Exhibit 10(f)
CONSTELLATION ENERGY GROUP, INC.
EXECUTIVE BENEFITS PLAN
Effective April 30, 1999
TABLE OF CONTENTS
Page No.
1. Objective 1
2. Definitions 1
3. Plan Administration 3
4. Eligibility 3
5. Supplemental Pension Benefit 4
(a) Retirement benefits 4
(i) Eligibility for retirement benefits 4
(ii) Computation of retirement benefits 4
(iii) Form of payout of retirement benefits 5
(iv) Amount, timing, and source of monthly
retirement benefit payout 5
(v) Amount, timing, and source of lump sum
retirement benefit payout 6
(vi) Death of participant entitled to lump
sum payout 6
(vii) Health and dental benefits 7
(b) Accrued benefit 7
(i) Computation of gross accrued benefit 7
(ii) Computation of net accrued benefit 8
(c) Entitlement to benefit upon happening of
certain events 8
(i) Satisfaction of requirements 8
(ii) Other events 8
(1) Change in control 8
(2) Plan amendment 9
(3) Involuntary Demotion, Termination
From Employment With CEG, or
eligibility withdrawal without
Cause 10
(iii) Form of benefit payout 10
(iv) Amount, timing and source of benefit
payout 10
(v) Death of participant entitled to lump
sum payout 11
(d) Other benefits 12
(i) Eligibility for other benefits 12
(ii) Computation of other benefits 12
(iii) Form of payout of other benefits 13
(iv) Amount, timing, and source of monthly
other benefit payout 13
6. Supplemental Long-Term Disability Benefit 13
(i) Eligibility for disability benefits 13
(ii) Computation of disability benefits 13
(iii) Form of payment of disability benefits 14
(iv) Amount, timing, and source of monthly
disability benefit payout 14
(v) Bonus 14
7. Supplemental Survivor Annuity Benefit 14
(a) Survivor annuity benefit 14
(i) Eligibility for survivor annuity benefit16
(ii) Computation of survivor annuity benefit 15
(iii) Form of payout of survivor annuity
benefits 16
(iv) Amount, timing, and source of monthly 16
survivor annuity benefit payout
(b) Other survivor benefit 17
(i) Eligibility for other survivor benefit 17
(ii) Computation of other survivor benefit 17
(iii) Form of payout of other survivor
benefit 17
(iv) Amount, timing, and source of monthly
other survivor benefit payout 18
8. Death Benefit 18
9. Dependent Death Benefit 18
10. Sickness Benefit 19
11. Vacation Benefit 19
12. Planning Benefit 19
13. Miscellaneous 20
CONSTELLATION ENERGY GROUP, INC.
EXECUTIVE BENEFITS PLAN
1. Objective. The objective of this Plan is to enhance the benefits
provided to officers and key employees of CEG and its subsidiaries in
order to attract and retain talented executive personnel.
2. Definitions. All words beginning with an initial capital letter and not
otherwise defined herein shall have the meaning set forth in the
Pension Plan. All singular terms defined in this Plan will include the
plural and vice versa. As used herein, the following terms will have
the meaning specified below:
"Annual Base Salary" means an amount determined by adding the monthly
base rate of pay amounts (i.e., the types of such pay that are
includable in the computation of Pension Plan benefits)earned over the
twelve calendar months immediately preceding the month that includes
the date of the computation.
"Average Incentive Award" (or "Average Award") means generally the
product of the percentage equal to an average of the two highest of the
participant's five immediately prior year award percentages earned
under CEG's Executive Annual Incentive Plan, CEG's Manager Annual
Incentive Plan and/or the Results Incentive Awards Program multiplied
by the participant's annualized base rate of pay amount (i.e., the
types of such pay that are includable in the computation of Pension
Plan benefits) in effect at the end of the prior year.
"Cause" means the participant's (a) failure to comply with CEG policy,
(b) deliberate and continual refusal to satisfactorily perform
employment duties on substantially a full-time basis, (c) deliberate
and continual refusal to act in accordance with any specific
instructions of a majority of CEG's Board of Directors, (d) disclosure,
without the consent of a majority of CEG's Board of Directors, of
confidential information or trade secrets concerning CEG which could be
materially damaging to CEG, or (e) deliberate misconduct which could be
materially damaging to CEG without
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reasonable good faith belief by the participant that such conduct was
in the best interest of CEG.
"Committee" means the Committee on Management of the Board of Directors
of CEG.
