Exhibit 10(e)


 


EXECUTION
VERSION


 





 


October 14, 2008


 


Mr. Jonathan W.
Thayer


Vice President &
Managing Director

Corporate Strategy & Development


Constellation Energy Group, Inc.


100 Constellation Way


Baltimore, Maryland 
21202


 


Re:  Promotion to Treasurer - Compensation
Package.


 


Dear Jack:


 


On behalf of
Constellation Energy Group, Inc. (the “Company”), I am pleased to
summarize the principal terms of your employment as Treasurer of the
Company.  This letter agreement will be
effective as of the date hereof.


 


1.                                       Title.  Treasurer of the Company.


 


2.                                       Duties and Responsibilities.  You will have the duties and responsibilities that are
normally associated with the position set forth above and such additional
executive responsibilities as may be assigned by the Company from time to
time.  You will devote your best efforts
and energy to the performance of your duties to the Company.  You will report directly to the Chief
Financial Officer of the Company; provided that if you are promoted to a
more senior financial position with the Company, you will likely be required to
report directly to the Chief Executive Officer of the Company.


 


3.                                       Base Salary.  Your base salary will be $400,000 per annum, payable
in accordance with the usual payroll practices of the Company.  Your base salary will be subject to periodic
review and modification by the Company.


 


4.                                       Annual Bonus.  You will be eligible to receive an annual
discretionary incentive payment under the Company’s annual bonus plan as in
effect from time to time upon the attainment of one or more pre-established
performance goals established by the Company. 
For each of the Company’s fiscal years 2008 and 2009, you will be
entitled to receive a guaranteed annual incentive bonus in the amount of
$800,000 (the “2008 Bonus”) and $600,000 (the “2009 Bonus”),
respectively, payable in the fiscal year following the fiscal year to which
such bonus relates at the same time bonuses are paid to other executives of the
Company generally, subject, except as otherwise provided in 


 


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Section 7(i) hereof,
to your continued employment with the Company on the date of payment.


 


5.                                       Incentive Plan
Participation.  You will be eligible to receive equity
and other long-term incentive awards under the equity-based incentive
compensation plans adopted by the Company from time to time for which employees
are generally eligible.  The level of
your participation in any such plan, if any, will be determined in the sole
discretion of the Company from time to time.


 


6.                                       Employee Benefits.  You will remain eligible to participate in all health
benefits, insurance programs, pension and retirement plans, and other employee
welfare benefits plans maintained by the Company for its employees generally in
accordance with the terms thereof.


 


7.                                       Severance.  If your employment by the Company is terminated by the
Company for a reason other than for “Cause” or due to your physical or mental
incapacity or by you for “Good Reason” (each, as defined in Section 9
hereof), subject to Section 8 hereof, the Company will pay or provide you
with the following benefits in addition to any earned, accrued or vested
obligation to which you may be entitled under any employee benefit plan of the
Company:


 


(i)                                     if such termination occurs prior to
payment of the 2008 Bonus and/or the 2009 Bonus, each of the 2008 Bonus and/or
the 2009 Bonus (as applicable), payable at the same time such bonuses would
have otherwise been paid had you remained employed with the Company through the
applicable date of payment in accordance with the provisions of Section 4
hereof;


 


(ii)                                  an amount equal to your monthly base
salary rate as in effect on the date of termination (but not as an employee),
which would continue to be paid monthly for a period of twelve (12) months
following such termination; provided that the first payment will be made
on the first payroll period after the sixtieth (60th)
day following such termination and will include payment of any amounts that
would otherwise be due prior thereto; and


 


(iii)          subject to (A) your timely election
of continuation coverage under the Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended (“COBRA”), (B) your continued copayment of
premiums at the same level and cost to you as if you were an employee of the
Company (excluding, for purposes of calculating cost, an employee’s ability to
pay premiums with pre-tax dollars), and (C) continued participation in the
Company’s group health plan (to the extent permitted under applicable law and
the terms of such plan) which covers you for a period of twelve (12) months at
the Company’s expense, provided that you are eligible and remain
eligible for COBRA coverage; and provided, further, that in the
event that you obtain other employment that offers group health benefits, such
continuation of coverage by the Company under this section will immediately
cease.


