Document:

Exhibit No. 10(f)

 

Constellation Energy Group, Inc.

Senior Executive

Supplemental Plan

 

Amended and Restated Effective

January 1, 2009

 

 

Table of Contents

 

	
  1.

  	
  Purpose and Nature of
  the Plan

  	
  1

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Definitions

  	
  1

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Plan Administration

  	
  7

  
	
   

  	
   

  	
   

  
	
  4.

  	
  Eligibility

  	
  7

  
	
   

  	
   

  	
   

  
	
  5.

  	
  Supplemental Pension
  Benefits

  	
  8

  
	
   

  	
   

  	
   

  
	
  6.

  	
  For Benefits Earned and
  Vested Prior to January 1, 2005

  	
  10

  
	
   

  	
   

  	
   

  
	
  7.

  	
  For Benefits Earned and
  Vested On or After January 1, 2005

  	
  15

  
	
   

  	
   

  	
   

  
	
  8.

  	
  Survivor Benefits

  	
  20

  
	
   

  	
   

  	
   

  
	
  9.

  	
  Compliance with
  Section 409A of the Code

  	
  26

  
	
   

  	
   

  	
   

  
	
  10.

  	
  Miscellaneous

  	
  26

  

 

 

1.                                       Purpose and Nature of the
Plan. 
Constellation Energy Group, Inc. (the “Company”) established the
Constellation Energy Group, Inc. Senior Executive Supplemental Plan (“Plan”)
and maintains the Plan as an unfunded retirement plan for purposes of Title I
of the Employee Retirement Income Security Act of 1974, notwithstanding the
creation of the Rabbi Trust.  The purpose
of the plan is to provide enhanced retirement benefits for certain senior
executives of the Company and its subsidiaries in order to attract and retain
talented executive personnel.  Any funds
which may be invested and any assets which may be held to provide benefits
under this Plan shall continue for all purposes to be a part of the general
funds and assets of Constellation Energy Group and no person other than
Constellation Energy Group shall by virtue of the provisions of this Plan have
any interest in such funds and assets. 
To the extent that any person acquires a right to receive payments from
Constellation Energy Group under this Plan, such rights shall be no greater
than the right of any unsecured general creditor of Constellation Energy Group.

 

The Plan is divided into
sections that separately address benefits earned and vested on or after January 1,
2005, which are subject to Internal Revenue Code section 409A, and benefits
earned and vested before January 1, 2005, which are “grandfathered” under
Internal Revenue Code section 409A.

 

2.                                       Definitions. 
All words beginning with an initial capital letter and not otherwise
defined herein shall have the meaning set forth in the Pension Plan.  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:

 

“Average Annual Base
Salary” means an amount determined by (a) computing the bi-weekly base
rate of pay amounts (i.e., the types of such pay that are includable in the
computation of Pension Plan benefits) paid during the prior five consecutive
twelve month periods immediately preceding the month that includes the date of
the computation, and (b) averaging the two twelve month periods during
which the highest amounts were paid.

 

“Average Incentive Award”
(or “Average Award”) means the average of the two highest of the participant’s
five immediately prior year awards earned under Constellation Energy Group’s
Executive Annual Incentive Plan,

 

1

 

Constellation Energy
Group’s Senior Management Annual Incentive Plan and/or Other Incentive Awards
Programs.

 

“Benefit Start Date”
means the date as of which the participant’s benefits, if any, under this Plan
commence.

 

“Cause” means the
participant’s (a) failure to comply with Constellation Energy Group
policy, (b) deliberate and continual refusal to satisfactorily perform
employment duties on substantially a full-time basis, (c) deliberate and
continual refusal to act in accordance with any specific instructions of a
majority of Constellation Energy Group’s Board of Directors, (d) disclosure,
without the consent of a majority of Constellation Energy Group’s Board of
Directors, of confidential information or trade secrets concerning
Constellation Energy Group which could be materially damaging to Constellation
Energy Group, or (e) deliberate misconduct which could be materially
damaging to Constellation Energy Group without reasonable good faith belief by
the participant that such conduct was in the best interest of Constellation
Energy Group.

 

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

 

(i)                                     individuals who, on January 24,
2003, constitute the Board of Directors of Constellation Energy Group (the “Incumbent Directors”) cease for any
reason to constitute at least a majority of the Board of Directors of
Constellation Energy Group (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 Constellation Energy
Group (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 

 

2

 

the Board shall be
deemed to be an Incumbent Director;

 

(ii)                                  any “person” (as such term is defined in Section 3(a)(9) of
the Securities Exchange Act of 1934, as amended (the “Exchange
Act”) and as used in Sections 13(d)(3) and 14(d)(2) of
the Exchange Act) is or becomes a “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of 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 Plan participant or any group of persons including Plan
participant (or any entity controlled by Plan participant or any group of
persons including Plan participant);

 

(iii)                               consummation of a merger, consolidation, statutory
share exchange or similar form of corporate transaction involving the Company
or any of its Subsidiary Companies (a “Business Combination”),
unless immediately following such Business Combination:  (A) more than 60% of the total voting
power of (x) the corporation resulting from such Business Combination (
the “Surviving Corporation”), or (y) if
applicable, the ultimate parent corporation that directly or indirectly has
beneficial ownership of at least 95% of the voting securities eligible to elect
directors of the 

 

3

 

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.

