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Exhibit 10(b)    
    


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


 
 

Constellation Energy Group, Inc.
  1995 Long-Term Incentive Plan
  (Plan)    
    



1.    Objective.    The objective of this Plan is to increase shareholder value by providing a
long-term incentive to reward officers and key employees of CEG and its Subsidiaries, who are mainly responsible for the continued growth, development, and financial success of CEG and its
Subsidiaries, for the continued profitable performance of CEG and its subsidiaries. The Plan is also designed to permit CEG and its Subsidiaries to retain talented and motivated officers and key
employees and to increase their ownership of CEG 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, Restricted Stock Units, Options, Performance Units, Stock Appreciation Rights, or Dividend Equivalents granted under this
Plan. 


        "Board"
means the Board of Directors of CEG. 


        "Book
Value" means the book value of a share of Stock determined in accordance with CEG'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. 


        "CEG"
means Constellation Energy Group, Inc., a Maryland corporation, or its successor, including any "New Company" as provided in Section 14I. 


        "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, "Committee" shall mean a committee of directors of CEG who satisfy the disinterested person requirements of such Section. 


        "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 or Early Retirement. 


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


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


        "Early
Retirement" means retirement prior to the Normal Retirement Date. 


        "Earned
Performance Award" means an actual award of a specified number of Performance Units (or shares of Restricted Stock or Restricted Stock Unit, as the context requires) which the
Committee has determined have been earned and are payable (or, in the case of Restricted Stock or Restricted Stock Units, earned and with respect to which restrictions will lapse) for a particular
Performance Period. 


        "Eligible
Employee" means any person employed by CEG or a Subsidiary on a regularly scheduled basis who satisfies all of the requirements of Section 5. 


        "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. 







 



        "Normal
Retirement Date" is the retirement date as described in the Pension Plan or a Subsidiary's retirement or pension plan. 



        "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 employee of CEG or a Subsidiary 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"
means that in determining the amount of a Restricted Stock or Restricted Stock Unit Award payout, the Committee will take into account the performance of the
Participant, CEG, one or more Subsidiaries, or any combination thereof. 


        "Performance
Period" means a period of time, established by the Committee at the time an Award is granted, during which corporate and/or individual performance is measured. 


        "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 an Award granted under Section 7. 


        "Restricted
Stock Unit" means a right granted under Section 7 that is denominated in shares of stock, each of which represents a right to receive the value of a share of stock (or
a percentage of such value, which percentage may be higher than 100%) upon the terms and conditions set forth by the Committee. 



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


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


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


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


        "Subsidiary(ies)"
means any corporation of which 20% or more of its outstanding voting stock or voting power is beneficially owned, directly or indirectly, by CEG. 


        "Target
Performance Award" means a targeted award of a specified number of Performance Units (or shares of Restricted Stock or Restricted Stock Unit, as the context requires) which may
be earned and payable (or, in the case of Restricted Stock or Restricted Stock Unit, earned and with respect to which restrictions will lapse) based upon the performance objectives for a particular
Performance Period, all as determined by the Committee. The Target Performance Award will be a factor in the Committee's ultimate determination of the Earned Performance Award. 



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


3.    Effective Date, Duration and Stockholder Approval.    


        A.    Effective Date and Stockholder Approval.    This Plan has been transferred from Baltimore Gas and Electric
Company (BGE) to CEG effective April 30, 1999 in connection with a share exchange between CEG and the common stockholders of BGE. The Plan was approved by a majority of the outstanding shares
of common stock of BGE voted at its 1995 Annual Meeting of Stockholders, and became effective as of January 1, 1995. 


        B.    Period for Grants of Awards.    Awards may be made as provided herein for a period of 10 years after
January 1, 1995. 


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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. 


        D.    Grants Outstanding.    Grants outstanding at the effective time of the share exchange between CEG and the common
stockholders of Baltimore Gas and Electric Company (BGE) will be converted from BGE common stock-based grants to CEG common stock-based grants. 



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, 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 objective. Such determinations shall be final and not subject to
further appeal. 


5.    Eligibility.    Each officer or key employee of CEG and its Subsidiaries (including officers or
employees who are members of the Board, but excluding directors who are not officers or employees) may be designated by the Committee as a Participant, from time to time, with respect to one or more
Awards. No officer or employee of CEG or its Subsidiaries shall have any right to be granted an Award under this Plan. 


