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Exhibit 10(s)  


This document constitutes part of a prospectus covering securities

that have been registered under the Securities Act of 1933.  


  
 

    Constellation Energy Group, Inc.
  Executive Long-Term Incentive Plan
  (Plan)    
  


        1.    Purpose.    The purpose of this Plan is to increase shareholder value by providing a
long-term incentive to reward officers and key employees of the Company and its Subsidiaries, who are mainly responsible for the continued growth, development, and financial success of the
Company and its Subsidiaries, and for the continued profitable performance of the Company and its Subsidiaries. The Plan is also designed to permit the Company and its Subsidiaries to attract and
retain talented and motivated directors, officers and key employees and to increase their ownership of Company common stock. The Plan also provides the ability to award long-term
incentives that qualify for federal income tax deduction. 


        2.    Definitions.    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: 



        "Adjusted
EBIT" means EBIT, subject to, and/or after giving effect to, any adjustments applicable pursuant to Section 9A(iv) at the time Business Criteria and Performance
Target(s) are established for any Year or Years. 


        "Adjusted
EPS" means EPS, subject to, and/or after giving effect to, any adjustments applicable pursuant to Section 9A(iv) at the time Business Criteria and Performance
Target(s) are established for any Year or Years. 


        "Adjusted
Net Income" means Net Income, subject to, and/or after giving effect to, any adjustments applicable pursuant to Section 9A(iv) at the time Business Criteria and
Performance Target(s) are established for any Year or Years. 


        "Adjusted
Return on Assets" means Return on Assets subject to, and/or after giving effect to, any adjustments applicable pursuant to Section 9A(iv) at the time Business
Criteria and Performance Target(s) are established for any Year or Years. 



        "Adjusted
Return on Equity" means Return on Equity, subject to, and/or after giving effect to, any adjustments applicable pursuant to Section 9A(iv) at the time Business
Criteria and Performance Target(s) are established for any Year or Years. 


        "Award"
means individually or collectively, Restricted Stock, Options, Performance Units, Stock Appreciation Rights, Dividend Equivalents, or Equity granted under this Plan. 


        "Board"
means the Board of Directors of the Company. 


        "Book
Value" means the book value of a share of Stock determined in accordance with the Company's regular accounting practices as of the last business day of the month immediately
preceding the month in which a Stock Appreciation Right is exercised as provided in Section 10. 


        "Business
Criteria" means any one or any combination of Net Income, Adjusted Net Income, Return on Equity, Adjusted Return on Equity, Return on Assets, Adjusted Return on Assets, Total
Shareholder Return, Stock Fair Market Value, EBIT, Adjusted EBIT, EPS or Adjusted EPS. 


        "Code"
means the Internal Revenue Code of 1986, as amended. Reference in the Plan to any section of the Code will be deemed to include any amendments or successor provisions to such
section and any regulations promulgated thereunder. 


        "Committee"
means the Committee on Management of the Board; provided, however, that if such Committee fails to satisfy the disinterested administration provisions of
Section 16b-3 of the 1934 Act or the outside director provisions of Section 162(m)(4)(C) of the Code, "Committee" 






 





shall mean a committee of directors of the Company who satisfy the requirements of such Sections. 



        "Company"
means Constellation Energy Group, Inc., a Maryland corporation, or its successor, including any "New Company" as provided in Section 15I. 


        "Date
of Grant" means the date on which the granting of an Award is authorized by the Committee or such later date as may be specified by the Committee in such authorization. 


        "Date
of Retirement" means the date of Retirement. 


        "Disability"
means the determination that a Participant is "disabled" under the Company disability plan in effect at that time. 


        "Dividend
Equivalent" means an Award granted under Section 11. 


        "EBIT"
for any Year means the consolidated earnings before income taxes of the Company, as reported in the consolidated financial statements of the Company for the Year. 


        "Eligible
Person" means any person who satisfies all of the requirements of Section 5. 


        "EPS"
for any Year means diluted earnings per share of the Company, as reported in the Company's consolidated financial statements for the Year. 


        "Equity"
means an Award granted under Section 12. 


        "Exercise
Period" means the period or periods during which a Stock Appreciation Right is exercisable as described in Section 10. 


        "Fair
Market Value" means the average of the highest and lowest price at which the Stock was sold regular way on the New York Stock Exchange-Composite Transactions on a specified date. 


        "Incentive
Stock Option" means an incentive stock option within the meaning of Section 422 of the Code. 



        "Net
Income" for any Year means the consolidated net income of the Company, as reported in the consolidated financial statements of the Company for the Year. 


        "1934
Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. 


        "Option"
or "Stock Option" means either a nonqualified stock option or an incentive stock option granted under Section 8. 


        "Option
Period" or "Option Periods" means the period or periods during which an Option is exercisable as described in Section 8. 


        "Participant"
means an individual who has been granted an Award under this Plan. 


        "Pension
Plan" means the Pension Plan of Constellation Energy Group, Inc. as may be amended from time to time. 


        "Performance-Based
Restricted Stock" means that in determining the amount of a Restricted Stock Award payout, the Committee will take into account the Performance Targets. 



        "Performance
Period" means the taxable year of the Company or any other period designated by the Committee with respect to which an Award may be granted. 



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        "Performance
Target(s)" means the specific objective goal or goals that are timely set in writing by the Committee pursuant to Section 9A(ii) for each Participant for the
applicable Performance Period in respect of any one or more of the Business Criteria. 



        "Performance
Unit" means a unit of measurement equivalent to such amount or measure as defined by the Committee which may include, but is not limited to, dollars, market value shares, or
book value shares. 


        "Plan
Administrator" means, as set forth in Section 4, the Committee. 


        "Restricted
Stock" means Stock issued in the name of a Participant that bears a restrictive legend prohibiting sale, transfer, pledge or hypothecation of the Stock until the expiration
of the restriction period. 


        "Retirement"
means retirement on or after the "Early Retirement Date" (as such term is defined in the Pension Plan or a Subsidiary's retirement or pension plan). 


        "Return
on Assets" means Net Income divided by the average of the total assets of the Company at the end of the four fiscal quarters of the Year, as reported by the Company in its
consolidated financial statements. 


        "Return
on Equity" means the Net Income divided by the average of the common shareholders equity of the Company at the end of each of the four fiscal quarters of the Year, as reported by
the Company in its consolidated financial statements. 


        "Service-Based
Restricted Stock" means that in determining the amount of a Restricted Stock Award payout, the Committee will take into account only the period of time that the
Participant performed services for the Company or its Subsidiaries since the Date of Grant. 


        "Stock"
means the common stock, without par value, of the Company. 


        "Stock
Appreciation Right" means an Award granted under Section 10. 



        "Subsidiary(ies)"
means any entity that is directly or indirectly controlled by the Company or any entity, including an acquired entity, in which the Company has a significant equity
interest, as determined by the Committee, in its discretion. 


        "Termination"
means resignation or discharge from employment with the Company or any of its Subsidiaries except in the event of death, Disability, or Retirement. 


        "Total
Shareholder Return" means the sum of the change in the Fair Market Value of the Stock plus the value of reinvested dividends and cash equivalents, over the Performance Period. 



        "Year"
means a fiscal year of the Company commencing on or after January 1, 2002 that constitutes all or part of the applicable Performance Period. 




        3.    Effective Date, Duration and Stockholder Approval.    



        A.    Effective Date and Stockholder Approval.    Subject to the approval of the Plan by a
majority of the outstanding shares of Stock voted at the 2002 Annual Meeting of Stockholders, the Plan will be effective as of January 1, 2002. 


        B.    Period for Grants of Awards.    Awards may be made as provided herein for a period of
10 years after January 1, 2002. 



        C.    Termination.    The Plan will continue in effect until all matters relating to the
payment of outstanding Awards and administration of the Plan have been settled. 