 

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 

 

4

 

Company Voting Securities
beneficially owned by such person, a Change in Control of the Company shall
then occur.

 

“Committee” means the
Compensation Committee of the Board of Directors of Constellation Energy Group.

 

“Constellation Energy
Group” means Constellation Energy Group, Inc., a Maryland corporation, or
its successor.

 

“Constellation Energy
Group’s Executive Annual Incentive Plan” means such plan or other incentive
plan or arrangement designated in writing by the Plan Administrator.

 

“Constellation Energy
Group’s Senior Management Annual Incentive Plan” means such plan or other
incentive plan or arrangement designated in writing by the Plan Administrator.

 

“Demotion” means a
transfer to a position with Constellation Energy Group or a subsidiary of
Constellation Energy Group that either (a) is substantially below the
position in which the participant was employed on the date of transfer, or (b) results
in a substantial reduction in pay when compared to the participant’s pay on the
date of the transfer.  Whether a position
is substantially below another position shall be determined in the reasonable
discretion of the Committee, with reference to factors including whether the
participant retains principal responsibility for a department or division, and
whether the participant remains eligible for the perquisites enjoyed by the
participant before the position change.

 

“Early Receipt Reduction
Factor” means 100% less 1/3 of 1% for each month that the participant is less
than age 62 on the participant’s Benefit Start Date.

 

“Interest Rate” means the
rate equal to the average monthly 30-year Treasury bond rate for the second
calendar quarter preceding the computation date, less 50 basis points.

 

“Internal Revenue Code
Limitations” means the limitations under Section 415 and/or 401(a)(17) of
the Internal Revenue Code.

 

“Key Employee” means an
employee listed each year by Constellation Energy Group on the Key Employee
list as required by Treasury Regulation 1.409A-1(i), which shall generally be
comprised of officers, and shall include but

 

5

 

not be limited to: the 50
most highly paid officers having annual compensation greater than $130,000 (as
adjusted from time to time); 5% owners; and 1% owners that have annual
compensation from Constellation Energy Group greater than $150,000 (as adjusted
from time to time). Key Employees shall be identified as of December 31 of
each year, and the List shall take effect on April 1 of the year
following.

 

“LTD Plan” means the
Constellation Energy Group, Inc. Disability Insurance Plan as may be
amended from time to time, or any successor plan.

 

“Mortality Table” means
the mortality table used to convert annuities to lump sums in the Pension Plan.

 

“Nonqualified Deferred
Compensation Plan” means the Constellation Energy Group, Inc. Nonqualified
Deferred Compensation Plan.

 

“Other Incentive Awards
Program” means the program(s) designated in writing by the Plan
Administrator applicable to certain employees that provides awards; but
includes only the types of awards that are includable in the computation of
Pension Plan benefits.

 

“Pension Plan” means the
Pension Plan of Constellation Energy Group, Inc. as may be amended from
time to time, or any successor plan.

 

“Plan” means this
Constellation Energy Group, Inc. Senior Executive Supplemental Plan.

 

“Plan Administrator”
means, as set forth in Section 3, the Committee and its designees.

 

“Rabbi Trust” means the
trust adopted by Constellation Energy Group pursuant to the Grantor Trust
Agreement Dated as of November 3, 2008, by and between Constellation
Energy Group and JPMorgan Chase Bank, N.A.

 

“Severance from Service
Date” means: (i) for benefit amounts earned and vested prior to January 1,
2005, the same as set forth in the Pension Plan; (ii) for benefit amounts
earned and vested on or after January 1, 2005, the date that the employee
dies, retires, or otherwise has a termination of employment such that it is
reasonably anticipated that the employee will perform no additional services,
or the level

 

6

 

of bona fide services
performed would permanently decrease to no more than 20 percent of the average
level of bona fide services performed in the immediately preceding 36-month
period.

 

“Survivor Annuity
Percentage” means 50%, unless the participant elects, in the timing and manner
established by the Plan Administrator, a higher percentage (in multiples of 5%
to a total percentage not to exceed 100%).

 

“Termination From
Employment With Constellation Energy Group” means a participant’s separation
from service with Constellation Energy Group or a subsidiary of Constellation
Energy Group; however, a participant’s retirement, disability, or transfer of
employment to or from a subsidiary of Constellation Energy Group shall not
constitute a Termination From Employment With Constellation Energy Group.

 

“Total SERP Service”
means (a) Credited Service accumulated while designated as a participant
with respect to supplemental pension benefits under this Plan or while a
participant under the Constellation Energy Group Supplemental Pension Plan, or
while a participant under any predecessor executive supplemental pension benefit
plan, plus (b) one fourth of Credited Service accumulated while not such a
participant.

 

3.                                       Plan Administration. 
The Committee is the Plan Administrator and has sole authority (except
as specified otherwise herein) to interpret the Plan and, in general, to make
all other determinations advisable for the administration of the Plan to
achieve its stated objective.  Appeals of
written decisions by the Plan Administrator may be made to the Board of
Directors of Constellation Energy Group. 
Decisions by the Board shall be final and not subject to further
appeal.  The Plan Administrator shall
have the power to delegate all or any part of its duties to one or more
designees, and to withdraw such authority, by written designation.

