Document:

Exhibit No. 10
(a)

 

This
document constitutes part of a prospectus covering securities

that have
been registered under the Securities Act of 1933.

 

Constellation
Energy Group, Inc.

2007 Long-Term
Incentive Plan

(Plan)

Amended and
Restated Effective February 26, 2009

 

1.                                       Purpose. 
The purpose of this Plan is to increase shareholder value by providing a
long-term incentive to reward officers and key employees of the Company and its
Subsidiaries, who are mainly responsible for the continued growth, development,
and financial success of the Company and its Subsidiaries, and for the
continued profitable performance of the Company and its Subsidiaries.  The Plan is also designed to permit the
Company and its Subsidiaries to attract and retain talented and motivated
directors, officers, consultants and employees and to increase their ownership
of Company common stock.  The Plan also
provides the ability to award long-term incentives that qualify for federal
income tax deduction.  Upon the adoption
of this Plan, no new Awards shall be granted under any prior long-term
incentive plan.

 

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, Cash-Based Award, Restricted Stock, Restricted
Stock Units, Options, Performance Units, Stock Appreciation Rights, Dividend
Equivalents, or Other Equity granted under this Plan.

 

“Board”
means the Board of Directors of the Company.

 

“Cash-Based Award” means
an Award granted to a Participant as described in Section 12A.

 

“Change in Control” means the occurrence of any
one of the following events:

 

(i)            individuals who, on the effective
date of the adoption of the Plan, 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 such adoption date, 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 the Company 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 the Company 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 1934 Act and as used in Sections 13(d)(3) and
14(d)(2) of the 1934 Act) is or becomes a “beneficial owner” (as defined
in Rule 13d-3 under the 1934 Act), directly or indirectly, of securities
of the Company representing 20% or more of the combined voting power of the
Company’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 the Company or
any corporation with respect to which the Company 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 the Company
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 a Participant or any group of persons including a
Participant (or any entity controlled by a Participant or any group of persons
including a Participant);

 

(iii)          consummation of a merger, consolidation,
statutory share exchange or similar form of corporate transaction involving the
Company (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 the Company
approve a plan of complete liquidation or dissolution of the Company, or the
consummation of a sale of all or substantially all of the Company’s assets.

 

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Notwithstanding the
foregoing, a Change in Control of the Company 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 Company Voting
Securities by the Company which reduces the number of Company Voting Securities
outstanding; provided, that if after such acquisition by the
Company 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.

 

“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 Compensation Committee of the Board or such other committee as the
Board shall appoint from time to time to administer the Plan and to otherwise
exercise and perform the authority and functions assigned to the Committee
under the terms of the Plan, at least two members of which qualify as
non-employee directors (within the meaning of Rule 16b-3 promulgated under
Section 16 of the 1934 Act), and as “outside directors” within the meaning
of Treasury Regulation Section 1.162-27(e)(3) and as “independent”
within the meaning of any rules or regulations promulgated by an
applicable stock exchange or similar regulatory authority.

 

“Company” means
Constellation Energy Group, Inc., a Maryland corporation, or its
successor, including any “New Company” as provided in Section 16J.

 

“Covered Employee” means
a Participant, who at the time of reference, is a “covered employee”, as
described in Code Section 162(m).

 

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

 

“Disability”
means the determination that a Participant is “disabled” under the Company
disability plan in effect at that time or, if applicable to such Participant, a
Subsidiary disability plan in effect at that time.

 

“Dividend
Equivalent” means an Award granted under Section 11.

 

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

 

“Exercise
Period” means the period or periods during which a Stock Appreciation Right is
exercisable.

 

“Fair
Market Value” means the value of the Stock determined by such methods or
procedures as shall be established from time to time by the Plan Administrator;
provided, that to the extent required to avoid the imposition of a 

 

3

 

tax
under Section 409A of the Code in respect of an Award, such method shall
conform to the requirements of Section 409A.

 

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

 

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

 

“Option”
or “Stock Option” means either a nonqualified stock option or an Incentive
Stock Option.

 

“Option
Period” or “Option Periods” means the period or periods during which an Option
is exercisable.

 

“Other
Equity” means an Award granted under Section 12B.

 

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

 

“Pension
Plan” means the Pension Plan of Constellation Energy Group, Inc. as may be
amended from time to time, or other qualified retirement plan of Constellation
Energy Group, Inc. or a Subsidiary designated by the Committee from time
to time.

 

“Performance-Based
Compensation” means compensation under an award that satisfies the requirements
of Section 162(m) of the code for deductibility of remuneration paid
to Covered Employees.

 

“Performance
Measures” means measures as described in Section 13 on which the
performance goals are based and which are approved by the Company’s
shareholders pursuant to the Plan in order to qualify Awards as
Performance-Based Compensation.

 

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

 

“Performance Target(s)”
means the specific objective goal or goals that are timely set in writing by
the Committee pursuant to Section 13B for each Participant for the
applicable Performance Period in respect of any one or more of the Performance
Measures.

 

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

 

“Plan
Administrator” means, as set forth in Section 4, the Committee or its
designee.

 

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“Restricted
Stock” means Stock issued in the name of a Participant that bears a restrictive
legend prohibiting sale, transfer, pledge or hypothecation of the Stock until
the expiration of the restriction period as described in Section 7.

 

“Restricted
Stock Unit” means a right granted 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 Plan Administrator.

 

“Retirement”
means retirement on or after the earlier of: (i) eligibility to receive an
early retirement benefit under a Pension Plan, (ii) eligibility to receive
retirement benefits under a Company supplemental retirement plan; or (iii) such
time as is specified in an applicable employment arrangement.

 

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

 

“Stock
Appreciation Right” means an Award granted under Section 10.

 

“Subsidiary”
means any entity that is directly or indirectly controlled by the Company or
any entity, including an acquired entity, in which the Company has a
significant equity interest, as determined by the Plan Administrator, in its
discretion.

 

“Termination”
means resignation or discharge from employment (or cessation of board
membership in the case of a director or cessation of the performance of
services in the case of a consultant) with the Company or any of its
Subsidiaries except in the event of death, Disability, or Retirement.

 

“Year” means a fiscal year of the Company
commencing on or after May 18, 2007 that constitutes all or part of the
applicable Performance Period.

 

3.                                      Effective Date, Duration
and Stockholder Approval.

 

A.                                   Effective Date and Stockholder Approval.  Subject to the approval of the Plan by the
Company’s shareholders in accordance with Maryland law at the Company’s 2007
Annual Meeting of Stockholders, the Plan will be effective as of May 18,
2007.  The Plan was amended and restated
effective February 21, 2008 and February 26, 2009.

 

B.                                     Period for Grants of Awards.  Awards may be made as provided herein for a
period of 10 years after May 18, 2007.

 

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

 

4.                                      Plan Administration.  The Committee is the Plan Administrator and
has sole authority (except as specified otherwise herein) to determine all
questions of interpretation and application of the Plan, or of the terms and
conditions pursuant to which Awards are granted, exercised or forfeited under
the Plan provisions, 

 

5

 

and,
in general, to make all determinations advisable for the administration of the
Plan to achieve its stated purpose. 
Without limiting the generality of the foregoing, on or after the date
of grant of an Award the Plan Administrator may modify, amend, extend, renew or
accelerate the vesting or settlement of outstanding Awards, or accept the
surrender of outstanding Awards and substitute new Awards or otherwise amend an
outstanding Award in whole or in part from time-to-time in such manner as the
Committee determines, in its sole and absolute discretion, to be necessary or
appropriate, which amendments may be made retroactively or prospectively,
provided, however, that, (i) no modification, amendment or substitution
that results in repricing a Stock Option or Stock Appreciation Right that is
settled in shares to a lower exercise price, other than to reflect an
adjustment made pursuant to Section 14, shall be made without prior
stockholder approval; (ii) except as provided in Section 14 of the
Plan, any modification that would materially adversely affect any outstanding
Award shall not be made without the consent of the Participant and, (iii) the
Committee shall not have any such authority to the extent that the grant or
exercise of such authority would cause any tax to become due under Section 409A
of the Code).  In addition, the Committee
will have the authority to determine whether an authorized leave of absence,
absence in the military or government service, or other break in the continuous
service of an employee or consultant constitutes a termination of employment
(or provision of services, in the case of a consultant).  The employment of an employee (or provision
of services in respect of a consultant) with the Company shall be deemed to
have terminated for all purposes of the Plan if such person is employed by or
provides services to an entity that is a Subsidiary of the Company and such
entity ceases to be a Subsidiary of the Company, unless the Committee
determines otherwise.

 

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

 

The
Committee may delegate its authority under the Plan to one or more
subcommittees, which may be comprised of one or more directors, officers or
employees of the Company to the extent permitted by applicable law, with
respect to Participants who are not directors or executive officers of the
Company.

 

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

 

6

 

6.                                      Grant of Awards and
Limitation of Number of Shares Awarded. 
The Plan
Administrator may, from time to time, grant Awards to one or more Eligible
Persons, provided that subject to any adjustment pursuant to Section 14,
the aggregate number of shares of Stock subject to Awards that may be delivered
under this Plan may not exceed 9,000,000 shares.  Shares delivered by the Company
under the Plan may be authorized and unissued Stock or Stock purchased on the
open market (including private purchases) in accordance with applicable
securities laws.

 

Any shares of Stock
covered by an Award (or portion of an Award) granted under the Plan that are
forfeited or canceled, expire or are not issued due to the cash-settlement of
such Award, shall be deemed not to have been delivered for purposes of
determining the maximum number of shares available for delivery under the Plan.  Any shares of Stock
covered by an Award (or portion of an Award) granted under a prior long-term
incentive plan that are forfeited or canceled, expire or are not issued due to
the cash-settlement of such prior long-term incentive plan Award shall be
available for delivery under this Plan.

 

The maximum number of
shares of Stock that may be issued in conjunction with  Restricted Stock or Restricted Stock Unit
Awards under Section 7 of the Plan, 
Performance Unit Awards under Section 9 of the Plan and other
Equity Awards under Section 12 of the Plan shall in the aggregate be
4,500,000.  The maximum number of shares
of Stock subject to Awards of any combination that may be granted during any
calendar year under the Plan to any one person is 2,000,000  and
the maximum amount of cash that may be granted pursuant to an Award during any
calendar year under the Plan to any one person is $20,000,000; provided,
however, that to the extent the maximum permissible award is not made in a
year, such amount may be carried over to subsequent years.  Such per-individual limit shall not be
adjusted to effect a restoration of shares of Stock with respect to which the
related Award is terminated, surrendered or canceled.   Shares of Stock covered by Awards granted
pursuant to the Plan in connection with the assumption, replacement, conversion
or adjustment of outstanding equity-based awards in the context of a corporate
acquisition or merger (within the meaning of Section 303A.08 of the New
York Stock Exchange Listed Company Manual or any successor provision) shall not
count as used under the Plan for purposes of this Section 6..