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 Employees, provided that (i) subject to any adjustment pursuant to Section 14H, the aggregate number of shares of Stock subject to Awards under this
Plan may not exceed three million (3,000,000) shares; (ii) to the extent that an Award lapses or the rights of the Participant to whom it was granted terminate, any shares of Stock subject to
such Award shall again be available for the grant of an Award under the Plan; and (iii) shares delivered by CEG under the Plan may be authorized and unissued Stock, Stock held in the treasury
of CEG, or Stock purchased on the open market (including private purchases) in accordance with applicable securities laws. 


7.    Restricted Stock and Restricted Stock Unit Awards.    


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


        The
Committee may also impose such other restrictions and conditions on the Restricted Stock or Restricted Stock Unit as it deems appropriate, and will designate the grant as either a
Service-Based or Performance-Based Award. 


        Upon
issuance to the Participant of the Restricted Stock, the Participant will have the right to vote the Restricted Stock.. Upon issuance to the Participant of the Restricted Stock or
grant of the Restricted Stock Unit and subject to the Committee's discretion, the Participant will have the right to receive the cash dividends (or Dividend Equivalents as provided in
Section 11) distributable with respect to such shares or units, with such dividends or Dividend Equivalents 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.    Service-Based Award.    



        i.    Restriction Period.    At the time a Service-Based Restricted Stock or Restricted Stock Unit 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 or Restricted Stock Unit Award may
have a different restriction period, at the discretion of the Committee. 



        ii.    Forfeiture or Payout of Award.    In the event a Participant ceases employment during a restriction period, a
Restricted Stock or Restricted Stock Unit Award is subject to forfeiture or payout (i.e., removal of restrictions) as follows: (a) Termination—the Restricted Stock or Restricted
Stock Unit Award is completely forfeited; (b) Retirement, Disability or death—payout of the Restricted Stock or Restricted Stock Unit Award is prorated for service during the
period; or (c) Early Retirement—if at the Participant's request, the payout or forfeiture of the Restricted Stock or Restricted Stock Unit Award is determined at the discretion of
the Committee, or if at CEG's request, payout of the Restricted Stock or Restricted Stock Unit Award is prorated for service during the period; provided, however, that the 



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Committee
may modify the above if it determines at its sole discretion that special circumstances warrant such modification. 




        Any
shares of Restricted Stock which are forfeited will be transferred to CEG. 



        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. 


        C.    Performance-Based Award.    



        i.    Restriction Period.    At the time a Performance-Based Restricted Stock or Restricted Stock Unit 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 or Restricted Stock Unit
Award may have a different restriction period, at the discretion of the Committee. The Committee will also establish a Performance Period. 


        ii.    Performance Objectives.    The Committee will determine, no later than 90 days after the beginning of
each Performance Period, the performance objectives for each Participant's Target Performance Award and the number of shares of Restricted Stock or Restricted Stock Units for each Target Performance
Award that will be issued on the Date of Grant. Performance objectives may vary from Participant to Participant and will be based upon such performance criteria or combination of factors as the
Committee deems appropriate, which may include, but not be limited to, the performance of the Participant, CEG, one or more Subsidiaries, or any combination thereof. Performance Periods may overlap
and Participants may participate simultaneously with respect to Performance-Based Restricted Stock or Restricted Stock Unit Awards 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 Committee, which the Committee expects to have a substantial effect on
a performance objective during such period, the Committee may revise such objective. 



        iii.    Forfeiture or Payout of Award.    As soon as practicable after the end of each Performance Period, the
Committee will determine whether the performance objectives 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 later of (i) the date the Committee makes the above determination, or (ii) the completion of the restriction period, the Committee will
determine the Earned Performance Award for each Participant. Such determination may result in forfeiture of all or some shares of Restricted Stock or Restricted Stock Units (if Target Performance
Award performance objectives were not attained), or the issuance of additional shares of Stock or Restricted Stock Units (if Target Performance Award performance objectives were exceeded), and will be
based upon such factors as the Committee determines at its sole discretion, but including the Target Performance Award performance objectives. 


