Exhibit 10(e)
Grantor Trust Agreement
Dated as of APRIL 30, 1999
between
Constellation Energy Group, Inc.
and
T. Rowe Price Trust Company
This Agreement made this 30th day of April, 1999, by and between
Constellation Energy Group, Inc., a Maryland Corporation, or its successor
("CEG") and T. Rowe Price Trust Company ("Trustee");
WITNESSETH THAT:
WHEREAS, effective with the April 30, 1999 share exchange between CEG
and the common stockholders of Baltimore Gas and Electric Company ("BGE"), BGE
transferred to CEG the former BGE Nonqualified Deferred Compensation Plan and
BGE's rights and obligations under the Grantor Trust Agreement dated as of June
1, 1996, between BGE and T. Rowe Price Trust Company.
WHEREAS, CEG has adopted the Constellation Energy Group, Inc.
Nonqualified Deferred Compensation Plan (formerly the Baltimore Gas and Electric
Company Nonqualified Deferred Compensation Plan) ("Plan");
WHEREAS, CEG has incurred or expects to incur liability under the terms
of such Plan with respect to the individuals participating in such Plan;
WHEREAS, CEG wishes to establish a trust ("Trust") and to contribute to
the Trust assets that shall be held therein, subject to the claims of CEG's
creditors in the event of CEG's Insolvency, as defined in Section 3(a) hereof,
until paid to Plan participants and their beneficiaries in such manner and at
such times as specified in the Plan;
WHEREAS, it is the intention of the parties that this Trust shall
constitute an unfunded arrangement and shall not affect the status of the Plan
as an unfunded plan maintained for the purpose of providing deferred
compensation for a select group of management or highly compensated employees
for purposes of Title I of the Employee Retirement Income Security Act of 1974;
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WHEREAS, it is the intention of CEG to make contributions to the Trust
to provide a source of funds to assist it in the meeting of its liabilities
under the Plan; and
NOW, THEREFORE, the parties do hereby establish the Trust and agree
that the Trust shall be comprised, held and disposed of as follows:
Section 1. Establishment of Trust.
(a) CEG hereby adopts and establishes with Trustee the Trust consisting
of such sums of cash (the "principal") that currently constitute the Trust and
as from time to time shall be paid to Trustee to be held, administered, and
disposed of by Trustee as provided in this Trust Agreement. The principal of the
Trust and any earnings thereon (the "Trust Assets") shall be held by Trustee and
shall be dealt with in accordance with the provisions of this Trust Agreement
until all payments required by this Trust Agreement have been made.
(b) The Trust hereby established shall be irrevocable.
(c) The Trust is intended to be a grantor trust, of which CEG is the
grantor, within the meaning of subpart E, part I, subchapter J, chapter 1,
subtitle A of the Internal Revenue Code of 1986, as amended, and shall be
construed accordingly.
(d) The Trust Assets shall be held separate and apart from other funds
of CEG and shall be used exclusively for the uses and purposes of Plan
participants and general creditors as herein set forth. Plan participants and
their beneficiaries shall have no preferred claim on, or any beneficial
ownership interest in, any Trust Assets. Any rights created under the Plan and
this Trust Agreement shall be mere unsecured contractual rights of Plan
participants and their beneficiaries against CEG. Any Trust Assets will be
subject to the claims of CEG's general creditors under federal and state law in
the event of Insolvency, as defined in Section 3(a) herein.
(e) As soon as practicable, but no later than the last business day,
which for purposes of this Trust Agreement shall be defined as any day the New
York Stock Exchange is open for business ("Business Day"), of the month
following the month in which a payment of compensation subject to a deferral
election under the Plan would otherwise have been paid, CEG shall be required to
irrevocably contribute cash to the Trust in an amount equal to such Deferred
Compensation, plus any Matching Contributions related thereto, to the extent the
Plan requires such funding. Trustee shall have no obligation to compute or
compel such contribution(s).