"CEG" means Constellation Energy Group, Inc., a Maryland corporation,
or its successor.
"CEG's Executive Annual Incentive Plan" means such plan or other
incentive plan or arrangement designated in writing by the Plan
Administrator.
"CEG's Manager Annual Incentive Plan" means such plan or other
incentive plan or arrangement designated in writing by the Plan
Administrator.
"Demotion" means a transfer to a position with CEG or a subsidiary of
CEG that either (a) is below the substantially equivalent position in
which the participant was employed on the date of transfer, or (b)
results in a substantial reduction in pay when compared to the
participant's pay on the date of the transfer. Whether a position is a
substantially equivalent position shall be determined in the reasonable
discretion of the Committee, with reference to factors including
whether the participant retains principal responsibility for a
department or division, and whether the participant remains eligible
for the perquisites enjoyed by the participant before the position
change.
"Income Replacement Percentage" means the percentage under the LTD Plan
that is used to calculate the participant's actual LTD Plan benefit.
"Interest Rate" means the rate equal to 3.5% plus 65% of yield on the
Lehman Brothers Government/Corporate Bond Index.
"LTD Plan" means the Constellation Energy Group, Inc. Disability
Insurance Plan as may be amended from time to time, or any successor
plan.
"Mortality Table" means the mortality table used to value liabilities
for Pension Plan funding purposes.
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"Pension Plan" means the Pension Plan of Constellation Energy Group,
Inc. as may be amended from time to time, or any successor plan.
"Plan Administrator" means, as set forth in Section 3, the Committee.
"Rabbi Trust" means the trust adopted by CEG pursuant to the Grantor
Trust Agreement Dated as of April 30, 1999, between CEG and Citibank,
N.A.
"Results Incentive Awards Program" means the program applicable to
certain employees that provides awards; but includes only the types of
awards that are includable in the computation of Pension Plan benefits.
"Termination From Employment With CEG" means a participant's separation
from service with CEG or a subsidiary of CEG; however, a participant's
retirement, disability, or transfer of employment to or from a
subsidiary of CEG shall not constitute a Termination From Employment
With CEG.
3. Plan Administration. The Committee is the Plan Administrator and has
sole authority (except as specified otherwise herein) to interpret the
Plan and, in general, to make all other determinations advisable for
the administration of the Plan to achieve its stated objective. Appeals
of written decisions by the Plan Administrator may be made to the Board
of Directors of CEG. Decisions by the Board shall be final and not
subject to further appeal. The Plan Administrator shall have the power
to delegate all or any part of its duties to one or more designees, and
to withdraw such authority, by written designation.
4. Eligibility. Each officer or key employee of CEG or its subsidiaries
may be designated in writing by the Plan Administrator as a participant
with respect to one or more benefits under the Plan. Once designated,
participation shall continue until such designation is withdrawn at the
discretion and by written order of the Plan Administrator, provided,
however, that such withdrawal may not be made for benefits provided
pursuant to Sections 5 and 7 with respect to a participant who has
satisfied the eligibility requirements to retire (as set forth in
Section 5(a)(i)). Notwithstanding the foregoing, any participant who is
disabled under the LTD Plan shall continue to participate in this Plan
while classified as disabled and, for purposes of the supplemental
pension benefit provided by this Plan,
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while classified as disabled, shall be deemed to continue to accrue
Credited Service until no later than his/her Normal Retirement Date.
5. Supplemental Pension Benefit.
(a) Retirement benefits.
(i) Eligibility for retirement benefits. A participant
shall be eligible to retire under this Plan on or
after the participant's Normal Retirement Date, or on
the first day of any month preceding his/her Normal
Retirement Date, if the participant has attained (1)
age 55 and has accumulated at least 20 years of
Credited Service; or (2) age 60 and has accumulated
at least one year of Credited Service.
