FOR IMMEDIATE RELEASE
May 31, 2002
Pepco and Conectiv Confirm Method of Calculation for "Average Final Price"
Potomac Electric Power Company (NYSE: POM)(Pepco) and Conectiv (NYSE: CIV, CIVA)
today announced that the method that will be used to calculate the "Average Final Price" of
Pepco's common stock has been confirmed.
The "Average Final Price" will be a volume-weighted average, rounded to the nearest
$0.0001. This will be calculated using the daily volume and closing trading prices for Pepco
common stock traded on the New York Stock Exchange as reported in the Wall Street Journal
(Eastern edition -- New York Stock Exchange Composite Transactions) for 20 trading days. The
trading days will be randomly selected by lot out of the 30 consecutive trading days ending on
the fifth business day immediately preceding the closing date of the merger.
As previously reported, under the terms of the merger agreement, Conectiv stockholders may
elect to receive for each share of Conectiv common stock that they own either $25.00 in cash
($21.69 for Conectiv Class A common stock) or shares of Pepco Holdings, Inc. (the new
corporate parent for the combined company), subject to pro-rationing. For Conectiv
stockholders receiving common stock as consideration, the exchange ratio, or number of shares
of Pepco Holdings, Inc. common stock to be received in exchange for each Conectiv share, will
be equal to $25.00 ($21.69 for the Conectiv Class A common stock) divided by the "Average
Final Price", subject to a collar fixing the high and low end of the exchange ratio. Shareholders
may refer to the joint proxy statement/prospectus dated May 30, 2001, for other important
information related to the exchange ratio calculation.
The merger of Pepco, based in Washington, D.C., and Wilmington, Del.-based Conectiv will
create the largest electricity delivery company in the mid-Atlantic region with a transmission
network serving 1.8 million customers in a 10,000-square-mile area. The two utilities will
continue operations as separate companies under a new corporate parent, Pepco Holdings, Inc.,
with headquarters in Washington.
Pepco (www.pepco.com) is an investor-owned company that delivers electricity to more than
700,000 customers in Washington, D.C. and the Maryland suburbs. Conectiv
(www.conectiv.com) is focused on two core energy businesses. Conectiv Power Delivery
provides regulated energy delivery to more than one million customers in New Jersey, Delaware,
Maryland, and Virginia. Conectiv Energy manages a growing portfolio of "mid-merit" power
plants that can respond quickly to changes in the demand for power with the PJM power pool.
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Pepco/Conectiv, Page 2
Forward Looking Statements: Except for historical statements and discussions, the
statements in this press release constitute "forward-looking statements" within the meaning of
the federal securities laws. These statements contain managements' beliefs based on information
currently available to them and on various assumptions concerning future events. Forward-
looking statements are not a guarantee of future performance or events. They are subject to a
number of uncertainties and other factors, many of which are outside the companies' control. In
connection with the transaction, additional important factors that could cause actual results to
differ materially from those in the forward-looking statements herein include risks and
uncertainties relating to delays in obtaining or adverse conditions contained in, related regulatory
approvals, changes in economic conditions, availability and cost of capital, changes in economic
conditions, availability and cost of capital, changes in weather patterns, changes in laws,
regulations or regulatory policies, developments in legal or public policy doctrines and other
presently unknown or unforeseen factors. These uncertainties and factors could cause actual
results to differ materially from such statements. The companies disclaim any intention or
obligation to update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise. This information is presented solely to provide
additional information to further understand the results and prospects of the companies.
Contacts for Pepco | Contacts for Conectiv |
Investors: Ernie Bourscheid | Investors: Bob Marshall |
(202) 872-2797 | (302) 429-3164 |
Media: Makini Street | Media: Tim Brown |
(202) 872-2680 | (302) 283-5803 |
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