EXHIBIT 10(l)
CONSTELLATION HOLDINGS, INC.
DEFERRED COMPENSATION PLAN
FOR NON-EMPLOYEE DIRECTORS
1. Objective. The objective of this Plan is to provide a portion of the
Compensation of non-employee Directors of CHI in the form of Stock
Units, thereby promoting a greater identity of interest between CHI's
non-employee Directors and its parent company's stockholders, and to
enable such Directors to defer receipt of the portion of their
Compensation that is payable in cash.
2. Definitions. As used herein, the following terms will have the meaning
specified below:
"Annual Retainer" means the amount payable by CHI to a Director as
annual compensation for performance of services as a Director, and
includes Committee Chair retainers. All other amounts (including without
limitation Board/committee meeting fees, and expense reimbursements)
shall be excluded in calculating the amount of the Annual Retainer.
"BGE" means Baltimore Gas and Electric Company, a Maryland corporation,
or its successor.
"Board" means the Board of Directors of CHI.
"Cash Account" means an account by that name established pursuant to
Section 7. The maintenance of Cash Accounts is for bookkeeping purposes
only.
"Change in Control" means (i) the purchase or acquisition by any
person, entity or group of persons (within the meaning of section 13(d)
or 14(d) of the Securities Exchange Act of 1934 (the "Exchange Act"), or
any comparable successor provisions), of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20
percent or more of either the outstanding shares of common stock of BGE
or the combined voting power of BGE's then outstanding shares of voting
securities entitled to a vote generally, or (ii) 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 (iii) a liquidation or dissolution of BGE or the sale of
substantially all of its assets, or (iv) a change of more than one-half
of the members of the board of directors of BGE within a 90-day period
for reasons other than the death, disability, or retirement of such
members or (v) the purchase or acquisition by any person, entity or
group of persons (within the meaning of section 13(d) or 14(d) of 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 CHI or the combined voting power of CHI's then
outstanding shares of voting securities entitled to a vote generally
unless such purchase or acquisition is deemed to have occurred as the
result of a reorganization, merger or consolidation involving BGE, or
(vi) the approval by the stockholders of CHI of a reorganization, merger
or consolidation, in each case, with respect to which persons who were
stockholders of CHI 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 (vii) a liquidation or dissolution of CHI or
the sale of substantially all of its assets, or (viii) a change of more
than one-half of the members of the Board of Directors of CHI within a
90-day period for reasons other than the death, disability, or
retirement of such members.
"CHI" means Constellation Holdings, Inc., a Maryland corporation, or its
successor.
"Common Stock" means the common stock, without par value, of BGE.
"Compensation" means any Annual Retainer and meeting fees payable by
CHI to a participant in his/her capacity as a Director. Compensation
excludes expense reimbursements paid by CHI to a participant in his/her
capacity as a Director.
"Deferred Cash Compensation" means any cash Compensation that is
voluntarily deferred by a participant pursuant to Section 6.
"Director" means a member of the Board who is not an employee of CHI or
any of its subsidiaries/affiliates.
"Disability" or "Disabled" means that the Plan Administrator has
determined that the participant is unable to fulfill his/her
responsibilities of Board membership because of illness or injury. For
purposes of this Plan, a
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participant's eligibility to participate shall be deemed to have
terminated on the date he/she is determined by the Plan Administrator to
be Disabled.
"Earnings" means, with respect to the Cash Account, hypothetical
interest credited to the Cash Account. "Earnings" means, with respect to
the Stock Account, hypothetical dividends credited to the Stock Account.
"Fair Market Value" means, as of any specified date, the average
closing price of a share of Common Stock, reported in "New York Stock
Exchange Composite Transactions" as published in the Eastern Edition of
The Wall Street Journal for the most recent 30 days during which Common
Stock was traded on the New York Stock Exchange (including such
valuation date if a trading date).
"Plan Accounts" means a participant's Cash Account and/or Stock
Account. The maintenance of Plan Accounts is for bookkeeping purposes
only.
"Plan Administrator" means, as set forth in Section 3, the Board.