 

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

 

7.                                      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 Person.  The Restricted Stock may 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 

 

7

 

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.  Each Restricted Stock or Restricted Stock
Unit Award may have a different restriction period, at the discretion of the
Plan Administrator.

 

The
Plan Administrator may also impose such other restrictions and conditions on the
Restricted Stock or Restricted Stock Unit as it deems appropriate including,
without limitation, a requirement that a Participant pay a stipulated purchase
price for each share of Restricted Stock or Restricted Stock Unit, restrictions
based upon the achievement of specific performance goals, service-based
restrictions on vesting following attainment of performance goals or
service-based restrictions.

 

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 Plan Administrator’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 Plan Administrator, 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 Plan Administrator.

 

B.            Forfeiture or Payout of Award.  For Awards that are subject to restrictions
based upon achievement of specific performance goals, as soon as practicable
after the end of each Performance Period, the Plan Administrator will determine
whether the performance objectives and other material terms of the Award were
satisfied.  The Plan Administrator’s
determination of all such matters will be final and conclusive.

 

As soon as practicable after the date the Plan
Administrator makes the above determination, the Plan Administrator will
determine the Award payment for each Participant. In the event a Participant
ceases employment (or ceases board membership in the case of a director or
ceases the performance of services in the case of a consultant) 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) involuntary
Termination by the Company without cause (as determined in the sole discretion
of the Company) - payout of the Restricted Stock or Restricted Stock Unit
Award is prorated for service during the period; (b) Retirement, Disability
or death - payout of the Restricted Stock or Restricted Stock Unit Award is
prorated for service during the period; or (c) other Termination -
the Restricted Stock or Restricted Stock Unit Award is completely
forfeited.  Notwithstanding the foregoing,
the Plan Administrator may modify the above in its sole discretion in the
actual Award.

 

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

 

8

 

C.            Form and Timing of Payment.  With respect to shares of Restricted Stock,
upon completion of the restriction period and satisfaction of any other
conditions related to the Award, all Award restrictions will expire and new
certificates representing the Award will be issued (the payout) without the
restrictive legend described in Section 7A.  With respect to Restricted Stock Units, upon
completion of the restriction period and satisfaction of any other conditions
related to the Award, such Units may be paid out in cash or shares of Stock or
in a combination of cash and Stock, as determined by the Plan Administrator in
its sole discretion.  Such payouts will
be made as soon as practicable after the Award payment is determined.

 

D.            Waiver of Section 83(b) Election.  Unless otherwise directed by the Plan
Administrator, 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 Person on the Date of Grant with or 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 the Company and the Participant
containing provisions determined by the Plan Administrator, including, without
limitation, provisions to qualify Incentive Stock Options as such under Section 422
of the Code if directed by the Plan Administrator at the Date of Grant;
provided, however, that each Incentive Stock Option Agreement must include the
following terms and conditions:  (i) that
the Options are exercisable, either in total or in part, with a partial
exercise not affecting the exercisability of the balance of the Option;  (ii) every share of Stock purchased
through the exercise of an Option will be paid for in full at the time of the
exercise; (iii) each Option will cease to be exercisable, as to any share
of Stock, at the earliest of (a) the Participant’s purchase of the Stock
to which the Option relates, (b) the Participant’s exercise of a related
Stock Appreciation Right, or (c) the lapse of the Option; (iv) Options
will not be transferable by the Participant except by will or the laws of
descent and distribution and will be exercisable during the Participant’s
lifetime only by the Participant or by the Participant’s guardian or legal
representative; and (v) notwithstanding any other provision, in the event
of a public tender for all or any portion of the Stock or in the event that any
proposal to merge or consolidate the Company with another company is submitted
to the stockholders of the Company for a vote, the Plan Administrator, in its sole
discretion, may declare any previously granted Options to be immediately
exercisable.

 

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

 

9

 

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

 

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

 

F.             Lapse of
Option.  An Option will lapse
upon the earlier of:  (i) 10 years
from the Date of Grant, or (ii) at the expiration of the Option Period set
by the grant.  If the Participant ceases
employment (or ceases board membership in the case of a director or ceases the
performance of services in the case of a consultant) within the Option Period
and prior to the lapse of the Option, the Option will lapse as follows: (a) Retirement
(for Awards granted on or after February 21, 2008) — any unvested
Option shall continue to vest in accordance with the schedule set forth in the
Stock Option Agreement and all Options will lapse on the earlier of the
expiration date of the Option Period specified in the Stock Option Agreement or
5 years from the effective date of Retirement; (b) Retirement (for
Awards granted before February 21, 2008), Disability or death — any
unvested Option will lapse on the effective date of the Retirement, Disability
or death and any vested Option will lapse at the expiration of the Option
Period set by the Grant; or (c) other Termination — any unvested
Option will lapse on the effective date of the Termination and any vested
Option will lapse 90 days after the effective date of the Termination.  Notwithstanding the foregoing, the Plan
Administrator may modify the above in its sole discretion in the actual Award.

 

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.            Grants of Performance
Units.  One or more
Performance Units may be granted to any Eligible Person.  The Performance Units may be issued to the
Participant on the Date of Grant without the payment of consideration by the
Participant.  One or more Performance
Units may be earned by an Eligible Person based on the achievement of
performance objectives during a Performance Period, in the sole discretion of
the Plan Administrator.  The Plan
Administrator may also impose such other restrictions and conditions on the
Performance Units as it deems appropriate. 
Each Performance Unit Award may be subject to different restrictions and
conditions, at the discretion of the Plan Administrator.

 

10

 

B.            Forfeiture or Payout of
Award. As soon as practicable after the end of each Performance
Period, the Plan Administrator will determine whether the performance
objectives and other material terms of the Award were satisfied.  The Plan Administrator’s determination of all
such matters will be final and conclusive.

 

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

 

In the event a
Participant ceases employment (or ceases board membership in the case of a
director or ceases the performance of services in the case of a consultant)
during a Performance Period (or at the Plan Administrator’s discretion, prior
to Award payout), the Performance Unit Award generally is subject to forfeiture
or payout as follows: (a) involuntary Termination by the Company
without cause, as determined in the sole discretion of the Company (for
terminations that occurred before February 26, 2009), Retirement (for
Awards granted before February 21, 2008), Disability or death — (i) if
the Plan Administrator determines that performance is at or above an applicable
target at the time employment ceases, payout of the Performance Unit Award is
based on 100% of target performance and prorated for service during the
Performance Period and (ii) if the Plan Administrator determines that
performance is below target at the time employment ceases no payout will be
made; (b) Retirement (for Awards granted on or after February 21,
2008) — payout is prorated for service during the Performance Period and
based on the achievement of performance objectives as determined by the Plan
Administrator after the end of the Performance Period; (c) involuntary
Termination by the Company without cause, as determined in the sole discretion
of the Company (for terminations on or after February 26, 2009) — (i) if
the Plan Administrator determines that performance is at or above an applicable
target after the end of the Performance Period, payout of the Performance Unit
Award is based on 100% of target performance and prorated for service during
the Performance Period and (ii) if the Plan Administrator determines that
performance is below target after the end of the Performance Period no payout
will be made; or (d) other Termination - the Performance Unit Award
is completely forfeited.  Notwithstanding
the foregoing, the Plan Administrator may modify the above in its sole
discretion in the actual Award.

 

C.            Form and Timing of
Payment. Each Performance Unit payout may be paid in cash or shares
of Stock or in a combination of cash and Stock, as determined by the Plan
Administrator in its sole discretion. 
Such payouts will be made within a reasonable period of time, as
determined in the sole discretion of the Plan Administrator, after the Award
payment is determined.

 

10.           Stock Appreciation Rights.

 

A.            Grants of Stock
Appreciation Rights.  Stock
Appreciation Rights may be granted under the Plan in conjunction with an Option
either at the Date of Grant or by amendment or may be separately granted.  Each Stock Appreciation Right will have a
grant price of not less than 100% of the Fair Market Value at 

 

11

 

the
Date of Grant.  Stock Appreciation Rights
will be subject to such terms and conditions not inconsistent with the Plan as
the Plan Administrator may impose.

 

B.            Right to Exercise;
Exercise Period. A Stock Appreciation Right issued pursuant to an
Option will be exercisable to the extent the Option is exercisable.  A Stock Appreciation Right issued independent
of an Option will be exercisable pursuant to such terms and conditions
established in the Award. 
Notwithstanding such terms and conditions, in the event of a public
tender for all or any portion of the Stock or in the event that any proposal to
merge or consolidate the Company with another company is submitted to the
stockholders of the Company for a vote, the Plan Administrator, in 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
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.  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 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.

 

The
Plan Administrator may direct the payment in settlement of the Stock Appreciation
Right to be in cash or Stock or a combination thereof.  Alternatively, the Plan Administrator may
permit the Participant to elect to receive cash in full or partial settlement
of the Stock Appreciation Right, provided that the Plan Administrator must
consent to or disapprove such election. 
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.

 

12

 

F.             Lapse of a
Stock Appreciation Right.  A
Stock Appreciation Right will lapse upon the earlier of:  (i) 10 years from the Date of Grant; or (ii) at
the expiration of the Exercise Period as set by the grant.  If the Participant ceases employment (or
ceases Board membership in the case of a director or ceases the performance of
services in the case of a consultant) within the Exercise Period and prior to
the lapse of the Stock Appreciation Right, the Stock Appreciation Right will
lapse as follows: (a) Retirement, Disability or death — any
unvested Stock Appreciation Right will lapse on the effective date of the
Retirement, Disability or death and any vested Stock Appreciation Right will
lapse at the expiration of the Exercise Period set by the grant; or (b) other
Termination — any unvested Stock Appreciation Right will lapse on the
effective date of the Termination and any vested Stock Appreciation Right will
lapse 90 days after the effective date of the Termination; provided, however,
that the Plan Administrator may modify the above in its sole discretion.

 

11.           Dividend
Equivalents.

 

A.            Grants of Dividend
Equivalents.  Dividend
Equivalents may also be granted under the Plan in conjunction with Restricted
Stock, Restricted Stock Units or Performance Units, at any time during the
Performance Period, without consideration by the Participant.  Dividend Equivalents
will be structured in a manner that complies with Section 409A of the
Code.