(f) The Board of Directors of CEG may at any time by resolution amend
the contribution requirements of Section 1(e) hereof such that CEG will not be
required to make additional contributions of cash to the Trust or will be
required to make only a stated percentage of the contributions otherwise
required under Section 1(e) hereof. If Section 1(e) is so amended, contributions
of cash to the Trust over and above the amounts required under Section 1(e) if
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amended, will be in the sole discretion of CEG pursuant to Section 1(g) hereof.
Trustee shall have no obligation to compute or compel such contribution(s).
(g) CEG, in its sole discretion, may at any time or from time to time,
make additional deposits of cash in trust with Trustee to augment the Trust
Assets to be held, administered and disposed of by Trustee as provided in this
Trust Agreement. Neither Trustee nor any Plan participant or beneficiary shall
have any right or obligation to compel such additional deposits.
Section 2. Payments to Plan Participants and Their Beneficiaries.
(a) CEG shall deliver or cause to be delivered to Trustee a schedule
(the "Payment Schedule") that indicates the amounts payable in respect of each
Plan participant (or his or her beneficiaries), that provides a formula or other
instructions acceptable to Trustee for determining the amounts so payable, the
form in which such amount is to be paid (as provided for or available under the
Plan), and the time of commencement for payment of such amounts. Except as
otherwise provided herein, Trustee shall make payments to the Plan participants
and their beneficiaries in accordance with such Payment Schedule. If so
instructed by CEG, the Trustee shall withhold federal and state taxes from each
payment under this agreement at the rate(s) designated by CEG and shall report
and pay such amounts to the appropriate federal and state taxing authorities.
(b) The entitlement of a Plan participant or his or her beneficiaries
to benefits under the Plan shall be determined by CEG or such party as it shall
designate under the Plan and any claim for such benefits shall be considered and
reviewed under the procedures set out in the Plan. Trustee shall have no right
or duty to inquire into CEG's decisions with respect to entitlement to benefits.
(c) CEG may make payment of benefits directly to Plan participants or
their beneficiaries as they become due under the terms of the Plan. CEG shall
notify Trustee in writing of its decision to make payment of benefits directly
prior to the time amounts are payable to participants or their beneficiaries.
CEG shall provide to the Trustee documentation substantiating that such payments
were made under the terms of the Plan. If such documentation is not provided,
Trustee shall make such payments in accordance with the Payment Schedule
directly to Plan participants and their beneficiaries. In addition, if the Trust
Assets, are not sufficient to make such payments of benefits in accordance with
the terms of the Plan, CEG shall make the balance of each such payment as it
falls due. Trustee shall notify CEG where Trust Assets are not sufficient to
make benefit payments, however, Trustee shall have no duty to require any
contributions to be made, or to determine that any of the contributions received
comply with the conditions and limitations of the Plan.
(d) In the event there is a final judicial determination or a final
determination by the Internal Revenue Service that the Plan participants or
their beneficiaries are subject to any tax with respect to any amounts held
under the terms of the Trust, then Trustee solely at the direction of CEG shall
make payments from the Trust to such Plan participants or their beneficiaries in
such amounts as set forth in such final determination for the purpose of paying
all applicable
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taxes and interest and any penalties thereon which such Plan participants or
their beneficiaries incur arising out of such determination. CEG's decision as
to whether a final determination has occurred shall be binding and conclusive on
all Plan participants and their beneficiaries.
Section 3. Trustee Responsibility Regarding Payments to Trust
Beneficiary When CEG is Insolvent.
(a) Upon receipt of notification issued in accordance with Section
3(b)(1) hereof, Trustee shall cease payment of benefits to Plan participants and
their beneficiaries if CEG is Insolvent. CEG shall be considered "Insolvent" for
purposes of this Trust Agreement if (1) CEG makes a voluntary filing under the
United States Bankruptcy Code, or (2) CEG is subject to a pending proceeding as
a debtor under the United States Bankruptcy Code.
(b) At all times during the continuance of this Trust, as provided in
Section 1(d) hereof, the Trust Assets shall be subject to claims of general
creditors of CEG under federal and state law as set forth below.
(1) The Board of Directors of CEG and the Chief Executive
Officer of CEG shall have the duty to inform Trustee in writing of CEG's
Insolvency. When so informed or when the Trustee is in receipt of a copy of a
bankruptcy petition relating to CEG or a court order determining CEG to be
Insolvent, Trustee shall discontinue payment of benefits to Plan participants or
their beneficiaries.
