BALTIMORE GAS AND ELECTRIC COMPANY
EXECUTIVE BENEFITS PLAN
Effective August 1, 1996
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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 6
(v) Amount, timing, and source of lump sum
retirement benefit payout 6
(vi) Death of participant entitled to lump
sum payout 7
(vii)Health and dental benefits 7
(b) Accrued benefit 7
(i) Computation of gross accrued benefit 8
(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 9
(1) Change in control 9
(2) Plan amendment 10
(3) Involuntary Demotion, Termination
From Employment With BGE, or
eligibility withdrawal without
Cause 11
(iii)Form of benefit payout 11
(iv) Amount, timing and source of benefit
payout 11
(v) Death of participant entitled to lump
sum payout 12
(d) Other benefits 13
(i) Eligibility for other benefits 13
(ii) Computation of other benefits 13
(iii)Form of payout of other benefits 14
(iv) Amount, timing, and source of monthly
other benefit payout 14
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6. Supplemental Long-Term Disability Benefit 14
(i) Eligibility for disability benefits 14
(ii) Computation of disability benefits 15
(iii)Form of payment of disability benefits 15
(iv) Amount, timing, and source of monthly
disability benefit payout 15
(v) Bonus 16
7. Supplemental Survivor Annuity Benefit 16
(a) Survivor annuity benefit 16
(i) Eligibility for survivor
annuity benefit 16
(ii) Computation of survivor
annuity benefit 17
(iii)Form of payout of survivor annuity
benefits 18
(iv) Amount, timing, and source of monthly 18
survivor annuity benefit payout 18
(b) Other survivor benefit 19
(i) Eligibility for other survivor benefit 19
(ii) Computation of other survivor benefit 19
(iii)Form of payout of other survivor
benefit 19
(iv) Amount, timing, and source of monthly
other survivor benefit payout 20
8. Death Benefit 20
9. Dependent Death Benefit 20
10. Sickness Benefit 21
11. Vacation Benefit 21
12. Planning Benefit 21
13. Miscellaneous 22
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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.
"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.
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"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, or any successor plan.
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"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 or from 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.
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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
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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
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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 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
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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)(iv),
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.
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(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
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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
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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
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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 under the Plan.
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(d) Other benefits.
(i) Eligibility for other benefits. Upon a participant's Termination
From Employment With BGE, 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 BGE's Executive Annual
Incentive Plan and/or BGE'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).
(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
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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 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.
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(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).
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(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.
(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 BGE), 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), 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
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(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
(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.
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(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 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 BGE, 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 BGE's Executive
Annual Incentive Plan and/or BGE's
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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 will receive his/her survivor
benefit payout in the form of a monthly payment.
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(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. 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
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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
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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 Income
Security Act of 1974. BGE shall make contributions to the Rabbi Trust in
accordance with the
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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.
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