 


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Payments and benefits
provided in this section will be in lieu of any termination or severance
payments or benefits for which you may be eligible under any of the plans,
policies or programs of the Company or under applicable law.  In the event that your employment with the
Company terminates for any reason other than as specified in this Section 7,
you will not be entitled to the severance benefits described in this Section 7
(other than any earned, accrued or vested obligation to which you may be
entitled under any employee benefit plan of the Company).


 


8.                                       Release; No Mitigation. 
Any and all amounts payable and benefits or additional rights provided
pursuant to Section 7 hereof (other than any earned, accrued or vested
obligation to which you may be entitled under any employee benefit plan of the
Company) will only be payable if you deliver to the Company and do not revoke a
general release of claims in favor of the Company in a form reasonably
satisfactory to the Company.  Such
release must be executed and delivered (and no longer subject to revocation, if
applicable) within sixty (60) days following termination.  In no event will you be obligated to seek
other employment or take any other action by way of mitigation of the amounts
payable to you under any of the provisions of this letter agreement, nor shall
the amount of any payment hereunder be reduced by any compensation earned by
you as a result of employment by a subsequent employer, except as provided in Section 7(iii) hereof.


 


9.                                       Definitions.


 


(i)                                     “Cause” will mean:  (A) your conviction of a felony
involving moral turpitude or misappropriation of property of the Company; (B) your
engaging in conduct or activities that constitutes disloyalty to the Company
and such conduct or activities are materially damaging to the property,
business or reputation of the Company; (C) your failure or refusal to
comply with any written direction of the board of directors of the Company or a
more senior executive of the Company; (D) your embezzlement of Company
funds or your knowing, and with intent, unlawful appropriation of any corporate
opportunity of the Company; (E) your willful misconduct or gross negligence in
the performance of your duties to the Company that has or could reasonably be
expected to have an adverse effect on the Company; or (F) your material
breach of this letter agreement or any other agreement with the Company, or a
material violation of the Company’s code of conduct or other written
policy.  Any determination of Cause by
the Company will be made by a resolution approved by a majority of the members
of the Company’s board of directors, provided that no such determination
may be made until you have been given written notice detailing the specific
Cause event and a period of thirty (30) days following receipt of such notice
to cure such event (if susceptible to cure). 
Notwithstanding anything to the contrary contained herein, your right to
cure will not apply if there are habitual or repeated breaches by you.


 


(ii)                                  “Good Reason”  will mean the occurrence of any of the
following events, without your express written consent, unless such events are
fully corrected in all material respects by the Company within thirty (30) days
following written notification by you to the Company that you intend to
terminate your employment hereunder for 


 


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one of the reasons set forth below: 
(A) a material diminution in your base salary; (B) a material
diminution in your duties, authorities or responsibilities (other than
temporarily while physically or mentally incapacitated or as required by
applicable law); provided that for purposes of this clause (B), a
reduction of your duties, authorities or responsibilities solely as a result of
the Company ceasing to be a publicly traded corporation will not constitute
Good Reason hereunder; and provided, further, that if you are
promoted to a more senior financial position with the Company, any material
diminution in your duties, authorities or responsibilities associated with such
more senior financial position with the Company will constitute Good Reason
hereunder; (C) a relocation of your primary work location by more than
fifty (50) miles from its then current location; or (D) the Company’s
material breach of this letter agreement. 
You must provide the Company with a written notice detailing the
specific circumstances alleged to constitute Good Reason within ninety (90)
days after the first occurrence of such circumstances.


 


10.                                 No Assignments.  This letter agreement is personal to each of the
parties hereto.  Except as provided in
this Section 10 hereof, no party may assign or delegate any rights or
obligations hereunder without first obtaining the written consent of the other
party hereto.  The Company may assign
this letter agreement to any successor to all or substantially all of the business
and/or assets of the Company, provided that the Company will require
such successor to expressly assume and agree to perform this letter agreement
in the same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place.  As used in this Agreement, “Company”
will mean the Company and any successor to its business and/or assets, which
assumes and agrees to perform the duties and obligations of the Company under
this letter agreement by operation of law or otherwise.