        In
the event a Participant ceases employment during a restriction period, the Restricted Stock or Restricted Stock Unit Award is subject to forfeiture or payout (i.e., removal of
restrictions) as follows: (a) Termination—the Restricted Stock or Restricted Stock Unit Award is completely forfeited; (b) Retirement, Disability or death—payout
of the Restricted Stock or Restricted Stock Unit Award is prorated taking into account factors including, but not limited to, service during the period; and the performance of the Participant during
the portion of the
Performance Period before employment ceased; or (c) Early Retirement—if at the Participant's request, the payout or forfeiture of the Restricted Stock or Restricted Stock Unit Award
is determined at the discretion of the Committee, or if at CEG's request, payout of the Restricted Stock or Restricted Stock Unit Award is prorated taking into account factors including, but not
limited to, service during the period 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 at its sole discretion that special circumstances warrant such modification. 


        Any
shares of Restricted Stock which are forfeited will be transferred to CEG. 



        With
respect to shares of Restricted Stock or Restricted Stock Units for which restrictions lapse, new certificates will be issued (the payout) without the restrictive legend described
in Section 7A. New certificates will also be issued for additional Stock, if any, awarded to the Participant because Target Performance Award performance objectives were exceeded. 


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        D.    Waiver of Section 83(b) Election.    Unless otherwise directed by the Committee, as a condition of
receiving an Award of 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 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 Employee on the Date of Grant without
the payment of consideration by the Participant. 


        B.    Stock Option Agreement.    Each Option granted under the Plan will be evidenced by a "Stock Option Agreement"
between CEG 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 CEG with another company is submitted to the stockholders of CEG for a vote, the Committee, in its sole discretion, may declare any previously granted Option 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 date the Option is exercised. 



        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—the Option will lapse on the effective date of the Termination; or (b) Retirement, Early Retirement, or Disability—the Option will lapse
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. If the Participant dies within the Option Period and prior to the lapse of the Option, the Option will lapse at the expiration of the Option Period set by the grant unless it is
exercised before such time by the Participant's legal representative(s) or by the person(s) entitled to do so under the Participant's Will or, if the Participant fails to make testamentary disposition
of the Option or dies intestate, by the person(s) entitled to receive the Option under the applicable laws of descent and distribution. 


        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 Units.    



        A.    Performance Units.    One or more Performance Units may be earned by an Eligible Employee based on the
achievement of preestablished performance objectives during a Performance Period. 


        B.    Performance Period and Performance Objectives.    The Committee will determine a Performance Period and will
determine, no later than 90 days after the beginning of each Performance Period, the performance objectives for each 


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Participant's
Target Performance Award and the number of 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 Committee deems appropriate, which may include, but not be limited to, the performance of the Participant, CEG, one or more
Subsidiaries, or any combination thereof. Performance Periods may overlap and Participants may participate simultaneously with respect to Performance Units 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 Committee which the Committee expects to have a substantial effect on a
performance objective during such period, the Committee may revise such objective. 


        C.    Forfeiture or Payout of Award.    As soon as practicable after the end of each Performance Period, the Committee
will determine whether the performance objectives 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 Earned Performance Award for each Participant. Such determination may
result in an increase or decrease in the number of Performance Units payable based upon such Participant's Target Performance Award, and will be based upon such factors as the Committee determines in
its sole discretion, but including the Target Performance Award performance objectives. 


        In
the event a Participant ceases employment during a Performance Period, the Performance Unit Award is subject to forfeiture or payout as follows: (a) Termination—the
Performance Unit Award is completely forfeited; (b) Retirement, Disability or death—payout of the 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; or (c) Early Retirement—if at the Participant's
request, the payout or forfeiture of the Performance Unit Award is determined at the discretion of the Committee, or if at CEG's request, payout of the 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. 


        D.    Form and Timing of Payment.    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 Earned Performance Award 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 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 CEG
with another company is submitted to the stockholders of CEG 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 


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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 within the Exercise Period and
prior to the lapse of the Stock Appreciation Right, the Stock Appreciation Right will lapse as follows: (a) Termination—the Stock Appreciation Right will lapse on the effective date
of the Termination; or (b) Retirement, Early Retirement, or Disability—the Stock Appreciation Right will lapse 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. If the Participant dies within the Exercise Period and
prior to the lapse of the Stock Appreciation Right, the Stock Appreciation Right will lapse at the expiration of the Exercise Period set by the grant unless it is exercised before such time by the
Participant's legal representative(s) or by the person(s) entitled to do so under the Participant's Will or, if the Participant fails to make testamentary disposition of the Stock Appreciation Right
or dies intestate, by the person(s) entitled to receive the Stock Appreciation Right under the applicable laws of descent and distribution. 


