EXHIBIT NO. 10
BALTIMORE GAS AND ELECTRIC COMPANY
EXECUTIVE BENEFITS PLAN
effective July 1, 1995
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 7
(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 BGE, 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
6. Supplemental Long-Term Disability Benefit 12
(i) Eligibility for disability benefits 12
(ii) Computation of disability benefits 12
(iii)Form of payment of disability benefits 12
(iv) Amount, timing, and source of monthly
disability benefit payout 13
(v) Bonus 13
7. Supplemental Survivor Annuity Benefit 13
(i) Eligibility for survivor annuity benefit 13
(ii) Computation of survivor annuity benefit 14
(iii)Form of payout of survivor annuity benefits 15
(iv) Amount, timing, and source of monthly
survivor annuity benefit payout 15
8. Death Benefit 15
9. Dependent Death Benefit 16
10. Sickness Benefit 16
11. Vacation Benefit 16
12. Planning Benefit 16
13. Miscellaneous 17
BALTIMORE GAS AND ELECTRIC COMPANY
EXECUTIVE BENEFITS PLAN
1. Objective. The objective of this Plan is to enhance the
benefits provided to officers and key 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 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 BGE's Executive
Annual Incentive Plan, BGE'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, and is calculated in accordance with procedures
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 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 Baltimore Gas and Electric Company
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.
"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.
"Results Incentive Awards Program" means the program
applicable to BGE 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 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 officer or key employee of BGE 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,
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, and President of Constellation
Holdings, 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 BGE or its
subsidiaries, other than the Chairman of the
Board or the President of BGE or the
President of Constellation Holdings, 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
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.
(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 BGE 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 BGE Retiree Flexible
Benefits Program, taking into account 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 BGE and President of Constellation
Holdings, 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)(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 62 (unless
the participant is the Chairman of the Board or
President of BGE, or the President of
Constellation Holdings, 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 BGE, or the President of
Constellation Holdings, 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
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
who has completed at least one full calendar month of
service with BGE 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,
(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 BGE'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 BGE-
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 BGE's general corporate
assets.
7. Supplemental Survivor Annuity Benefit.
(i) Eligibility for survivor annuity benefit. Following
the death of a participant, a 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 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 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 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,
(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 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 BGE's 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
BGE'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 BGE 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 BGE 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 BGE 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 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 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 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 rate of pay 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 rate of pay 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
rate of pay awarded to the participant under BGE's
Executive Annual Incentive Plan, BGE's Manager Annual
Incentive Plan, or the Results Incentive Awards Program
(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 more than one 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
more than one Incentive Plan, 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 rate of pay as an
officer or key employee) plus the actual percentage
award under BGE's Manager Annual Incentive Plan
(expressed as a percentage of annualized final base
rate of pay as a manager) plus the actual percentage
award under the Results Incentive Awards Program
(expressed as a percentage of annualized final base
rate of pay as a regular employee).