        4.    Plan Administration.    The Committee is the Plan Administrator and has sole authority
(except as specified otherwise herein) to determine all questions of interpretation and application of the Plan, 


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or of the terms and conditions pursuant to which Awards are granted, exercised or forfeited under the Plan provisions, and, in general, to make all determinations advisable for the administration of
the Plan to achieve its stated purpose. Without limiting the generality of the foregoing, the Plan Administrator may modify, amend, extend or renew outstanding Awards, or accept the surrender of
outstanding Awards and substitute new Awards (provided, however, that, except as provided in Section 15H of the Plan, any modification that would materially adversely affect any outstanding
Award shall not be made
without the consent of the Participant, and provided, further, that no modification, amendment or substitution that results in repricing a Stock Option to a lower exercise price, other than to reflect
an adjustment made pursuant to Section 15H, shall be made without prior stockholder approval). 


        The
Plan Administrator's determinations under the Plan (including without limitation, determinations of the persons to receive Awards, the form, amount and timing of such Awards, the
terms and provisions of such Awards and any agreements evidencing such Awards) need not be uniform and may be made by the Administrator selectively among persons who receive, or are eligible to
receive, Awards under the Plan, whether or not such persons are similarly situated. Such determinations shall be final and not subject to further appeal. 



        The
Committee may delegate its authority under the Plan with respect to Participants who are not directors or executive officers. 


        5.    Eligibility.    Each officer, key employee or director of the Company and its
Subsidiaries may be designated by the Committee as a Participant, from time to time, with respect to one or more Awards. No officer, employee or director of the Company or its Subsidiaries shall have
any right to be granted an Award under this Plan. The Plan Administrator may also grant Awards to individuals in connection with hiring (as an officer, key employee or director), retention or
otherwise, prior to the date the individual first performs services for the Company or a Subsidiary; provided, however, that such Awards shall not become vested or exercisable prior to the date the
individual first commences performance of such services. 


        6.    Grant of Awards and Limitation of Number of Shares Awarded.    The Committee may, from
time to time, grant Awards to one or more Eligible Persons, provided that subject to any adjustment pursuant to Section 15H, the aggregate number of shares of Stock subject to Awards that may
be delivered under this Plan may not exceed eight million (8,000,000) shares. Shares delivered by the Company under the Plan may be authorized and unissued Stock, Stock held in the treasury of the
Company, or Stock purchased on the open market (including private purchases) in accordance with applicable securities laws. 


        Any
shares of Stock covered by an Award (or portion of an Award) granted under the Plan that is forfeited or canceled, expires or is settled in cash, including the settlement of tax
withholding obligations using shares, shall be deemed not to have been delivered for purposes of determining the maximum number of shares available for delivery under the Plan. Likewise, if any Option
granted under the Plan is exercised by tendering shares of Stock to the Company as full or partial payment for such exercise under the Plan, only the number of shares issued net of the shares tendered
shall be deemed delivered for purposes of determining the maximum number of shares available for delivery under the Plan. 


        The
maximum number of shares of Stock that may be issued in conjunction with Service-Based Restricted Stock Awards under Section 7 of the Plan, Performance-Based Restricted Stock
or
Performance Unit Awards under Section 9 of the Plan and Equity Awards under Section 12 of the Plan shall in the aggregate be eight hundred thousand (800,000). The maximum number of
shares of Stock subject to Awards of any combination that may be granted during any calendar year under the Plan to any one person is two million (2,000,000); provided, however, that to the extent the
maximum permissible award is not made in a year, such amount may be carried over to subsequent years. Such 


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per-individual limit shall not be adjusted to effect a restoration of shares of Stock with respect to which the related Award is terminated, surrendered or canceled. 



        The
Plan Administrator may permit or require a recipient of an Award to defer all or part of such individual's receipt of the payment of cash or the delivery of Stock that would
otherwise be due to such individual by virtue of the exercise of, payment of, or lapse or waiver of restrictions respecting, any Award. If any such payment deferral is required or permitted, the Plan
Administrator shall, in its sole discretion, establish rules and procedures for such payment deferrals. 


        7.    Service-Based Restricted Stock Awards.    



        A.    Grants of Service-Based Restricted Shares.    One or more shares of Restricted Stock may
be granted to any Eligible Person. The Service-Based Restricted Stock will be issued to the Participant on the Date of Grant without the payment of consideration by the Participant. The Service-Based
Restricted Stock will be issued in the name of the Participant and will bear a restrictive legend prohibiting sale, transfer, pledge or hypothecation of the Service-Based Restricted Stock until the
expiration of the restriction period. 


        The
Committee may also impose such other restrictions and conditions on the Service-Based Restricted Stock as it deems appropriate. 



        Upon
issuance to the Participant of the Service-Based Restricted Stock, the Participant will have the right to vote the Service-Based Restricted Stock, and subject to the Committee's
discretion, to receive the cash dividends distributable with respect to such shares, with such dividends treated as compensation to the Participant. The Committee, in its sole discretion, may direct
the accumulation and payment of distributable dividends to the Participant at such times, and in such form and manner, as determined by the Committee. 


        B.    Restriction Period.    At the time a Service-Based Restricted Stock Award is granted,
the Committee will establish a restriction period applicable to such Award which will be not less than one year and not more than ten years. Each Restricted Stock Award may have a different
restriction period, at the discretion of the Committee. 


        C.    Forfeiture or Payout of Award.    In the event a Participant ceases employment (or
ceases Board membership in the case of a director) during a restriction period, a Service-Based Restricted Stock Award is subject to forfeiture or payout (i.e., removal of restrictions) as follows:
(a) Termination—the Service-Based Restricted Stock Award is completely forfeited; or (b) Retirement, Disability or death—payout of the Service-Based Restricted
Stock Award is prorated for service during the period; provided, however, that the Committee may modify the above if it determines at its sole discretion that special circumstances warrant such
modification. 


        Any
shares of Service-Based Restricted Stock which are forfeited will be transferred to the Company. 


        Upon
completion of the restriction period, all Award restrictions will expire and new certificates representing the Award will be issued (the payout) without the restrictive legend
described in Section 7A. 


        D.    Waiver of Section 83(b) Election.    Unless otherwise directed by the Committee,
as a condition of receiving an Award of Service-Based Restricted Stock, a Participant must waive in writing the right to make an election under Section 83(b) of the Code to report the value of
the Service-Based Restricted Stock as income on the Date of Grant. 




        8.    Stock Options.    



        A.    Grants of Options.    One or more Options may be granted to any Eligible Person on the
Date of Grant without the payment of consideration by the Participant. 



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        B.    Stock Option Agreement.    Each Option granted under the Plan will be evidenced by a
"Stock Option Agreement" between the Company and the Participant containing provisions determined by the Committee, including, without limitation, provisions to qualify Incentive Stock Options as such
under Section 422 of the Code if directed by the Committee at the Date of Grant; provided, however, that each Incentive Stock Option Agreement must include the following terms and conditions:
(i) that the Options are exercisable, either in total or in part, with a partial exercise not affecting the exercisability of the balance of the Option; (ii) every share of Stock
purchased through the exercise of an Option will be paid for in full at the time of the exercise; (iii) each Option will cease to be exercisable, as to any share of Stock, at the earliest of
(a) the Participant's purchase of the Stock to which the Option relates, (b) the Participant's exercise of a related Stock Appreciation Right, or (c) the lapse of the Option;
(iv) Options will not be transferable by the Participant except by Will or the laws of descent and distribution and will be exercisable during the Participant's lifetime only by the Participant
or by the Participant's guardian or legal representative; and (v) notwithstanding any other provision, in the event
of a public tender for all or any portion of the Stock or in the event that any proposal to merge or consolidate the Company with another company is submitted to the stockholders of the Company for a
vote, the Committee, in its sole discretion, may declare any previously granted Options to be immediately exercisable. 



        C.    Option Price.    The Option price per share of Stock will be set by the grant, but will
be not less than 100% of the Fair Market Value at the Date of Grant. 


        D.    Form of Payment.    At the time of the exercise of the Option, the Option price will be
payable in cash or in other shares of Stock or in a combination of cash and other shares of Stock, in a form and manner as required by the Committee in its sole discretion. When Stock is used in full
or partial payment of the Option price, it will be valued at the Fair Market Value on the applicable date. 



