EXHIBIT 10
BALTIMORE GAS AND ELECTRIC COMPANY
EXECUTIVE BENEFITS PLAN
1. Objective. The objective of this Plan is to enhance
the benefits provided to senior management employees of BGE 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 salary amounts 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 under BGE's Executive Annual Incentive Plan
and/or BGE's Manager Annual Incentive Plan multiplied by the
participant's annualized base salary in effect at the end of the
prior year, and is calculated in accordance with procedures
approved by the Committee, that are attached hereto.
"BGE" means Baltimore Gas and Electric Company, a Maryland
corporation, or its successor.
"BGE's Executive Annual Incentive Plan" means such plan or
other incentive plan or arrangement designated in writing by the
Plan Administrator.
"BGE's Manager Annual Incentive Plan" means such plan or
other incentive plan or arrangement designated in writing by the
Plan Administrator.
"Cause" means the participant's (a) failure to comply with
BGE 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 BGE's
Board of Directors, (d) disclosure, without the consent of a
majority of BGE's Board of Directors, of confidential information
or trade secrets concerning BGE which could be materially
damaging to BGE, or (e) deliberate misconduct which could be
materially damaging to BGE without reasonable good faith belief
by the participant that such conduct was in the best interest of
BGE.
"Committee" means the Committee on Management of the Board
of Directors of BGE.
"Demotion" means a transfer to a position with BGE or a
subsidiary of BGE that either (a) is below the substantial
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 substantial 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.
"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 Baltimore Gas and Electric Company Long
Term Disability 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.
"Pension Plan" means the Pension Plan of Baltimore Gas and
Electric Company as may be amended from time to time.
"Plan Administrator" means, as set forth in Section 3, the
Committee.
"Rabbi Trust" means the trust established by BGE pursuant to
the Grantor Trust Agreement Dated as of July 31, 1994, between
BGE and Citibank, N.A.
"Termination From Employment With BGE" means a participant's
separation from service with BGE or a subsidiary of BGE; however,
a participant's retirement, disability, or transfer of employment
to a subsidiary of BGE shall not constitute a Termination From
Employment With BGE.
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 BGE. 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 member of full-time senior
management or key employee of BGE or its subsidiaries may be
designated 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 Committee,
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, 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 BGE - 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 a
member of full-time senior management or key employee of BGE,
other than the Chairman of the Board or the President of BGE,
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 Committee a signed Lump Sum Election Form. The
Form must be received by the Committee 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 Committee 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 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 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
cost of living adjustments or to post-retirement survivor annuity
coverage.
(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 BGE - 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)(iii), of (1) the participant's
Accrued Gross Pension under the Pension Plan, expressed as a
monthly amount if 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 BGE, 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 BGE, or
eligibility withdrawal event shall be the date of such Demotion,
Termination From Employment With BGE, 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 BGE, 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 BGE, 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 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 BGE or the combined voting power of
BGE's then outstanding shares of voting securities entitled to a
vote generally, or (x) the approval by the stockholders of BGE of
a reorganization, merger, or consolidation, in each case, with
respect to which persons who were stockholders of BGE 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 BGE 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 BGE 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 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 BGE, or eligibility withdrawal without Cause. A
participant's involuntary Demotion or involuntary Termination
From Employment With BGE 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 BGE 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 65
(or the participant's actual age, if the participant is older
than 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 Adjustment Factor 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
BGE 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 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.
6. Supplemental Long Term Disability Benefit.
(i) Eligibility for disability benefits. Any
participant with at least one year of Credited Service who is
Disabled (as that term is defined in 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 salary 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) divide the sum by 12,
(4) multiply this monthly dollar amount by
the income replacement percentage applicable under the LTD Plan,
and
(5) subtract from the product the gross
monthly amount provided for the participant under the LTD Plan
before such amount is reduced for Offset for Other Income (as
that term is defined in 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 expiration of the participant's BGE-provided
sickness benefits. Monthly payments shall permanently cease when
benefits under the LTD Plan cease.
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).
Monthly payments shall be made from BGE's general corporate
assets.
7. Supplemental 50% Survivor Annuity Benefit.
(i) Eligibility for survivor annuity benefit.
Following the death of a participant, a supplemental survivor
annuity will be paid to the participant's surviving spouse until
the death of that spouse. For purposes of this Section 7, 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, begin with the monthly pension benefit (under
both the Pension Plan and Section 5 of this Plan) that the
participant was receiving prior to the date of death. Otherwise,
begin with the larger of the Early Retirement pension benefit
(under both the Pension Plan and Section 5 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
B) participant had retired on the date of death for purposes of
computing the Early Retirement Adjustment Factor,
(2) multiply this dollar amount by .5, and
(3) subtract from the product the net
amount, if any, of the survivor annuity provided on behalf of the
participant under the Pension Plan.