"Stock Account" means an account by that name established pursuant to
Section 8. The maintenance of Stock Accounts is for bookkeeping purposes
only.
"Stock Unit(s)" means the share equivalents credited to a Participant's
Stock Account pursuant to Section 8. The use of Stock Units is for
bookkeeping purposes only; the Stock Units are not actual shares of
Common Stock. CHI will not reserve or otherwise set aside any Common
Stock for or to any Stock Account.
3. Plan Administration.
(i) Plan Administrator - The Plan is administered by the Board, who has
sole authority to interpret the Plan, and, in general, to make all other
determinations advisable for the administration of the Plan to achieve
its stated objective. Decisions by the Plan Administrator shall be final
and binding upon all persons for all purposes. The Plan Administrator
shall have the power to delegate all or any part of its
non-discretionary duties to one or more designees, and to withdraw such
authority, by written designation.
(ii) Amendment - This Plan may be amended from time to time or
suspended or terminated at any time, at the written
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direction of the Plan Administrator. However, amendments required to
keep the Plan in compliance with applicable laws and regulations may be
made by the Secretary of CHI (or other officer of CHI succeeding to that
function) on advice of counsel. Nothing herein creates a vested right.
(iii) Indemnification - The Plan Administrator (and its designees),
Chairman of the Board, Chief Executive Officer, President, and Secretary
of CHI and all other employees of CHI or its subsidiaries/affiliates
whose assigned duties include matters under the Plan, shall be
indemnified by CHI or its subsidiaries /affiliates or from proceeds
under insurance policies purchased by CHI or its
subsidiaries/affiliates, against any and all liabilities arising by
reason of any act or failure to act made in good faith pursuant to the
provisions of the Plan, including expenses reasonably incurred in the
defense of any related claim.
4. Eligibility and Participation.
(i) Mandatory participation - A Director is required to participate in
this Plan with respect to the receipt of fifty percent (50%) of his/her
Annual Retainer in the form of Stock Units under Section 5 of the Plan,
while so classified.
(ii) Voluntary participation - A Director is eligible to participate in
the Plan by electing to defer all or certain portions of the
participant's Compensation, that is payable in cash, under Section 6 of
the Plan, while so classified.
(iii) Termination of participation - Eligibility to participate shall
terminate on the date the participant ceases to be a Director.
Notwithstanding termination of eligibility, such person with Plan
Accounts will remain a participant of the Plan, solely for purposes of
the administration of existing Plan Accounts, and no additional Stock
Units will be granted and no further deferrals of cash Compensation
under the Plan will be permitted.
5. Mandatory Stock Units. The Stock Account of a participant will be
credited on January 1 of each calendar year with Stock Units equal to
the number of shares of Common Stock (including fractions of a share)
that could have been purchased, with fifty percent (50%) of the
participant's Annual Retainer for such calendar year, at Fair Market
Value on such January 1.
If a participant initially becomes eligible to participate in the Plan
during a calendar year, the Stock Account of the
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participant for such calendar year will be credited, on the date that is
the first day of the calendar month after the participant initially
becomes eligible to participate in the Plan, with Stock Units equal to
the number of shares of Common Stock (including fractions of a share)
that could have been purchased at Fair Market Value on such date, with
an amount equal to (i) fifty percent (50%) of the participant's Annual
Retainer multiplied by (ii) a fraction the numerator of which is the
number of full calendar months in the calendar year on and after such
date, and the denominator of which is 12.
The Stock Account will be maintained pursuant to Section 8.
6. Cash Compensation Deferral Election. A participant may elect to defer
none, all or fifty percent (50%) of his/her Annual Retainer that is
payable in cash (i.e., fifty percent (50%) of the Annual Retainer)
and/or may elect to defer none, all, fifty percent (50%), or
seventy-five percent (75%) of his/her other Compensation that is payable
in cash (i.e., one hundred percent (100%) of all other Compensation). A
participant's cash Compensation deferral election with respect to the
Annual Retainer shall specify whether the deferred Annual Retainer is to
be credited to the Cash Account or to the Stock Account. All other Cash
Compensation that a participant elects to defer will be credited to the
Cash Account.