        E.    Other Terms and Conditions.    The Option will become exercisable in such manner and
within such Option Period or Periods, not to exceed 10 years from its Date of Grant, as set forth in the Stock Option Agreement upon payment in full. Except as otherwise provided in this Plan
or in the Stock Option Agreement, any Option may be exercised in whole or in part at any time. 


        F.    Lapse of Option.    An Option will lapse upon the earlier of: (i) 10 years
from the Date of Grant, or (ii) at the expiration of the Option Period set by the grant. If the Participant ceases employment (or ceases Board membership in the case of a director) within the
Option Period and prior to the lapse of the Option, the Option will lapse as follows: (a) Termination—any unvested Option will lapse on the effective date of the Termination and any
vested Option will lapse 90 days after the effective date of the Termination; or (b) Retirement, Disability or death—any unvested Option will lapse on the effective date of
the Retirement, Disability or death and any vested Option will lapse on the earlier of 60 months after the effective date of the Retirement, Disability or death or at the expiration of the
Option Period set by the Grant; provided, however, that the Committee may modify the above if it determines in its sole discretion that special circumstances warrant such modification. 



        G.    Individual Limitation.    In the case of an Incentive Stock Option, the aggregate Fair
Market Value of the Stock for which Incentive Stock Options (whether under this Plan or another arrangement) in any calendar year are first exercisable will not exceed $100,000 with respect to such
calendar year (or such other individual limit as may be in effect under the Code on the Date of Grant) plus any unused portion of such limit as the Code may permit to be carried over. 



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        9.    Performance-Based Restricted Stock/Performance Units.    



        A.    Provision for Awards.    



        (i)    General.    For Awards under this Section 9, the Committee will establish
(a) Performance Target(s) relative to the applicable Business Criteria, (b) the applicable Performance Period and (c) the applicable number of shares of Performance-Based
Restricted Stock or Performance Units that are the subject of the Award. The applicable Performance Period and Performance Target(s) shall be determined by the Committee consistent with the terms of
the Plan and Section 162(m) of the Code. Notwithstanding the fact that the Performance Target(s) have been attained, the Committee may pay an Award under this Section 9 of less than the
amount determined by the formula or standard established pursuant to Section 9A(ii) or may pay no Award at all. 


        (ii)    Selection of Performance Target(s).    The specific Performance Target(s) with respect
to the Business Criteria must be established by the Committee in advance of the deadlines applicable under Section 162(m) of the Code and while the performance relating to the Performance
Target(s) remains substantially uncertain within the meaning of Section 162(m) of the Code. The Performance Target(s) with respect to any Performance Period may be established on a cumulative
basis or in the alternative, and may be established on a stand-alone basis with respect to the Company or on a relative basis with respect to any peer companies or index selected by the Committee. At
the time the Performance Target(s) are selected, the Committee shall provide, in terms of an objective formula or standard for each Participant, the method of computing the specific amount that will
represent the maximum amount of Award payable to the Participant if the Performance Target(s) are attained. The objective formula or standard shall preclude the use of discretion to increase the
amount of any Award earned pursuant to the terms of the Award. 


        (iii)    Effect of Mid-Year Commencement of Service.    If services as an
executive officer or director commence after the adoption of the Plan and the Performance Target(s) are established for a Performance Period, the Committee may grant an Award that is proportionately
adjusted based on the period of actual service during the Year, and the amount of any Award paid to such person shall not exceed that proportionate amount of the applicable maximum individual Award
under Section 6. 


        (iv)    Adjustments.    To preserve the intended incentives and benefits of an Award based on
Adjusted EPS, Adjusted Net Income, Adjusted Return on Assets or Adjusted Return on Equity, the Committee may determine at the time the Performance Targets are established that certain adjustments
shall apply to the objective formula or standard with respect to the applicable Performance Target to take into account, in whole or in part, in any manner specified by the Committee, any one or more
of the following with respect to the Performance Period: (i) the gain, loss, income or expense resulting from changes in accounting principles that become effective during the Performance
Period; (ii) the gain, loss, income or expense reported publicly by the Company with respect to the Performance Period that are extraordinary or unusual in nature or infrequent in occurrence,
excluding gains or losses on the early extinguishment of debt; (iii) the gains or losses resulting from, and the direct expenses incurred in connection with, the disposition of a business, in
whole or in part or the sale of investments or non-core assets; (iv) gain or loss from all or certain claims and/or litigation and all or certain insurance recoveries relating to
claims or litigation; (v) the impact of impairment of tangible or intangible assets; (vi) the impact of restructuring or business recharacterization activities, including but not limited
to reductions in force, that are reported publicly by the Company; and (vii) the impact of investments or acquisitions
made during the year or, to the extent provided by the Committee, any prior year. Each of the adjustments 




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described in this Section 9A(iv) may relate to the Company as a whole or any part of the Company's business or operations, as determined by the Committee at the time the Performance
Targets are established. The adjustments are to be determined in accordance with generally accepted accounting principles and standards, unless another objective method of measurement is designated by
the Committee. In addition to the foregoing, the Committee shall adjust any Business Criteria, Performance Targets or other features of an Award that relate to or are wholly or partially based on the
number of, or the value of, any stock of the Company, to reflect any stock dividend or split, recapitalization, combination or exchange of shares or other similar changes in such stock. 


        (v)    Committee Discretion to Determine Award.    The Committee has the sole discretion to
determine the standard or formula pursuant to which each Participant's Award shall be calculated, whether all or any portion of the amount so calculated will be paid, and the specific amount (if any)
to be paid to each Participant, subject in all cases to the terms, conditions and limits of the Plan. To this same extent, the Committee may at any time establish (and, once established, rescind,
waive or amend) additional conditions and terms of payment of Awards (including but not limited to the achievement of other financial, strategic or individual goals, which may be objective or
subjective) as it may deem desirable in carrying out the purposes of the Plan. The Committee may not, however, increase the maximum amount permitted to be paid to any individual under the Plan or pay
Awards under this Section 9 if the applicable Performance Target(s) have not been satisfied. 




        B.    Performance-Based Restricted Stock Awards.    



        (i)    Grants of Performance-Based Restricted Stock.    Subject to Section 9A, one or
more shares of Performance-Based Restricted Stock may be granted to any Eligible Person. The Performance-Based Restricted Stock will be issued to the Participant on the Date of Grant without the
payment of consideration by the Participant. The Performance-Based Restricted Stock will be issued in the name of the Participant and will bear a restrictive legend prohibiting sale, transfer, pledge
or hypothecation of the Performance-Based Restricted Stock until the expiration of the restriction period. 


        The
Committee may also impose such other restrictions and conditions on the Performance-Based Restricted Stock as it deems appropriate. 


        Upon
issuance to the Participant of the Performance-Based Restricted Stock, the Participant will have the right to vote the Performance-Based Restricted Stock, and subject to the
Committee's discretion, to receive the cash dividends distributable with respect to such shares, with such dividends treated as compensation to the Participant. The Committee, in its sole discretion,
may direct the accumulation and payment of distributable dividends to the Participant at such times, and in such form and manner, as determined by the Committee. 




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        (ii)    Restriction Period.    At the time a Performance-Based Restricted Stock Award is
granted, the Committee will establish a restriction period applicable to such Award which will be not less than one year and not more than ten years. Each Performance-Based Restricted Stock Award may
have a different restriction period, at the discretion of the Committee. 



        (iii)    Waiver of Section 83(b) Election.    Unless otherwise directed by the
Committee, as a condition of receiving an Award of Performance-Based Restricted Stock, a Participant must waive in writing the right to make an election under Section 83(b) of the Code to
report the value of the Performance-Based Restricted Stock as income on the Date of Grant. 




        C.    Performance Units.    Subject to Section 9A, one or more Performance Units may be
earned by an Eligible Person based on the achievement of preestablished performance objectives during a Performance Period. 



        D.    Forfeiture or Payout of Award.    As soon as practicable after the end of each
Performance Period, the Committee will determine whether the Performance Targets and other material terms of the Award were satisfied. The Committee's determination of all such matters will be final
and conclusive. 


