EXHIBIT 10(a)
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
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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.
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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:
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(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.
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(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.
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(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.
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(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
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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.
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(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,
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(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:
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(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.
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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.
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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.
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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.
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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
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- 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
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