Such election shall be made by written notification to the Secretary of
CHI (or other officer of CHI succeeding to that function). Such election
shall be made prior to the calendar year during which the applicable
cash Compensation is payable, and shall be effective as of the first day
of such calendar year. If a participant initially becomes eligible to
participate in the Plan during a calendar year, the election for such
calendar year must be made within thirty (30) calendar days after the
date the participant initially becomes eligible to participate in the
Plan, and shall be effective with respect to Compensation earned after
the date the election is received by the Secretary of CHI (or other
officer of CHI succeeding to that function). Elections under this
Section shall remain in effect for all succeeding calendar years until
revoked. Elections may be revoked by written notification to the
Secretary of CHI (or other officer of CHI succeeding to that function),
and shall be effective as of the first day of the calendar year
following the calendar year during which the revocation is received by
the Secretary of CHI.
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Notwithstanding anything herein contained to the contrary, the Plan
Administrator shall have the right in its sole discretion to permit a
participant to defer other percentages of his/her Annual Retainer and/or
other Compensation that is payable in cash.
7. Cash Accounts. Cash Compensation that consists of the Annual Retainer
that a participant has elected to defer into the Cash Account is
credited to the participant's Cash Account on January 1 (or if later,
the date the participant's initial election to participate in the
Plan becomes effective). All other cash Compensation that a
participant has elected to defer is credited to the participant's Cash
Account on each date such cash Compensation would otherwise have been
paid to the Director. A participant's Cash Account shall be credited
with earnings at the rate earned by the Interest Income Fund under the
Baltimore Gas and Electric Company Employee Savings Plan, and computed
in the same manner as under such plan. Earnings are credited to the
Cash Account commencing on the date the applicable Deferred Cash
Compensation is credited to the Cash Account.
8. Stock Accounts. Cash Compensation that consists of the Annual Retainer
that a participant has elected to defer into the Stock Account is
credited to the participant's Stock Account on January 1 (or if later,
the date the participant's initial election to participate in the Plan
becomes effective). A participant's Stock Account shall be credited with
Stock Units equal to the number of shares of Common Stock (including
fractions of a share) that could have been purchased with such Deferred
Cash Compensation, at Fair Market Value on such date. Grants of
mandatory Stock Units are credited to the Stock Account as set forth in
Section 5.
As of any dividend distribution date for the Common Stock, the
participant's Stock Account shall be credited with additional Stock
Units equal to the number of shares of Common Stock (including fractions
of a share) that could have been purchased, at the closing price of a
share of Common Stock on such date as reported in "New York Stock
Exchange Composite Transactions" as published in the Eastern Edition of
the The Wall Street Journal, with the amount which would have been paid
as dividends on that number of shares (including fractions of a share)
of Common Stock which is equal to the number of Stock Units then
credited to the participant's Stock Account.
In the event of any change in the outstanding shares of Common Stock by
reason of any stock dividend or split, recapitalization, combination or
exchange of shares or other
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similar changes in the Common Stock, then appropriate adjustments shall
be made in the number of Stock Units in each participant's Stock
Account. Such adjustments shall be made effective on the date of the
change related to the Common Stock.
9. Distributions of Plan Accounts. Distributions of Plan Accounts shall be
made in cash only, from the general assets of CHI.
A participant may elect (by notification in the form and manner
established by the Secretary of CHI (or other officer of CHI succeeding
to that function) from time to time) to begin distributions (i) in the
calendar year following the calendar year that eligibility to
participate terminates, (ii) in the calendar year following the calendar
year in which a participant attains age 70, if later, or (iii) any
calendar year between (i) and (ii). Such election must be made prior to
the end of the calendar year in which eligibility to participate
terminates. Alternatively, a participant who reaches age 70 while still
eligible to participate may elect to begin distributions, in the
calendar year following the calendar year that the participant reaches
age 70, of amounts in his/her Plan Accounts as of the end of the
calendar year the participant reaches age 70. Such election must be made
prior to the end of the calendar year in which the participant reaches
age 70, and a distribution election to receive any subsequently deferred
amounts beginning in the calendar year following the calendar year that
eligibility to participate terminates, must be made prior to the end of
the calendar year in which eligibility to participate terminates.