        As
soon as practicable after the date the Committee makes the above determination, the Committee will determine the Award payment for each Participant. Before any payments are made under
this Section 9, the Committee shall be responsible for certifying in writing to the Company that the applicable Performance Targets have been met. 



        In
the event a Participant ceases employment (or ceases Board membership in the case of a director) during a Performance Period, the Performance-Based Restricted Stock or Performance
Unit Award is subject to forfeiture or payout as follows: (a) Termination—the Performance-Based Restricted Stock or Performance Unit Award is completely forfeited; or
(b) Retirement, Disability or death—payout of the Performance-Based Restricted Stock or Performance Unit Award is prorated taking into account factors including, but not limited to,
service and the performance of the Participant during the portion of the Performance Period before employment ceased; provided, however, that the Committee may modify the above if it determines in its
sole discretion that special circumstances warrant such modification. 


        Any
shares of Performance-Based Restricted Stock which are forfeited will be transferred to the Company. 


        E.    Form and Timing of Payment.    With respect to shares of Performance-Based Restricted
Stock for which restrictions lapse, new certificates will be issued (the payout) without the restrictive legend described in Section 9B(i). Each Performance Unit is payable in cash or shares of
Stock or in a combination of cash and Stock, as determined by the Committee in its sole discretion. Such payment will be made as soon as practicable after the Award payment is determined. 




        10.    Stock Appreciation Rights.    



        A.    Grants of Stock Appreciation Rights.    Stock Appreciation Rights may be granted under
the Plan in conjunction with an Option either at the Date of Grant or by amendment or may be separately granted. Stock Appreciation Rights will be subject to such terms and conditions not inconsistent
with the Plan as the Committee may impose. 


        B.    Right to Exercise; Exercise Period.    A Stock Appreciation Right issued pursuant to an
Option will be exercisable to the extent the Option is exercisable; both such Stock Appreciation Right and the Option to which it relates will not be exercisable during the six months following their
respective Dates of Grant except in the event of the Participant's Disability or death. A Stock Appreciation Right issued independent of an Option will be exercisable pursuant to such terms 



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and conditions established in the grant. Notwithstanding such terms and conditions, in the event of a public tender for all or any portion of the Stock or in the event that any proposal to merge or
consolidate the Company with another company is submitted to the stockholders of the Company for a vote, the Committee, in its sole discretion, may declare any previously granted Stock Appreciation
Right immediately exercisable. 


        C.    Failure to Exercise.    If on the last day of the Option Period, in the case of a Stock
Appreciation Right granted pursuant to an Option, or the specified Exercise Period, in the case of a Stock Appreciation Right issued independent of an Option, the Participant has not exercised a Stock
Appreciation Right, then such Stock Appreciation Right will be deemed to have been exercised by the Participant on the last day of the Option Period or Exercise Period. 


        D.    Payment.    An exercisable Stock Appreciation Right granted pursuant to an Option will
entitle the Participant to surrender unexercised the Option or any portion thereof to which the Stock Appreciation Right is attached, and to receive in exchange for the Stock Appreciation Right
payment (in cash or Stock or a combination thereof as described below) equal to either of the following amounts, determined in the sole discretion of the Committee at the Date of Grant: (1) the
excess of the Fair Market Value of one share of Stock at the date of exercise over the Option price, times the number of
shares called for by the Stock Appreciation Right (or portion thereof) which is so surrendered, or (2) the excess of the Book Value of one share of Stock at the date of exercise over the Book
Value of one share of Stock at the Date of Grant of the related Option, times the number of shares called for by the Stock Appreciation Right. Upon exercise of a Stock Appreciation Right not granted
pursuant to an Option, the Participant will receive for each Stock Appreciation Right payment (in cash or Stock or a combination thereof as described below) equal to either of the following amounts,
determined in the sole discretion of the Committee at the Date of Grant: (1) the excess of the Fair Market Value of one share of Stock at the date of exercise over the Fair Market Value of one
share of Stock at the Date of Grant of the Stock Appreciation Right, times the number of shares called for by the Stock Appreciation Right, or (2) the excess of the Book Value of one share of
Stock at the date of exercise of the Stock Appreciation Right over the Book Value of one share of Stock at the Date of Grant of the Stock Appreciation Right, times the number of shares called for by
the Stock Appreciation Right. 


        The
Committee may direct the payment in settlement of the Stock Appreciation Right to be in cash or Stock or a combination thereof. Alternatively, the Committee may permit the
Participant to elect to receive cash in full or partial settlement of the Stock Appreciation Right, provided that (i) the Committee must consent to or disapprove such election and
(ii) unless the Committee directs otherwise, the election and the exercise must be made during the period beginning on the 3rd business day following the date of public release of quarterly or
year-end earnings and ending on the 12th business day following the date of public release of quarterly or year-end earnings. The value of the Stock to be received upon
exercise of a Stock Appreciation Right shall be the Fair Market Value of the Stock on the trading day preceding the date on which the Stock Appreciation Right is exercised. To the extent that a Stock
Appreciation Right issued pursuant to an Option is exercised, such Option shall be deemed to have been exercised, and shall not be deemed to have lapsed. 


        E.    Nontransferable.    A Stock Appreciation Right will not be transferable by the
Participant except by Will or the laws of descent and distribution and will be exercisable during the Participant's lifetime only by the Participant or by the Participant's guardian or legal
representative. 


        F.    Lapse of a Stock Appreciation Right.    A Stock Appreciation Right will lapse upon the
earlier of: (i) 10 years from the Date of Grant; or (ii) at the expiration of the Exercise Period as set by the grant. If the Participant ceases employment (or ceases Board
membership in the case of a director) within the Exercise Period and prior to the lapse of the Stock Appreciation Right, the 



10





 





Stock Appreciation Right will lapse as follows: (a) Termination—any unvested Stock Appreciation Right will lapse on the effective date of the Termination and any vested Stock
Appreciation Right will lapse 90 days after the effective date of the Termination; or (b) Retirement, Disability or death—any unvested Stock Appreciation Right will lapse on
the effective date of the Retirement, Disability or death and any vested Stock Appreciation Right will lapse on the earlier of 60 months after the effective date of the Retirement, Disability
or death or at the expiration of the Exercise Period set by the grant; provided, however, that the Committee may modify the above if it determines in its sole discretion that special circumstances
warrant such modification. 




        11.    Dividend Equivalents.    



        A.    Grants of Dividend Equivalents.    Dividend Equivalents may be granted under the Plan in
conjunction with an Option or a separately awarded Stock Appreciation Right, at the Date of Grant or by amendment, without consideration by the Participant. Dividend Equivalents may also be granted
under the Plan in conjunction with Performance-Based Restricted Stock or Performance Units, at any time during the Performance Period, without consideration by the Participant. 


        B.    Payment.    Each Dividend Equivalent will entitle the Participant to receive an amount
equal to the dividend actually paid with respect to a share of Stock on each dividend payment date from the Date of Grant to the date the Dividend Equivalent lapses as set forth in Section 11D.
The Committee, in its sole discretion, may direct the payment of such amount at such times and in such form and manner as determined by the Committee. 


        C.    Nontransferable.    A Dividend Equivalent will not be transferable by the Participant. 


        D.    Lapse of a Dividend Equivalent.    Each Dividend Equivalent will lapse on the earlier of
(i) the date of the lapse of the related Option or Stock Appreciation Right; (ii) the date of the exercise of the related Option or Stock Appreciation Right; (iii) the end of the
Performance Period (or if earlier, the date the Participant ceases employment) of the related Performance Units or Performance-Based Restricted Stock Award; or (iv) the lapse date established
by the Committee on the Date of Grant of the Dividend Equivalent. 




        12.    Equity.    One or more shares of Stock may be granted to any Eligible Person, in such
amounts, on such terms and conditions, and for such consideration, including no consideration or such minimum consideration as may be required by law, as the Committee shall determine. An Equity Award
may be denominated in Stock or other securities, stock-equivalent units, securities or debentures convertible into Stock, or any combination of the foregoing and may be paid in Stock or other
securities, in cash, or in a combination of Stock or other securities and cash, all as determined in the sole discretion of the Committee. Unless the Committee determines otherwise, the vesting period
for Equity Awards shall be at least three years. 