(2) Unless Trustee has received written notification in
accordance with Section 3(b)(1) of this Trust Agreement, Trustee may in all
events rely on such evidence concerning CEG's solvency as may be furnished by
CEG to Trustee.
(3) If at any time Trustee has received written notification
in accordance with Section 3(b)(1), Trustee shall discontinue payments to Plan
participants or their beneficiaries and shall hold the Trust Assets for the
benefit of CEG's general creditors. Nothing in this Trust Agreement shall in any
way diminish any rights of Plan participants or their beneficiaries to pursue
their rights as general creditors of CEG with respect to benefits due under the
Plan or otherwise.
(4) Trustee shall resume the payment of benefits to Plan
participants or their beneficiaries in accordance with Section 2 of this Trust
Agreement only after Trustee has received a copy of a court order determining
CEG to be no longer Insolvent or evidencing that such bankruptcy proceeding is
dismissed in connection with any notification made in accordance with Section
3(b)(1)
(c) Provided that there are sufficient assets, if Trustee discontinues
the payment of benefits from the Trust pursuant to Section 3(b) hereof and
subsequently resumes such payments, the first payment following such
discontinuance shall include the aggregate amount of all payments due to Plan
participants or their beneficiaries under the terms of the Plan for the period
of such
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discontinuance, less the aggregate amount of any payments made to Plan
participants or their beneficiaries by CEG in lieu of the payments provided for
hereunder during any period of discontinuance.
Section 4. Payments to CEG.
(a) Except as provided in Section 3 and Section 4(b) hereof, CEG shall
have no right or power to direct Trustee to return to CEG or to divert to others
any of the Trust Assets before all payment of benefits have been made to Plan
participants and their beneficiaries pursuant to the terms of the Plan and of
this Trust Agreement.
(b) In the event (1) CEG makes payment of benefits directly to Plan
participants or their beneficiaries in accordance with Section 2(c) hereof, or
(2) if for any other reason Trust Assets exceed the market value of the
aggregate balances of Plan participant accounts, then CEG may in its sole
discretion, direct Trustee in writing to distribute the amount of such payment
or excess, in whole or in part, to CEG provided such distribution does not
contravene any provision of law.
(c) Notwithstanding Section 4(b)(2) hereof, CEG may not direct Trustee
to distribute such excess Trust Assets for 2 years from the date a Change of
Control is deemed to occur under Section 13(e) hereof except to reimburse CEG
for any payment it makes directly to participants in accordance with Section
2(c) hereof.
Section 5. Investment Authority.
(a) In no event may Trustee invest in securities (including stock or
rights to acquire stock) or obligations issued by CEG, other than a de minimis
amount held in common investment vehicles in which Trustee invests. All rights
associated with assets of the Trust shall be exercised, solely upon the
direction of CEG, by Trustee or the person designated by Trustee and shall in no
event be exercisable by or rest with Plan participants and their beneficiaries.
(b) Trustee shall invest and reinvest the Trust Assets and keep the
Trust invested, without distinction between principal and income, in such
investments as directed in writing by CEG or its designee, which instruction may
be modified from time to time by CEG or its designee. Trustee shall have no duty
to question any action or direction of CEG or its designee or any failure to
give directions, or to make any suggestion to CEG as to the investment,
reinvestment, disposition or distribution of, such assets.
(c) CEG shall have the right, at anytime, and from time to time in its
sole discretion, and with Trustee's approval, to substitute assets of equal fair
market value for any asset held by the Trust.
Section 6. Disposition of Income.
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During the term of this Trust, all income received by the Trust, net of
expenses and taxes, shall be accumulated and reinvested, until otherwise
required for disbursement under the terms of this Trust Agreement.
Section 7. Accounting by Trustee.