 

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

 

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

 

D.            Lapse of a Dividend Equivalent.  Each Dividend Equivalent will lapse on the
earlier of (i) the end of the Performance Period (or if earlier, the date
the Participant ceases employment or ceases board membership in the case of a
director or ceases the performance of services in the case of a consultant) of
the related Performance Units, Restricted Stock or Restricted Stock Unit Award;
or (ii) the lapse date established by the Plan Administrator on the Date
of Grant of the Dividend Equivalent.

 

12.           Cash-Based
Awards and Other Equity Awards.

 

A.            Grant of Cash-Based
Awards.  Cash-Based Awards may
be granted to any Eligible Person, in such amounts, on such terms and
conditions, and for such consideration, including no consideration as the Plan
Administrator shall determine.  A
Cash-Based Award may be paid in cash or shares of Stock or in a combination of
cash and Stock, as determined in the sole discretion of the Plan Administrator.

 

13

 

B.            Other Equity Awards.
One or more shares of Stock may be granted to any Eligible Person, in such
amounts, on such terms and conditions, and for such consideration, including no
consideration as the Plan Administrator shall determine.  An Other Equity Award may be denominated in
Stock or other securities, stock-equivalent units, securities or debentures
convertible into Stock, or any combination of the foregoing and may be paid in
Stock or other securities, in cash, or in a combination of Stock or other
securities and cash, as determined in the sole discretion of the Plan
Administrator.

 

C.            Forfeiture of Payout
of Award.  The Plan
Administrator shall determine the extent to which the Participant shall have
the right to receive outstanding Cash-Based Awards or Other Equity Awards or to
have such Awards vest or payout, as applicable, in the event a Participant ceases employment (or
ceases board membership in the case of a director or
ceases the performance of services in the case of a consultant). 
Such provisions shall be determined in the sole discretion of the Plan
Administrator, may be included in an agreement with the Participant reflecting
the terms of such Award, but need not be uniform among all such Awards, and may
reflect distinctions based on the reasons for the cessation.

 

13.           Performance
Measures.

 

A.            General.  Unless and until the Committee proposes for
shareholder vote and the shareholders approve a change in the general
Performance Measures set forth in this Section, the performance goals upon
which the payment or vesting of an Award to a Covered Employee that is intended
to qualify as Performance-Based Compensation shall be limited to goals set by
reference to the following Performance Measures: net earnings or net income
(before or after taxes); earnings per share; share price (including growth measures
and total shareholder return); net sales growth; net operating profit; capital
targets (including return
on capital); return on assets; return on equity; earnings before or after
taxes, interest, depreciation and/or amortization; ongoing earnings; net
earnings; net sales growth; return on sales; cash flow (including operating
cash flow, free cash flow, discounted cash flow return on investment, cash flow
return on capital and cash flow in excess of costs of capital); economic value
added; value created; economic profit (net operating profit after tax, less a
cost of capital charge); shareholder value added; revenues; operating income;
pre-tax profit margin; gross margin; performance against business plan;
customer service; corporate governance quotient or rating; market share;
productivity ratios; operating efficiency; employee satisfaction; customer
satisfaction; safety; employee engagement; succession planning; supplier
diversity; workforce diversity; margins (including gross, future gross or operating
margins); credit rating; dividend payments; expenses (including targets or
ratios); fuel cost per million BTU; costs per kilowatt hour; retained earnings;
completion of acquisitions, divestitures, corporate restructurings, projects or
other specific events or transactions; and individual goals based on objective
business criteria underlying the goals listed above and which pertain to
individual effort as to achievement of those goals or to one or more business
criteria in the areas of litigation, human resources, information services,
production, inventory, support 

 

14

 

services,
site development, plant development, building development, facility
development, government relations, product market share or management.

 

In the event the
Committee intends that any Award under this Plan should qualify as
Performance-Based Compensation, such Awards shall be granted in accordance with
the additional requirements of this Section, which, in case of any conflict,
shall supersede any other provision of the Plan.  For Awards subject to Performance Measures
set forth in this Section, the Committee will establish (a) Performance
Target(s) relative to the applicable Performance Measures, (b) the
applicable Performance Period and (c) the applicable amount of cash or
number of shares that are the subject of the Award.  The applicable Performance Period and
Performance Target(s) shall be determined by the Committee consistent with
the terms of the Plan and Section 162(m) of the Code.  Notwithstanding the fact that the Performance
Target(s) have been attained, the Committee may pay an Award under this Section of
less than the amount determined by the formula or standard established pursuant
to this Section or may pay no Award at all.  Before any payments are made under this
Section, the Committee shall be responsible for certifying in writing to the
Company that the applicable Performance Targets have been met.

 

B.            Selection of Performance Target(s).  The specific Performance Target(s) with
respect to the Performance Measures must be established by the Committee in
advance of the deadlines applicable under Section 162(m) of the Code
and while the performance relating to the Performance Target(s) remains
substantially uncertain within the meaning of Section 162(m) of the
Code.  The Performance Target(s) with
respect to any Performance Period may be established based on the performance
of the Company or a Subsidiary as a whole or any business unit of the Company
or a Subsidiary or any combination thereof, as the Committee may deem
appropriate, or on a cumulative basis or in the alternative, or as compared to
the performance of a group of comparator companies, or a published or special
index that the Committee, in its sole discretion, deems appropriate.  The Committee also has the authority to
provide for accelerated vesting of any Award based on the achievement of
performance goals pursuant to the Performance Measures specified in this Section 13.  The Committee also has the authority to use
any other performance measures in connection with Awards under the Plan that
are not intended to qualify as Performance-Based Compensation.  At the time the Performance Target(s) are
selected, the Committee shall provide, in terms of an objective formula or
standard for each Participant, the method of computing the specific amount that
will represent the maximum amount of Award payable to the Participant if the
Performance Target(s) are attained. 
The objective formula or standard shall preclude the use of discretion
to increase the amount of any Award earned pursuant to the terms of the Award.

 

C.            Evaluation of Performance For
Performance—Based Compensation. 
The Committee may provide in any such Award that any evaluation of
performance may include or exclude, in whole or in part, any one or more of the
following with respect to the Performance Period: (i) the gain, loss,
income or expense resulting from changes in tax laws or accounting principles
or other laws or provisions affecting reported results, that become effective
during the 

 

15

 

Performance Period; (ii) the
gain, loss, income or expense with respect to the Performance Period that are
extraordinary or unusual in nature or infrequent in occurrence, including but
not limited to gain or loss on certain transactions that do not meet the
definition of cash flow hedges under U.S. generally accepted accounting
principles and must be recognized for financial statement purposes prior to
financial statement recognition of the gain or loss of the underlying
transaction and also including but not limited to any major corporate
transaction-related costs; (iii) the gains or losses resulting from, and
the direct expenses incurred in connection with mergers, acquisitions or the
disposition of a business, in whole or in part, or the sale of investments or
non-core assets; (iv) gain or loss from all or certain claims and/or
litigation and all or certain insurance recoveries relating to claims or
litigation; (v) the impact of impairment of tangible or intangible assets
including but not limited to changes in valuation allowances for deferred
income tax assets; (vi) any impact of the phase-out of the tax credit for
synthetic fuel or any synthetic fuel earnings; (vii) the impact of
reorganization, restructuring or business recharacterization activities,
including but not limited to reductions in force; (viii) foreign exchange
gains and losses and (ix) the impact of investments or acquisitions made
during the year or, to the extent provided by the Committee, any prior
year.  Each of the adjustments described
in this Section 13C may relate to the Company as a whole or any part of
the Company’s business or operations, as determined by the Committee at the
time the Performance Targets are established. 
To the extent such adjustments affect Awards to Covered Employees, they
shall be prescribed in a form that meets the requirements of Code Section 162(m) for
deductibility. The adjustments are to be determined in accordance with U.S.
generally accepted accounting principles and standards, unless another
objective method of measurement is designated by the Committee.  In addition to the foregoing, the Committee
shall adjust any Performance Measures, Performance Targets or other features of
an Award that relate to or are wholly or partially based on the number of, or
the value of, any stock of the Company, to reflect any stock dividend or split,
recapitalization, combination or exchange of shares or other similar changes in
such stock.

 

D.            Committee Discretion to Determine
Award.  The Committee has the
sole discretion to determine the standard or formula pursuant to which each
Participant’s Award shall be calculated, whether all or any portion of the
amount so calculated will be paid, and the specific amount (if any) to be paid
to each Participant, subject in all cases to the terms, conditions and limits
of the Plan.  To this same extent, the
Committee may at any time establish (and, once established, rescind, waive or
amend) additional conditions and terms of payment of Awards (including but not
limited to the achievement of other financial, strategic or individual goals,
which may be objective or subjective) as it may deem desirable in carrying out
the purposes of the Plan.  The Committee
may not, however, with respect to Performance-Based Compensation, increase the
maximum amount permitted to be paid to any individual under the Plan or pay
Awards under this Section 13 if the applicable Performance Target(s) have
not been satisfied.

 

In the event that the
requirements of Section 162(m) and the regulations thereunder change
to permit Committee discretion to alter the governing Performance Measures
without obtaining shareholder approval of such changes, 

 

16

 

the Committee shall have
sole discretion to make such changes without obtaining shareholder
approval.  In addition, in the event that
the Committee determines that it is advisable to grant Awards that shall not
qualify as Performance-Based Compensation and/or to amend previously granted
Awards in a way that would disqualify them as Performance-Based Compensation,
the Committee may make such grants without satisfying the requirements of Code Section 162(m) and
may base vesting on Performance Measures other than those set forth in Section 13A
and/or make such amendments.

 

14.           Accelerated
Award Payout/Exercise.

 

A.            Adjustment
Upon Changes in Stock.  In the
event of any change in the number of shares of Stock outstanding by reason of
any stock dividend or split, recapitalization, merger, consolidation,
combination or exchange of shares or similar corporate change, the maximum
aggregate number of shares of Stock with respect to which the Committee may
grant Awards and the maximum aggregate number of shares of Stock with respect
to which the Committee may grant Awards to any individual Participant in any
year shall be appropriately adjusted by the Committee.  In the event of any change in the number of
shares of Stock outstanding by reason of any other similar event or
transaction, the Committee may, but need not, make such adjustments in the
number and class of shares of Stock with respect to which Awards may be granted
as the Committee may deem appropriate.