 


11.                                 Withholding Taxes.  The Company may withhold from any and all amounts
payable to you hereunder such federal, state and local taxes as may be required
to be withheld pursuant to any applicable law or regulation.


 


12.                                 Section 409A
Compliance.


 


(i)                                     The intent of the parties is that
payments and benefits under this letter agreement comply with Internal Revenue
Code Section 409A and the regulations and guidance promulgated thereunder
(collectively “Code Section 409A”) and, accordingly, to the maximum
extent permitted, this letter agreement will be interpreted to be in compliance
therewith.  If you notify the Company
(with specificity as to the reason therefor) that you believe that any
provision of this letter agreement (or of any award of compensation, including
equity compensation or benefits) would cause you to incur any additional tax or
interest under Code Section 409A and the Company concurs with such belief,
the Company will, after consulting with you, reform such provision to attempt
to comply with Code Section 409A through good faith modifications to the minimum extent
reasonably appropriate to conform with Code Section 409A.  To the extent that any provision
hereof is modified in order to comply with Code 


 


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Section 409A, such modification will be made in good faith and
will, to the maximum extent reasonably possible, maintain the original intent
and economic benefit to you and the Company of the applicable provision without
violating the provisions of Code Section 409A.  In no event whatsoever will the Company be
liable for any additional tax, interest or penalty that may be imposed on you
by Code Section 409A or damages for failing to comply with Code Section 409A.


 


(ii)                                  A termination of employment will not be
deemed to have occurred for purposes of any provision of this letter agreement
providing for the payment of any amounts or benefits upon or following a
termination of employment unless such termination is also a “separation from
service” within the meaning of Code Section 409A and, for purposes of any
such provision of this letter agreement, references to a “termination,” “termination
of employment” or like terms will mean “separation from service.”  If you are deemed on the date of termination
to be a “specified employee” within the meaning of that term under Code Section 409A(a)(2)(B),
then with regard to any payment or the provision of any benefit that is
considered deferred compensation under Code Section 409A payable on
account of a “separation from service,” such payment or benefit will be made or
provided at the date which is the earlier of (A) the expiration of the six
(6)-month period measured from the date of such “separation from service” by
you, and (B) the date of your death (the “Delay Period”).  Upon the expiration of the Delay Period, all
payments and benefits delayed pursuant to this section (whether they would have
otherwise been payable in a single sum or in installments in the absence of
such delay) will be paid or reimbursed to you in a lump sum, and any remaining
payments and benefits due under this letter agreement will be paid or provided
in accordance with the normal payment dates specified for them herein.


 


(iii)          For purposes of Code Section 409A,
your right to receive any installment payments pursuant to this letter
agreement will be treated as a right to receive a series of separate and
distinct payments.


 


13.                                 Governing Law.  This letter agreement will be governed by, and
construed under and in accordance with, the internal laws of the State of Maryland,
without reference to rules relating to conflicts of laws.


 


14.                                 Entire Agreement.  This letter agreement constitutes the entire agreement
between you and the Company with respect to the subject matter hereof and
supersedes any and all prior agreements or understandings between you and the
Company with respect to the subject matter hereof, whether written or
oral.  This letter agreement may be
amended or modified only by a written instrument executed by you and the
Company.


 


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Jack, I would like to
congratulate you on your promotion to Treasurer of the Company, and I very much
look forward to your continued contributions to the success of the Company.


 




	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  CONSTELLATION
  ENERGY GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mayo A. Shattuck III

  
	
   

  	
   

  	
   

  
	
   

  	
  Name: 

  	
  Mayo A. Shattuck III

  
	
   

  	
   

  	
   

  
	
   

  	
  Title: 

  	
  Chairman,
  President and Chief Executive Officer

  






 


The above terms and
conditions accurately reflect our understanding regarding the terms and
conditions of my employment with the Company, and I hereby confirm my agreement
to the same.


 


 




	
  Dated: October 14,
  2008

  	
  /s/ Jonathan W. Thayer

  
	
   

  	
  Jonathan W. Thayer

  






 


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