(a) Trustee shall keep accurate, and detailed records of all
investments, receipts, disbursements and all other transactions required to be
made, including such specific records as shall be agreed upon in writing between
CEG and Trustee. Within 60 days following the close of each calendar year and
within 60 days after the removal or resignation of Trustee, Trustee shall
deliver to CEG a written account of its administration of the Trust during such
year or during the period from the close of the last preceding year to the date
of such removal or resignation, setting forth all investments, receipts,
disbursements and other transactions effected by it, including a description of
all securities and investments purchased and sold with the cost or net proceeds
of such purchases or sales (accrued interest paid or receivables being shown
separately), and showing all cash, cost and market value of all securities and
other property held in the Trust at the end of such year or as of the date of
such removal or resignation, as the case may be.
(b) CEG shall prepare and file such tax returns and other reports as
may be required for the Trust, with any taxing authority or any other government
authority except for IRS Form 1041 which shall be prepared and filed by the
Trustee.
Section 8. Responsibility of Trustee.
(a) Trustee shall act with the care, skill, prudence and diligence
under the circumstances then prevailing that a prudent person acting in like
capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims, provided, however, that
Trustee shall incur no liability, costs or expense to any person, for any action
taken pursuant to a direction, request or approval given by CEG which is
contemplated by, and in conformity with, the terms of this Trust Agreement and
is given in writing by CEG. Trustee shall also be reimbursed by CEG for
reasonable expenses or fees incurred in connection with governmental or
regulatory inquiries related to this Trust.
(b) If Trustee undertakes or defends any litigation arising in
connection with this Trust, unless such litigation results in a determination
that Trustee breached its duties undertaken pursuant to this Trust Agreement,
CEG agrees to indemnify Trustee against Trustee's reasonable costs, expenses and
liabilities (including, without limitation, reasonable attorneys' fees and
expenses) relating thereto and to be primarily liable for such payments. If CEG
does not pay such costs, expenses and liabilities in a reasonably timely manner,
Trustee may obtain payment from the Trust.
(c) Trustee may consult with legal counsel (who may also be counsel for
CEG generally) with respect to any of its duties or obligations hereunder. In
the event that Trustee
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anticipates charging legal fees to the Trust, Trustee must obtain CEG's prior
written consent for such legal counsel, which consent will not be unreasonably
withheld.
(d) Trustee may hire agents, accountants, actuaries, investment
advisors, financial consultants or other professionals to assist it in
performing any of its duties or obligations hereunder. In the event that Trustee
anticipates charging fees for such services to the Trust, Trustee must obtain
CEG's prior written consent for such legal counsel, which consent will not be
unreasonably withheld.
(e) Notwithstanding any powers granted to Trustee pursuant to this
Trust Agreement or to applicable law, Trustee shall not have any power that
could give this Trust the objective of carrying on a business and dividing the
gains therefrom, within the meaning of section 301.7701-2 of the Procedure and
Administrative Regulations promulgated pursuant to the Internal Revenue Code.
Section 9. Compensation and Expenses of Trustee.
CEG shall pay all reasonable administrative and Trustee's fees and
expenses. If not so paid, the fees and expenses shall be paid from the Trust.
Section 10. Resignation and Removal of Trustee.
(a) Trustee may resign at any time by written notice to CEG, which
shall be effective 30 days after receipt of such notice unless CEG and Trustee
agree otherwise.
(b) Except as provided in Section 10(c), Trustee may be removed by CEG
on 30 days written notice unless CEG and Trustee agree otherwise.
(c) Upon written notification by CEG that a Change of Control, as
defined in Section 13(e) hereof has occurred, Trustee may not be removed by CEG
for 2 years from the date a Change of Control is deemed to occur under Section
13(e) hereof.
(d) If Trustee resigns within 2 years after a Change of Control, as
defined herein, CEG shall apply to a court of competent jurisdiction for the
appointment of successor Trustee or for instructions.
(e) Upon resignation or removal of Trustee and appointment of a
successor Trustee, all Trust Assets shall subsequently be transferred to the
successor Trustee. The transfer shall be completed at the later of (1) 30 days
after receipt of notice of resignation or removal of Trustee or (2) appointment
of successor Trustee.