A participant may elect (by notification in the form and manner
established by the Secretary of CHI (or other officer of CHI succeeding
to that function) from time to time) to receive distributions in a
single payment or in annual installments during a period not to exceed
fifteen years. The single payment or the first installment payment,
whichever is applicable, shall be made within the first sixty (60)
calendar days of the calendar year elected for distribution. Subsequent
installments, if any, shall be made within the first sixty (60) calendar
days of each succeeding calendar year until the participant's Cash
Account has been paid out.
In the event applicable elections are not timely made, a participant
shall receive a distribution in a single payment within the first sixty
(60) calendar days of the calendar
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year following the calendar year that eligibility to participate
terminates.
The value of the Stock Account, which is equal to the number of Stock
Units in the Stock Account multiplied by the Fair Market Value on the
date on which the participant's eligibility to participate terminates
(or, the date that is the last day of the calendar year during which the
participant reaches age 70, for a participant who elects to begin
distributions while still eligible to participate), is transferred to
the Cash Account on such date. Earnings are credited to the Cash Account
through the date of distribution, and amounts held for installment
payments shall continue to be credited with Earnings. The value of the
Cash Account that is payable in cash on the date of the single payment
distribution is equal to the balance in the Cash Account on the date
that is no earlier than five (5) calendar days prior to the day of such
distribution ("Distribution Valuation Date"). The amount of any cash
distribution to be made in installments from the Cash Account will be
determined by multiplying (i) the balance in such Cash Account on the
Distribution Valuation Date by (ii) a fraction, the numerator of which
is one and the denominator of which is the number of installments in
which distributions remain to be made (including the current
distribution).
If a participant dies or becomes Disabled, the entire unpaid balance of
his/her Plan Accounts shall be paid to the beneficiary(ies) designated
by the participant by notification in the form and manner established by
the Secretary of CHI (or other officer of CHI succeeding to that
function) from time to time or, if no designation was made, in the event
of death, to the estate of the participant, and in the event of
Disability, to the participant. Payment shall be made within sixty (60)
calendar days after notice of death or Disability is received by the
Secretary, unless prior to the participant's death or Disability, the
participant elected (in the form and manner established by the Secretary
of CHI (or other officer of CHI succeeding to that function) from time
to time) a delayed and/or installment distribution option for such
beneficiary(ies); provided, however that (i) such a distribution option
election shall be effective only if the value of the participant's Plan
Accounts is more than $50,000 on the date of the participant's death or
Disability; and (ii) the final distribution must be made to such
beneficiary(ies) no later than 15 years after the participant's death or
Disability. After the end of the calendar year that a participant's
eligibility to participate terminates, a distribution option election
for a particular beneficiary is irrevocable;
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provided, however, that the participant may make a distribution option
election for a new beneficiary who is initially designated after the
participant's eligibility to participate terminates, and such election
is irrevocable with respect to the new beneficiary.
The value of the Stock Account, which is equal to the number of Stock
Units in the Stock Account multiplied by the Fair Market Value on the
date of the participant's death or Disability, is transferred to the
Cash Account on such date. Earnings are credited to the Cash Account
through the date of distribution, and amounts held for installment
payments shall continue to be credited with Earnings. The value of the
Cash Account that is payable in cash on the date of the single payment
distribution is equal to the balance in the Cash Account on the date
that is no earlier than five (5) calendar days prior to the day of such
distribution ("Beneficiary Distribution Valuation Date"). The amount of
any cash distribution to be made in installments from the Cash Account
will be determined by multiplying (i) the balance in such Cash Account
on the Beneficiary Distribution Valuation Date by (ii) a fraction, the
numerator of which is one and the denominator of which is the number of
installments in which distributions remain to be made (including the
current distribution).