 

4.                                       Eligibility. 
Each senior executive of Constellation Energy Group or its subsidiaries
may be designated in writing by the Plan Administrator as a participant with
respect to one or more benefits under the Plan. Once designated, participation
shall continue until such designation is withdrawn at the discretion and by
written order of the Plan 

 

7

 

Administrator, provided,
however, that such withdrawal may not be made with respect to a participant who
has satisfied the eligibility requirements to retire (as set forth in Section 5(a)).  Notwithstanding the foregoing, any
participant while classified as disabled under the LTD Plan shall continue to
participate in this Plan while classified as disabled and, for purposes of the
supplemental pension benefit provided by this Plan, while classified as
disabled, shall be deemed to continue to accrue Credited Service until no later
than his/her Normal Retirement Date.

 

A Plan participant who
was a participant in the Constellation Energy Group Supplemental Pension Plan
on January 1, 2000, shall be eligible for supplemental pension benefits
under this Plan only if the participant’s supplemental pension benefits under
this Plan are greater than the supplemental pension benefits computed under the
Constellation Energy Group Supplemental Pension Plan based on the participant’s
age, service, and eligible compensation on the date as of which benefits become
payable. If a participant or a participant’s surviving spouse receives benefits
from this Plan, he/she cannot also receive benefits from the Constellation
Energy Group Supplemental Pension Plan.

 

Any other participant in
the Plan shall be eligible for benefits under this Plan without regard to any
computation under the Constellation Energy Group Supplemental Pension Plan.

 

5.                                      Supplemental Pension
Benefits.

 

(a)                                  Commencement of benefits.A participant shall be eligible to
retire under this Plan on or after the participant’s Normal Retirement Date, or
on the first day of any month preceding his/her Normal Retirement Date, if on
his/her Severance From Service Date and while a participant he/she has attained
(1) age 55 and has accumulated at least 10 years of Credited Service; or (2) age
62 and has accumulated at least five years of Credited Service.

 

(b)                                 Computation of retirement
benefits.  A participant who is eligible to retire under
this Plan will be entitled to supplemental pension retirement benefits under
this Plan, which will be calculated as set forth below on the participant’s
Benefit Start Date:

 

8

 

(i)                                   add
the Average Annual Base Salary and the Average Incentive Award,

 

(ii)                                divide
the sum by 26,

 

(iii)                             multiply
this dollar amount by the appropriate percentage, determined as follows:
Chairman of the Board and President of Constellation Energy Group - 60%; all
other participants (the product of 5.5% multiplied by the number of full and
fractional years of Total SERP Service), (maximum is 55%).

 

(iv)                            multiply
this dollar amount by the Early Receipt Reduction Factor; provided, however, if
the participant is age 62 or older on his/her Benefit Start Date, such factor
shall be one (1),

 

(v)                               subtract
from this dollar amount the charges relating to coverage for a pre-retirement
survivor annuity in excess of 50%, and for a post-retirement survivor annuity
in excess of 50%, and

 

(vi)                            subtract
from the remainder the net bi-weekly amount payable to the participant under
the Pension Plan on the participant’s Benefit Start Date (assuming a 50%
spousal joint and survivor annuity for a married participant), (if the participant
is not eligible to commence bi-weekly Pension Plan payments on the participant’s
Benefit Start Date, the participant’s benefit will be unreduced for Pension
Plan payments until the date the participant is first eligible to commence
bi-weekly Pension Plan payments),  or, if the
participant elects a lump sum under the PEP provisions of the Pension Plan, the
bi-weekly amount that would have been payable under the Pension Plan as a life
annuity for a single participant or as a 50% spousal joint and survivor annuity
for a married participant, as of the Benefit Start Date under this Plan.

 

9

 

6.                                      For
Benefits Earned and Vested Prior to January 1, 2005.

 

(a)                                Form of payout of retirement benefits.

 

Each participant entitled
to supplemental pension retirement benefits will receive his/her supplemental
pension retirement benefits payout in the form of a bi-weekly payment, unless
the participant makes a valid election to receive his/her supplemental pension
retirement benefits payout in the form of a lump sum.

 

A participant may elect
to receive his/her supplemental pension retirement benefits payout in the form
of a lump sum by submitting to the Plan Administrator a signed Lump Sum
Election Form.  The Form must be
received by the Plan Administrator before the beginning of the calendar year
during which the participant’s Severance From Service Date occurs.  The election to receive a payout in the form
of a lump sum may be revoked at any time before the beginning of the calendar
year during which the participant’s Severance From Service Date occurs, by
submitting to the Plan Administrator a signed Lump Sum Revocation Form.

 

(b)                               Amount, timing, and source of bi-weekly retirement
benefit payout.  A
participant entitled to bi-weekly supplemental pension retirement benefits will
receive bi-weekly payments equal to the amount determined under Section 5(b) 
Such payments shall commence effective with the first of the month following
the Participant’s Severance From Service Date. 
If such participant receives (or would have received but for the
Internal Revenue Code Limitations) cost of living adjustment(s) under the
Pension Plan, the bi-weekly payments hereunder will be automatically increased
based on the percentage of, and at the same time as, such adjustment(s).  Bi-weekly payments hereunder shall
permanently cease upon the death of the participant, effective with the
bi-weekly payment for the period following the month of the participant’s
death.  Bi-weekly payments hereunder
shall be made in accordance with the provisions of the Rabbi Trust and, to the
extent not paid under the terms of the Rabbi Trust, from general corporate
assets.