        13.    Accelerated Award Payout/Exercise.    



        A.    Change in Control.    Notwithstanding anything in this Plan document to the contrary, a
Participant is entitled to an accelerated payout or accelerated Option or Exercise Period (as set forth in Section 13B) with respect to any previously granted Award, upon the happening of a
change in control. 


        A
change in control for purposes of this Section 13 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 1934 Act, or any comparable successor provisions), of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the 1934 Act) of
20 percent or more of either the outstanding shares of common stock of the Company or the combined voting power of the Company's then outstanding shares of voting securities entitled to a vote
generally; or (ii) the consummation of, following the approval by the stockholders of the Company of a reorganization, merger, or 



11





 





consolidation, in each case, with respect to which persons who were stockholders of the Company 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 the Company or the sale of substantially all of its assets; or (iv) a change of more than one-half of the members of the Board within a
90-day period for reasons other than the death, disability, or retirement of such members. 


        B.    Amount of Award Subject to Accelerated Payout/Option Period/Exercise Period.    The
amount of a Participant's previously granted Award that will be paid or exercisable upon the happening of a change in control will be determined as follows: 


        Service-Based Restricted Stock Awards.    The Participant will be entitled to an accelerated Award payout, and the amount of the
payout will be based on the number of shares of Service-Based Restricted Stock that were issued on the Date of Grant. 


        Stock Option Awards and Stock Appreciation Rights.    Any previously granted Stock Option Awards or Stock Appreciation Rights
will be immediately vested, any gain will be immediately paid in cash, and the Stock Option Awards and/or Stock Appreciation Rights will then lapse. 


        Performance-Based Restricted Stock/Performance Units.    The Participant will be entitled to an accelerated Award payout, and
the amount of the payout will be based on the number of shares of Performance-Based Restricted Stock/Performance Units subject to the Award as established on the Date of Grant, prorated based on the
number of months of the Performance Period that have elapsed as of the payout date, and assuming that maximum performance was achieved. 


        Equity Awards.    Any previously granted Equity Award will be immediately vested. 


        C.    Timing of Accelerated Payout/Option Period/Exercise Period.    The accelerated payout
set forth in Section 13B will be made in cash within 30 days after the date of the change in control. When Stock is related to the Award, the amount of cash will be determined based on
the Fair Market Value of Stock on the payout date. 




        14.    Amendment of Plan.    


        The
Committee may at any time and from time to time alter, amend, suspend or terminate the Plan in whole or in part, except (i) no such action may be taken without stockholder
approval which materially increases the number of securities which may be issued pursuant to the Plan (except as provided in Section 15H), extends the period for granting Options under the Plan
or materially modifies the requirements as to eligibility for participation in the Plan; (ii) no such action may be taken without the consent of the Participant to whom any Award was previously
granted, which adversely affects the rights of such Participant concerning such Award, except as such termination or amendment of the Plan is required by statute, or rules and regulations promulgated
thereunder; and (iii) no such action that would require the consent of the Board and/or the stockholders of the Company pursuant to Section 162(m) of the Code or the 1934 Act, or any
other applicable law, rule, or regulation, shall be effective without such consent. Notwithstanding the foregoing, the Committee may amend the Plan as desirable at the discretion of the Committee to
address any issues concerning (i) Section 162(m) of the Code, or (ii) maintaining an exemption under rule 16b-3 of the 1934 Act. 



        15.    Miscellaneous Provisions.    



        A.    Nontransferability.    No benefit provided under this Plan shall be subject to
alienation or assignment by a Participant (or by any person entitled to such benefit pursuant to the terms of this Plan), nor shall it be subject to attachment or other legal process except
(i) to the extent specifically mandated and directed by applicable state or federal statute; (ii) as requested by the Participant (or by any person entitled to such benefit pursuant to
the terms of this Plan), and 



12





 


approved by the Committee, to satisfy income tax withholding; and (iii) as requested by the Participant and approved by the Committee, to members of the Participant's family, or a trust
established by the Participant for the benefit of family members. 


        B.    No Employment Right.    Participation in this Plan shall not constitute a contract of
employment between the Company or any Subsidiary and any person and shall not be deemed to be consideration for, or a condition of, continued employment of any person. 


        C.    Tax Withholding.    the Company or a Subsidiary may withhold any applicable federal,
state or local taxes at such time and upon such terms and conditions as required by law or determined by the Company or a Subsidiary. Subject to compliance with any requirements of applicable law, the
Committee may permit or require a Participant to have any portion of any withholding or other taxes payable in respect to a distribution of Stock satisfied through the payment of cash by the
Participant to the Company or a Subsidiary, the retention by the Company or a Subsidiary of shares of Stock, or delivery of previously owned shares of the Participant's Stock, having a Fair Market
Value equal to the withholding amount. 


        D.    Fractional Shares.    Any fractional shares concerning Awards shall be eliminated at the
time of payment or payout by rounding down for fractions of less than one-half and rounding up for fractions of equal to or more than one-half. No cash settlements shall be
made with respect to fractional shares eliminated by rounding. 


        E.    Government and Other Regulations.    The obligation of the Company to make payment of
Awards in Stock or otherwise shall be subject to all applicable laws, rules, and regulations, and to such approvals by any government agencies as may be required. The Company shall be under no
obligation to register under the Securities Act of 1933, as amended ("Act"), any of the shares of Stock issued, delivered or paid in settlement under the Plan. If Stock awarded under the Plan may in
certain circumstances be exempt from registration under the Act, the Company may restrict its transfer in such manner as it deems advisable to ensure such exempt status. 



        F.    Indemnification.    Each person who is or at any time serves as a member of the
Committee (and each person or Committee to whom the Committee or any member thereof has delegated any of its authority or power under this Plan) shall be indemnified and held harmless by the Company
against and from (i) any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by such person in connection with or resulting from any claim, action, suit, or
proceeding to which such person may be a party or in which such person may be involved by reason of any action or failure to act under the Plan; and (ii) any and all amounts paid by such person
in satisfaction of judgment in any such action, suit, or proceeding relating to the Plan. Each person covered by this indemnification shall give the Company an opportunity, at its own expense, to
handle and defend the same before such person undertakes to handle and defend it on such person's own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled under the Charter or By-Laws of the Company or any of its Subsidiaries, as a matter of law, or otherwise, or any power that the
Company may have to indemnify such person or hold such person harmless. 


        G.    Reliance on Reports.    Each member of the Committee (and each person or Committee to
whom the Committee or any member thereof has delegated any of its authority or power under this Plan) shall be fully justified in relying or acting in good faith upon any report made by the
independent public accountants of the Company and its Subsidiaries and upon any other information furnished in connection with the Plan. In no event shall any person who is or shall have been a member
of the Committee be liable for any determination made or other action taken or any omission to act in reliance upon any such report or information or for any action taken, including the furnishing of
information, or failure to act, if in good faith. 



13





 




        H.    Changes in Capital Structure.    In the event of any change in the outstanding shares of
Stock by reason of any stock dividend or split, recapitalization, combination or exchange of shares or other similar changes in the Stock, then appropriate adjustments shall be made in the shares of
Stock
theretofore awarded to the Participants and in the aggregate number of shares of Stock which may be awarded pursuant to the Plan. Such adjustments shall be conclusive and binding for all purposes.
Additional shares of Stock issued to a Participant as the result of any such change shall bear the same restrictions as the shares of Stock to which they relate. 



        I.    Company Successors.    In the event the Company becomes a party to a merger,
consolidation, sale of substantially all of its assets or any other corporate reorganization in which the Company will not be the surviving corporation or in which the holders of the Stock will
receive securities of another corporation (in any such case, the "New Company"), then the New Company shall assume the rights and obligations of the Company under this Plan. 


        J.    Governing Law.    All matters relating to the Plan or to Awards granted hereunder shall
be governed by the laws of the State of Maryland, without regard to the principles of conflict of laws. 