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 Units, at any time during the Performance Period, without consideration by the Participant. Dividend Equivalents will be granted under a Performance-Based Restricted Stock
or Restricted Stock Unit Award in conjunction with additional shares of Stock issued if Target Performance Award performance objectives are exceeded. 


        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 


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Performance
Units or Performance-Based Restricted Stock or Restricted Stock Unit Award; or (iv) the lapse date established by the Committee on the Date of Grant of the Dividend Equivalent. 


12.    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 12B) with respect to any previously granted Award, upon the happening of a change in control. 


        A
change in control for purposes of this Section 12 means the occurrence of any one of the following events: 



          (i)  individuals
who, on January 24, 2003, constitute the Board (the "Incumbent Directors") cease for any reason to
constitute at least a majority of the Board, provided that any person becoming a director subsequent to January 24, 2003, whose election or nomination for election was approved by a vote of at
least two-thirds of the Incumbent Directors then on the Board (either by a specific vote or by approval of the proxy statement of CEG in which such person is named as a nominee for
director, without written objection to such nomination) shall be an Incumbent Director; provided,  however, that no individual initially elected or
nominated as a director of CEG as a result of an actual or threatened election contest with respect to
directors or as a result of any other actual or threatened solicitation of proxies by or on behalf of any person other than the Board shall be deemed to be an Incumbent Director; 


         (ii)  any
"person" (as such term is defined in Section 3(a)(9) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes a "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of CEG representing 20% or more of the combined voting power of CEG's then outstanding securities eligible to vote for the election of the Board (the
"Company Voting Securities"); provided, however, that
the event described in this paragraph (ii) shall not be deemed to be a Change in Control by virtue of any of the following acquisitions: (A) by CEG or any corporation with respect to
which CEG owns a majority of the outstanding shares of common stock or has the power to vote or direct the voting of sufficient securities to elect a majority of the directors (a
"Subsidiary Company"), (B) by any employee benefit plan (or related trust) sponsored or maintained by CEG or any Subsidiary Company,
(C) by any underwriter temporarily holding securities pursuant to an offering of such securities, (D) pursuant to a Non-Qualifying Transaction (as defined in
paragraph (iii)), or (E) pursuant to any acquisition by Participant or any group of persons including Participant (or any entity controlled by Participant or any group of persons
including Participant); 


        (iii)  consummation
of a merger, consolidation, statutory share exchange or similar form of corporate transaction involving CEG or any of its Subsidiary Companies (a  "Business Combination"), unless immediately following
such Business Combination: (A) more than 60% of the total voting power of (x) the
corporation resulting from such Business Combination (the "Surviving Corporation"), or (y) if applicable, the ultimate parent corporation that
directly or indirectly has beneficial
ownership of at least 95% of the voting securities eligible to elect directors of the Surviving Corporation (the "Parent Corporation"), is represented
by Company Voting Securities that were outstanding immediately prior to such Business Combination (or, if applicable, is represented by shares into which such Company Voting Securities were converted
pursuant to such Business Combination), and such voting power among the holders thereof is in substantially the same proportion as the voting power of such Company Voting Securities among the holders
thereof immediately prior to the Business Combination, (B) no person (other than any employee benefit plan (or related trust) sponsored or maintained by the Surviving Corporation or the Parent
Corporation), is or becomes the beneficial owner, directly or indirectly, of 20% or more of the total voting power of the outstanding voting securities eligible to elect directors of the Parent
Corporation (or, if there is no Parent Corporation, the Surviving Corporation) and (C) at least a majority of the members of the board of directors of the Parent Corporation (or, if there is no
Parent Corporation, the Surviving Corporation) following the consummation of the Business Combination were Incumbent Directors at the time of the Board's approval of the execution of the initial
agreement providing for such Business Combination (any Business Combination which satisfies all of the criteria specified in (A), (B), and (C) above shall be deemed to be a
"Non-Qualifying Transaction"); or 


         (iv)  the
stockholders of CEG approve a plan of complete liquidation or dissolution of CEG, or the consummation of a sale of all or substantially all of CEG's assets. 




