Exhibit 99(b)
Extract From Post-Effective Amendment No. 1 to Form S-4
THE COMPARATIVE SHAREHOLDER RIGHTS
After the share exchange, BGE common shareholders will become
Constellation Energy common shareholders, and their rights will be governed by
Constellation Energy's charter and by-laws rather than BGE's charter and
by-laws. Constellation Energy's charter and by-laws differ from BGE's in certain
respects. The differences in Constellation Energy's charter and by-laws reflect
the: (1) removal of obsolete and unnecessary provisions; (2) inclusion of
provisions that provide flexibility to operate in a competitive market; and (3)
inclusion of provisions that provide additional financing flexibility. Approval
of the share exchange will also be considered approval and ratification of
Constellation Energy's charter and by-laws. For more information, please refer
to the forms of the charter and by-laws that are included as appendices B and C
in Post-Effective Amendment No. 1 to Form S-4 (Registration No. 33-64799).
The table below compares some of the rights provided to BGE and
Constellation Energy shareholders under their respective charters and by-laws,
under Securities and Exchange Commission (SEC) rules, and Maryland law:
RIGHT BGE CONSTELLATION ENERGY
----- --- --------------------
Voting rights for Superior voting rights No superior voting rights
preferred shareholders (Four votes per share) (One vote per share)
Call of special meeting Permitted by 25% of votes Permitted by 25% of votes
entitled to be cast entitled to be cast
Shareholder action by
written consent Permitted Permitted
Removal of directors by Permitted by majority vote Permitted by majority vote
shareholders for cause
Advance notice of Proxy Proposals -- Proxy Proposals --
shareholder proposals 120 days 120 days
Meeting Proposals -- Meeting Proposals --
45 days 75 days
Charter amendments by Permitted by two-thirds Permitted by two-thirds
common shareholders vote vote(Board may provide
for lesser number)
By-law amendments by Permitted by majority Permitted by two-thirds
common shareholders vote vote
The differences between BGE's and Constellation Energy's charter and
by-laws are summarized below:
AUTHORIZED SHARES
BGE. BGE has authorized:
o 175,000,000 shares of common stock,
o 1,000,000 shares of preferred stock, and
o 6,500,000 shares of preference stock.
CONSTELLATION ENERGY. Constellation Energy has authorized:
o 250,000,000 shares of common stock, and
o 25,000,000 shares of preferred stock.
PREFERRED STOCK
BGE. BGE's charter authorizes both preferred and preference stock. The
charter specifies, among other things:
o the number of votes per share (4 votes per share for preferred and 1
vote per share for preference),
o matters preferred and preference shareholders may vote on,
o a limit on the amount of dividends that are payable on the preferred
stock, and
o certain financial tests that must be met before the preferred or
preference stock may be issued.
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The charter allows BGE's Board of Directors to specify the other rights
and terms of both types of stock, such as redemption and convertibility
provisions.
CONSTELLATION ENERGY. Constellation Energy's charter authorizes only
preferred stock. It specifies that the preferred stock will have no more
than one vote per share, as determined by the Board. The Board will
determine the other terms of any preferred stock at the time of issuance.
Constellation Energy will not issue preferred stock as a defensive
takeover mechanism without prior shareholder approval and will not afford
preferred shareholders voting rights superior (including votes per share)
to common shareholders.
VOTE REQUIRED TO PASS CERTAIN MATTERS
BGE. The approval of two-thirds of all the votes entitled to be cast must
be received to approve charter amendments and certain extraordinary matters such
as mergers, share exchanges and the sale of substantially all of BGE's assets.
CONSTELLATION ENERGY. The approval of two-thirds of all the votes
entitled to be cast must be received to approve charter amendments and certain
extraordinary matters such as mergers, share exchanges and the sale of
substantially all of Constellation Energy's assets. However, the Board may
authorize that such a matter be approved by a majority of all the votes entitled
to be cast.
REMOVAL OF DIRECTORS
BGE. Under BGE's by-laws, the shareholders, at any meeting duly called
and at which a quorum is present, may remove any director from office by a
majority vote.
CONSTELLATION ENERGY. Under Constellation Energy's charter, the
shareholders, at any meeting duly called and at which a quorum is present, may
remove any director from office for cause by a majority vote.
AMENDING THE BY-LAWS
BGE. BGE's by-laws may be amended or repealed, and new by-laws adopted,
by a majority vote of the Board of Directors or the common shareholders.
CONSTELLATION ENERGY. Constellation Energy's by-laws may be amended or
repealed, and new by-laws adopted by a majority vote of the Board of Directors
or by a two-thirds vote of the common shareholders.
ADVANCE NOTICE PROVISION
BGE. Neither BGE's charter nor its by-laws include a provision with
respect to advance notice of shareholder proposals or director nominations.
Under SEC rules, shareholder proposals must be received at least 120 days prior
to the anniversary of the date that the prior year's proxy statement was mailed
to shareholders in order to be considered for inclusion in the proxy statement.
Other proposals sought to be presented at the shareholders' meeting must be
received at least 45 days prior to the anniversary of the date that the prior
year's proxy statement was mailed to shareholders.
CONSTELLATION ENERGY. The SEC rule requiring 120 days advance notice of
shareholder proposals sought to be included in the proxy statement will also
apply to Constellation Energy. In addition, under Constellation Energy's
by-laws, written notice of a proposal to be presented by any shareholder at the
shareholders' meeting (including nominations for director) must be received by
the Secretary of Constellation Energy at its principal executive office not less
than 75 days prior to the anniversary of the date the proxy statement was mailed
for the prior year's annual meeting (if the share exchange is approved, the
anniversary of the mail date for Constellation Energy's first annual meeting
will be March 5, 2000). If the proposal is not timely received, the shareholder
may not present it at the annual meeting. See "Submission of Shareholder
Proposals for Next Year" on page 38. The additional 30 day time period has been
added to ensure that Constellation Energy has sufficient time to inform all
shareholders, in the proxy statement, of the matter sought to be presented at
the meeting.
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MARYLAND LAW
Certain provisions of Maryland law provide enhanced rights to
shareholders, including the right of holders of at least 25% of the outstanding
common stock to call a special meeting of shareholders for any purpose and the
right to take action by way of unanimous written consent without calling a
special meeting of shareholders.
However, certain other provisions of Maryland law may have the effect of
discouraging persons from acquiring large blocks of a Maryland corporation's
stock and/or delaying or preventing a change of control of a Maryland
corporation. Under certain circumstances, these provisions could have the effect
of, among other things:
o reducing or eliminating the voting power of a 20% or more
shareholder,
o prohibiting a 10% or more shareholder from engaging in a business
combination with a Maryland corporation for five years following the
acquisition of the 10% stake (a "freezeout" provision), and
o requiring a premium payment for shares purchased in a two-step
acquisition.
Friendly mergers and other business combinations would not be affected by
these provisions. However, a Maryland corporation may opt out of the provisions
by providing so in its charter or by-laws. An amendment adopted for the purpose
of opting out of the freeze-out provision does not become effective until 18
months after its adoption. Neither BGE nor Constellation Energy have opted out
of the provisions.
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