(ii) Computation of retirement benefits. A participant who
is eligible to retire under this Plan will be
entitled to supplemental pension retirement benefits
under this Plan, which will be calculated as set
forth below on the participant's Retirement Date:
(1) add the Annual Base Salary and the Average
Incentive Award,
(2) divide the sum by 12,
(3) multiply this dollar amount by the
appropriate percentage, determined as
follows: Chairman of the Board and President
of CEG, and President of Constellation
Enterprises, Inc. - 60%; all other
participants (by completed years of Credited
Service) 1 through 9 - 3% per year; 10
through 19 - 40%; 20 through 24 - 45%; 25
through 29 - 50%; and 30 or more - 55%,
(4) multiply this dollar amount by the Early
Retirement Adjustment Factor set forth under
the Pension Plan; provided, however, if the
participant is age 62 or older and is an
officer or key employee of CEG or its
subsidiaries, other than the Chairman of the
Board and President of CEG or the President
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of Constellation Enterprises, Inc., such
factor shall be one (1),
(5) subtract from this dollar amount the charges
relating to coverage for a preretirement
survivor annuity in excess of 50%, and for a
post-retirement survivor annuity in excess
of 50%, and
(6) subtract from the remainder the net amount
payable to the participant under the Pension
Plan.
(iii) Form of payout of retirement benefits. Each
participant entitled to supplemental pension
retirement benefits will receive his/her supplemental
pension retirement benefits payout in the form of a
monthly payment, unless the participant makes a valid
election to receive his/her supplemental pension
retirement benefits payout in the form of a lump sum.
A participant may elect to receive his/her
supplemental pension retirement benefits payout in
the form of a lump sum by submitting to the Plan
Administrator a signed Lump Sum Election Form. The
Form must be received by the Plan Administrator
before the beginning of the calendar year during
which the participant's Retirement Date occurs. The
election may be revoked at any time before the
beginning of the calendar year during which the
participant's Retirement Date occurs, by submitting
to the Plan Administrator a signed Lump Sum
Revocation Form.
(iv) Amount, timing, and source of monthly retirement
benefit payout. A participant entitled to monthly
supplemental pension retirement benefits will receive
monthly payments equal to the amount determined under
paragraph (a)(ii). Such payments shall commence
effective with the participant's Retirement Date. If
such participant receives (or would have received but
for the Internal Revenue Code limitations) cost of
living adjustment(s) under the Pension Plan, the
monthly payments hereunder will be automatically
increased based on the percentage of, and at the same
time as, such adjustment(s). Monthly payments
hereunder shall
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permanently cease upon the death of the participant,
effective with the monthly payment for the month
following the month of the participant's death.
Monthly payments hereunder shall be made in
accordance with the provisions of the Rabbi Trust
and, to the extent not paid under the terms of the
Rabbi Trust, from general corporate assets.
(v) Amount, timing, and source of lump sum retirement
benefit payout. A participant entitled to a lump sum
supplemental pension retirement benefit will receive
a lump sum payment. This lump sum payment will be
calculated by a certified actuary and will be equal
to the present value of an immediate annuity
including the estimated present value of
post-retirement supplemental survivor annuity
benefits described in Section 7, using (1) the
supplemental pension retirement benefit amount
calculated under paragraph (a)(ii), which is
expressed as a monthly amount, (2) the Interest Rate
computed on the participant's Retirement Date, and
(3) the Mortality Table. Such lump sum payment shall
be made within 60 days after the participant's
Retirement Date. The lump sum payment shall be made
in accordance with the provisions of the Rabbi Trust
and, to the extent not paid under the terms of the
Rabbi Trust, from general corporate assets. A
participant who receives a lump sum payment shall not
be entitled to any cost of living adjustments or to
post-retirement survivor annuity coverage under the
Plan.
(vi) Death of participant entitled to lump sum payout. In
the event of the death of a participant after his/her
Retirement Date and before the participant receives
the lump sum payment under paragraph (a)(v), such
lump sum payment shall be made to the participant's
surviving spouse (as defined in Section 7(i)). The
lump sum payment shall be the same amount and made at
the same time and from the same sources as set forth
in paragraph (a)(v). If there is no surviving spouse
at the date of the participant's death, no payments
shall be made pursuant to Sections 5 or 7. A
surviving spouse who receives a lump sum benefit
under this paragraph (a)(vi) shall not be entitled to
any
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cost of living adjustments or to post-retirement
survivor annuity coverage under the Plan.
(vii) Health and dental benefits. A participant who
receives supplemental pension retirement benefits
under this Plan, but who is not eligible for benefits
under the CEG Retiree Flexible Benefits Program, is
entitled to health and dental benefits under this
Plan that in the sole discretion of the Plan
Administrator, are reasonably similar to health and
dental benefits provided for participants under the
CEG Retiree Flexible Benefits Program, taking into
account employer cost, age and service.
(b) Accrued benefit.