 

B.            Increase
or Decrease in Issued Shares Without Consideration. Subject to any
required action by the shareholders of the Company, in the event of any
increase or decrease in the number of issued shares of Stock resulting from a
subdivision or consolidation of shares of Stock or the payment of a stock
dividend (but only on the shares of Stock), or any other increase or decrease
in the number of such shares effected without receipt or payment of
consideration by the Company, the Committee shall proportionally adjust the
number of shares of Stock subject to each outstanding Award and the exercise
price per share of Stock of each such Award.

 

C.            Certain
Mergers.  Subject to any
required action by the shareholders of the Company, in the event that the
Company shall be the surviving corporation in any merger, consolidation or
similar transaction as a result of which the holders of shares of Stock receive
consideration consisting exclusively of securities of such surviving
corporation, the Committee shall adjust each Award outstanding on the date of such
merger or consolidation so that it pertains to and applies to the securities
which a holder of the number of shares of Stock subject to such Award would
have received in such merger or consolidation.

 

D.            Certain Other Transactions.

 

In the event of (i) a dissolution or liquidation
of the Company, (ii) a sale of all or substantially all of the Company’s
assets (on a consolidated basis), (iii) a merger, consolidation or similar
transaction involving the Company in which the Company is not the surviving corporation
or (iv) a merger, consolidation or similar transaction involving the
Company in which the Company is the surviving

 

17

 

corporation but the holders of shares of Stock receive
securities of another corporation and/or other property, including cash, the
Committee shall, in its discretion, have the power to:

 

(i)  cancel,
effective immediately prior to the occurrence of such event, each Award
(whether or not then exercisable), and, in full consideration of such
cancellation, pay to the Participant to whom such Award was granted an amount
in cash, for each share of Stock subject to such Award equal to the value, as
determined by the  Committee in its
discretion, of such Award, provided that with respect to any outstanding Option
such value shall be equal to the excess of (A) the value, as determined by
the Committee in its discretion, of the property (including cash) received by
the holder of a share of Stock as a result of such event over (B) the
exercise price of such Option; or

 

(ii)  provide for
the exchange of each Award (whether or not then exercisable or vested) for an
incentive award with respect to, as appropriate, some or all of the property
which a holder of the number of shares of Stock subject to such Award would
have received in such transaction and, incident thereto, make an equitable
adjustment as determined by the Committee in its discretion in the exercise
price of the incentive award, or the number of shares or amount of property
subject to the incentive award or, if appropriate, provide for a cash payment
to the Participant to whom such Award was granted in partial consideration for
the exchange of the Award.

 

E.             Other Changes. 
In the event of any change in the capitalization of the Company or
corporate change other than those specifically referred to in paragraphs B, C
or D, the Committee may, in its discretion, make such adjustments in the number
and class of shares subject to Awards outstanding on the date on which such
change occurs and in such other terms of such Awards as the Committee may
consider appropriate.

 

F.             No Other Rights. 
Except as expressly provided in the Plan, no Participant shall have any
rights by reason of any subdivision or consolidation of shares of stock of any
class, the payment of any dividend, any increase or decrease in the number of
shares of stock of any class or any dissolution, liquidation, merger or
consolidation of the Company or any other corporation.  Except as expressly provided in the Plan, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number of shares or amount
of other property subject to any Award.

 

G.            Change in Control.  Unless otherwise determined
by the Committee in connection with the grant of an Award, or
unless the Participant and the Company agree in writing that the provisions of
this Section 14G shall not apply, the following provisions shall apply
upon the occurrence of a Change in Control of the Company:

 

i.      Restricted Stock, Restricted Stock Unit,
Cash-Based, or Other Equity Awards Subject to Service-Based Restrictions on
Vesting. A
prorata 

 

18

 

portion of all outstanding Restricted Stock,
Restricted Stock Unit, Cash-Based or Other Equity Awards subject to
service-based restrictions on vesting will be immediately and fully vested and
earned, with the prorata portion determined based on the number of months in
the restriction period that have elapsed as of the date of the Change in
Control as compared to the total number of months in the restriction period.  The amount of the Award not so vested shall
remain outstanding (on a converted basis, if applicable) in accordance with the
original terms of the Award.

 

ii.     Stock Option Awards and Stock
Appreciation Rights.  Any previously granted Stock Option Awards or
Stock Appreciation Rights will be immediately and fully vested and will become
fully exercisable.

 

iii.    Restricted Stock, Restricted Stock Unit,
Cash-Based, or Other Equity Awards with Restrictions Based on Achievement of
Performance Goals/Performance Units.  The
Participant will be entitled to an immediate accelerated vesting and payout of
Performance Unit, Restricted Stock, Restricted Stock Unit, Cash-Based or Other
Equity Awards with restrictions based on achievement of performance goals, and
the amount of the accelerated vesting and payout will be based on the number of
such Restricted Stock or Restricted Stock Units/Performance Units subject to
the Award as established on the Date of Grant, prorated based on the number of
months of the Performance Period that have elapsed as of the date of the Change
in Control as compared to the total number of months in the Performance Period,
and assuming maximum performance was achieved.  
Applicable payouts shall be made in the form set forth in the original
terms of the grant.  The amount of the
Award not so vested shall remain outstanding (on a converted basis, if
applicable) in accordance with the original terms of the grant.

 

H.            Savings Clause.  No provision of this Section 14 shall be given
effect to the extent that such provision would cause any tax to become due
under Section 409A of the Code.

 

15.           Amendment of Plan.

 

                The
Committee may at any time and from time to time alter, amend, suspend or
terminate the Plan in whole or in part, except (i) no such action may be
taken without stockholder approval which materially increases the number of
securities which may be issued pursuant to the Plan (except as provided in Section 14A
- E), extends the period for granting Options under the Plan or materially
modifies the requirements as to eligibility for participation in the Plan; (ii) no
such action may be taken without the consent of the Participant to whom any
Award was previously granted, which materially adversely affects the rights of
such Participant concerning such Award, except as such alteration, termination,
suspension or amendment of the Plan is required by statute, or rules and
regulations promulgated thereunder; and (iii) no such action that would
require the consent of the Board and/or the stockholders of the Company
pursuant to Section 162(m) of the Code or the 1934 Act, or any other
applicable law, rule, or 

 

19

 

regulation,
or the requirements of any securities exchange on which shares of stock are
traded, shall be effective without such consent.  Notwithstanding the foregoing, except as
otherwise required by applicable law, rule or regulation, the Committee
may amend the Plan at its discretion to (i) address any issues concerning Section 162(m) of
the Code; (ii) comply with applicable laws, rules or regulations and
changes thereto; or (iii) maintain an exemption under rule 16b-3 of
the 1934 Act. No provision of this Section 14 shall be given effect to the
extent that such provision would cause any tax to become due under Section 409A
of the Code.

 

16.           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 the Company or any Subsidiary and
any person and shall not be deemed to be consideration for, or a condition of,
continued employment of any person.

 

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

 

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

 

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

 

20

 

the
Company may restrict its transfer in such manner as it deems advisable to
ensure such exempt status. 
Notwithstanding anything herein to the contrary, the Company shall not
be obligated to cause to be issued or delivered any certificates evidencing
shares of Stock pursuant to the Plan unless and until the Company is advised by
its counsel that the issuance and delivery of such certificates is in
compliance with all applicable laws, regulations of governmental authority and
the requirements of any securities exchange on which shares of Stock are
traded.

 

The
exercise of any Option or Stock Appreciation Right granted under the Plan shall
only be effective at such time as counsel to the Company shall have determined
that the issuance and delivery of shares of Stock pursuant to such exercise is
in compliance with all applicable laws, regulations of governmental authority
and the requirements of any securities exchange on which shares of Stock are
traded.  The Company may, in its
discretion, defer the effectiveness of an exercise of an Option or Stock
Appreciation Right hereunder or the issuance or transfer of shares of Stock
pursuant to any Award pending or to ensure compliance under federal or state
securities laws or the rules or regulations of any exchange on which the
shares are then listed for trading.  The
Company shall inform the Participant in writing of its decision to defer the
effectiveness of the exercise of an Option or Stock Appreciation Right or the
issuance or transfer of shares of Stock pursuant to any Award.  During the period that the effectiveness of
the exercise of an Option or Stock Appreciation Right has been deferred, the
Participant may, by written notice, withdraw such exercise and obtain the
refund of any amount paid with respect thereto.

 

F.             Compliance with Section 409A of the Code.  This Plan is intended to comply and shall be
administered in a manner that is intended to comply with section 409A of the
Code and shall be construed and interpreted in accordance with such
intent.  To the extent that an Award,
issuance and/or payment is subject to section 409A of the Code, it shall be awarded
and/or issued or paid in a manner that will comply with section 409A of the
Code, including proposed, temporary or final regulations or any other guidance
issued by the Secretary of the Treasury and the Internal Revenue Service with
respect thereto.  Any provision of this
Plan that would cause an Award, issuance and/or payment to fail to satisfy
section 409A of the Code shall have no force and effect until amended to comply
with Code section 409A (which amendment may be retroactive to the extent permitted
by applicable law).

 

G.            Indemnification.  Each person who is or at any time serves as a
member of the Committee (and each person or committee to whom the Committee or
any member thereof has delegated any of its authority or power under this Plan)
shall be indemnified and held harmless by the Company against and from (i) any
loss, cost, liability, or expense that may be imposed upon or reasonably
incurred by such person in connection with or resulting from any claim, action,
suit, or proceeding to which such person may be a party or in which such person
may be involved by reason of any action or failure to act under the Plan; and (ii) any
and all amounts paid by such person in satisfaction of judgment in any such
action, suit, or proceeding relating to the Plan.  Each person covered by this indemnification
shall give the Company an opportunity, at its own expense, to handle and defend
the same before such person undertakes 

 

21

 

to
handle and defend it on such person’s own behalf.  The foregoing right of indemnification shall
not be exclusive of any other rights of indemnification to which such persons
may be entitled under the Charter or By-Laws of the Company or any of its Subsidiaries,
as a matter of law, or otherwise, or any power that the Company may have to
indemnify such person or hold such person harmless.

 

H.            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 registered public
accounting firm of the Company and its Subsidiaries and upon any other
information furnished in connection with the Plan.  In no event shall any person who is or shall
have been a member of the Committee be liable for any determination made or
other action taken or any omission to act in reliance upon any such report or
information or for any action taken, including the furnishing of information,
or failure to act, if in good faith.

 

I.              Severability. 
If any provision of this
Plan would cause Awards intended  to
qualify as Performance-Based Compensation to not so qualify, that provision
shall be severed from, and shall be deemed not to be a part of, the Plan, but
the other provisions hereof shall remain in full force and effect.  Any specific action by the Committee that
would be violative of Section 162(m) with respect to Awards intended
to qualify as Performance-Based Compensation shall be void.