        K.    Relationship to Other Benefits.    Any Awards under this Plan are not considered
compensation for purposes of determining benefits under any pension, profit sharing, or other retirement or welfare plan, or for any other general employee benefit program. 



        L.    Expenses.    The expenses of administering the Plan shall be borne by the Company and
its Subsidiaries. 


        M.    Titles and Headings.    The titles and headings of the sections in the Plan are for
convenience of reference only, and in the event of any conflict, the text of the Plan, rather than such titles or headings, shall control. 


        This document constitutes part of a prospectus covering securities that have been registered under the Securities Act of 1933.



        You may obtain without charge, upon written or oral request, a copy of documents incorporated by reference in the Registration Statement on file with the
Securities and Exchange Commission pertaining to the securities offered under the Executive Long-Term Incentive Plan. In addition you may obtain, without charge, upon written or oral
request, a copy of documents that are required to be delivered under Rule 428(b) of the Securities Act including our annual report to shareholders or annual report on
Form 10-K and a copy of the documents that comprise the prospectus.


        To make a request for any of these documents, you may telephone or write:  



Kathleen A. Chagnon,

Corporate Secretary

750 East Pratt Street

18th Floor

Baltimore, Maryland 21202

(410) XXX-XXXX  


14






  



 
 

Executive Long-Term Incentive Plan
  Appendix    
  


Additional Information  


        The Plan is not subject to any provisions of the Employee Retirement Income Security Act of 1974, and the Plan is not qualified under Section 401(a) of the
Internal Revenue Code. 


        Participants
may obtain additional information about the Plan by contacting: 




[Name]

Director—Compensation

Constellation Energy Group, Inc.

750 East Pratt Street

5th Floor

Baltimore, MD 21202

(410) XXX-XXXX 





        After
each grant is made, participants will be furnished with information about the amount of the grant. At least annually, participants will be furnished with information about their
outstanding grants. 


        In
general, grants subject to restrictions are taxable to participants when the restrictions lapse, and deductible by Constellation Energy at such time, based on the fair market value of
the awards when the restrictions lapse. Grants not subject to restrictions are taxable/deductible at fair market value on the grant date. Additionally, options are subject to other special tax
provisions. 


May 24,
2002 


15








  



 
 

FORM OF SERVICE-BASED
  RESTRICTED STOCK AGREEMENT    
  



	NAME	 	 
	Vice President

Human Resources	 	750 East Pratt Street

5th Floor

Baltimore, Maryland 21201-2437

Phone (410) 783-XXXX

Fax (410)-783-XXXX
	

 	 	 
	 	 	‹DATE›
	‹NAME›

‹ADDRESS›	 	 




RE: Service-Based Restricted Stock Award  


Dear
‹NAME›: 


        Effective
‹DATE›, ‹NAME› of Constellation Energy Group, Inc. (CEG) granted you ‹#SHARES› service-based
restricted shares of CEG Common Stock (the "Award") pursuant to Section 7 of the Constellation Energy Group, Inc. ‹PLAN NAME› Long-Term Incentive Plan
(the "Plan"). In addition to other provisions of the Plan (a copy of which is provided to you with this letter), your Award is subject to the following conditions: 


	1.
	The
Plan restriction period for these shares expires as show on the restriction lapse dates in the table below: 






	# Shares

Granted
 
	 	Share

Grant

Date
	 	Restriction

Period
	 	Restriction Lapse

Date
	 	Aggregate

Shares

Lapsed

	#	 	DATE	 	# YRS	 	DATE	 	#





	2.
	The
Plan requires that as a condition to receiving your Award, you waive in writing the right to make an election under Section 83(b) of the Internal Revenue Code of 1986 with
respect to your Award (see Section 7D of the Plan). Your execution of this letter will constitute your waiver to make such election under Section 83(b). This waiver means that you will
not have the option of electing to be taxed on the restricted shares at the time of the grant. Instead, you will be taxed on the restricted shares at the time the Plan restrictions are removed (see
Attachment A). This waiver allows the Company to treat dividends paid to you during the period of the Plan restrictions as compensation, thereby giving the Company a tax deduction for such amounts.



	3.
	As
provided in the Plan, until the Plan restriction period expires, you may not sell, transfer, pledge or hypothecate the Award shares. CEG will hold the shares for safekeeping until
the restriction lapse, unless you let us know that you want a stock certificate for the Award. If you prefer a certificate, it will be issued in your name with a legend to the effect that you may not
sell, transfer, pledge, or hypothecate the Award shares and that the shares are subject to certain conditions under the Plan.



	4.
	If
you contemplate the sale or transfer (for example to a family member) of any shares after the restriction period expires, you should contact the SEC-related persons
specified below for advice on the timing of any sale or transfer and any reporting obligations you may have. 


16





 

        Please
read the Plan carefully as it contains many other provisions relating to your Award. If you have any questions, please do not hesitate to call: 



	General
 
	 	SEC-related
	 	Tax-related

	‹NAME›	 	‹NAME›	 	‹NAME›
	(410) 783-XXX	 	(410) 783- XXX	 	(410) 783- XXX






        Please sign the enclosed copy of this letter and return it in the envelope provided.


Sincerely,



‹NAME›



        I
have read the Plan and this letter and agree to the terms and conditions contained in each regarding my Award. 



	
 Signature of Recipient	 	
 Date




17






  



ATTACHMENT A  


 
 

CONSTELLATION ENERGY GROUP, INC.
  ‹PLAN NAME› LONG-TERM INCENTIVE PLAN    
    
    INCOME TAX CONSEQUENCES TO PARTICIPANTS
FOR
SERVICE-BASED RESTRICTED STOCK AWARDS    
  


        Set forth is a brief overview of certain income tax consequences associated with your Service-Based Restricted Stock Award ("the Award"). 


Stock  


        Because the Plan places certain restrictions on the Award which could lead to forfeiture of the shares prior to lifting the Plan restrictions and because you have
agreed to waive the Section 83(b) election(1), the value of the restricted stock is not taxed to you when the initial grant is made. Rather, the stock is taxable to you at the
time the restrictions are removed. The amount subject to income tax is the fair market value of the stock on the day that the Plan restrictions are removed. This amount is treated as compensation
subject to withholding of income taxes, Medicare taxes and, if applicable, Social Security taxes. You are not taxed on the value of any stock forfeited. 




	(1)
	The
Plan requires that as a condition to receiving a Restricted Stock Award, you must waive in writing the right to make an election under Section 83(b) of the Internal Revenue Code
of 1986 with respect to your Award (see Section 7 D of the Plan). This waiver means that you will not have the option of electing to be taxed on the restricted shares at the time of grant. Instead,
you will be taxed
on the restricted shares at the time the Plan restrictions are removed. This allows the Company to treat dividends paid during the period of Plan restrictions as compensation, thereby giving the
Company a tax deduction for such amounts. 



        For
purposes of determining the gain or loss on any sale of the stock received pursuant to this Award, your basis in the stock is the amount that you included in taxable income when the
Plan restrictions were removed. Your tax holding period, for purposes of determining whether a gain or loss on a sale is long-term or short-term, begins on the day after the
day that the Plan restrictions were removed. 


Dividends  


        The dividends are payable to you during the period of the Plan restriction and are taxable in the year of receipt. For tax purposes, the dividends on the
restricted stock are treated as compensation and subject to withholding of income taxes and Medicare taxes and, if applicable, Social Security taxes. 



        After
the Plan restrictions on the stock are removed, the dividends are treated as regular dividend income (generally not subject to tax withholding). 


Tax Planning  


        You may wish to consult your tax advisor in the year the restrictions are lifted from the Award if you have questions regarding the impact of the Award on your
tax withholding or if you have questions about the applicable capital gains holding period and rates for this Award. 