 

(c)                                Amount, timing, and source of lump sum retirement
benefit payout.  A
participant entitled to a lump sum supplemental pension retirement benefit will
receive a lump sum payment.  This lump
sum payment will be calculated by a certified actuary and will be equal to the
present value of an immediate annuity including the 

 

10

 

estimated present
value of post-retirement supplemental survivor annuity benefits described in Section 8,
and reflecting the present value of any deferred Pension Plan payments using (1) the
supplemental pension retirement benefit amount calculated under Section 5(b),
which is expressed as a bi-weekly amount, (2) the Interest Rate computed
on the participant’s Benefit Start Date, and (3) the Mortality Table.  Such lump sum payment shall be made within 60
days after the participant’s Severance From Service Date, and shall be paid to
the participant.  The lump sum payment
shall be made in accordance with the provisions of the Rabbi Trust and, to the
extent not paid under the terms of the Rabbi Trust, from general corporate assets.  A participant who receives a lump sum payment
shall not be entitled to any cost of living or other pension payment
adjustments or to post-retirement survivor annuity coverage under the Plan.

 

(d)                               Entitlement to benefit upon happening of certain
events.

 

(i)                                   Computation
of gross accrued benefit.  The
computation of the gross accrued supplemental pension benefit for a participant
as of the date of the computation will be made as follows:

 

(1)                                add
the Average Annual Base Salary and the Average Incentive Award,

 

(2)                                divide
the sum by 26, and

 

(3)                                multiply
this dollar amount by the appropriate percentage, determined as follows:
Chairman of the Board and President of Constellation Energy Group – 60%; all
other participants - by the product of 5.5% multiplied by the number of full
and fractional years of Total SERP Service as of the date of the computation
(maximum is 55%).

 

(ii)                                Computation
of net accrued benefit.  The
computation of the net accrued supplemental pension benefit for a participant
as of the date of the computation will be made by subtracting from the gross
accrued benefit determined under Section 6(d)(i) the amount of the
participant’s

 

11

 

Gross Pension under the
Pension Plan determined as of the date of the computation and assuming that
bi-weekly payments of such Gross Pension begin on the first of the month after
the later of reaching age 62 or the date of the computation.  If the participant is not eligible for
payment of a Gross Pension under the Pension Plan, the participant’s Accrued
Gross Pension determined as of the date of the computation shall be substituted
for the Gross Pension described above, with the appropriate reduction for early
receipt applied as if the participant were eligible to begin payment of his
Accrued Gross Pension on the first of the month after the later of reaching age
62 or the date of the computation.

 

(iii)                             Satisfaction of
requirements.  A participant who has
satisfied the age and Credited Service requirements set forth in Section 5(a) while
eligible as set forth in Section 4, but who does not retire under the Plan
due to Demotion, Termination From Employment With Constellation Energy Group,
or the withdrawal of a participant’s eligibility to participate under Section 5,
shall be entitled to his/her net accrued supplemental pension benefit.  The effective date of the Demotion,
Termination From Employment With Constellation Energy Group, or eligibility
withdrawal event shall be the date of such Demotion, Termination From
Employment With Constellation Energy Group, or eligibility withdrawal.

 

(iv)                            Other
events.  A participant, regardless of
his/her age and years of Credited Service, shall be entitled to his/her net
accrued supplemental pension benefit upon the happening of any of the following
entitlement events, but only if such entitlement event occurs while a
participant and before a participant retires under this Plan:

 

(1)                                Change
in Control.  A Change in Control,
followed within two years by the participant’s Demotion, a participant’s
Termination From Employment With Constellation Energy Group, or the withdrawal
of the participant’s eligibility to 

 

12

 

participate under the
Plan, is an entitlement event.  A
participant’s Termination From Employment is also an entitlement event if it is
reasonably demonstrated that such Termination From Employment (a) was at
the request of a third party who has taken steps reasonably calculated to
effect a Change in Control or (b) otherwise arose in connection with or
anticipation of a Change in Control.  The
effective date of the entitlement event shall be the date of the Demotion,
Termination From Employment With Constellation Energy Group, or eligibility
withdrawal.

 

(2)                                Plan
amendment.  A Plan amendment that has
the effect of reducing a participant’s gross accrued supplemental pension
benefit is an entitlement event.  In
determining whether such a reduction has occurred, the participant’s gross
accrued supplemental pension benefit calculated on the day immediately
preceding the effective date of the amendment shall be compared to the
participant’s gross accrued supplemental pension benefit calculated on the
effective date of the amendment.  An
amendment that has the effect of reducing future benefit accruals is not an
entitlement event.  It is intended that
an entitlement event under this Section 6(d)(iv)(2) will occur only
with respect to those amendments that are substantially similar to amendments
that are prohibited by Internal Revenue Code section 411(d)(6) with
respect to qualified pension plans.  The
effective date of the entitlement event shall be the effective date of the Plan
amendment.

 

(3)                                Involuntary
Demotion, Termination From Employment With Constellation Energy Group, or eligibility
withdrawal without Cause.  A
participant’s involuntary Demotion or involuntary Termination From Employment
With Constellation Energy Group without Cause, or the withdrawal of a
participant’s eligibility to participate in the Plan without Cause, is 

 

13

an entitlement
event.  The effective date of the
entitlement event shall be the effective date of the participant’s involuntary
Demotion or involuntary Termination From Employment With Constellation Energy
Group without Cause, or the eligibility withdrawal without Cause.