(f) If Trustee resigns or is removed, a successor shall be appointed,
in accordance with Section 11 hereof, by the effective date of resignation or
removal under paragraphs (a) or (b) of this
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section. If no such appointment has been made, Trustee may apply to a court of
competent jurisdiction for appointment of a successor or for instructions. All
reasonable expenses of Trustee in connection with the proceeding shall be
allowed as administrative expenses of the Trust.
Section 11. Appointment of Successor.
(a) If Trustee resigns or is removed in accordance with Section 10(a)
or (b) hereof, CEG may appoint any third party, such as a bank trust department
or other party that may be granted corporate trustee powers under state law, as
a successor to replace Trustee upon resignation or removal. The appointment
shall be effective when accepted in writing by the successor Trustee, who shall
have all of the rights and powers of the former Trustee, including ownership
rights in the Trust Assets. The former Trustee shall execute any instrument
necessary or reasonably requested by CEG or the successor Trustee (in which case
former Trustee shall have received a copy of successor Trustee's acceptance) to
evidence the transfer of the Trust Assets.
(b) If Trustee resigns pursuant to the provisions of Section 10(d)
hereof, the appointment of a successor Trustee shall be effective when accepted
in writing by the successor Trustee. The successor Trustee shall have all the
rights and powers of the former Trustee, including ownership rights in Trust
Assets. The former Trustee shall execute any instrument necessary or reasonably
requested by the successor Trustee to evidence the transfer of the Trust Assets.
(c) The successor Trustee need not examine the records and acts of any
prior Trustee and may retain or dispose of existing Trust Assets, subject to
Sections 7 and 8 hereof. The successor Trustee shall not be responsible for and
CEG shall indemnify and defend the successor Trustee from any claim or liability
resulting from any action or inaction of any prior Trustee or from any other
past event, or any condition existing at the time it becomes successor Trustee.
(d) In the event of such removal or resignation, Trustee shall duly
file with CEG a written account as provided in Section 7(a) hereof.
Section 12. Amendment or Termination.
(a) Except as provided in Section 12(d), this Trust Agreement may be
amended by a written instrument executed by Trustee and CEG. Notwithstanding the
foregoing, no such amendment shall conflict with the terms of the Plan or shall
make the Trust revocable.
(b) The Trust shall not terminate until the date on which Plan
participants and their beneficiaries are no longer entitled to benefits pursuant
to the terms of the Plan or have received payment of all benefits to which they
are entitled under the terms of this Trust Agreement. Upon termination of the
Trust any assets remaining in the Trust shall be returned to CEG.
(c) Upon written approval of all Plan participants or beneficiaries
entitled to payment of benefits pursuant to the terms of the Plan and this Trust
Agreement, CEG may terminate this Trust
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prior to the time all benefit payments under the Plan and this Trust Agreement
have been made. All Trust Assets at termination shall be returned to CEG.
(d) This Trust Agreement may not be amended by CEG for 2 years
following a Change of Control, unless CEG determines that such amendment does
not adversely affect the rights of the Plan participants and their beneficiaries
entitled to payment of benefits pursuant to terms of the Plan on the date a
Change of Control is deemed to occur.
Section 13. Miscellaneous.
(a) Any provision of this Trust Agreement prohibited by law shall be
ineffective to the extent of any such prohibition, without invalidating the
remaining provisions hereof.
(b) Benefits payable to Plan participants and their beneficiaries under
this Trust Agreement may not be anticipated, assigned (either at law or in
equity), alienated, pledged, encumbered or subjected to attachment, garnishment,
levy, execution or other legal or equitable process, and any attempt to so
alienate, sell, transfer, assign, pledge, attach, charge or otherwise encumber
any such amount, whether presently or thereafter payable, shall be void. The
Trust shall be in no manner liable for or subject to the debts or liabilities of
any participant.
(c) This Trust Agreement shall be governed by and construed in
accordance with the laws of the State of Maryland and applicable federal law.
(d) All words beginning with an initial capital letter and not
otherwise defined herein shall have the meaning set forth in the Plan. All
singular terms defined in this Trust will include the plural and vice versa.
(e) For a Change of control to be effective with respect to this Trust
Agreement, CEG must issue written notification of Change of Control to Trustee.
