s filings with the Securities and Exchange Commission (SEC), and available at the SEC’s website at, including PHI’s 2013 Annual Report on Form 10-K in (a) ITEM 1A. Risk Factors, (b) ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and (c) ITEM 8. Financial Statements and Supplementary Data, and PHI’s Second Quarter 2014 Quarterly Report on Form 10-Q in (x) PART I, ITEM 1. Financial Statements, (y) PART I, ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations and (z) PART II, ITEM 1A. Risk Factors. These risks as well as other risks associated with the proposed merger will be more fully discussed in the proxy statement that PHI intends to file with the SEC and mail to its stockholders in connection with the proposed merger. In light of these risks, uncertainties, assumptions and factors, the forward-looking events discussed in this communication may not occur. Readers are cautioned not to place

undue reliance on these forward-looking statements, which speak only as of the date of this communication. PHI does not undertake any obligation to publicly release any revision to its forward-looking statements to reflect events or circumstances after the date of this communication. New factors emerge from time to time, and it is not possible for PHI to predict all such factors. Furthermore, it may not be possible to assess the impact of any such factor on PHI’s or its utility subsidiaries’ businesses (either individually or collectively) or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statement. Any specific factors that may be provided should not be construed as exhaustive.

Additional Information and Where to Find It

This communication does not constitute a solicitation of any vote or approval. PHI intends to file with the SEC and mail to its stockholders a proxy statement in connection with the proposed merger transaction. PHI URGES INVESTORS AND SECURITY HOLDERS TO READ THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION about Exelon, PHI and the proposed merger. Investors and security holders will be able to obtain these materials (when they are available) and other documents filed with the SEC free of charge at the SEC’s website, In addition, a copy of PHI’s proxy statement (when it becomes available) may be obtained free of charge from Pepco Holdings, Inc., Corporate Secretary, 701 Ninth Street, N.W., Room 1300, Washington, D.C. 20068. Investors and security holders may also read and copy any reports, statements and other information filed by PHI with the SEC, at the SEC public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 or visit the SEC’s website for further information on its public reference room.

Participants in the Merger Solicitation

Exelon, PHI, and their respective directors, executive officers and certain other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding Exelon’s directors and executive officers is available in its proxy statement filed with the SEC on April 2, 2014 in connection with its 2014 annual meeting of stockholders, and information regarding PHI’s directors and executive officers is available in its proxy statement filed with the SEC on March 25, 2014 in connection with its 2014 annual meeting of stockholders. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement and other relevant materials to be filed with the SEC when they become available.

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