18








  



 
 

FORM OF PERFORMANCE-BASED
  RESTRICTED STOCK AGREEMENT    
  



	 	 	‹DATE›
	‹NAME›,

‹ADDRESS›	 	 





        RE:
Constellation Energy Group, Inc. ‹PLAN NAME› Long-Term Incentive Plan Award 


Dear
‹NAME›: 


        On
‹DATE›, ‹NAME› of Constellation Energy Group, Inc. granted you performance-based restricted shares of CEG Common Stock (the
"Award") pursuant to Section 7 of the Constellation Energy 2002 ‹PLAN NAME› Long-Term Incentive Plan (the "Plan") as follows: 


 
 

Share Award, Excluding Accumulated Dividends    
  



	Performance Period
 
	 	Below Minimum
	 	Minimum

Performance
	 	Target

Performance
	 	Exceeds

Performance

	‹PERFORMANCE PERIOD›	 	0	 	‹#›	 	‹#›	 	‹#›





        In
addition to other provisions of the Plan, the Awards are subject to the following conditions: 


	1.
	The
‹NAME› will determine the final award soon after the conclusion of the performance period. 



Restricted
shares were issued equivalent to the number of shares that will be earned if "target" performance is achieved. These awards are subject to forfeiture if the minimum performance targets are
not achieved. Additional shares will be awarded if performance exceeds target at the end of the performance period. Performance will be measured based on ‹ENTER PERFORMANCE
MEASURE›. 


Dividends
on the target number of restricted shares will be accumulated during the performance period and will be reinvested in Constellation Energy shares. Actual dividends paid will be based upon
final shares awarded. All or a portion of the accumulated dividends may be forfeited if performance is below target. Dividend equivalents from the date of the initial grant will be paid for any
additional shares that are awarded. Actual awards, dividends and dividend equivalents will be paid in stock (except that you may elect to have a portion of the shares withheld to satisfy
tax-withholding requirements). 



	2.
	The
Plan requires that as a condition to receiving the Awards, you waive in writing the right to make an election under Section 83(b) of the Internal Revenue Code of 1986 with
respect to your Awards (see Section 7D of the Plan). Your execution of this letter will constitute your waiver to make such election under Section 83(b). This waiver means that you will
not have the option of electing to be taxed on the restricted shares at the time of the grant. Instead, you will be taxed on the restricted shares at the time the Plan restrictions are removed (see
Attachment A). This waiver allows the Company to treat dividends accumulated and reinvested for you during the period of Plan restrictions as compensation when the restrictions on the reinvested
dividends expire, thereby giving the Company a tax deduction for such amounts.



	3.
	Until
the Plan restriction period expires, you may not sell, transfer, pledge or hypothecate the Grant shares, except a transfer to a family member or to a trust for the benefit of
family members, which has been approved by the Plan Administrator as provided in the Plan. CEG will hold the shares for safekeeping until the restrictions lapse, unless you let us know that you want
to retain a stock certificate for the Grant shares. If you want a stock certificate, it will be issued in your name 


19





 

(or
the name of the permitted transferee) with a legend to the effect that you (or the transferee) may not sell, transfer, pledge, or hypothecate the Grant shares and that the shares are subject to
certain conditions under the Plan. 



	4.
	If
you contemplate the sale or transfer (for example to a family member) of any shares after the restriction period expires, you should contact the SEC-related persons
specified below for advice on the timing of any sale or transfer and any reporting obligations you may have. 



        Please
read the Plan carefully as it contains many other provisions relating to the Awards. If you have any questions, please do not hesitate to call: 



	General
 
	 	SEC-related
	 	Tax-related

	‹NAME›	 	‹NAME›	 	‹NAME›
	(410) 783-XXX	 	(410) 783- XXX	 	(410) 783- XXX






        Please sign this letter and return it in the envelope provided, keeping a copy for your records.






Sincerely,

‹NAME› 







        I
have read the Plan and this letter and agree to the terms and conditions contained in each regarding my Awards. 



	
 Signature of Recipient	 	
 Date




20






  



ATTACHMENT A  


 
 

CONSTELLATION ENERGY GROUP, INC.
  ‹PLAN NAME›LONG-TERM INCENTIVE PLAN    
    
    INCOME TAX CONSEQUENCES TO PARTICIPANTS
  FOR PERFORMANCE-BASED RESTRICTED STOCK AWARDS    
  


        Set forth below is a brief overview of certain income tax consequences associated with your Performance-Based Restricted Stock Award ("the Award"). 


Stock  


        Because the Plan places certain restrictions on the Award which could lead to forfeiture of the shares prior to lifting the Plan restrictions and because you have
agreed to waive the Section 83(b) election(2), the value of the restricted stock is not taxed to you when the initial grant is made. Rather, on the day the final Award is made and
the restrictions are removed, you will be taxed on the fair market value of your final stock Award. This amount is treated as compensation subject to withholding of income taxes, Medicare taxes and,
if applicable, Social Security taxes. You are not taxed on the value of any stock forfeited, e.g. for below-target performance or separation from service. 




	(2)
	The
Plan requires that as a condition to receiving a Restricted Stock Award, you must waive in writing the right to make an election under Section 83(b) of the Internal Revenue Code
of 1986 with respect to your Award (see Section 7 D of the Plan). This waiver means that you will not have the option of electing to be taxed on the restricted shares at the time of grant. Instead,
you will be taxed
on the restricted shares at the final Award is made and the restrictions are removed. This allows the Company to treat dividends reinvested during the period of Plan restrictions as compensation when
the restrictions on the reinvested dividends expire, thereby giving the Company a tax deduction for such amounts. 



        If,
at the end of the performance period, you are awarded shares in excess of the target shares originally granted, the additional shares will be taxed as compensation (in an amount
equal to the fair market value of the stock on the day the final Award is made and the restrictions are removed) and subject to withholding of income taxes, Medicare taxes and, if applicable, Social
Security taxes. 


        For
purposes of determining the tax gain or loss on any sale of the stock received pursuant to the Award, your basis in the stock is the amount reported as taxable income when the final
Award is made and the restrictions are removed. Your tax holding period, for purposes of determining whether a tax gain or loss on a sale is long-term or short-term, and for
determining the applicable tax rate, begins on the day after the day that the final Award is made and the restrictions are removed. 


Dividends  


        The dividends under the Plan are accumulated during the performance period and are not taxable to you until paid in shares of stock at the same time the final
Award is made and the restrictions are removed. At that time, the dividends on the restricted stock are treated as compensation and are subject to withholding of income taxes, Medicare taxes and, if
applicable, Social Security taxes. 


        If
target shares are forfeited, the accumulated dividends on those shares will also be forfeited and will not be taxable to you. If additional shares are awarded, an amount equal to the
dividends that would have accumulated had you owned the shares throughout the performance period will be awarded to you at the time the final Award is made and the restrictions are removed. This
amount is treated as compensation subject to withholding of income taxes, Medicare taxes and, if applicable, Social Security taxes. 


21





 



        After
the final Award is made and the restrictions are removed, the future dividends are treated as regular dividend income. 



Tax Planning  


        You may wish to consult your tax advisor in the year the final Award is made if you have questions regarding the impact of the Award on your tax withholding or if
you have questions about the applicable capital gains holding period and tax rates for this Award. 


22








  



 
 

FORM OF
  STOCK OPTION AGREEMENT    
  


        This Stock Option Agreement ("Agreement") is subject to the terms and conditions of the Constellation Energy Group, Inc. «Plan»(the
"Plan"). The «Administrator» Constellation Energy Group, Inc. (the "Plan Administrator") has authorized the option grant under this Agreement by and between Participant
(designated below) and Constellation Energy Group, Inc. ("Constellation Energy"). 



1.    Grant of Option.  


        (a)  The
"Participant" is «First» «Middle» «Last». 


        (b)  The
date of the grant is «GrantDate» ("Grant Date"). 


        (c)  The
number of shares subject to the option ("Option Shares") are «Grant» shares of Constellation
Energy common stock ("Stock"). 


        (d)  The
exercise price is «OptionPrice» per share of Stock ("Exercise Price"). 


        This
Agreement specifies the terms of the option ("Option") granted to Participant to purchase the Option Shares at the Exercise Price set forth above. The Option is  not intended to constitute an "incentive
stock option" as that term is used in Internal Revenue Code section 422. The "Option Period" is the
period during which the Option is exercisable as provided in this Agreement. 



