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This document constitutes part of a prospectus covering securities

that have been registered under the Securities Act of 1933.  


Exhibit 10(u)  


 
 

Constellation Energy Group, Inc.
  2002 Senior Management 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 certain executives, senior management level and key employees of the Company and its Subsidiaries, whose responsibilities include the continued growth,
development, and financial success of the Company and its Subsidiaries, and 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 executive, senior management and key employees and to increase their ownership of Company common stock. 


        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: 



        "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. 


        "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. 


        "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 Plan Administrator or such later date as may be specified by the Plan Administrator 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. 



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


        "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. 






 




        "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 Plan Administrator will take into account the performance of the
Participant, the Company, one or more Subsidiaries, or any combination thereof. 


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


        "Performance
Unit" means a unit of measurement equivalent to such amount or measure as defined by the Plan Administrator 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 Chief Executive Officer of the Company. 



        "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). 


        "Service-Based
Restricted Stock" means that in determining the amount of a Restricted Stock Award payout, the Plan Administrator 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 Plan Administrator, in his/her 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. 


        "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.    The Plan became effective as of
May 24, 2002. 


        B.    Period for Grants of Awards.    Awards may be made as provided herein for a period of
10 years after May 24, 2002. 



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        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 Chief Executive Officer is the Plan Administrator and has
sole authority (except as specified otherwise herein) to determine all questions of interpretation and application of the Plan, 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
Plan Administrator may delegate his/her authority under the Plan. 


        5.    Eligibility.    Each officer (who is not a participant under the Company's Executive
Long-Term Incentive Plan), senior management level or key employee of the Company and its Subsidiaries may be designated by the Plan Administrator as a Participant, from time to time, with
respect to one or more Awards. No employee 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, senior management level or key employee), 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 Plan Administrator
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 five million (5,000,000) 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
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 


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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
his/her 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
Plan Administrator may also impose such other restrictions and conditions on the Service-Based Restricted Stock as he/she 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 Plan
Administrator's discretion, to receive the cash dividends distributable with respect to such shares, with such dividends treated as
compensation to the Participant. The Plan Administrator, in his/her 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 Plan Administrator. 


        B.    Restriction Period.    At the time a Service-Based Restricted Stock Award is granted,
the Plan Administrator 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 Plan Administrator. 


        C.    Forfeiture or Payout of Award.    In the event a Participant ceases employment 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 Plan Administrator may modify the above if he/she determines at his/her 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 Plan
Administrator, 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 Plan Administrator, including, without limitation, provisions to qualify Incentive Stock
Options as such under Section 422 of the Code if directed by the Plan Administrator 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 Plan Administrator,
in his/her 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 Plan Administrator in his/her 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 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 Plan Administrator may modify the above if he/she determines in his/her 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. 




        9.    Performance-Based Restricted Stock/Performance Units.    



        A.    Provision for Awards.    The Plan Administrator will determine a Performance Period and
will determine the performance objectives for each Participant's target performance award and the 



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number of shares of Performance-Based Restricted Stock or Performance Units subject to each target performance award. Performance objectives may vary from Participant to Participant and will be based
upon such performance criteria or combination of factors as the Plan Administrator deems appropriate, which may include, but not be limited to, the performance of the Participant, the Company, one or
more Subsidiaries, or any combination thereof. Performance Periods may overlap and Participants may participate simultaneously with respect to Performance Units or Performance-Based Restricted Stock
for which different Performance Periods are prescribed. 


        If
during the course of a Performance Period significant events occur as determined in the sole discretion of the Plan Administrator which the Plan Administrator expects to have a
substantial effect on a performance objective during such period, the Plan Administrator may revise such objective 


        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
Plan Administrator may also impose such other restrictions and conditions on the Performance-Based Restricted Stock as he/she 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 Plan
Administrator's discretion, to receive the cash dividends distributable with respect to such shares, with such dividends treated as compensation to the Participant. The Plan Administrator, in his/her
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 Plan Administrator. 


        (ii)    Restriction Period.    At the time a Performance-Based Restricted Stock Award is
granted, the Plan Administrator 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 Plan Administrator. 



        (iii)    Waiver of Section 83(b) Election.    Unless otherwise directed by the Plan
Administrator, 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 Plan Administrator will determine whether the performance objectives and other material terms of the Award were satisfied. The Plan Administrator's determination of all such
matters will be final and conclusive. 



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        As
soon as practicable after the date the Plan Administrator makes the above determination, the Plan Administrator will determine the Award payment for each Participant. 


        In
the event a Participant ceases employment 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 Plan Administrator may modify the above if he/she determines in his/her 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 Plan Administrator in his/her 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 Plan Administrator 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 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 Plan Administrator, in his/her 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 Plan Administrator 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 



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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 Plan Administrator 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
Plan Administrator may direct the payment in settlement of the Stock Appreciation Right to be in cash or Stock or a combination thereof. Alternatively, the Plan Administrator may
permit the Participant to elect to receive cash in full or partial settlement of the Stock Appreciation Right, provided that (i) the Plan Administrator must consent to or disapprove such
election and (ii) unless the Plan Administrator 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 within the Exercise
Period and prior to the lapse of the Stock Appreciation Right, the 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 Plan Administrator may modify
the above if he/she determines in his/her 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. 



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The Plan Administrator, in his/her sole discretion, may direct the payment of such amount at such times and in such form and manner as determined by the Plan Administrator. 


        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 Plan Administrator 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 Plan Administrator 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 Plan Administrator. Unless the Plan Administrator 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 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. 



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        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 Plan Administrator may at any time and from time to time
alter, amend, suspend or terminate the Plan in whole or in part, except 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. 



        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 approved by the Plan Administrator, to satisfy income tax withholding; and (iii) as requested by the Participant and approved by the Plan Administrator, 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
Plan Administrator 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. 



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        F.    Indemnification.    The Plan Administrator (and his/her designees) 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.    The Plan Administrator (and each person to whom the Plan
Administrator has delegated any of his/her 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 the Plan Administrator (or each person to whom the Plan Administrator has
delegated any of his/her authority or power under this Plan) 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. 


        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.


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        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 2002 Senior Management 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) 783-3600  


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2002 Senior Management 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: 




Steven
R. Mantegna

Director—Compensation

Constellation Energy Group, Inc.

750 East Pratt Street

5th Floor

Baltimore, MD 21202

(410) 783-3680 





        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 


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QuickLinks


Constellation Energy Group, Inc. 2002 Senior Management Long-Term Incentive Plan (Plan)



2002 Senior Management Long-Term Incentive Plan Appendix