Upon the death of a participant's beneficiary for whom a delayed and/or
installment distribution option was elected, the entire unpaid balance
of the participant's Cash Account shall be paid to the beneficiary(ies)
designated by the participant's beneficiary by notification in the form
and manner established by the Secretary of CHI (or other officer of CHI
succeeding to that function) from time to time or, if no designation was
made, to the estate of the participant's beneficiary. Payment shall be
made within sixty (60) calendar days after notice of death is received
by the Secretary . The value of the Cash Account that is payable in cash
is equal to the balance in the Cash Account on the date that is no
earlier than five (5) calendar days prior to the day of such
distribution.
Notwithstanding anything herein contained to the contrary, the Plan
Administrator shall have the right in its sole discretion to (i) vary
the manner and timing of distributions of a participant or beneficiary
entitled to a distribution under this Section 9, and may make such
distributions in a single payment or over a shorter or longer period of
time than that elected by a participant; and (ii) vary the period during
which the closing price of Common Stock is referenced to determine the
value of the Stock Account that is
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transferred to the Cash Account on the date on which the participant's
eligibility to participate terminates. Any affected participants will
not participate in exercising such discretion.
10. Beneficiaries. A participant shall have the right to designate, change
or rescind a beneficiary(ies) who is to receive a distribution(s)
pursuant to Section 9 in the event of the death or Disability of the
participant. A participant's beneficiary(ies) for whom a delayed and/or
installment distribution option was elected shall have the right to
designate a beneficiary(ies) who is to receive a distribution pursuant
to Section 9 in the event of the death of the participant's
beneficiary(ies).
Any designation, change or recision of the designation of beneficiary
shall be made by notification in the form and manner established by the
Secretary of CHI (or other officer of CHI succeeding to that function)
from time to time. The last designation of beneficiary received by the
Secretary shall be controlling over any testamentary or purported
disposition by the participant (or, if applicable, the participant's
beneficiary(ies)), provided that no designation, recision or change
thereof shall be effective unless received by the Secretary prior to the
death or Disability (whichever is applicable) of the participant (or, if
applicable, the death of the participant's beneficiary(ies)).
If the designated beneficiary is the estate, or the executor or
administrator of the estate, of the participant (or, if applicable, the
participant's beneficiary(ies)), a distribution pursuant to Section 9
may be made to the person(s) or entity (including a trust) entitled
thereto under the will of the participant (or, if applicable, the
participant's beneficiary(ies)), or, in the case of intestacy, under the
laws relating to intestacy.
11. Valuation of Plan Accounts. The Plan Administrator shall cause the value
of a participant's Plan Accounts to be determined and reported to CHI
and the participant at least once per year as of the last business day
of the calendar year. The value of the Stock Account will equal the
number of Stock Units in the Stock Account multiplied by the closing
price of a share of Common Stock on the last business day of the
calendar year as reported in "New York Stock Exchange Composite
Transactions" as published in the Eastern Edition of the The Wall Street
Journal. The value of the Cash Account will equal the balance in the
Cash Account on the last business day of the calendar year.
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12. Withdrawals. No withdrawals of Plan Accounts may be made, except a
participant may at any time request a hardship withdrawal from his/her
Plan Accounts if he/she has incurred an unforeseeable financial
emergency. An unforeseeable financial emergency is defined as
severe financial hardship to the participant resulting from a
sudden and unexpected illness or accident of the participant (or of
his/her dependents), loss of the participant's property due to
casualty, or other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of the
participant. The need to send a child to college or the desire to
purchase a home are not considered to be unforeseeable emergencies.
The circumstance that will constitute an unforeseeable emergency will
depend upon the facts of each case.
A hardship withdrawal will be permitted by the Plan Administrator only
as necessary to satisfy an immediate and heavy financial need. A
hardship withdrawal may be permitted only to the extent reasonably
necessary to satisfy the financial need. Payment may not be made to the
extent that such hardship is or may be relieved (i) through
reimbursement or compensation by insurance or otherwise, (ii) by
liquidation of the participant's assets, to the extent the liquidation
of such assets would not itself cause severe financial hardship, or
(iii) by cessation of deferrals under the Plan.