 

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

 

K.            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.

 

L.             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.

 

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

 

N.            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.

 

22

 

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

 

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

 

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

 

Corporate
Secretary

100
Constellation Way

Suite 1800P

Baltimore,
Maryland 21202

(410)
470-3011

 

23

 

Executive
Long-Term Incentive Plan

Appendix

 

Additional
Information

 

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

 

Participants may
obtain additional information about the Plan by contacting:

 

Manager — Executive
Compensation

Constellation Energy
Group, Inc.

100 Constellation Way, Suite 500P

Baltimore, MD 21202

(410) 470-3244

 

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.

 

24Exhibit 10(b)

 

SECOND AMENDED AND
RESTATED 

CHANGE IN CONTROL SEVERANCE AGREEMENT

 

This second amended and restated agreement (the “Agreement”) is made as
of the 31st day of December, 2008, by and between CONSTELLATION ENERGY GROUP,
INC. (the “Company”) and Michael J. Wallace (the “Executive”).

 

WHEREAS, the Company and the Executive are parties to a Change in
Control Severance Agreement dated as of August 9, 2004 (the “Original
Agreement”);

 

WHEREAS, the Company and the Executive are parties to an Amended and
Restated Change in Control Severance Agreement dated as of December 20th, 2005, and modified by letter agreement dated February 15,
2006 (“the Amended Agreement”);

 

WHEREAS, the Company and the Executive desire to amend and restate the Amended
Agreement so that the Amended Agreement will be replaced in its entirety with
this Agreement;

 

WHEREAS, the Company wishes to encourage the orderly succession of
management in the event of a Change in Control (as hereinafter defined);

 

WHEREAS, the Company desires to maintain a severance benefit for the
Executive covering the period from the date of a Change in Control until the
end of the twenty-four month period following the date of a Change in Control,
to avoid the loss or the serious distraction of the Executive to the detriment
of the Company and its stockholders prior to and during such period when the
Executive’s undivided attention and commitment to the needs of the Company
would be particularly important;

 

WHEREAS, the Executive desires to devote the Executive’s time and
energy for the benefit of the Company and its stockholders and not to be
distracted as a result of a Change in Control.

 

NOW, THEREFORE, the parties agree as follows:

 

1.                                       Definitions.

 

1.1                                 Annual Award Amount.  The term “Annual Award Amount” means, as of
the applicable date of determination, the average of the two highest annual
incentive awards under the Company’s annual incentive plan (or the annual
incentive plan maintained by a successor Company or a Subsidiary) payable or
actually paid under the terms of such annual incentive plan for the performance
year during which the date of determination occurs, and in respect of the last
four years to the Executive prior to the date of determination; provided,
however, that (a) if the Executive has not been employed by the Company or
a Subsidiary for a sufficient length of time to have been eligible for payment
of at least two annual incentive awards, deemed target award payout shall be
used for the one or two years for which the Executive was not so eligible,
except that the maximum payout shall be used for the performance year in which
the date of determination occurs; (b) for any year during which an annual
incentive award was paid or is payable to the Executive that 

 

 

was prorated because of less than a year of plan participation, such
award shall be annualized, except that for the year in which the date of
determination occurs, the maximum payout shall be used; and (c) for any
year during which a guaranteed minimum annual incentive award amount was paid
or is payable to the Executive, such full (not prorated because of less than a
full year of plan participation) guaranteed annual incentive amount shall be
used for such year.

 

1.2                                 Board.  The term “Board” means the
Board of Directors of the Company.

 

1.3                                 Cause.  The term “Cause” means the
occurrence of any one or more of the following:

 

(a)                                  The Executive is
convicted of a felony involving moral turpitude or that involves the
misappropriation of property of the Company or a Subsidiary; or

 

(b)                                 The Executive
engages in conduct or activities that constitutes disloyalty to the Company or
a Subsidiary and such conduct or activities are materially damaging to the
property, business or reputation of the Company or a Subsidiary; or

 

(c)                                  The Executive persistently
fails or refuses to comply with any written direction of an authorized
representative of the Company other than a directive constituting an assignment
described in Section 1.7(a); or

 

(d)                                 The Executive
embezzles or knowingly, and with intent, unlawfully appropriates any corporate
opportunity of the Company or a Subsidiary.

 

A termination of the Executive’s employment
for Cause for purposes of this Agreement shall be effected in accordance with
the following procedures.  The Company
shall give the Executive written notice (“Notice of Termination for Cause”) of
its intention to terminate the Executive’s employment for Cause, setting forth
in reasonable detail the specific conduct of the Executive that it considers to
constitute Cause and the specific provision(s) of this Agreement on which
it relies, and stating the date, time and place of the Board Meeting for
Cause.  The “Board Meeting for Cause”
means a meeting of the Board at which the Executive’s termination for Cause
will be considered, that takes place not less than ten (10) and not more
than twenty (20) business days after the Executive receives the Notice of
Termination for Cause.  The Executive
shall be given an opportunity, together with counsel, to be heard at the Board
Meeting for Cause.  The Executive’s
Termination for Cause shall be effective when and if a resolution is duly
adopted at the Board Meeting for Cause by a two-thirds vote of the entire
membership of the Board, excluding employee directors, stating that in the good
faith opinion of the Board, the Executive is guilty of the conduct described in
the Notice of Termination for Cause, and that conduct constitutes Cause under
this Agreement.

 

Notwithstanding the foregoing, no event
described hereunder shall constitute Cause if such event is a result of an
isolated, insubstantial and inadvertent action that is not taken in bad faith
and that is remedied by the Executive within ten (10) days after receipt
of the Notice of Termination for Cause by the Executive from the Company.

 

1.4                                 Change in Control.  The term “Change in Control” means the
occurrence of any one of the following events:

 

2

 

(a)                                  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 the Company 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 the Company 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;

 

(b)                                 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 the Company representing 20% or more of the
combined voting power of the Company’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 (b) shall not be deemed
to be a Change in Control by virtue of any of the following acquisitions: (A) by
the Company or any Subsidiary, (B) by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any Subsidiary, (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 (c)), or (E) pursuant to any acquisition by Executive or any
group of persons including Executive (or any entity controlled by Executive or
any group of persons including Executive);

 

(c)                                  there is
consummated a merger, consolidation, statutory share exchange or similar form
of corporate transaction involving the Company or any of its Subsidiaries (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 

 

3

 

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

 

(d)                                 the stockholders
of the Company approve a plan of complete liquidation or dissolution of the
Company, or the consummation of a sale of all or substantially all of the
Company’s assets.

 

Notwithstanding the foregoing, a Change in Control of the Company 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 Company Voting Securities by the Company which reduces the
number of Company Voting Securities outstanding; provided,
that if after such
acquisition by the Company 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.

 

1.5                                 Effective
Date.  The term “Effective Date” means
the first date during the term of this Agreement on which a Change in Control
occurs provided that the Executive is employed by the Company or a Subsidiary
on such date.  Anything in this Agreement
to the contrary notwithstanding, if the Executive’s employment with the Company
or a Subsidiary has terminated for any reason prior to the first date on which
a Change in Control occurs, this Agreement shall be null and void as of the
date of such termination of employment; provided, however, that 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, then for all purposes of this Agreement the “Effective Date” shall
mean the date immediately prior to the date of such termination.

 

1.6                                 Eligible to Retire.  The term “Eligible to Retire”
means an Executive who has met the eligibility requirements for retirement
under any Company or Subsidiary supplemental executive non-qualified defined
benefit retirement plan in which the Executive participated immediately prior
to the occurrence of a Qualifying Termination.

 

1.7                                 Good Reason.  The term “Good Reason” means,
without the Executive’s express written consent, the occurrence after the
Effective Date of any one or more of the following:

 

(a)                                  The assignment
to the Executive of duties materially inconsistent with the Executive’s
authorities, duties, responsibilities, and status (including offices, title and
reporting relationships) as an executive and/or officer of the Company or a
Subsidiary immediately prior to the Effective Date, or a material reduction or 

 

4

 

alteration in the nature or status of the Executive’s authorities,
duties, or responsibilities from those in effect immediately prior to the
Effective Date, (including as a type of such reduction or alteration for an
Executive who is an officer of a publicly traded company immediately prior to
the Effective Date, the Executive occupying the same position or title but with
a company whose stock is not publicly traded) unless such act is remedied by
the Company or such Subsidiary within 10 business days after receipt of written
notice thereof given by the Executive; or

 

(b)                                 A reduction by
the Company or a Subsidiary of the Executive’s base salary in effect
immediately prior to the Effective Date or as the same shall be increased from
time to time, unless such reduction is less than ten percent (10%) and it is
either (i) replaced by an incentive opportunity equal in value; or is (ii) consistent
and proportional with an overall reduction in management compensation due to
extraordinary business conditions, including but not limited to reduced
profitability and other financial stress (i.e., the base salary of the
Executive will not be singled out for reduction in a manner inconsistent with a
reduction imposed on other executives of the Company or such Subsidiary); or

 

(c)                                  The relocation
of the Executive’s office more than 50 miles from the Executive’s office
immediately prior to the Effective Date; or

 

(d)                                 Failure of the
Company or a Subsidiary (whichever is the Executive’s employer) to provide (i) the
Executive the opportunity to participate in all applicable incentive, savings
and retirement plans, practices, policies and programs of the Company or such
Subsidiary to the same extent as other senior executives (or, where applicable,
retired senior executives) of the Company or such Subsidiary, and (ii) the
Executive and/or the Executive’s family, as the case may be, the opportunity to
participate in, and receive all benefits under, all applicable welfare benefit
plans, practices, policies and programs provided by the Company or such
Subsidiary, including, without limitation, medical, prescription, dental,
disability, sick benefits, accidental death and travel insurance plans and programs,
to the same extent as other senior executives (or, where applicable, retired
senior executives) of the Company or such Subsidiary; or

 

(e)                                  Failure of the
Company or a Subsidiary (whichever is the Executive’s employer) to provide the
Executive such perquisites as the Company or such Subsidiary may establish from
time to time which are commensurate with the Executive’s position and at least
comparable to those received by other senior executives at the Company or such
Subsidiary; or

 

(f)                                    The aggregate
benefits provided to the Executive by the Company following a Change in Control
are materially less than the aggregate benefits made available to the Executive
immediately prior to such Change in Control; or

 

(g)                                 The failure by
the Company to comply with paragraph (c) of Section 14 of this
Agreement; or

 

5

 

(h)                                 Any other substantial breach of this Agreement by
the Company that either is not taken in good faith or is not remedied by the
Company promptly after receipt of notice thereof from the Executive.