(i) Computation of gross accrued benefit. The computation
of the gross accrued supplemental pension benefit for
a participant as of the date of the computation will
be made as follows:
(1) add the Annual Base Salary and the Average
Incentive Award,
(2) divide the sum by 12, and
(3) multiply this dollar amount by the
appropriate percentage, determined as
follows: Chairman of the Board and President
of CEG and President of Constellation
Enterprises, Inc. - 60%; all other
participants (by completed years of Credited
Service as of the date of the computation) 1
through 9 - 3% per year; 10 through 19 -
40%; 20 through 24 - 45%; 25 through 29 -
50%; and 30 or more - 55%.
(ii) Computation of net accrued benefit. The computation
of the net accrued supplemental pension benefit for a
participant as of the date of the computation will be
made by subtracting from the gross accrued benefit
determined under paragraph (b)(i) the amount,
computed on the date a benefit is payable under
paragraph (c)(iv), of (1) the participant's Accrued
Gross Pension under the Pension Plan, expressed as a
monthly amount if
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the participant is not eligible for Normal
Retirement, Early Retirement or Disability Retirement
benefits under the Pension Plan, otherwise (2) the
gross amount payable to the participant under the
Pension Plan.
(c) Entitlement to benefit upon happening of certain events.
(i) Satisfaction of requirements. A participant who has
satisfied the age and Credited Service requirements
set forth in Section 5(a)(i) while eligible as set
forth in Section 4, but who does not retire under the
Plan due to Demotion, Termination From Employment
With CEG, or the withdrawal of a participant's
eligibility to participate under Section 5, shall be
entitled to his/her net accrued supplemental pension
benefit. The effective date of the Demotion,
Termination From Employment With CEG, or eligibility
withdrawal event shall be the date of such Demotion,
Termination From Employment With CEG, or eligibility
withdrawal.
(ii) Other events. A participant, regardless of his/her
age and years of Credited Service, shall be entitled
to his/her net accrued supplemental pension benefit
upon the happening of any of the following
entitlement events, but only if such entitlement
event occurs before a participant retires under this
Plan:
(1) Change in control. A change in control,
followed within two years by the
participant's Demotion, a participant's
Termination From Employment With CEG, or the
withdrawal of the participant's eligibility
to participate under the Plan, is an
entitlement event. The effective date of the
entitlement event shall be the date of the
Demotion, Termination From Employment With
CEG, or eligibility withdrawal.
A change in control for purposes of this
paragraph (c)(i)(1) shall mean (w) the
purchase or acquisition by any person,
entity or group of persons, (within the
meaning of
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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 (x) 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 (y) a liquidation or
dissolution of CEG or the sale of
substantially all of its assets, or (z) a
change of more than one-half of the members
of the Board of Directors of CEG within a
90-day period for reasons other than the
death, disability, or retirement of such
members.
(2) Plan amendment. A Plan amendment that has
the effect of reducing a participant's gross
accrued supplemental pension benefit is an
entitlement event. In determining whether
such a reduction has occurred, the
participant's gross accrued supplemental
pension benefit calculated on the day
immediately preceding the effective date of
the amendment shall be compared to the
participant's gross accrued supplemental
pension benefit calculated on the effective
date of the amendment. An amendment that has
the effect of reducing future benefit
accruals is not an entitlement event. It is
intended that an entitlement event under
this paragraph (c)(i)(2) will occur only
with respect to those amendments that are
substantially similar to amendments that are
prohibited by Internal Revenue Code section
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411(d)(6) with respect to qualified pension
plans. The effective date of the entitlement
event shall be the effective date of the
Plan amendment.
(3) Involuntary Demotion, Termination From
Employment With CEG, or eligibility
withdrawal without Cause. A participant's
involuntary Demotion or involuntary
Termination From Employment With CEG without
Cause, or the withdrawal of a participant's
eligibility to participate under Sections 5
or 7 of the Plan without Cause, is an
entitlement event. The effective date of the
entitlement event shall be the effective
date of the participant's involuntary
Demotion or involuntary Termination From
Employment With CEG without Cause, or the
eligibility withdrawal without Cause.
(iii) Form of benefit payout. Each participant entitled to
a payout under this paragraph (c) will receive such
payout in the form of a lump sum payment.
(iv) Amount, timing, and source of benefit payout. A
participant entitled to a payout of his/her net
accrued benefit, as a result of the occurrence of an
event described in paragraphs (c)(i), (c)(ii)(1),
(2), or (3) will be entitled to a lump sum benefit.