The request for hardship withdrawal shall be made by notification in
the form and manner established by the Plan Administrator from time to
time. Such hardship withdrawal will be permitted only with approval of
the Plan Administrator. The participant will receive a lump sum payment
after the Plan Administrator has had reasonable time to consider and
then approve the request.
The value of the Stock Account for purposes of processing a hardship
cash withdrawal is equal to the number of Stock Units in the Stock
Account multiplied by the Fair Market Value on the date on which the
hardship withdrawal is processed. The value of the Cash Account for
purposes of processing a hardship cash withdrawal is equal to the
balance in the Cash Account on the date on which the hardship withdrawal
is processed.
13. Change in Control. The terms of this Section 13 shall immediately
become operative, without further action or consent by any person or
entity, upon a Change in Control, and once operative shall supersede
and control over any other
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provisions of this Plan. Upon the occurrence of a Change in Control
followed within one year of the date of such Change in Control by the
participant's cessation of Board membership for any reason, such
participant shall be paid the value of his/her Plan Accounts in a
single, lump sum cash payment. The value of the Stock Account, which
is equal to the number of Stock Units in the Stock Account multiplied
by the Fair Market Value on the date of the participant's
cessation of Board membership, is transferred to the Cash Account
on such date. Earnings are credited to the Cash Account through the
date of distribution. The value of the Cash Account that is payable
in cash on the date of the single lump sum cash payment is equal to
the balance in the Cash Account on the date that is no earlier than
five (5) calendar days prior to the day of such distribution. Such
payment shall be made as soon as practicable, but in no event later
than thirty (30) calendar days after the date of the participant's
cessation of Board membership. On or after a Change in Control, no
action, including, but not by way of limitation, the amendment,
suspension or termination of the Plan, shall be taken which would affect
the rights of any participant or the operation of this Plan with
respect to the balance in the participant's Plan Accounts.
14. Withholding. CHI may withhold to the extent required by law all
applicable income and other taxes from amounts deferred or distributed
under the Plan.
15. Copies of Plan Available. Copies of the Plan and any and all amendments
thereto shall be made available to all participants during normal
business hours at the office of the Plan Administrator.
16. Miscellaneous.
(i) Inalienability of benefits - Except as may otherwise be required by
law or court order, the interest of each participant or beneficiary
under the Plan cannot be sold, pledged, assigned, alienated or
transferred in any manner or be subject to attachment or other legal
process of whatever nature; provided, however, that any applicable taxes
may be withheld from any cash benefit payment made under this Plan.
(ii) Controlling law - The Plan and its administration shall be
governed by the laws of the State of Maryland, except to the extent
preempted by federal law.
(iii) Gender and number - A masculine pronoun when used herein refers
to both men and women and words used in the singular are intended to
include the plural, and vice versa, whenever appropriate.
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(iv) Titles and headings - Titles and headings to articles and sections
in the Plan are placed herein solely for convenience of reference and in
any case of conflict, the text of the Plan rather than such titles and
headings shall control.
(v) References to law - All references to specific provisions of any
federal or state law, rule or regulation shall be deemed to also include
references to any successor provisions or amendments.
(vi) Funding and expenses - Benefits under the Plan are not vested or
funded, and shall be paid out of the general assets of CHI. To the
extent that any person acquires a right to receive payments from CHI
under this Plan, such rights shall be no greater than the right of any
unsecured general creditor of CHI. The expenses of administering the
Plan will be borne by CHI.
(vii) Not a contract - Participation in this Plan shall not constitute
a contract of employment or Board membership between CHI and any person
and shall not be deemed to be consideration for, or a condition of,
continued employment or Board membership of any person.
(viii) Successors - In the event CHI becomes a party to a merger,
consolidation, sale of substantially all of its assets or any other
corporate reorganization in which CHI will not be the surviving
corporation or in which the holders of the common stock of CHI will
receive securities of another corporation (in any such case, the "New
Company"), then the New Company shall assume the rights and obligations
of CHI under this Plan.
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