 

(v)                               Form of
benefit payout. Each participant entitled to a payout under this Section 6(d) will
receive such payout in the form of a lump sum payment.

 

(vi)                            Amount,
timing, and source of benefit payout. 
A participant entitled to a payout of his/her net accrued benefit, as a
result of the occurrence of an event described in Sections 6(d)(iii) or  (iv) will be entitled to a lump sum
benefit.  This lump sum benefit will be
calculated by a certified actuary as the present value, determined as of the
date of payment, of an annuity beginning at age 62 (or the participant’s actual
age, if the participant is older than age 62 on the date the lump sum benefit
is payable), including the estimated present value of post-retirement survivor
annuity benefits described in Section 8, using (1) the net accrued
benefit amount calculated under Section 6(d)(ii) on the effective
date of the entitlement event, which is expressed as a bi-weekly amount, (2) the
Interest Rate computed on the date the lump sum benefit is payable, and (3) the
Mortality Table.  The lump sum benefit
shall be payable as of the participant’s Severance From Service Date, and shall
be made within 60 days after such date in accordance with the provisions of the
Rabbi Trust and, to the extent not paid under the terms of the Rabbi Trust,
from general corporate assets.  A
participant who receives a lump sum benefit under this Section 6(d)(vi) shall
not be entitled to any cost of living or other pension payment adjustments or
to pre-retirement or post-retirement survivor annuity coverage.

 

14

 

7.                                       For Benefits Earned and Vested On or After January 1,
2005

 

(a)                                Form of payout of retirement benefits.

 

(i)                                   Generally.
Each participant entitled to supplemental pension retirement benefits will
receive his/her supplemental pension retirement benefits payout in the form of
a bi-weekly payment, unless the participant makes a valid election to receive
his/her supplemental pension retirement benefits payout in the form of a lump
sum.

 

 

(ii)                                Initial
election of form of payment.  A
participant may make an initial election to receive his or her payout in the
form of a lump sum in the form and manner established by the Plan Administrator
from time to time, but such initial election shall be made no later than 30
days after the first day of the participant’s taxable year immediately
following the first year the participant accrues a benefit under the Plan.

 

(iii)                             Subsequent elections of
form of payment.  The election to
receive a payout in the form of a lump sum may be revoked at any time in the
form and manner established by the Plan Administrator from time to time, but
such revocation shall not take effect until 12 months after the date the
revocation is received by the Plan Administrator, and will delay the benefit
commencement date five years from the date such payment would otherwise have
been paid.

 

(b)                               Amount, timing, and source of participant benefit
payout.

 

(i)                                   Bi-weekly
retirement benefit payout.  A
participant entitled to bi-weekly supplemental pension retirement benefits will
receive bi-weekly payments equal to the amount determined under Section 5(b).  Such payments shall commence effective with
the first of the month following the Participant’s Severance From Service
Date.  If such participant receives (or
would have received but for the Internal Revenue Code Limitations) cost of
living adjustment(s) under the Pension Plan, the bi-weekly payments
hereunder will be automatically increased based on the percentage of, and at
the same time as, such adjustment(s). 
Bi-weekly payments hereunder shall permanently 

 

15

 

cease upon the death of
the participant, effective with the bi-weekly payment for the period following
the month of the participant’s death. 
Bi-weekly payments hereunder shall be made in accordance with the
provisions of the Rabbi Trust and, to the extent not paid under the terms of
the Rabbi Trust, from general corporate assets.

 

(ii)                                Lump
sum retirement benefit payout.  A
participant entitled to a lump sum supplemental pension retirement benefit will
receive a lump sum payment.  This lump
sum payment will be calculated by a certified actuary and will be equal to the
present value of an immediate annuity including the estimated present value of
post-retirement supplemental survivor annuity benefits described in Section 8,
and reflecting the present value of any deferred Pension Plan payments using (1) the
supplemental pension retirement benefit amount calculated under Section 5(b),
which is expressed as a bi-weekly amount, (2) the Interest Rate computed
on the participant’s Benefit Start Date, and (3) the Mortality Table.  Such lump sum payment shall be made within 60
days after the participant’s Severance From Service Date, and shall be paid to
the participant.  The lump sum payment
shall be made in accordance with the provisions of the Rabbi Trust and, to the
extent not paid under the terms of the Rabbi Trust, from general corporate
assets.  A participant who receives a
lump sum payment shall not be entitled to any cost of living or other pension
payment adjustments or to post-retirement survivor annuity coverage under the
Plan.

 

(iii)                             Six-month delay for Key
Employees. Notwithstanding the foregoing, a participant who is also a Key
Employee shall receive no benefit payments of amounts earned and vested on or
after January 1, 2005, before the date that is six months after the
participant’s Severance From Service Date, where the benefit payment is as a
result of Termination from Employment with Constellation Energy Group.

 

16

 

(c)                                Entitlement
to benefit upon happening of certain events.

 

(i)                                   Computation
of gross accrued benefit.  The
computation of the gross accrued supplemental pension benefit for a participant
as of the date of the computation will be made as follows:

 

(1)                                add
the Average Annual Base Salary and the Average Incentive Award,

 

(2)                                divide
the sum by 26, and

 

(3)                                multiply
this dollar amount by the appropriate percentage, determined as follows:
Chairman of the Board and President of Constellation Energy Group — 60%; all
other participants - by the product of 5.5% multiplied by the number of full
and fractional years of Total SERP Service as of the date of the computation
(maximum is 55%).