        Notwithstanding
the foregoing, a Change in Control of CEG shall not be deemed to occur solely because any person acquires beneficial ownership of more than 20% of the Company Voting
Securities as a result of the acquisition of 


8







 

Company
Voting Securities by CEG which reduces the number of Company Voting Securities outstanding; provided,  that if after such acquisition by CEG such person
becomes the beneficial owner of additional Company Voting Securities that increases the percentage of
outstanding Company Voting Securities beneficially owned by such person, a Change in Control of the Company shall then occur. 



        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 (or if earlier upon the termination of the Participant's employment with the Company or a Subsidiary
if it is reasonably demonstrated that such termination (i) was at the request of a third party who has taken steps reasonably calculated to effect a change in control or (ii) otherwise
arose in connection with or anticipation of a change in control) will be determined as follows: 



        Restricted Stock or Restricted Stock Unit 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 Restricted Stock or Restricted Stock Units that were issued on the Date of Grant, prorated based on the number of months of the restriction period that have elapsed
as of the payout date. Also, with respect to Performance-Based Restricted Stock or Restricted Stock Unit Awards, in determining the amount of the payout, maximum performance achievement will be
assumed. 


        Stock Option Awards and Stock Appreciation Rights.    Any previously granted Stock Option Awards or Stock Appreciation Rights will be
immediately
exercisable. 


         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
Performance Units subject to the Target Performance 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. 




        C.    Timing of Accelerated Payout/Option Period/Exercise Period.    The accelerated payout set forth in
Section 12B will be made in cash within 30 days after the date of the change in control. The accelerated Option Period/Exercise Period set forth in Section 12B will begin on the
date of the change in control, and applicable payments will be in cash. 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
or exercise date, whichever is applicable. 


13.    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 benefits accruing to Participants pursuant to the Plan, materially increases the number of securities which may be issued pursuant to the Plan (except as
provided in Section 14H), extends the period for granting Options under the Plan or materially modifies the requirements as to eligibility for participation in the Plan; and (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. 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. 


14.    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 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 CEG or
any Subsidiary and any person and shall not be deemed to be consideration for, or a condition of, continued employment of any person. 


9







 



        C.    Tax Withholding.    CEG 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 CEG 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 CEG or a Subsidiary, the
retention by CEG 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 CEG 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. CEG 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, CEG 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 CEG 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 CEG 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 CEG or any of its Subsidiaries, as a matter of law, or otherwise, or any power that CEG 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
CEG 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. 


        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.    CEG Successors.    In the event CEG becomes a party to a merger, consolidation, sale of substantially all of its
assets or any other corporate reorganization in which CEG 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 CEG 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. 


10







 



        L.    Expenses.    The expenses of administering the Plan shall be borne by CEG 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 1995 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:  


 Corporate Secretary

750 East Pratt Street

18th Floor

Baltimore, Maryland 21202

(410) 783-3600  


11







 
  
 

    1995 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: 




Director—Compensation

Constellation Energy Group, Inc.

750 East Pratt Street

5th Floor

Baltimore, MD 21202

(410) 783-2844 





        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. 


12









 
 

FORM OF SERVICE-BASED RESTRICTED STOCK AWARD AGREEMENT    
    


[DATE]


Recipient Name

Recipient Title

Company

Company Address

City, State Zip Code  


RE: Service-Based Restricted Stock Award  


Dear
Recipient: 


Effective
date, The Board of Directors Compensation Committee, (The Committee), granted you  [#] service-based restricted shares of CEG Common Stock
(the "Award") pursuant to Section 7 of the Constellation Energy
Group, Inc. 1995 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: 


	2.
	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

	

	[#]	 	mm/dd/yy	 	[one to five years]	 	[one to five years after Share Grant 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. 



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]
	[PHONE NUMBER]	 	[PHONE NUMBER]	 	[PHONE NUMBER]









 

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


Sincerely,



[NAME]
[TITLE, DEPARTMENT]


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




2









 
 

Attachment A    
    


 
 

CONSTELLATION ENERGY GROUP, INC.    
    
    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. 


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 during the restriction period will be automatically reinvested in additional shares of company common stock. These shares will be subject to the same restrictions
as the originally awarded shares and will vest accordingly. For tax
purposes, the dividends on the restricted stock will not be taxable as dividend income. Rather, the accumulated shares of stock will be taxable to you in the same manner as stated above. 



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. 




	(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. 