This lump sum benefit will be calculated by a
certified actuary as the present value of an annuity
beginning at age 62 (unless the participant is the
Chairman of the Board or President of CEG, or the
President of Constellation Enterprises, Inc. in which
case age 65) (or the participant's actual age, if the
participant is older than age 62 (unless the
participant is the Chairman of the Board or President
of CEG, or the President of Constellation
Enterprises, Inc. in which case age 65) on the date
the lump sum benefit is payable), including the
estimated present value of post-retirement survivor
annuity benefits described in Section 7, using (1)
the net accrued benefit amount calculated under
paragraph (b)(ii) on the effective date of the event,
which is expressed as a monthly amount, (2) the Early
Retirement
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Adjustment Factor (using the method set forth in
(a)(ii)(4)) computed by substituting the date the
lump sum benefit is payable for the Retirement Date,
(3) the Interest Rate computed on the date the lump
sum benefit is payable, and (4) the Mortality Table.
The lump sum benefit shall be payable on the date
that is the later of the date of the participant's
Termination From Employment With CEG or the date the
participant reaches age 55. The lump sum payment
shall be made within 60 days after such date and
shall be made in accordance with the provisions of
the Rabbi Trust and, to the extent not paid under the
terms of the Rabbi Trust, from general corporate
assets. A participant who receives a lump sum benefit
under this paragraph (c)(iv) shall not be entitled to
any cost of living adjustments or to preretirement or
post-retirement survivor annuity coverage.
(v) Death of participant entitled to lump sum payout. In
the event of the death of a participant after the
occurrence of an event described in paragraphs
(c)(i), (c)(ii)(1), (2), or (3) and before the
participant receives the lump sum payment under
paragraph (c)(iv), such lump sum payment shall be
made to the participant's surviving spouse (as
defined in Section 7(i)). The lump sum payment will
be calculated by a certified actuary and will be
equal to 50% of the present value of an immediate
annuity using (1) the monthly amount under paragraph
(c)(iv), (2) the Early Retirement Adjustment Factor
computed using the participant's age at the date of
the participant's death, or if the participant was
younger than age 60 on the date of death, using age
60, (3) the Interest Rate computed on the date the
lump sum benefit is payable, and (4) the Mortality
Table. However, if the participant's death occurred
during the 60 day period described in paragraph
(c)(iv), 100% shall be used instead of 50% in the
preceding sentence. The lump sum benefit shall be
payable on the date that is the later of the date
that the participant would have reached age 55 or the
date of the participant's death. The lump sum payment
shall be made within 60 days after such date, and
shall be made in accordance with the provisions of
the Rabbi Trust and, to the extent not paid under the
terms of the Rabbi Trust, from general corporate
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assets. If there is no surviving spouse at the date
of the participant's death, no payments shall be made
pursuant to Sections 5 or 7. A surviving spouse who
receives a lump sum benefit under this paragraph (c)
(v) shall not be entitled to any cost of living
adjustments or to preretirement or post-retirement
survivor annuity coverage under the Plan.
(d) Other benefits.
(i) Eligibility for other benefits. Upon a participant's
Termination From Employment With CEG, if such
participant (1) does not satisfy the requirements of
Sections 5(a)(i), 5(c)(i), and/or 5(c)(ii), and (2)
is a vested participant under the Pension Plan, such
participant shall be entitled to the benefits in this
Section 5(d).
(ii) Computation of other benefits. A participant who is
eligible for other benefits will be entitled to
benefits under this Plan, which will be calculated as
set forth below on the date the participant begins
receipt of benefit payments under the Pension Plan:
(1) compute the participant's adjusted monthly
benefit payment under the terms of the
Pension Plan, by also treating awards, if
any, paid to the participant under CEG's
Executive Annual Incentive Plan and/or CEG's
Manager Annual Incentive Plan during the
immediately preceding twenty-four
consecutive months as bonuses and/or
incentives included in the computation of
the participant's Average Pay (as defined
under the Pension Plan), and
(2) subtract from the amount in (1) above the
participant's actual monthly benefit payment
under the Pension Plan.
For purposes of the computation in (1), the
participant will bear the cost of any
post-retirement survivor annuity coverage
provided under Section 7(b).
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(iii) Form of payout of other benefits. Each participant
entitled to other benefits will receive his/her other
benefits payout in the form of a monthly payment.