 

(ii)                                Computation
of net accrued benefit.  The
computation of the net accrued supplemental pension benefit for a participant
as of the date of the computation will be made by subtracting from the gross
accrued benefit determined under Section 7(c)(i) the amount of the
participant’s Gross Pension under the Pension Plan determined as of the date of
the computation and assuming that bi-weekly payments of such Gross Pension
begin on the first of the month after the later of reaching age 62 or the date
of the computation.  If the participant
is not eligible for payment of a Gross Pension under the Pension Plan, the
participant’s Accrued Gross Pension determined as of the date of the
computation shall be substituted for the Gross Pension described above, with
the appropriate reduction for early receipt applied as if the participant were
eligible to begin payment of his Accrued Gross Pension on the first of the
month after the later of reaching age 62 or the date of the computation.

 

(iii)                             Satisfaction of
requirements.  A participant who has
satisfied the age and Credited Service requirements set forth in Section 5(a) while

 

17

 

eligible as set forth in Section 4,
but who does not retire under the Plan due to Demotion, Termination From
Employment With Constellation Energy Group, or the withdrawal of a participant’s
eligibility to participate under Section 5, shall be entitled to his/her
net accrued supplemental pension benefit. 
The effective date of the Demotion, Termination From Employment With
Constellation Energy Group, or eligibility withdrawal event shall be the date
of such Demotion, Termination From Employment With Constellation Energy Group,
or eligibility withdrawal.

 

(iv)                            Other
events.  A participant, regardless of
his/her age and years of Credited Service, shall be entitled to his/her net
accrued supplemental pension benefit upon the happening of any of the following
entitlement events, but only if such entitlement event occurs while a
participant and before a participant retires under this Plan:

 

(1)                                Change
in Control.  A Change in Control,
followed within two years by the participant’s Demotion, a participant’s
Termination From Employment With Constellation Energy Group, or the withdrawal
of the participant’s eligibility to participate under the Plan, is an
entitlement event.  A participant’s
Termination From Employment is also an entitlement event if it is reasonably
demonstrated that such Termination From Employment (a) was at the request
of a third party who has taken steps reasonably calculated to effect a Change
in Control or (b) otherwise arose in connection with or anticipation of a
Change in Control.  The effective date of
the entitlement event shall be the date of the Demotion, Termination From
Employment With Constellation Energy Group, or eligibility withdrawal.

 

(2)                                Plan
amendment.  A Plan amendment that has
the effect of reducing a participant’s gross accrued supplemental pension
benefit is an entitlement event.  In
determining whether 

 

18

 

such a reduction has
occurred, the participant’s gross accrued supplemental pension benefit
calculated on the day immediately preceding the effective date of the amendment
shall be compared to the participant’s gross accrued supplemental pension
benefit calculated on the effective date of the amendment.  An amendment that has the effect of reducing
future benefit accruals is not an entitlement event.  It is intended that an entitlement event
under this Section 7(c)(iv)(2) will occur only with respect to those
amendments that are substantially similar to amendments that are prohibited by
Internal Revenue Code section 411(d)(6) with respect to qualified pension
plans.  The effective date of the
entitlement event shall be the effective date of the Plan amendment.

 

(3)                                Involuntary
Demotion, Termination From Employment With Constellation Energy Group, or
eligibility withdrawal without Cause. 
A participant’s involuntary Demotion or involuntary Termination From
Employment With Constellation Energy Group without Cause, or the withdrawal of
a participant’s eligibility to participate in the Plan without Cause, is an
entitlement event.  The effective date of
the entitlement event shall be the effective date of the participant’s
involuntary Demotion or involuntary Termination From Employment With Constellation
Energy Group without Cause, or the eligibility withdrawal without Cause.

 

(v)                               Form of
benefit payout. Each participant entitled to a payout under this Section 7(c) will
receive such payout in the form elected pursuant to Section 7(a).

 

(vi)                            Amount,
timing, and source of benefit payout. 
The benefit payout under this Section 7(c) shall be payable as
of the participant’s Severance From Service Date, and shall be paid in
accordance with Sections 7(b)(i),(ii) and (iii), as applicable.

 

19

 

8.                                       Survivor Benefits

 

(a)                                Eligibility for survivor benefits.  Following the death of a participant who is
fully vested under the Pension Plan, a survivor benefit may be paid to the
participant’s surviving spouse. For purposes of this Section 8(a), a
participant’s surviving spouse is the individual married to the participant on
the date of the participant’s death.  If
there is no surviving spouse, no survivor benefits will be payable.

 

(b)                               Form of payout of survivor benefits.

 

(i)                                   For
participants entitled to a lump sum benefit payment:  All survivor benefits for participants
entitled to a lump sum benefit payment shall be paid in the form of a lump sum
payment.

 

(ii)                                For
participants entitled to a bi-weekly annuity benefit payment:  A supplemental survivor annuity may be paid
to the participant’s surviving spouse until the death of that spouse, using the
Survivor Annuity Percentage. The survivor annuity benefit will be 50%, unless
the participant elects, in the form and manner established by the Plan
Administrator from time to time, another percentage in 5% increments up to
100%. The participant will not bear the cost of up to a 50% survivor annuity
benefit, but will bear the cost of a survivor annuity benefit in excess of 50%.