 
 

FORM OF PERFORMANCE UNIT AGREEMENT    
    


[date]



TO:
«First» «MI» «Last» 


Effective
[Date], as part of the [3 CALENDAR YEAR PERFORMANCE
PERIOD] Long-Term Incentive Program, you were granted [#] performance units (the
"Units") under the Constellation Energy Group, Inc. 1995 Long-Term Incentive Plan (the "Plan"). In addition to other provisions of the Plan, your award is subject to the conditions
set forth in this document. 



	

	Target Grant

(# Units)
	 	Grant Date
	 	Performance Period
	 	Vesting Date

	

	[#]	 	[MM/DD/YY]	 	[3-Year Period]	 	[End of 3-Year Period]
	







Under
current tax law, you are not subject to tax on your Units until the Vesting Date. 


	1.
	Each
Unit is worth $1. The final award payout on the Vesting Date will be based on Constellation Energy Group's relative Total Shareholder Return ("TSR") performance over the
Performance Period as set forth below. TSR is defined as the stock price change from [BEGINNING TO END OF 3 CALENDAR YEAR PERFORMANCE
PERIOD] and dividends during that period that are reinvested on the ex-dividend date (date stock trades without its dividend) at the closing price on
that date. 



The
Plan Administrator will determine the award payout soon after the conclusion of the Performance Period. The performance measures used to determine the award payout are as follows: 


	•
	Primary Measure: Constellation Energy TSR for the Performance Period is compared to the TSR performance results of large and
mid-size investment grade companies within the Dow Jones Electric Utilities Index (DJEUI) on [END OF PERFORMANCE
PERIOD]. In the DJEUI, companies that are rated "non-investment grade" by both Moody's and S&P rating agencies on  [END OF PERFORMANCE PERIOD] are excluded.



	•
	Secondary Measure: If Constellation Energy's percentile rank for the Primary Measure is below the  [    ]
 percentile, then a comparison will be made to the TSR performance results of investment grade companies in the
S&P 500 Index on [END OF PERFORMANCE PERIOD]. 







	 
	 	 
	 	

	 
	 	 
	 	Primary Measure

TSR v. DJEUI Large & Mid-Cap Investment Grade Companies
	 	Secondary Measure

TSR v. S&P 500 Index Comparison Group

	 
	 	 
	 	

	Performance Level	 	Total Shareholder Return	 	Payout vs. Target	 	Payout vs. Target
	

	<Threshold	 	<[    ] Percentile	 	[    ]%	 	[    ]%
	

	Threshold	 	[    ] Percentile	 	[    ]%	 	[    ]%
	

	Target	 	[    ] Percentile	 	[    ]%	 	[    ]%
	

	Stretch	 	[    ] Percentile	 	[    ]%	 	[    ]%
	







Payout
levels interpolated between points.

Secondary measure applies only if performance vs. primary measure is below threshold. 



	2.
	The
award payout amount is determined by multiplying the "Payout vs. Target" percentage by the number of Units (worth $1 each) that you were granted. This award payout amount may be
settled, in the sole discretion of the Plan Administrator, in either restricted or unrestricted stock or stock units, or cash (or any combination thereof).



	3.
	Under
current tax law, you will be subject to tax on the Vesting Date on the award payout amount. The Company will be required to withhold applicable taxes at such time. If the award
payout is settled in stock or stock units, the Company will withhold the required number of shares or units to pay these taxes.



	4.
	As
provided in the Plan, until the Vesting Date, you may not sell, transfer, or pledge the Units. 







 

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]
	[PHONE NUMBER]	 	[PHONE NUMBER]	 	[PHONE NUMBER]





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


Sincerely,



[NAME]
[TITLE, DEPARTMENT]


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



	
 Signature of «First» «MI» «Last»	 	
 DATE




2









 
 

FORM OF STOCK UNIT AWARD WITH SALE RESTRICTION AGREEMENT    
    


[DATE]


Recipient Name

Recipient Title

Company

Company Address

City, State Zip Code  


  
 

    RE: Stock Unit Award with Sale Restriction    
    



Dear  Recipient: 


Effective  date, as part of your [PERFORMANCE YEAR] annual incentive and in
recognition of your performance during [PERFORMANCE YEAR], you were granted  [#] restricted Constellation Energy Group, Inc. (the "Company")
common stock units with sale restrictions ("Deferred
Shares") under the Constellation Energy Group, Inc. 1995 Long-Term Incentive Plan (the "Plan"). In addition to other provisions of the Plan, your award is subject to the following
conditions: 


	1.
	Each
Deferred Share entitles you to receive on the Restriction Lapse Date (set forth below) one share of Constellation Energy Group common stock ("Common Stock"). Under current tax
law, you are not subject to tax on your Deferred Shares until the Restriction Lapse Date (see paragraph 4 below).



