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                                                                   Exhibit 10(b)
                       Constellation Energy Group, Inc.
                         1995 Long-Term Incentive Plan
                                    (Plan)


1.   Objective.  The objective of this Plan is to increase shareholder value by
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     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
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     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, 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.
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     "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, as the context requires)
     which the Committee has determined have been earned and are payable (or, in
     the case of Restricted Stock, 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 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.

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     "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.

     "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
     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, as the context requires)
     which may be earned and payable (or, in the case of Restricted Stock,
     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.
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     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.

     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.

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     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
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     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
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     (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
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     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 Awards.
     -----------------------

     A. Grants of Restricted Shares. One or more shares of Restricted Stock may
     be granted to any Eligible Employee.  The Restricted Stock will be issued
     to the Participant on the Date of Grant without the payment of
     consideration by the Participant.  The 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 Restricted Stock until the
     expiration of the restriction period.

     The Committee may also impose such other restrictions and conditions on the
     Restricted Stock 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, and subject to the
     Committee's discretion, to receive the cash dividends distributable with
     respect to such shares, with such dividends treated as compensation to the
     Participant. The Committee, in its sole discretion, may direct the
     accumulation and payment of distributable dividends to

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

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

     Any shares of 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 Award is granted, the Committee will establish a restriction period
     applicable to such Award which will be not less than one year and not more
     than ten years.  Each Restricted Stock Award may have a different
     restriction period, at the discretion of the Committee.  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 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 Awards
     for which different Performance Periods are prescribed.

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     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 (if Target Performance Award performance
     objectives were not attained), or the issuance of additional shares of
     Stock (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 Award is subject to forfeiture or payout (i.e.,
     removal of restrictions) as follows: (a) Termination - the Restricted Stock
     Award is completely forfeited; (b) Retirement, Disability or death - payout
     of the Restricted Stock 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 Award is
     determined at the discretion of the Committee, or if at CEG's request,
     payout of the Restricted Stock 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 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.

     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.
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     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

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     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.
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     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 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.

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     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.
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     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

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

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

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

     F. Lapse of a Stock Appreciation Right.  A Stock Appreciation Right will
     lapse upon the earlier of:  (i) 10 years from the Date of Grant; or (ii) at
     the expiration of the Exercise Period as set by the grant.  If the
     Participant ceases employment 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

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

12.  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 (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

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<PAGE>

     stock of CEG or the combined voting power of CEG's then outstanding shares
     of voting securities entitled to a vote generally, or (ii) the consummation
     of, following the approval by the stockholders of CEG of a reorganization,
     merger, or consolidation, in each case, with respect to which persons who
     were stockholders of CEG 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 CEG 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:

     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 Restricted Stock 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 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

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<PAGE>

     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.

     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

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<PAGE>

     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.

                                       14
<PAGE>

     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 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.

                                       15