(iv) Amount, timing, and source of monthly other benefit
payout. A participant entitled to monthly other
benefits will receive monthly payments equal to the
amount determined under paragraph (d)(ii). Such
payments shall commence effective with the date the
participant commences receipt of benefit payments
under the Pension Plan. Monthly payments hereunder
shall permanently cease upon the death of the
participant, effective with the monthly payment for
the month following the month of the participant's
death. Monthly payments hereunder shall be made from
general corporate assets.
6. Supplemental Long-Term Disability Benefit.
(i) Eligibility for disability benefits. Any participant who has
completed at least one full calendar month of service with CEG
or its subsidiaries, who has elected coverage under the LTD
Plan, and who is disabled (as determined under the LTD Plan)
will be entitled to supplemental disability benefits under
this Plan.
(ii) Computation of disability benefits. The amount of such
supplemental disability benefits shall be determined as
follows:
(1) multiply the monthly base rate of pay amount in
effect immediately prior to becoming entitled to
benefits under the LTD Plan by twelve,
(2) add the Average Incentive Award to the product,
(3) add certain bonuses and incentives that are included
in the computation of Average Pay under the Pension
Plan (except that awards under the Results Incentive
Awards Program shall be excluded), earned over the
last 12 months to the product,
(4) divide the sum by 12,
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(5) multiply this monthly dollar amount by the Income
Replacement Percentage, and
(6) subtract from the product the gross monthly amount
provided for the participant under the LTD Plan
before such amount is reduced for other benefits as
set forth under the LTD Plan.
(iii) Form of payment of disability benefits. Each participant
entitled to supplemental disability benefits will receive
his/her supplemental disability benefit payout in the form of
a monthly payment.
(iv) Amount, timing, and source of monthly disability benefit
payout. A participant entitled to supplemental disability
benefits will receive a monthly payment equal to the amount
determined under (ii) above. Such payments shall commence
effective with the commencement of the participant's LTD Plan
benefit payments. Monthly payments shall permanently cease
when benefit payments under the LTD Plan cease. Monthly
payments shall be made from CEG's general corporate assets.
If a participant receiving payments pursuant to this Section 6
receives cost of living adjustment(s) under the LTD Plan, the
payments hereunder will be automatically increased based on
the same percentage of, and at the same time as, such
adjustment(s).
(v) Bonus. Any participant who has less than ten years of Credited
Service shall be entitled to a monthly taxable cash bonus,
equal to an amount based on the cost of LTD Plan coverage,
using the formula for computing CEG-provided Flexible Benefits
Plan credits for LTD Plan coverage and taking into account the
Participant's Credited Service and covered compensation. Such
cash bonus shall be made from general corporate assets.
7. Supplemental Survivor Annuity Benefit.
(a) Survivor annuity benefit.
(i) Eligibility for survivor annuity benefit. Following
the death of a participant (other than a participant
who satisfied the requirements of Section 5(d)(i)
upon such participant's Termination From Employment
With CEG), a
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supplemental survivor annuity may be paid to the
participant's surviving spouse until the death of
that spouse, using the same percentage to compute
such supplemental benefit that is actually used to
compute any survivor annuity provided on behalf of
the participant under the Pension Plan. The
participant will not bear the cost of up to a 50%
survivor annuity benefit, but will bear the cost of a
survivor annuity benefit in excess of 50%. For
purposes of this Section 7(a), a participant's
surviving spouse is the individual married to the
participant on the date of the participant's death.
If there is no surviving spouse, or if the
participant or the participant's spouse previously
received or is entitled to receive a lump sum payment
under Section 5, no supplemental survivor annuity
will be payable.
(ii) Computation of survivor annuity benefit. The amount
of the supplemental survivor annuity will be
determined as follows:
(1) if the participant had retired prior to the
date of death:
(a) begin with the monthly pension
benefit (under Section 5(a) of this
Plan) that the participant was
receiving prior to the date of
death, and
(b) multiply this dollar amount by the
percentage used to compute the
survivor annuity provided on behalf
of the participant under the Pension
Plan.
(2) otherwise:
(a) begin with the larger of the Early
Retirement pension benefit (under
both the Pension Plan and Section
5(a) of this Plan) to which the
participant would have been entitled
to receive if the:
(A) participant had been
retired at age 60 on the
date of death for purposes
of computing the Early
Retirement Adjustment
Factor, or
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(B) participant had retired on
the date of death for
purposes of computing the
Early Retirement Adjustment
Factor,
(b) multiply this dollar amount by the
percentage used to compute the
survivor annuity provided on behalf
of the participant under the Pension
Plan,
(c) subtract from the product the net
amount, if any, of the survivor
annuity provided on behalf of the
participant under the Pension Plan,
and
(d) subtract from this dollar amount the
charges relating to coverage (under
both the Pension Plan and this Plan)
for a preretirement survivor annuity
in excess of 50%, and for a
post-retirement survivor annuity in
excess of 50%.
