Exhibit 10(d)
Executive Annual Incentive Plan
Of
Constellation Energy Group, Inc.
1. Plan Objective. The objective of this Plan is to allow Constellation
Energy Group, Inc. (Constellation Energy Group or Company) to attract,
retain and motivate highly competent officers and key employees of the
Company and its subsidiaries by focusing incentive compensation toward
the achievement of performance results that primarily support the
interests of shareholders and customers of the Company.
2. Plan Administration. The Plan is administered by the Constellation
Energy Group Board of Directors' (Board) Committee on Management
(Committee on Management) which has sole authority (unless otherwise
specified herein) to interpret the Plan; to refine its provisions from
time to time subject to Board approval, particularly those relating to
factors, targets and procedures used in connection with calculating the
awards (which refinements shall be reflected in guidelines for the
performance year); to suspend the Plan at any time; and in general, to
make all other determinations necessary or advisable for the
administration of the Plan to achieve its stated objective.
The Committee on Management shall have the power to delegate all or any
part of their duties to one or more designees, and to withdraw such
authority, by written designation.
3. Eligibility. Each officer or key employee of Constellation Energy Group
or its subsidiaries may be designated in writing by the Committee on
Management as a participant under the Plan. Once designated,
participation shall continue until such designation is withdrawn at the
discretion and by written order of the Committee on Management.
Participation is subject to the following conditions:
Participant must have been an eligible participant for some
portion of the performance year and at the time of
distribution be actively employed by the Company or elsewhere
with the approval of the Company unless employment was
terminated by death, disability or retirement. Except as
otherwise provided herein, where an individual is not an
eligible participant for the entire performance year, the
amount of the award, whether full, partial or none, will be at
the Committee on Management's discretion, subject to Board
approval.
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Where, prior to the end of a performance year, a participant's
active employment is terminated as a result of death,
disability or retirement, the award is calculated based on the
participant's position at the time of termination. Unless
otherwise stated, any such award will be made on a pro-rata
basis for the period of active employment, or, in total, at
the discretion of the Committee on Management. Where active
employment is terminated as a result of death of participant,
distribution is made in accordance with Section 9.
(Designation of Beneficiary) of this Plan.
4. Performance Goals
A. Performance Targets. The Committee on Management shall
establish for each plan year Performance Targets designed to
accomplish the purpose set forth in Section 1 of this Plan.
The Committee on Management will ensure that each plan year's
Performance Targets meet the following general criteria:
(1) The interests of the Company's shareholders will be
balanced with the interests of the Company's
customers.
(2) The targets should be set at levels which are
attainable, but which, in the Committee on
Management's judgment, are attainable only with a
high degree of competence and diligence.
The Committee on Management shall have sole authority to amend
Performance Targets at any time when, in the Committee's
judgment, unforeseen circumstances exist which require
modification in order to ensure that the purpose of the Plan
is properly served.
The Committee on Management shall have authority to establish
appropriate Performance Targets, differing to the degree
necessary from those established for the Company, for each of
the Company's subsidiaries employing one or more participants
in this Plan; and shall have authority to adjust such targets
subsequently should unforeseen circumstances arise.
B. Individual Performance. A participant's individual per-
formance will be evaluated by the Chairman of the Board.
5. Award Opportunity. The Committee on Management shall establish for each
plan year the Award Opportunity (minimum, target,
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and maximum, as appropriate) applicable to participants in the Plan.
The Award Opportunity may be allocated among the various Performance
Targets and Individual Performance and may vary among classes of
participants.
6. Award Determination. The Committee on Management, with the concurrence
of the Board, shall determine the Awards, if any, to be made for each
plan year as soon after the end of the plan year as is practical. In
the case of participants in this Plan employed by a subsidiary of the
Company, the Award, if any, will be recommended by the non-employee
members of the board of directors of that subsidiary and subsequently
approved by the Committee on Management.
Awards are calculated taking into account the degree of attainment of
performance targets, individual performance, and the percent of
participation during the performance year. The dollar amount of the
participants' award is determined by multiplying the participant's
prior December 31 annualized base salary by the award percentage. All
amounts awarded to participants are subject to the approval of the
Board.
7. Payment of Awards. Awards approved by the Board for each plan year
shall be paid as soon as practicable after such determination has been
made. Payment may be made in a lump cash sum or, at the participants'
election, may be deferred in whole or in part. When required by
applicable law, Federal, State and FICA taxes will be withheld from
awards at applicable rates.
Awards will not be paid for any performance year in which Company
earnings are less than the amount necessary to fund the annual
dividend. Additionally, awards will not be paid for any plan year in
which the dividend is suspended or effectively reduced from its prior
amount.