 

(1)                                For
benefits earned and vested prior to January 1, 2005: Unless the
participant made a valid election to have the survivor benefits paid in a lump
sum, by December 31 of the year prior to his/her death or during the 2001
initial election period established by the Plan Administrator, each surviving
spouse entitled to a supplemental survivor annuity benefit will receive his/her
survivor annuity benefit payout in the form of a bi-weekly payment.

 

(2)                                For
benefits earned and vested on or after January 1, 2005:

 

20

 

(a)                                Initial
election: A participant may make an initial election of lump sum survivor
benefits in the form and manner established by the Plan Administrator from time
to time, but such initial election shall be made no later than 30 days after
the first day of the participant’s taxable year immediately following the first
year the participant accrues a benefit under the Plan.

 

(b)                               Subsequent
elections: The election of lump sum survivor benefits may be revoked at any
time in the form and manner established by the Plan Administrator from time to
time, but such revocation shall not take effect until 12 months after the date
the revocation is received by the Plan Administrator, and will delay the benefit
commencement date five years from the date such payment would otherwise have
been paid.

 

(c)                                Pre-retirement survivor benefits: Amount, timing,
and source of benefit payout. 
If the participant dies prior to his Severance from Service Date, the
participant’s surviving spouse shall be entitled to either a lump sum or
bi-weekly annuity benefit, as set forth below.

 

(i)                                   Death
of a participant entitled to a lump sum benefit payout.  In the event of the death of a participant
who elected a lump sum supplemental pension benefit, the participant’s
surviving spouse will receive a lump sum payment.  The lump sum payment shall be the same amount
and made at the same time and from the same sources as set forth in Section 6(c) or
(7)(b)(ii), as applicable.  Such lump sum
payment shall be made within 60 days after the participant’s death.

 

Notwithstanding the
foregoing, in the event of the death of a participant after the occurrence of
an event described in Sections 6(d)(iii) or (iv) or 7(c)(iii) or
(iv) and before the participant receives the lump sum payment under
Sections 

 

21

 

6(d)(vi) or
7(c)(vi), a lump sum payment shall be made to the participant’s surviving
spouse (as defined in Section 8(a)). 
If the participant’s date of death is before his/her Severance From
Service Date, the lump sum payment shall be calculated by a certified actuary
and will be equal to 50% of the lump sum that would have been paid to the
participant under Sections 6(d)(vi) or 7(c)(vi).  The lump sum benefit shall be payable as of
the earlier of the participant’s Severance From Service Date or date of death,
and shall be made within 60 days after such date.

 

Any lump sum paid under
this Section shall be paid in accordance with the provisions of the Rabbi
Trust and, to the extent not paid under the terms of the Rabbi Trust, from
general corporate assets.

 

If there is no surviving
spouse at the date of the participant’s death, no payments shall be made.  In the event of the death of a surviving
spouse before the spouse receives the lump sum payment under this paragraph, no
payment shall be made. A surviving spouse who receives a lump sum benefit shall
not be entitled to any cost of living or other pension payment adjustments or
to pre-retirement or post-retirement survivor annuity coverage under the Plan.

 

(ii)                                Death
of a participant entitled to a bi-weekly retirement benefit payout.

 

(1)                                If
the participant elected a lump sum survivor benefit, the benefit shall be paid
as set forth in 8(c)(i) above.

 

(2)                                If
the participant elected a bi-weekly annuity survivor benefit payment, the
benefit shall be paid as set forth below.

 

(a)                                Computation
of the benefit: Unless the participant elected the alternative in-service
death benefit in paragraph (b) below:

 

(i)                                   begin
with the  bi-weekly Early Retirement
pension benefit (under 

 

22

 

both the Pension Plan and
Section 5(b) of this Plan) to which the participant would have been
entitled if the participant had been retired at the later of age 60 or his/her
actual age on the date of death for purposes of computing the Early Receipt
Reduction Factor,

 

(ii)                                multiply
this dollar amount by the Survivor Annuity Percentage,

 

(iii)                             subtract from the product
the net amount, if any, of the survivor annuity provided on behalf of the
participant under the Pension Plan if the participant is participating in the
Traditional Pension Plan, or the bi-weekly annuity that would have been
provided to the participant’s spouse assuming that he or she had been
designated as the participant’s beneficiary and had chosen to receive a
survivor benefit in the form of a bi-weekly annuity, if the participant is
participating in the PEP, and

 

(iv)                            subtract
from this dollar amount the charges relating to coverage (under both the
Pension Plan and this Plan) for a pre-retirement survivor annuity in excess of
50%.

 

(b)                               If
the participant was a participant in the Pension Equity Plan option of the
Pension Plan and elected this alternative in-service death benefit by December 31
of the year prior to his/her death or during the 2001 initial election period
established by the Plan Administrator

 

(i)                                   calculate
the benefit under the Constellation Energy Group Benefits Restoration Plan that
would have been payable to the surviving 

 

23

 

spouse if the participant
were a participant in that plan and

 

(ii)                                that
dollar amount will be paid to the surviving spouse only in the form of a lump
sum from this Plan.