(iii) Form of payout of survivor annuity benefits. Each
surviving spouse entitled to a supplemental survivor
annuity benefit will receive his/her survivor annuity
benefit payout in the form of a monthly payment.
(iv) Amount, timing, and source of monthly survivor
annuity benefit payout. A surviving spouse entitled
to monthly supplemental survivor annuity benefits
will receive a monthly payment equal to the amount
determined under (ii) above. Such payments shall
commence effective with the first day of the month
following the month of the participant's death. If
such surviving spouse receives (or would have
received but for the Internal Revenue Code
limitations) cost of living adjustment(s) under the
Pension Plan, the monthly payments hereunder will be
automatically increased based on the percentage of,
and at the same time as, such adjustment(s). Monthly
payments hereunder shall permanently cease upon the
death of the surviving spouse, effective with the
monthly payment for the month following the month of
the surviving spouse's death. Monthly payments
hereunder shall be made in accordance with the
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provisions of the Rabbi Trust and, to the extent not
paid under the terms of the Rabbi Trust, from general
corporate assets.
(b) Other survivor benefit.
(i) Eligibility for other survivor benefit. Following the
death of a participant who satisfied the requirements
of Section 5(d)(i) upon such participant's
Termination From Employment With CEG, a survivor
benefit may be paid to the participant's surviving
spouse until the death of that spouse. For purposes
of this Section 7(b), a participant's surviving
spouse is the individual who is the Surviving Spouse
under the Pension Plan. If there is no surviving
spouse, no survivor benefit will be payable.
(ii) Computation of other survivor benefit. The amount of
the survivor benefit will be calculated as set forth
below on the date the surviving spouse begins receipt
of benefit payments under the Pension Plan:
(1) compute the surviving spouse's adjusted
monthly benefit payment under the terms of
the Pension Plan, by also treating awards,
if any, paid to the participant under CEG's
Executive Annual Incentive Plan and/or CEG's
Manager Annual Incentive Plan during the
immediately preceding twenty-four
consecutive months as bonuses and/or
incentives included in the computation of
the participant's Average Pay (as defined
under the Pension Plan), and
(2) subtract from the amount in (1) above the
surviving spouse's actual monthly benefit
payment under the Pension Plan.
For purposes of the computation in (1), the
surviving spouse will bear the cost of the
survivor benefit.
(iii) Form of payout of other survivor benefit. Each
surviving spouse entitled to a survivor benefit
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will receive his/her survivor benefit payout in the
form of a monthly payment.
(iv) Amount, timing, and source of monthly other survivor
benefit payout. A surviving spouse entitled to
monthly survivor benefits will receive monthly
payments equal to the amount determined under
paragraph (b)(ii). Such payments shall commence
effective with the date the surviving spouse
commences receipt of benefit payments under the
Pension Plan. Monthly payments hereunder shall
permanently cease upon the death of the surviving
spouse, effective with the monthly payment for the
month following the month of the surviving spouse's
death. Monthly payments hereunder shall be made from
general corporate assets.
8. Death Benefit. CEG shall make arrangements, through its split-dollar
life insurance program or otherwise, for life insurance coverage for
each participant providing that the participant's beneficiary shall
receive, as a pre-rollout death benefit, an amount which is
approximately equal to three times the participant's compensation, and
as a post-rollout benefit, an amount which is approximately equal to
two times the participant's compensation, as set forth in a separate
agreement between CEG and the participant.
As determined in the sole discretion of the Plan Administrator, in the
event that either (i) a participant is ineligible to receive the type
of life insurance coverage provided to other participants under this
Plan, or (ii) such coverage is not available on reasonably
cost-effective terms as a result of any penalty for smoking or other
factors that are reflected in the insurance carrier's rates, then CEG
shall provide a benefit that, in the discretion of the Plan
Administrator, is substantially equivalent to the cost of the benefit
provided to other participants under this Plan.