 

The Executive’s right to terminate employment for Good Reason shall not
be affected by the Executive’s incapacity due to physical or mental
illness.  The Executive’s continued
employment shall not constitute consent to, or a waiver of rights with respect
to, any circumstance constituting Good Reason herein; provided, however, a
termination of employment by the Executive for Good Reason for purposes of this
Agreement shall be effectuated by giving the Company written notice (“Notice of
Termination for Good Reason”) of the termination, at any time during the
Protection Period, setting forth in reasonable detail the specific conduct of
the Company that constitutes Good Reason and the specific provision(s) of
this Agreement on which the Executive relied.  Unless the parties agree otherwise, a
termination of employment by the Executive for Good Reason shall be effective
on the thirtieth (30th) day following
the date when the Notice of Termination for Good Reason is given during which
time the Company shall have the opportunity to remedy the conduct, unless the
notice sets forth a later date (which date shall in no event be later than
sixty (60) days after the notice is given); provided, however, that no event
described hereunder shall constitute Good Reason if such event is a result of
an isolated, insubstantial and inadvertent action that is not taken in bad
faith and that is remedied by the Company within ten (10) days after
receipt of the Notice of Termination for Good Reason by the Company from the
Executive.  If the Executive continues to
provide services to the Company after one of the events giving rise to Good
Reason has occurred, it will be in no way considered a waiver of the Executive’s
right to terminate his employment at any time during the Protection Period for
Good Reason in connection with such event.

 

1.8                                 Ineligible
to Retire.  The term “Ineligible to
Retire” means an Executive who has not met the eligibility requirements for
retirement under any Company or Subsidiary supplemental executive non—qualified defined benefit retirement plan in which the
Executive participated immediately prior to the occurrence of a Qualifying
Termination.

 

1.9                                 Qualifying
Termination.  The term “Qualifying
Termination” means

 

(a)                                  The occurrence
of any one or more of the following employment termination events during the period
beginning with the Effective Date and ending on the second anniversary
of such date, shall constitute a “Qualifying Termination”:

 

(i)                                     The Company’s
termination of the Executive’s employment without Cause (as defined in Section 1.3);
or

 

(ii)                                  The Executive’s
resignation for Good Reason (as defined in Section 1.7).

 

(b)                                 A Qualifying
Termination shall not include a termination of employment by reason of death,
disability, the Executive’s voluntary termination of employment without Good
Reason, or the Company’s termination of the Executive’s employment for Cause.

 

6

 

(c)                                  The
date of a Qualifying Termination shall be the date the Executive has a
separation from service under Internal Revenue Code Section 409A and the
regulations thereunder.

 

1.10                           Protection Period.  The Term “Protection Period” means the two (2) year
period commencing on the Change in Control and ending on the second anniversary
of the Change in Control.

 

1.11                           Subsidiary.  The term “Subsidiary” means any corporation
with respect to which the Company 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.

 

2.                                       Severance Benefits for an Executive Ineligible to Retire.  Upon the occurrence of a Qualifying
Termination with respect to an Executive who is Ineligible to Retire:

 

(a)                                  Severance
Payment.  The Company
shall pay to the Executive an amount equal to three times the sum of (i) the
greater of (A) the Executive’s annual base salary as of immediately prior
to the occurrence of the Change of Control or (B) the Executive’s annual
base salary (as in effect on the date of the Qualifying Termination, not
reduced by any reduction described in Section 1.7(b) above that would
constitute Good Reason) and (ii) the greater of (A) the Annual Award
Amount, determined with the date of the Change of Control as the date of
determination, or (B) the Annual Award Amount, determined with the date of
the Qualifying Termination as the date of determination.  The payment shall be made in a lump sum after
the Qualifying Termination, and within 5 business days after the Company receives the executed agreement referred
to in 2(e) below but in no case prior to the expiration of any period
during which the Executive is permitted to revoke such agreement.

 

(b)                                 Supplemental
Retirement Benefits.  For purposes of determining
the Executive’s supplemental retirement
benefits which the Executive is entitled to under the Company’s supplemental
non-qualified retirement plan in which the Executive participated immediately
prior to the Qualifying Termination (or the supplemental retirement plan
maintained by a successor company or a Subsidiary), (i) the Executive’s
service percentage shall be computed by adding three years of executive-level
service to the Executive’s actual service, provided that the Executive’s
service percentage shall not be deemed to be less than 40%; (ii) any
minimum age and service eligibility requirements for such benefits shall be
waived and such benefits shall be fully vested; (iii) Annual Award Amount
shall be used to compute such benefits in lieu of any other annual incentive
award amount under such plan and (iv) for purposes of computing the
present value of the benefit to be paid to the Executive at age 62, three years
will be added to the Executive’s age. 
Notwithstanding the foregoing, on a Qualifying Termination, the
Executive will be entitled to receive an amount equal to the greater of (i) the
amount that would have been payable under this Section 2(b) under the
supplemental non-qualified retirement plan in which he participated had the
Qualifying Termination occurred on the Change in Control or (ii) the
amount 

 

7

 

payable under this Section 2(b) under the supplemental
non-qualified retirement plan in which he participated as of the date of the
Qualifying Termination.

 

(c)                                  Severance
Health Benefits.  Commencing
upon a Qualifying Termination and continuing through the third anniversary of
such Qualifying Termination, the Executive and/or the Executive’s family, as
the case may be, shall receive all medical and dental benefits and any life
insurance coverage provided to active employees of the Company, and such
benefits shall be provided on an insured basis. In addition, if the Executive
has attained age fifty (50) as of his Qualifying Termination (or would have attained
age fifty (50) had he remained employed through the period ending on the third
anniversary of his Qualifying Termination), the Company shall make available to
the Executive insured medical and dental benefits at prevailing retiree
coverage rates (based on the executive’s age and deemed service on the third
anniversary of his Qualifying Termination), beginning upon the third
anniversary of the Executive’s Qualifying Termination and lasting for the
Executive’s life. The Executive must elect retiree medical and dental coverage
within five (5) years after the third anniversary of his Qualifying
Termination, in order to be entitled to the benefit described in the second
sentence of this paragraph, and will commence receiving such coverage effective
as soon as practicable after the date of such election in accordance with the
terms of the applicable retiree medical and dental programs.  If the Company either cannot, or chooses not
to, provide the benefits in the first or second sentences, as applicable, the
Company may provide such benefits on a non-insured basis or may instead provide
adequate compensation to the Executive such that he may purchase the benefit
from a 3rd party on a tax neutral basis.

 

(d)                                 Release.  The benefits described in this Section 2
are payable by the Company to the Executive only if after the date of the
Qualifying Termination, the Executive executes (and does not subsequently
revoke) in writing and submits to the Company a mutual release and waiver of
legal claims, including those against the Company and its Subsidiaries, in the
form attached hereto. Following receipt of the Executive’s signed mutual
release pursuant to this Agreement, which release shall be delivered to the
Company no later than sixty (60) days following the date of the Qualifying
Termination (absent the existence of a material dispute between the parties
regarding the benefits), the Company shall have ten (10) days from the
date such release becomes irrevocable to execute the release and deliver a copy
to the Executive.  If the Company fails
to execute such release within the time frame established by the preceding
sentence, the release shall be deemed to have been signed by the Company and
shall be fully enforceable by each party against the other.

 

(e)                                  Benefits
Paid to Estate of Executive on Death. If the Executive dies (i) after
termination of the Executive’s employment without Cause or (ii) after
providing the Company with Notice of Termination for Good Reason during the
Protection Period and a Good Reason event has occurred, but before all payments
or benefits due to him under this Agreement have been paid, then in such case
any payments and benefits due to him at the time of his death under this
Agreement, shall be 

 

8

 

paid to his estate in accordance with the same terms as described in the
provisions of this Agreement. Such benefits shall expressly include
continuation of any severance health benefits for which the Executive was
eligible under Section 2(c) for the Executive’s family.

 

3.                                       Severance Benefits for an Executive Eligible to Retire.  Upon the occurrence of a Qualifying
Termination with respect to an Executive who
is Eligible to Retire:

 

(a)                                  Severance
Payment.  The Company shall pay to the
Executive an amount equal to the amount determined under Section 2(a) of
this Agreement.  The payment shall be
made in a lump sum after the Qualifying Termination, and within 5 business days
after the Company receives the executed agreement referred to in Section 3(e) below,
but in no case prior to the expiration of any period during which the Executive
is permitted to revoke such agreement.

 

(b)                                 Supplemental
Retirement Benefits.  For purposes of determining
the Executive’s supplemental retirement benefits which the Executive is
entitled to under the Company’s supplemental non-qualified retirement plan in
which the Executive participated immediately prior to the Qualifying
Termination (or the supplemental retirement plan maintained by a successor
company or a Subsidiary), (i) the Executive’s service percentage shall be
computed by adding three years of executive-level service to the Executive’s
actual service, provided that the Executive’s service percentage shall not be
deemed to be less than 40%; (ii) Annual Award Amount shall be used to
compute such benefits in lieu of any other annual incentive award amount under such plan; and (iii) for purposes of computing
the present value of the benefit to be paid to the Executive at age 62, three
years will be added to the Executive’s age.  
Notwithstanding the foregoing, on a Qualifying Termination, the
Executive will be entitled to receive an amount equal to the greater of (i) the
amount that would have been payable under this Section 3(b) under the
supplemental non-qualified retirement plan in which he had participated had the
Qualifying Termination occurred on the Change in Control or (ii) the
amount payable under this Section 3(b) under the supplemental
non-qualified retirement plan in which he participated as of the date
of the Qualifying Termination.

 

(c)                                  Severance
Health Benefits.  Commencing upon a Qualifying Termination and
continuing through the third anniversary of such Qualifying Termination, the
Executive and/or the Executive’s family, as the case may be, shall receive all
medical and dental benefits and any life insurance coverage provided to active
employees of the Company, and such benefits shall be provided on an insured
basis.  In addition, if the Executive has
attained age fifty (50) as of his Qualifying Termination (or would have
attained age fifty (50) had he remained employed through the period ending on
the third anniversary of his Qualifying Termination), the Company shall make
available to the Executive insured medical and dental benefits at prevailing
retiree coverage rates (based on the executive’s age and deemed service on the
third anniversary of his Qualifying Termination), beginning upon the third
anniversary of the Executive’s Qualifying Termination 

 

9

 

and lasting for the Executive’s life. The Executive must elect retiree
medical and dental coverage within five (5) years after the third
anniversary of his Qualifying Termination, in order to be entitled to the
benefit described in the second sentence of this paragraph, and will commence
receiving such coverage effective as soon as practicable after the date of such
election in accordance with the terms of the applicable retiree medical and
dental programs. If the Company either cannot, or chooses not to, provide the
benefits in the first or second sentences, as applicable, the Company may
provide such benefits on a non-insured basis or may instead provide adequate
compensation to the Executive such that he may purchase the benefit from a 3rd party on a tax neutral basis.