8. Deferred Payment of Award. A participant may elect to defer the receipt
of all or a portion of the award for the plan year. Any such deferral
and investment of any such amounts deferred pursuant to this Plan shall
be made in accordance with the provisions of the Constellation Energy
Group Nonqualified Deferred Compensation Plan.
9. Designation of Beneficiary. A participant shall have the right to
designate a beneficiary or beneficiaries who are to receive in a lump
sum any undistributed incentive compensation award to the extent a
participant has chosen not to defer all or a portion of his incentive
award pursuant to Section 8 hereof, should the participant
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die during the plan year and be entitled to an incentive award for that
plan year. Such designation shall apply only to the portion of the
undistributed incentive award not subject to a deferral election. Any
designation, change or rescission of the designation shall be made in
writing by completing and furnishing to the Vice President - Human
Resources of the Company a notice on an appropriate form designated by
the Vice President - Human Resources of the Company. The last
designation of beneficiary received by the Vice President - Human
Resources of the Company shall be controlling over any testamentary or
purported disposition by the participant, provided that no designation,
rescission or change thereof shall be effective unless received prior
to death of the participant. Distribution of any incentive awards
previously deferred pursuant to Section 8 of the Plan shall be paid to
the beneficiary or beneficiaries designated under the Constellation
Energy Group Nonqualified Deferred Compensation Plan.
10. Change in Control. Notwithstanding any other provisions of this Plan to
the contrary, if a participant separates from service with
Constellation Energy Group or a subsidiary of Constellation Energy
Group (except due to a participant's transfer of employment to or from
a subsidiary of Constellation Energy Group), within 2 years following a
change in control, such participant is eligible for an award for the
performance year during which the separation from service occurs. The
award is calculated assuming maximum performance achievement and based
on the participant's position at the time of termination and is
pro-rated for the period of active employment during the performance
year. The Committee on Management, in its discretion, may grant a
total, rather than pro-rated award. Payment of the award will be made
in a lump cash sum within 60 days after the participant's separation
from service. Payment may not be deferred.
A change in control for purposes of this Section 10 shall mean (i) 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 Constellation Energy Group or the
combined voting power of Constellation Energy Group's then outstanding
shares of voting securities entitled to a vote generally, or (ii) the
consummation of, following the approval by the stockholders of
Constellation Energy Group of a reorganization, merger, or
consolidation of Constellation Energy Group, in each case, with respect
to which persons who were stockholders of Constellation Energy Group
immediately prior to such reorganization, merger
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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 (iii) a liquidation or
dissolution of Constellation Energy Group or the sale of substantially
all of its assets, or (iv) a change of more than one-half of the
members of the Board of Directors of Constellation Energy Group within
a 90-day period for reasons other than the death, disability, or
retirement of such members.
11. Miscellaneous. The plan year and the performance year shall be the same
and shall be the calendar year.
Any payments made under this Plan are not considered as earnings for
purpose of the Company's qualified pension or Employee Saving Plan, or
for any other general employee benefit program. However, all payments
made under this Plan will be included in the determination of benefits
provided under the Company's Executive Benefits Plan.
None of the payments provided under this Plan which are deferred 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 to the extent specifically
mandated and directed by applicable State or Federal statute. Payment
shall be made only into the hands of the participant or beneficiary
entitled to receive the same or into the hands of his or her authorized
legal representative. Deposit of any sum into any financial institution
to the credit of the participant or beneficiary entitled thereto shall
constitute payment into his or her hands. Notwithstanding the
foregoing, at the request of the participant or beneficiary or as
required by law, such sums as may be requisite for payment of any
estimated or currently accrued income tax liability may be withheld and
paid over to the governmental entity entitled to receive the same.
Participation in this Plan shall not constitute a contract of
employment between the Company and any employee and shall not be deemed
to be consideration for, inducement to, or a condition of employment of
any person. The deferral of any incentive compensation amounts pursuant
to the provisions of the Plan shall not be construed to give any
employee the right to be retained in the employ of the Company or to
interfere with the right of the company to terminate such employment at
any time.
The Board intends to continue the Plan indefinitely but reserves the
right to amend the Plan from time to time or to permanently
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discontinue it provided none of these, nor any suspension, may deprive
the participants of any payment of amounts which were previously
awarded at the time thereof.
In the event Constellation Energy Group becomes a party to a merger,
consolidation, sale of substantially all of its assets or any other
corporate reorganization in which Constellation Energy Group will not
be the surviving corporation or in which the holders of the common
stock of Constellation Energy Group will receive securities of another
corporation (in any such case, the "New Company"), then the New Company
shall assume the rights and obligations of Constellation Energy Group
under this Plan.
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