9. Dependent Death Benefit. In the event of the death of a participant's
qualified dependent while the participant is an active employee of CEG
or a subsidiary of CEG, CEG shall make a death benefit payment to the
participant, from general corporate assets. For purposes of this
Section 9, qualified dependent shall have the same meaning as set forth
in CEG's Family Life Insurance Plan. For purposes of this Section 9,
the amount of the death benefit payment shall be
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the highest amount of insurance that would have been payable with
respect to such qualified dependent if coverage had been provided under
CEG's Family Life Insurance Plan. The dependent death benefit payment
under this Plan shall be grossed-up for income tax withholding.
10. Sickness Benefit. Each participant, without regard to length of
service, shall be entitled to the greater of the benefits stipulated
under the CEG sick benefit policy for employees or twenty-six (26)
weeks of paid sick benefits within a rolling 52-week period.
11. Vacation Benefit. Each participant, without regard to length of
service, shall be entitled to the greater of the benefits stipulated
under the CEG vacation benefit policy for employees or five weeks of
paid vacation during a calendar year.
12. Planning Benefit. Each participant shall be entitled to certain
personal financial, tax, and estate planning services paid for by CEG
but provided through designated professional firms. This entitlement
shall be subject to any dollar limitation established by the Plan
Administrator with respect to all such fees. The services shall be
provided to each participant by the chosen firm(s) on a personalized
and confidential basis; and each firm shall have sole responsibility
for quality of the services which it may render.
The services to be provided shall be on an on-going and continuous
basis, but shall be limited to (i) the development and legal
documentation of both career-oriented financial plans and personal
estate plans, and (ii) tax counseling regarding personal tax return
preparation and the most advantageous structuring, tax-wise, of
proposed personal transactions.
Such planning benefit shall continue during the year of retirement plus
the next two calendar years and include the completion of the federal
and state personal tax returns for the second calendar year following
retirement. However, if a retired member of senior management continues
to serve as a member of the Board of Directors of CEG, his/her planning
benefit period shall be extended until he/she no longer serves as a
member of the Board of Directors.
Upon the death of a participant entitled to the planning benefit
provided hereunder, his/her surviving spouse shall
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be entitled to receive the following planning benefit: (i) if the
deceased was not retired at the time of death, the surviving spouse
shall be entitled to the planning benefit for the year in which the
death occurred plus the next two calendar years, including completion
of the federal and state personal tax returns for the second calendar
year after the year in which the death occurred; or (ii) if the
deceased was retired at the time of death, then the surviving spouse
shall receive a planning benefit equal to that the deceased would have
received if he/she had not died prior to expiration of the planning
benefit. The surviving spouse of a retired member of senior management
whose death occurs while serving as a member of the Board of Directors
of CEG, shall be entitled to a planning benefit as set forth in (i)
above.
The planning benefit provided under this Plan shall be grossed-up for
income tax withholding.
13. Miscellaneous. None of the benefits provided under this Plan shall be
subject to alienation or assignment by any participant or beneficiary
nor shall any of them be subject to attachment or garnishment or other
legal process except (i) to the extent specially mandated and directed
by applicable State or Federal statute; (ii) as requested by the
participant or beneficiary to satisfy income tax withholding or
liability; and (iii) any policy of insurance written by a commercial
carrier on a split-dollar basis shall be assignable.
This Plan may be amended from time to time, or suspended or terminated
at any time, provided, however, that no amendment or termination shall
reduce any previously accrued supplemental pension benefit under this
Plan or prejudice the rights of any participant or beneficiary entitled
to receive payment hereunder at the time of such action. All amendments
to this Plan which would increase or decrease the compensation of any
Officer of CEG, either directly or indirectly, must be approved by the
Board of Directors. All other permissible amendments may be made at the
written direction of the Committee.
Participation in this Plan shall not constitute a contract of
employment between CEG and any person and shall not be deemed to be
consideration for, or a condition of, continued employment of any
person.
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The Plan, notwithstanding the creation of the Rabbi Trust, is intended
to be unfunded for purposes of Title I of the Employee Retirement
Income Security Act of 1974. CEG shall make contributions to the Rabbi
Trust in accordance with the terms of the Rabbi Trust. Any funds which
may be invested and any assets which may be held to provide benefits
under this Plan shall continue for all purposes to be a part of the
general funds and assets of CEG and no person other than CEG shall by
virtue of the provisions of this Plan have any interest in such funds
and assets. To the extent that any person acquires a right to receive
payments from CEG under this Plan, such rights shall be no greater than
the right of any unsecured general creditor of CEG.
This Plan shall be governed in all respects by Maryland law.
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