 

(d)                                 Release.  The benefits described in this Section 3
are payable by the Company to the Executive only if after the date of the
Qualifying Termination, the Executive executes (and does not subsequently
revoke) in writing and submits to the Company a mutual release and waiver of
legal claims, including those against the Company and its Subsidiaries, in the
form attached hereto. Following receipt of the Executive’s signed mutual
release pursuant to this Agreement, which release shall be delivered to the
Company no later than sixty (60) days following the date of the Qualifying
Termination (absent the existence of a material dispute between the parties
regarding the benefits), the Company shall have ten (10) days from the
date such release becomes irrevocable to execute the release and deliver a copy
to the Executive.  If the Company fails
to execute such release within the time frame established by the preceding
sentence, the release shall be deemed to have been signed by the Company and
shall be fully enforceable by each party against the other.

 

(e)                                  Benefits
Paid to Estate of Executive on Death. If the Executive dies (i) after
termination of the Executive’s employment without Cause or (ii) after
providing the Company with Notice of Termination for Good Reason during
the Protection Period and a Good Reason event has occurred, but before all payments
of benefits due to him under this Agreement have been paid, then in such case any payments and
benefits due to him at the time of his death under this Agreement, shall be
paid to his estate in accordance with the same terms as described in the
provisions of this Agreement. Such benefits shall expressly include
continuation of any severance health benefits for which the Executive was
eligible under Section 3(c) for the Executive’s family.

 

4.                                       Grant of Replacement Options upon a Change in Control. Some or all of
the outstanding options to purchase common stock of the Company outstanding
under the Company’s equity compensation plans (the “Equity Plans”) as of the
occurrence of a Change in Control will be cashed-out in accordance with the
terms of the applicable plans in connection with any Change in Control (the “Cashed-Out
Options”).  As soon as practicable
following the occurrence of a Change in Control, the Company shall, subject to
shareholder approval, cause the applicable committee or committees
administering the Equity Plans to grant the Executive additional stock options
(the “Replacement Options”) to purchase common stock of the Company (or, if the
Company is not the surviving entity in connection with a Change in Control,
common stock of the surviving entity). 
The 

 

10

 

Replacement Options will (i) be granted on substantially the same
terms and conditions as the Cashed-Out Options (including provisions related to
the term), (ii) have an exercise price equal to the greater of (A) the
fair market value of the underlying common stock at the time of grant and (B) the
exercise price of the Cashed-Out Options to which they relate, as adjusted to
take into account the transaction or transactions that resulted in the Change
in Control, (iii) relate to the same number of shares as the Cashed-Out
Options (as adjusted to take into account the transaction or transactions that
resulted in the Change in Control), (iv) vest in accordance with the terms
of the schedule of the Cashed-Out Options to which they relate (excluding any
vesting that occurs as a result of such Change in Control and, for purposes of
determining the vesting schedule, the Replacement Options will be deemed to
have been granted at the time of grant of the Cashed-Out Options to which they
relate), and (v) will remain exercisable for the same period as the
Cashed-Out Options would have been exercisable had they not been terminated.
The Replacement Options shall vest in full as of a Qualifying Termination.  Notwithstanding anything to
the contrary set forth herein, the Replacement Options will not vest in
connection with a subsequent transaction (the “Subsequent Transaction”)
following the Change in Control in which such Replacement Options were granted
(the “Initial Change in Control”) that would constitute a Change in Control if
such Subsequent Transaction merely increases the percentage ownership of common
stock of the Company held by the person or entity whose initial acquisition of
common stock of the Company triggered the Initial Change in Control.

 

5.                                       Non-Exclusivity of Rights.  Nothing in this Agreement shall prevent or
limit the Executive’s continuing or future participation in any plan, program,
policy or practice provided by the Company or a successor company or a
Subsidiary (whichever is the Executive’s employer) for which the Executive may
qualify, nor shall anything in this Agreement limit or otherwise affect such
rights as the Executive may have under any contract or agreement with the
Company or a successor Company or such Subsidiary.  However, if the Executive receives severance
benefits under this Agreement, the Executive is not also entitled to any
benefit under any other severance plan, program, arrangement or agreement
maintained by the Company or a Subsidiary. 
Vested benefits and other amounts that the Executive is otherwise
entitled to receive under any incentive compensation (including, but not
limited to any restricted stock or stock option agreements), deferred
compensation and other benefit programs listed in Section 1.7(d), life
insurance coverage, or any other plan, policy, practice or program of, or any
contract or agreement with, the Company or a successor Company or such
Subsidiary on or after the date of the Qualifying Termination shall be payable
in accordance with the terms of each such plan, policy, practice, program,
contract or agreement, as the case may be, except as explicitly modified by
this Agreement.

 

6.                                       Full Settlement.  The Company’s obligation to
make the payments provided for in, and otherwise to perform its obligations
under, this Agreement shall not be affected by any set-off, counterclaim,
recoupment, defense or other claim, right or action that the Company may have
against the Executive or others.  In no
event shall the Executive be obligated to seek other employment or take any
other action by way of mitigation of the amounts payable to the Executive under
any of the provisions of this Agreement and, 

 

11

 

such
amounts shall not be reduced, regardless of whether the Executive obtains other
employment.

 

7.             Certain Additional Payments by the Company.

 

(a)                                  Anything in this
Agreement to the contrary notwithstanding, in the event it shall be determined that any payment or distribution (including an
acceleration of vesting, or a lapse of restrictions on amounts otherwise
subject to vesting) by the Company to or for the benefit of the Executive (a “Payment”)
would be subject to the excise tax imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended (the “Code”) or any interest or penalties are
incurred by the Executive with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter collectively
referred to as the “Excise Tax”), then the Executive shall be entitled to
receive an additional payment (a “Gross-Up Payment”) in an amount such that
after payment by the Executive of all taxes (including any interest or
penalties imposed with respect to such taxes), including, without limitation,
any income taxes (and any interest and penalties imposed with respect thereon)
and Excise Tax imposed upon the Gross-Up Payment, the Executive retains an
amount of the Gross-Up Payment equal to the Excise Tax imposed upon the
Payment.

 

(b)                                 Subject to the
provisions of paragraph (c) of this Section 7, all determinations
required to be made under this Section 7, including whether and when a
Gross-Up Payment is required and the amount of
such Gross-Up Payment and the assumptions to be utilized in arriving at such
determination, shall be made by one of the
major internationally recognized certified public accounting firms (commonly
referred to, as of the date hereof, as a Big Four firm) designated by the
Executive and approved by the Company (which approval shall not be unreasonably
withheld) (the “Accounting Firm”), which shall provide detailed supporting
calculations both to the Company and the Executive within fifteen (15) business
days of the receipt of notice from the Executive that there has been a Payment,
or such earlier time as is requested by the Company.  In the event that the Accounting Firm is
serving as accountant or auditor for the individual, entity or group affecting
the change of control, the Executive shall designate another Big Four
accounting firm (subject to the approval of the Company, which approval shall
not be unreasonably withheld) to make the determinations required hereunder
(which accounting firm shall then be referred to as the Accounting Firm
hereunder).  All fees and expenses of the
Accounting Firm shall be borne solely by the Company.  Any Gross-Up Payment, as determined pursuant
to this Section 7, shall be paid by the Company to the Executive within
five (5) days of the receipt of the Accounting Firm’s determination.  Any determination by the Accounting Firm
shall be binding upon the Company and the Executive.  As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that Gross-Up
Payments which will not have been made by the Company should have been made (“Underpayment”)
consistent with the calculations required to be made hereunder.  In the event that the Company exhausts its
remedies pursuant to 

 

12

 

paragraph (c) of this Section 7 and the Executive thereafter
is required to make a payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company to or for the benefit of the
Executive.

 

(c)                                  The Executive
shall notify the Company in writing of any claim by the Internal Revenue
Service that, if successful, would require the payment by the Company of the
Gross-Up Payment.  Such notification
shall be given as soon as practicable but no later than ten (10) business
days after the Executive is informed in writing of such claim and shall
apprise the Company of the nature of such claim and the date on which such
claim is requested to be paid.  The
Executive shall not pay such claim prior to the expiration of the thirty (30)
day period following the date on which the Executive gives such notice to the
Company (or such shorter period ending on the date that any payment of taxes
with respect to such claim is due).  If
the Company notifies the Executive in writing prior to the expiration of such period
that it desires to contest such claim, the Executive shall:

 

(i)                                     give the Company
any information reasonably requested by the Company relating to such claim,

 

(ii)                                  take such action
in connection with contesting such claim as the Company shall reasonably
request in writing from time to time, including, without limitation, accepting
legal representation with respect to such claim by an attorney reasonably
selected by the Company,

 

(iii)                               cooperate with
the Company in good faith in order effectively to contest such claim, and

 

(iv)                              permit the
Company to participate in any proceedings relating to such claim;

 

PROVIDED, however, that the Company shall bear and
pay directly all costs and expenses (including additional interest and
penalties) incurred in connection with such contest and shall indemnify and
hold the Executive harmless, on an after—tax basis, for any Excise Tax or
income tax (including interest and penalties with respect thereto) imposed as a
result of such representation and payment of costs and expenses.  Without limitation on the foregoing
provisions of this paragraph (c) of Section 7, the Company shall
control all proceedings taken in connection with such contest and, at its sole
option, may pursue or forego any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in respect of such claim and
may, at its sole option, either direct the Executive to pay the tax claimed and
sue for a refund or contest the claim in any permissible manner, and the
Executive agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine; PROVIDED, however, that if
the Company directs the Executive to pay such claim and sue for a refund, the
Company shall advance the amount of such payment to the Executive, on an
interest-free basis and shall indemnify and hold the Executive harmless, on an
after-tax basis, from any Excise 

 

13

 

Tax or income tax (including interest or penalties
with respect thereto) imposed with respect to such advance or with respect to
any imputed income with respect to such advance; and PROVIDED, further, that
any extension of the statute of limitations relating to payment of taxes for
the taxable year of the Executive with respect to which such contested amount
is claimed to be due is limited solely to such contested amount.  Furthermore, the Company’s control of the
contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and the Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.