(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 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 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.
8. Death Benefit. BGE 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 BGE 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 BGE 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 BGE, BGE 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 the Family Life Insurance Plan. For purposes of
this Section 9, the amount of the death benefit payment shall be
the highest amount of insurance that would have been payable with
respect to such qualified dependent if coverage had been provided
under the Family Life Insurance Plan. The dependent death
benefit payment under this Plan shall be grossed-up to provide
for income taxes.
10. Sickness Benefit. Each participant, without regard to
length of service, shall be entitled to the greater of the
benefits stipulated under the BGE sick benefit policy for
employees or twenty-six (26) weeks of sick benefits.
11. Vacation Benefit. Each participant, without regard to
length of service, shall be entitled to the greater of the
benefits stipulated under the BGE vacation benefit policy for
employees or five weeks of paid vacation.
12. Planning Benefit. Each participant shall be entitled
to certain personal financial, tax, and estate planning services
paid for by BGE but provided through designated professional
firms. This entitlement shall be subject to any dollar
limitation established by the Committee 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 BGE, 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 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 BGE, shall be entitled to a planning benefit as set forth in
(i) above.
The planning benefit provided under this Plan shall be
grossed-up to provide for income taxes.
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
BGE, 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 BGE and any person and shall not be deemed
to be consideration for, or a condition of, continued employment
of any person.
The Plan, notwithstanding the creation of the Rabbi Trust,
is intended to be unfunded for purposes of Title I of the
Employee Retirement Security Act of 1974. BGE 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 BGE and no person other than BGE 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 BGE under this Plan, such rights shall be
no greater than the right of any unsecured general creditor of
BGE.
This Plan shall be governed in all respects by Maryland law.
Executive Benefits Plan
Procedures
Computation of Average Incentive Award
Average Incentive Award is the product of the annualized
prior year, year end base salary multiplied by the greater
of the following:
(i) a fraction, the numerator of which is expressed as
a percentage and is equal to the sum of the two
highest of the percentages of the applicable
annualized year end base salary awarded to the
participant under BGE's Executive Annual Incentive
Plan during the participant's most recent five
calendar years of participation thereunder (or
such shorter period, if applicable, as set forth
below), and the denominator of which is 2
(reduced, if applicable, as set forth below), or
(ii) a fraction, the numerator of which is expressed as
a percentage and is equal to the sum of the two
highest of the percentages of the applicable
annualized base salary awarded to the participant
under either BGE's Executive Annual Incentive Plan
or BGE's Manager Annual Incentive Plan
(collectively referred to as Incentive Plans)
during the participant's most recent five calendar
years of participation thereunder (or such shorter
period, if applicable, as set forth below), and
the denominator of which is 2 (reduced, if
applicable, as set forth below),
provided that
- - for purposes of (i) and (ii), the year that the
participant separates from service due to
retirement, disability, or other termination of
employment with BGE shall be completely
disregarded, therefore, the computation of the
Average Award shall generally be made, except as
otherwise provided herein, by taking into
consideration the five years preceding the year of
such separation from service, and
- - for purposes of (i) and (ii), no consideration
shall be given, in the numerator and the
denominator, to any year (or for purposes of (ii),
part of a year) for which awards were not made
under the applicable Incentive Plans, and
- - for purposes of (i) and (ii), consideration shall
be given, in both the numerator and the
denominator, to any year (or for purposes of (ii),
part of a year) for which awards were made to one
or more participants under the applicable
Incentive Plans, even though the participant did
not receive an award, and
- - for purposes of (i), and for purposes of (ii)
except as provided below, no consideration shall
be given, in the numerator and in the denominator,
to any year during which the participant is deemed
to have participated under the applicable
Incentive Plans for less than the full year,
notwithstanding the fact that the participant may
have received a reduced award based upon
participation for some portion of that year, and
- - for purposes of (ii), consideration shall be given
to a year during which a participant had
participated in both Incentive Plans, however, the
numerator with respect to such year shall equal
the sum of the actual percentage award under BGE's
Executive Annual Incentive Plan (expressed as a
percentage of the applicable annualized year end
base salary as a member of senior management) plus
the actual percentage award under BGE's Manager
Annual Incentive Plan (expressed as a percentage
of annualized final base salary as a manager).
Date: March 17, 1995