	2.
	During
the Restriction Period (set forth below), on any date that Constellation Energy Group pays dividends with respect to the Common Stock, the Company shall credit you with a number
of Deferred Shares equal to (i) the number of your Deferred Shares on the dividend record date times (ii) the dividend rate per share, divided by (iii) the per share reinvestment
price. These dividend-based additional Deferred Shares shall be subject to the same rules and restrictions as Deferred Shares originally granted to you.



	3.
	The
Restriction Period for your Deferred Shares expires on the Restriction Lapse Date as shown in the table below: 






	

	# Deferred Shares Granted
	 	Deferred Share Grant Date
	 	Restriction Period
	 	Restriction Lapse Date

	

	
[#]	
 	

[MM/DD/YY]	
 	
[5 years]	
 	
[5 years after Grant Date]
	

	

 	
 	

 	
 	

 	
 	

 
	 	 	

	

 	
 	

 	
 	

 	
 	

 
	 	 	







Your
Deferred Shares are fully and immediately vested, however, during the Restriction Period, you may not sell, transfer, or pledge the Deferred Shares. During the Restriction Period, you will have
no voting rights with respect to the Deferred Shares. The Restriction Period remains in effect irrespective of your employment status. 



	4.
	Following
the Restriction Lapse Date, the Company shall cause to be issued to you a certificate for shares of Common Stock equal to the number of your Deferred Shares (including
dividend-based additional Deferred Shares). Under current tax law, you will be subject to tax on the Restriction Lapse Date based on an amount equal to the number of shares of Common Stock issued to
you times the Fair Market Value per share (i.e., the average of the high and low price of the Common Stock on the Restriction Lapse Date). The Company will be required to withhold applicable taxes at
such time, and will withhold the required number of shares to pay these taxes. The total shares you receive will be rounded to the nearest whole share. You should consult your tax advisor regarding
any tax issues. 





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]
	[PHONE NUMBER]	 	[PHONE NUMBER]	 	[PHONE NUMBER]









 

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


Sincerely,



[NAME]

[TITLE, DEPARTMENT]


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




2









 
 

FORM OF
  STOCK OPTION AGREEMENT    
    



        This
Stock Option Agreement ("Agreement") is subject to the terms and conditions of the Constellation Energy Group, Inc. 1995 Long-Term Incentive 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 = fair market value of stock on grant date] 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

	

	
[1/3 of Option Shares] Options	
 	

[One year after Grant Date]
	

	[1/3 of Option Shares] Options	 	[Two years after Grant Date]
	

	[1/3 of Option Shares] Options	 	[Three years after Grant Date]
	







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 Participant's employment Termination (as defined in
the Plan) and as to vested Option Shares 90 days after such effective date; provided that 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. 


        (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 the method specified by the Plan Administrator from time to time or by
contacting [NAME] at [PHONE NUMBER(S)]. 







 

        (b)   On
or before the exercise date specified pursuant to paragraph 4(a), 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 paragraph 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)   Participant
is required to comply with Constellation Energy's Insider Trading Policy at all times, including in connection with exercise of the Option. 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. 


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 Participant's family member or to a trust established for the benefit of 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 


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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 in this Agreement 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. 


        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:
	
[NAME]	
 	
By:	
 	

 
	[TITLE, DEPARTMENT]	 	 	 	
 «First» «Middle» «Last»




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QuickLinks



Exhibit 10(b)


Constellation Energy Group, Inc. 1995 Long-Term Incentive Plan (Plan)

1995 Long-Term Incentive Plan Appendix


FORM OF SERVICE-BASED RESTRICTED STOCK AWARD AGREEMENT



Attachment A


CONSTELLATION ENERGY GROUP, INC. INCOME TAX CONSEQUENCES TO PARTICIPANTS FOR SERVICE-BASED RESTRICTED STOCK AWARDS

FORM OF PERFORMANCE UNIT AGREEMENT


FORM OF STOCK UNIT AWARD WITH SALE RESTRICTION AGREEMENT

RE: Stock Unit Award with Sale Restriction



FORM OF STOCK OPTION AGREEMENT