 

(d)                                 If, after the
receipt by the Executive of an amount advanced by the Company pursuant to
paragraph (c) of this Section 7, the Executive becomes entitled to
receive any refund with respect to such claim, the Executive shall promptly
take all necessary action to obtain such refund and (subject to the Company’s
complying with the requirements of paragraph (c) of this Section 7)
upon receipt of such refund shall promptly pay to the Company the amount of
such refund (together with any interest paid or credited thereon after taxes
applicable thereto).  If after the
receipt by the Executive of an amount advanced by the Company pursuant to
paragraph (c) of this Section 7, a determination is made that the
Executive shall not be entitled to any refund with respect to such claim and
the Company does not notify the Executive in writing of its intent to contest
such denial of refund prior to the expiration of thirty (30) days after such
determination, then such advance shall be forgiven and shall not be required to
be repaid and the amount of such advance shall offset, to the extent thereof,
the amount of Gross-Up Payment required to be paid.

 

(e)                                  Notwithstanding
anything herein to the contrary, the Company shall pay all amounts that it is
required to pay to or on behalf of the Executive under the foregoing provisions
of this Section 7 not later than the end of the calendar year following (1) the
calendar year in which the related Taxes are remitted to the applicable taxing
authority, or (2) in the case of amounts relating to a claim described in Section 7(c) that
does not result in the remittance of any Taxes, the calendar year in which the
claim is finally settled or otherwise resolved.

 

8.             Certain Additional Agreements
under Section 409A.

 

(a)                                  In the event the
payment of any amounts under this Agreement would be treated as non-qualified
deferred compensation under Section 409A of the Code, such payment will be
delayed for six (6) months after the date of the Executive’s Qualifying
Termination if required in order to avoid additional tax under Section 409A
of the Code; provided, however, that if the Executive incurs a separation from
service within the meaning of Code section 409A prior to his Qualifying
Termination, then such six (6) month delay period shall commence with the date
of his prior separation from service.  If
the Executive dies within six (6) months following a Qualifying
Termination (or his prior separation from service, if applicable), any such
delayed payments shall not be further delayed, and shall be 

 

14

 

immediately payable to the Executive’s estate in accordance with the
applicable provisions of this Agreement.

 

(b)                                 The Company intends
that this Agreement will comply and be administered in accordance with the rules and
requirements of Section 409A of the Code, including the applicable
exemptions thereunder.  The Company will
not take any action that would expose any payment or benefit to the Executive
under this Agreement or under any plan, arrangement or other agreement to the
additional tax imposed under Section 409A of the Code, unless (i) the
Company is obligated to take the action under an agreement, plan or arrangement
to which the Executive is a party, (ii) the Executive requests the action,
(iii) the Company advises the Executive in writing that the action may
result in the imposition of the additional tax and (iv) the Executive
subsequently requests the action in a writing that acknowledges that he will be
responsible for any effect of the action under Section 409A of the
Code.  The Company will hold the
Executive harmless for any action it may take in violation of this paragraph.

 

(c)                                  It is the
parties’ intention that the benefits and rights to which the Executive could
become entitled in connection with the termination of employment covered under
this Agreement comply with Section 409A of the Code, including the
applicable exemptions thereunder.  If the
Executive or the Company believes, at any time, that any of such benefit or
right does not so comply, he or it will promptly advise the other party and
will negotiate reasonably and in good faith to amend the terms of such
arrangement such that it complies (with the most limited possible economic
effect on the Executive and on the Company).

 

(d)                                 Any obligation of the Company to
reimburse the Executive for legal, accounting or any other type of professional
fees shall continue for the Executive’s life and, if later, until the complete
disposition of all relevant claims.  In
addition, all benefits in the nature of reimbursements or in-kind services
shall comply with the requirements of Treas. Reg. § 1.409A-3(i)(1)(iv) to
the extent applicable.  For this purpose,
(i) the amount of expenses eligible for reimbursement, or benefits
provided, in one calendar year shall not affect the expenses eligible for
reimbursement, or benefits to be provided, in any other calendar year, (ii) the
reimbursement of any expense shall be made promptly, but in no event later than
the last day of the calendar year next following the calendar year in which the
expense was incurred, and (iii) the right to any reimbursement or benefit
shall not be subject to liquidation or exchange for any other benefit.

 

(e)                                  Each payment made pursuant to Sections 2(a) or
(c) and Sections 3(a) or (c) shall constitute a separate payment
for 409A purposes.

 

(f)                                    Any payment made pursuant to
this Agreement that would constitute a gross-up payment under Treasury
Regulation 1.409A-3(i)(1)(v) shall be made in accordance with the timing
requirements set forth in that regulation.

 

15

 

9.             Termination
of Agreement.  This Agreement
shall remain in effect from the date hereof until the last day of the
twenty-fourth calendar month following the date of a Change in Control.  Further, upon a Qualifying Termination, this
Agreement shall continue until the Company or its successor shall have fully
performed all of its obligations thereunder with respect to the Executive, with
no future performance being possible. 
This Agreement may be terminated at any time by the Board with the
written consent of the Executive. 
Notwithstanding the foregoing, this Agreement shall automatically
terminate upon cessation of Executive’s employment with the Company and its
Subsidiaries prior to the Effective Date.

 

10.           Amendment
of Agreement.  This Agreement may be amended
at any time by the Board with the written consent of the Executive.

 

11.           Construction.  Wherever any words are used
herein in the masculine gender they shall be construed as though they were also
used in the feminine gender in all cases where they would so apply, and
wherever any words are used herein in the singular form, they shall be
construed as though they were also used in the plural form in all cases where
they would so apply.

 

12.           Governing
Law.  This  Agreement shall be
governed by the laws of Maryland.

 

13.           Dispute Resolution.  The parties agree that any disputes, claims,
complaints or causes of action of any type or kind (including but not limited
to any disputes relating in any way to this Agreement) which the parties may
have between themselves shall be resolved by final and binding arbitration
using a single arbitrator from the American Arbitration Association pursuant to
its then existing commercial arbitration rules. The arbitration proceedings
shall be conducted in Baltimore, Maryland, unless the parties mutually agree in
writing to a different location. Prior to presiding over any such dispute, any
arbitrator shall be required to consent in writing that he or she shall reach a
final decision within four (4) months after a claim has been filed and
within sixty (60) days after final submission. Any award rendered in the
arbitration may be enforced in any court of competent jurisdiction. Pending the
resolution of any such claim or dispute, the Executive (and his beneficiaries)
shall continue to receive all payments and benefits due under this Agreement or
otherwise, except to the extent that the arbitrators otherwise provide.

 

14.           Successors and Assigns.

 

(a)           This Agreement shall inure to
the benefit of and be enforceable by the Executive’s legal
representatives.

 

(b)           This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.

 

(c)           The Company shall require any
successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company expressly to assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would have
been required to perform it if no such succession had taken place.  As used in this Agreement, “Company” shall
mean both the Company as defined above and any such successor that assumes and
agrees to perform this Agreement, by
operation of law or otherwise.

 

16

 

15.           Director &
Officer Insurance and Indemnification.  During the
Protection Period and, upon a Qualifying Termination, for so long thereafter as
the Executive could be subject to liability, the Company shall keep in place a
directors’ and officers’ liability insurance policy (or policies) providing
comprehensive coverage to the Executive for claims relating to the Executive’s
service as an employee, officer, or director of the Company, on terms and
conditions no less favorable to the Executive (e.g., with respect to scope,
amounts and deductibles) provided to then-existing officers and directors of
the Company.  The Company shall indemnify
the Executive to the fullest extent permitted by the general laws of the State
of Maryland and shall provide indemnification expenses in advance to the extent
permitted thereby.  The Company will
follow the procedures required by applicable law in determining persons
eligible for indemnification and in making indemnification payments and
advances.   The indemnification and
advance of expenses provided by the Company pursuant to this Agreement shall
not be deemed exclusive of any other rights to which the Executive may be
entitled under any law (common or statutory), or any agreement, vote of
stockholders or disinterested directors or other provision that is consistent
with law, both as to action in his official capacity and as to action in
another capacity while holding office or while employed or acting as agent for
the Company, shall continue in respect of all events occurring while the
Executive was a director of or employed by the Company after the Executive has
ceased to be a director of or employed by the Company, and shall inure to the
benefit of the estate, heirs, executors and administrators of the Executive.

 

16.           Reimbursement of Legal Fees.  The Company will pay all reasonable fees and
expenses, if any (including without limitation, legal fees and expenses) that
are incurred by the Executive to enforce this Agreement and that result from a
breach of this Agreement by the Company.

 

17.           Notice.  Any notices, requests,
demands, or other communications provided for by this Agreement shall be
sufficient if in writing and if sent by registered or certified mail to the
Executive at the last address the Executive has filed in writing with the
Company, or in the case of the Company, to its principal offices.

 

18.           Severability.  The invalidity or
unenforceability of any provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement.  If any provision of this Agreement shall be
held invalid or unenforceable in part, the remaining portion of such provision,
together with all other provisions of this Agreement, shall remain valid and
enforceable and continue in full force and effect to the fullest extent
consistent with law.

 

19.           Withholding.  Notwithstanding any other
provision of this Agreement, the Company may withhold from amounts payable under this Agreement
all federal, state, local and foreign taxes that are required to be withheld by
applicable laws or regulations.

 

20.           Entire
Agreement.  Unless otherwise specifically
provided in this Agreement, the Executive and the Company acknowledge that this
Agreement supersedes any other agreement between them or between the Executive
and the Company or a Subsidiary, concerning the subject matter hereof.

 

21.           Alienability.  The rights and benefits of
the Executive under this Agreement may not be anticipated, alienated or subject
to attachment, garnishment, levy, execution or other legal or 

 

17

 

equitable process except as required by law.  Any attempt by the Executive to anticipate,
alienate, assign, sell, transfer, pledge, encumber or charge the same shall be
void.  Payments hereunder shall not be
considered assets of the Executive in the event of insolvency or bankruptcy.

 

22.           Counterparts.  This Agreement may be
executed in several counterparts, each of which shall be deemed an original,
and said counterparts shall constitute but one and the same instrument.

 

IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand
and, pursuant to the authorization of the Board, the Company has caused this
Agreement to be executed in its name on its behalf, all as of the day and year
first above written.

 

 

	
   

  	
  CONSTELLATION ENERGY GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Charles A. Berardesco

  
	
   

  	
   

  	
  Name: Charles A. Berardesco

  
	
   

  	
   

  	
  Title: Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Michael J. Wallace

  
	
   

  	
   

  	
  Michael J. Wallace

  

 

18

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