Trustee has no obligation to make any independent determination or verification
that a Change of Control has occurred. For purposes of this Trust Agreement,
Change of Control shall mean (a) the purchase or acquisition by any person,
entity or group of persons (within the meaning of section 13(d) or 14(d) of the
Securities Exchange Act of 1934 (the "Exchange Act"), or any comparable
successor provisions) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 20 percent or more of either the
outstanding shares of common stock of CEG or the combined voting power of CEG's
then outstanding shares of voting securities entitled to a vote generally, or
(b) the consummation of, following the approval by the stockholders of CEG of a
reorganization, merger, or consolidation of CEG, in each case, with respect to
which persons who were stockholders of CEG immediately prior to such
reorganization, merger, or consolidation do not, immediately thereafter, own
more than 50 percent of the combined voting power entitled to vote generally in
the election of directors of the reorganized, merged or consolidated entity's
then outstanding securities, or (c) a liquidation or dissolution of CEG or the
sale of substantially all of its assets, or (d) a change of more than one-half
of the members of the Board of Directors of
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CEG within a 90-day period for reasons other than death, disability, or
retirement of such members.
(f) CEG shall certify to Trustee the name or names of any person or
persons authorized to act for CEG under this Trust Agreement. Such certification
shall be signed by a Vice President of CEG. Until CEG notifies Trustee, in a
similarly signed notice or certification, that any such person is no longer
authorized to act for CEG, Trustee may continue to rely upon the authority of
such person.
Trustee may rely upon any certificate, schedule, notice or direction of
CEG which Trustee in good faith believes to be genuine, executed and delivered
by a duly authorized officer or agent of CEG.
Communications to Trustee shall be sent in writing to Trustee at the
address specified in Section 13(h) hereof or to such other address as the
Trustee may specify in writing. No communication shall be binding upon the Trust
or Trustee until it is received by Trustee and unless it is in writing and
signed by an authorized person.
Communications to CEG shall be sent in writing to CEG's principal
offices at the address specified in Section 13(h) hereof or to such other
address as CEG may specify in writing. No communication shall be binding upon
CEG until it is received by CEG and unless it is in writing and signed by
Trustee.
(g) In the event of any conflict between the provisions of the Plan
document and this Trust Agreement, the provisions of this Trust Agreement shall
prevail. This Trust Agreement sets forth the entire understanding of the parties
with respect to the subject matter hereof and supersedes any and all prior
agreements, arrangements and understandings relating thereto.
(h) Any notice, report, demand, waiver or communication required or
permitted hereunder shall be in writing and shall be given personally or by
prepaid registered or certified mail, return receipt requested, addressed as
follows:
If to CEG:
Constellation Energy Group, Inc.
250 West Pratt Street 24th Floor
Baltimore, MD 21201
Attention:
Elaine W. Johnston
Manager - Corporate and Enterprises Human Resources
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If to Trustee:
T. Rowe Price Trust Company
4555 Painters Mill Road
Owings Mills, MD 21117
Attention: CEG Client Manager
If to a participant or beneficiary:
To the address shown on the most recent Payment Schedule provided by
CEG to Trustee.
(i) In the event of insufficiency of Trust assets and to the extent CEG
does not make payments directly to Plan participants or their beneficiaries, as
provided in Section 2(c) hereof, or if CEG as provided in Section 1(f) hereof
fails to contribute cash to the Trust to restore such insufficiency, such
insufficiency shall be allocated by the record keeper among all Plan Accounts
subject to funding on a proportionate basis according to the market value of the
Plan Account subject to funding. Trustee shall have no obligation to determine
or calculate such insufficiency, the amount of timing of any additional funding
or the allocation of any insufficiency among Plan Accounts.
Section 14. Effective Date.
The effective date of this Trust Agreement shall be April 30, 1999.
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement
to be executed by their respective officers thereunto duly authorized as of the
Effective Date indicated above.
WITNESS: T. ROWE PRICE TRUST COMPANY
___________________________ By:_________________________________(Seal)
Name:
Title:
WITNESS: CONSTELLATION ENERGY GROUP, INC.
___________________________ By:__________________________________(Seal)
Name: Linda D. Miller
Title: Vice President, Human Resources
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