 

(c)                                A
surviving spouse entitled to bi-weekly supplemental survivor annuity benefits
will receive a bi-weekly payment equal to the amount determined under (a) or
(b) above.  Such payments shall
commence effective with the first day of the month following the month of the
participant’s death.  If such surviving
spouse receives (or would have received but for the Internal Revenue Code
Limitations) cost of living adjustment(s) under the Pension Plan, the
bi-weekly payments hereunder will be automatically increased based on the percentage
of, and at the same time as, such adjustment(s).  Bi-weekly payments hereunder shall
permanently cease upon the death of the surviving spouse, effective with the
first bi-weekly payment for the month following the month of the surviving
spouse’s death.  Bi-weekly payments
hereunder shall be made in accordance with the provisions of the Rabbi Trust
and, to the extent not paid under the terms of the Rabbi Trust, from general
corporate assets

 

(d)                               Post-retirement survivor benefits: Amount, timing,
and source of benefits payout. 
If the participant dies after the participant’s Severance from Service
Date, the participant’s surviving spouse shall be entitled to either a lump sum
or bi-weekly annuity benefit, as set forth below.

 

(i)                                   Death
of a participant entitled to a lump sum benefit payout.  In the event of the death of a participant
after the participant’s Severance From Service Date and before the participant
receives the lump sum payment under Section 6(c) or 7(b)(ii) ,
such lump sum payment shall be made to 

 

24

 

the participant’s
surviving spouse (as defined in Section 8(a)).  The lump sum payment shall be the same amount
and made at the same time and from the same sources as set forth in Section 6(c) or
7(b)(ii).  If there is no surviving
spouse at the date of the participant’s death, no payments shall be made.  A surviving spouse who receives a lump sum
benefit under this Section 8(d)(i) shall not be entitled to any cost
of living or other pension payment adjustments or to post-retirement survivor
annuity coverage under the Plan.

 

(ii)                                Death
of a participant entitled to a bi-weekly retirement benefit payout.

 

(1)                                If
the participant elected a lump sum survivor benefit, the benefit shall be paid
as set forth in 8(d)(i) above.

 

(2)                                If
the participant elected a bi-weekly annuity survivor benefit payment, the
benefit shall be paid as set forth below.

 

(a)                                Computation
of the benefit.  The amount of the
survivor annuity will be determined as follows:

 

(i)                                   begin
with the bi-weekly pension benefit (under Section 5(b) of this Plan)
that the participant was receiving prior to the date of death, and

 

(ii)                                multiply
this dollar amount by the Survivor Annuity Percentage.

 

(b)                               A
surviving spouse entitled to bi-weekly supplemental survivor annuity benefits
will receive a bi-weekly payment equal to the amount determined under (a) above.  Such payments shall commence effective with
the first day of the month following the month of the participant’s death.  If such surviving spouse receives (or would
have received but for the Internal Revenue Code Limitations) cost of living 

 

25

 

adjustment(s) under
the Pension Plan, the bi-weekly payments hereunder will be automatically increased
based on the percentage of, and at the same time as, such adjustment(s).  Bi-weekly payments hereunder shall
permanently cease upon the death of the surviving spouse, effective with the
first bi-weekly payment for the month following the month of the surviving
spouse’s death.  Bi-weekly payments
hereunder shall be made in accordance with the provisions of the Rabbi Trust
and, to the extent not paid under the terms of the Rabbi Trust, from general
corporate assets.

 

9.                                       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).

 

10.                                 Miscellaneous.  None of the benefits provided under this Plan
shall be subject to alienation or assignment by any participant or beneficiary
nor shall any of them be subject to attachment or garnishment or other legal
process except (i) to the extent specially mandated and directed by
applicable State or Federal statute; (ii) as requested by the participant
or beneficiary to satisfy income tax withholding or liability; and (iii) any
policy of insurance written by a commercial carrier on a split-dollar basis
shall be assignable.

 

This Plan may be amended
from time to time, or suspended or terminated at any time, provided, however,
except as set forth in Sections 6(d)(iv)(2) or 7(c)(iv)(2), no amendment 

 

26

 

or termination shall
reduce any previously accrued supplemental pension benefit under this Plan or
impair the rights of any participant or beneficiary entitled to receive current
or future payment hereunder at the time of such action.  All amendments to this Plan may be made at
the written direction of the Committee. Notwithstanding anything else in this
Plan to the contrary, and subject to the limitations set forth in applicable
law, the Constellation Energy Group Board of Directors may authorize a
Participant to be eligible for benefits or may increase benefit payments.

 

Participation in this
Plan shall not constitute a contract of employment between Constellation Energy
Group or any of its subsidiaries and any person and shall not be deemed to be
consideration for, or a condition of, continued employment of any person.

 

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

 

This Plan shall be
governed in all respects by Maryland law, without respect to any conflicts of
laws principles.

 

27Exhibit No. 10(h)

 

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 Mayo A. Shattuck III (the “Executive”).

 

WHEREAS, the Company and the Executive are parties to a Change in
Control Severance Agreement dated as of August 16, 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; (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 payable
under this Section 2(b) under 

 

7

 

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 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; (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 and lasting for the
Executive’s life. The Executive must elect retiree medical and

 

9

 

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 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
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 Replacement Options will (i) be granted on substantially the
same terms and conditions as the Cashed-Out Options (including provisions 

 

10

 

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

 

11

 

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 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.

 

12

 

(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 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 

 

13

 

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 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 

 

14

 

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.

 

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, 

 

15

 

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.

 

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 

 

16

 

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 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.

 

17

 

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 and General Counsel

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Mayo A. Shattuck III

  
	
   

  	
   

  	
  Mayo A. Shattuck III

  

 

18

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