2.    Installment Exercise.  


        Subject to the terms of this Agreement, the Option will be exercisable in installments according to the following schedule (each a "Vesting Date"): 



	INSTALLMENT
	 	VESTING DATE

APPLICABLE TO

INSTALLMENT

	«Vest1» Options	 	 
	«Vest2» Options	 	 
	«Vest3» Options	 	 





3.    Termination of Option.  


        (a)  Except
as provided in paragraph 3(b) below, the Option will terminate upon the earlier to occur of: (1) when all Option Shares have been exercised; or
(2) ten (10) years from the Grant Date ("Expiration Date"). 


        (b)  If
Participant ceases employment, the Option will terminate as to any unvested Option Shares on the effective date of employment Termination (as defined in the Plan) and
as to vested Option Shares 90 days after Participant's effective date of Termination. If Participant ceases employment because of Participant's Retirement, Disability (each as defined in the
Plan), or death, the Option will terminate as to any unvested Option Shares on the effective date of the Retirement, Disability or death, and as to vested Option Shares, the Option will remain
exercisable until the earlier of 60 months after such effective date or the Expiration Date. 


        (c)  In
the event of Participant's death during the Option Period, vested Option Shares may be exercised by Participant's legal representative(s), or by other person(s)
authorized under Participant's will. Alternatively, if Participant fails to make testamentary disposition of the Option or dies intestate, such vested Option Shares may be exercised by persons(s)
entitled to receive the Option Shares under the applicable laws of descent and distribution. 


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        (d)  A
transfer of Participant's employment between Constellation Energy and any Subsidiary of Constellation Energy, or between Subsidiaries of Constellation Energy, will not
be considered an employment Termination. 


4.    Exercise of Option.  


        (a)  Subject
to this Agreement and the Plan, the Option may be exercised in whole or in part by filing a written notice with the Corporate Secretary of Constellation Energy
at 750 East Pratt Street, 18th Floor, Baltimore, Maryland 21202. The notice of exercise must be given before Constellation Energy's close of business on the last business day that occurs
before the date the Option terminates as provided in Section 3(a) or (b) above. 



        (b)  On
or before the exercise date specified in the notice, Participant must fully pay the Exercise Price and the tax withholding obligation for the Option Shares exercised
in U.S. dollars by cash or by check payable to Constellation Energy Group, Inc. All or a portion of the Exercise Price and tax withholding obligation may also be paid by Participant:
(i) subject to the terms of paragraph 4(c) below, by delivery of shares of Stock owned by Participant and acceptable to the Plan Administrator having an aggregate Fair Market Value (as
defined in 6 below) on the date of exercise that is equal to the amount of cash that would otherwise be required; or (ii) by authorizing a third party to sell the Option Shares (or a sufficient
portion of the Option Shares), and immediately remit to Constellation Energy the Exercise Price and any tax withholding resulting from such exercise. Further, tax withholding up to the minimum
required withholding rate (but not in excess of that rate) may also be satisfied through a holdback by Constellation Energy of some of the Option Shares that would otherwise be deliverable to
Participant by reason of the Option exercise. The Option will cease to be exercisable, as to the portion exercised, when Participant purchases the Stock to which the exercised portion of the Option
relates. 


        (c)  Other
shares of Stock owned by Participant may be delivered to satisfy the Exercise Price, or to satisfy Participant's tax withholding obligation above the minimum
withholding rate, only if the shares have been held by Participant for at least six months before delivery, except that there shall be no holding period imposed for shares purchased by Participant for
cash on the open market. Use of previously-owned shares shall be effected by actual delivery of the Stock certificates to Constellation Energy, and by completing an affidavit available from
Constellation Energy affirming that Participant owns the necessary shares and that any applicable holding period has been satisfied. 


        (d)  The
Option may not be exercised by Participant during any blackout or prohibited trading period established by Constellation Energy or applicable to Participant, nor
shall the Option be exercisable if and to the extent Constellation Energy determines that such exercise would violate applicable state or Federal securities laws or the rules and regulations of any
securities exchange on which the Stock is traded. If Constellation Energy makes such a determination, it will use all reasonable efforts to comply with such laws, rules or regulations. In making any
such determinations, Constellation Energy may rely on the opinion of counsel for Constellation Energy. 


        (e)  As
soon as practicable after the exercise date, Constellation Energy will deliver to Participant a Stock certificate or certificates (or other evidence of ownership) for
the purchased Option Shares. 


5.    Tax Withholding.  



        Constellation Energy will have the right to withhold any applicable federal, state or local taxes, deductions or withholdings due with respect to the Option or
its exercise in such form and manner as provided in the Plan. 


24





 



6.    Fair Market Value.  


        The "Fair Market Value" of a share of Stock is the average of the highest and lowest sale price per share of Stock on the New York Stock Exchange-Composite
Transactions on the applicable date of reference, or if there are no sales on such date, then the average of such highest and lowest sale price on the last previous day on which sales are reported. 


7.    No Rights of Stockholders.  


        Participant does not have any of the rights and privileges of a stockholder of Constellation Energy with respect to any shares of Stock purchasable or issuable
upon the exercise of the Option, in whole or in part, before the date of exercise and purchase of the Option Shares. 



8.    Non-Transferability of Option.  


        The Option is not transferable, except for a transfer to a Participant's family member or to a trust established for the benefit Participant's family members
which has been approved by the Plan Administrator as provided in the Plan, or in case of Participant's death, by will or the laws of descent and distribution, nor shall the Option be subject to
attachment, execution or other similar process. During Participant's lifetime, the Option is exercisable only by Participant, any guardian or legal representative of Participant, or a family member or
trustee of a trust established for the benefit of Participant's family members to whom the Option has been transferred in accordance with the Plan. In the event of (a) any attempt by
Participant to alienate, assign, pledge, hypothecate or otherwise dispose of the Option, except as provided in this Agreement, or (b) the levy of any attachment, execution or similar process
upon the rights or interest conferred under this Agreement, Constellation Energy may terminate the Option by notice to Participant and it will become null and void. 


9.    Employment Not Affected.  


        Neither this Agreement nor the grant of the Option constitutes a contract of employment between Constellation Energy or any Subsidiary and Participant, and
neither will be deemed to be consideration for, or a condition of, continued employment of Participant. 


10.  Incorporation of Plan by Reference.  


        The Option is granted pursuant to the terms of the Plan, the terms of which are incorporated by reference. The Option will in all respects be interpreted in
accordance with the Plan. All capitalized terms, which are not otherwise defined in this Agreement, will have the meaning specified in the Plan. The Plan Administrator will interpret and construe the
Plan and this Agreement, and its interpretations and determinations will be conclusive and binding on the parties and any other person claiming an interest with respect to any issue arising under this
Agreement. 


11.  Severability.  


        The provisions of this Agreement are severable. If any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the
remaining provisions will nevertheless be binding and enforceable. 


25





 



        IN
WITNESS WHEREOF, Constellation Energy Group, Inc. and Participant have executed this Stock Option Agreement effective as of the Grant Date. 



	Constellation Energy Group, Inc	 	ACCEPTED AND AGREED TO:
	

 	
 	

By:	
 	

        
 «First» «Middle» «Last»
	
Vice President, Human Resources	
 	

 	
 	

 




26









QuickLinks


Constellation Energy Group, Inc. Executive Long-Term Incentive Plan (Plan)


Executive Long-Term Incentive Plan Appendix



FORM OF SERVICE-BASED RESTRICTED STOCK AGREEMENT


CONSTELLATION ENERGY GROUP, INC. ‹PLAN NAME› LONG-TERM INCENTIVE PLAN INCOME TAX CONSEQUENCES TO PARTICIPANTS FOR SERVICE-BASED RESTRICTED STOCK AWARDS


FORM OF PERFORMANCE-BASED RESTRICTED STOCK AGREEMENT

Share Award, Excluding Accumulated Dividends


CONSTELLATION ENERGY GROUP, INC. ‹PLAN NAME›LONG-TERM INCENTIVE PLAN INCOME TAX CONSEQUENCES TO PARTICIPANTS FOR PERFORMANCE-BASED RESTRICTED STOCK AWARDS


FORM OF STOCK OPTION AGREEMENT